Annual Report (ESEF) • Dec 15, 2022
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Download Source FileAuction Technology Group PLC 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 213800U8Q9K2XI3WRE39 2021-09-30 213800U8Q9K2XI3WRE39 2022-09-30 213800U8Q9K2XI3WRE39 2020-09-30 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:RetainedEarningsMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:ReserveOfSharebasedPaymentsMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:CapitalRedemptionReserveMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:OtherReservesMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:SharePremiumMember 213800U8Q9K2XI3WRE39 2020-10-01 2021-09-30 ifrs-full:IssuedCapitalMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:RetainedEarningsMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:ReserveOfSharebasedPaymentsMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:CapitalRedemptionReserveMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:OtherReservesMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:SharePremiumMember 213800U8Q9K2XI3WRE39 2021-10-01 2022-09-30 ifrs-full:IssuedCapitalMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:RetainedEarningsMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:ReserveOfSharebasedPaymentsMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:CapitalRedemptionReserveMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:OtherReservesMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:SharePremiumMember 213800U8Q9K2XI3WRE39 2020-09-30 ifrs-full:IssuedCapitalMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:RetainedEarningsMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:IssuedCapitalMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:SharePremiumMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:OtherReservesMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:CapitalRedemptionReserveMember 213800U8Q9K2XI3WRE39 2021-09-30 ifrs-full:ReserveOfSharebasedPaymentsMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:IssuedCapitalMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:SharePremiumMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:OtherReservesMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:CapitalRedemptionReserveMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:ReserveOfSharebasedPaymentsMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 213800U8Q9K2XI3WRE39 2022-09-30 ifrs-full:RetainedEarningsMember iso4217:GBP iso4217:GBP xbrli:shares U nlock ing the value of the curat ed secondar y goods ma rk et Annual Report 2022 Auction T e chnolo gy Group plc Increased diversication We have proven ou r abil it y to add laye rs of grow t h and diver sif y re venu e wit h the ro ll out of va lue - add se r v ice s. P a g e 10 Structural shift The structural shift online has rem ain ed ro bus t as demonstrated by our continue d growth even pos t- C ovi d -1 9. P a g e 15 Our strategy Our s trateg y is to ef cie ntly connect aucti oneers and b idders. We do that th rou gh the e xecu tio n of our si x stra tegic d rive rs . Pag e 20 U n l oc k i n g t h e v a l u e o f t h e se c o n dar y go o ds mar k e t and ac c e le rat ing the gro w th o f the circ ular e c o n o my A T G is th e opera t or o f th e wo rld’ s le ad ing m ark etp laces and auct ion ser vices f or cura t ed it ems. Our t echnol ogy hel ps e xper t auct ioneer s di git ise t hei r bus iness, incr eas e oper at iona l e f cienc y an d cr ea te v alue th ro ugh on li ne access t o a la rg e, di v erse a nd fr ag men t ed buyer base. By ena bl ing b uye rs fr om acro ss t he w orld t o bi d on a w ide ran ge o f used a sse ts, w e giv e mil li ons o f it ems mul ti ple li ve s, acceler at ing the g r owth o f the ci rc ul ar econom y andf aci lit ati ng a c han nel o f su sta inab le com mer ce. A T G is ea rly i n its j ourney t o un lock t he va lue o f th e secon dary goods ma rk et and i s uniq uel y pos iti oned, asat rust ed par tne r t o auct ioneers a nd b idd ers, t olea d thet rans form at ion o f the a uct ion i ndust r y . Our Purpose Contents FY22 Group Overview Reve n ue £ 11 9 . 8 m FY22 FY21 FY20 2 £119.8m £70.1m £52.3m Adjusted EBITDA 1 £5 4 .0 m FY22 FY21 FY20 2 £54.0m £31.8m £22.2m Pro t /(lo ss) be for e ta x ³ £ 9. 3 m FY22 FY21 3 FY20 £9.3m £(25.0)m £(19.0)m Bas ic l os s pe r s ha re ³ ( 5 .1 ) p FY22 FY21 3 FY20 (5.1)p (31.0)p (34.3)p Ad ju s te d di l u te d ear n i ng s pe r sha r e 3 2 9.5 p FY22 FY21 ² 29.5p 9.2p Adj us te d fr e e ca sh ow 1 £ 4 9 .9 m FY22 FY21 FY20 49.9m 30.4m 13.9m G ro s s me r c h a n di s e val u e (“ G M V ” ) 4 £ 3.3bn FY22 FY21 FY20 £3.3bn £2.6bn £1.9bn Conv ersion rate 4 3 3% FY22 FY21 FY20 33% 33% 31% T ot al h a mm er va lu e (“ TH V ” ) 4 £ 1 0 .1 b n FY22 FY21 FY20 £10.1bn £7.8bn £6.1bn Strategic Report At a Glance 02 Our History 04 Our Investment Case 06 Chairman ’ s Statement 08 Chief Executive Ofcer’ s Statement 10 Market Overview 14 Our Business Model 18 Our Six Strategic Drivers 20 Key Performance Indicators 26 Chief Financial Ofcer’ s Review 32 Risk Management 38 Principal Risks and Uncertainties 40 Viability Statement 45 Stakeholder Engagement and s172 46 Sustainability Report 52 Corporate Go vernance Chairman ’ s Introduction 73 Governance Report 74 Board of Directors 84 Audit Committee Report 88 Nomination Committee Report 95 Remuneration Committee Report 98 Directors’ Report 113 Directors’ Responsibilities 117 Financial Statements Independent Auditor’ s Report 119 Consolidated Statement of Pr ot or Loss and Other Comprehensive Income or Loss 128 Consolidated Statement of FinancialPosition 129 Consolidated Statement of Changes in Equity 130 Consolidated Statement of Cash Flows 131 Notes to the Consolidated Financial Statements 132 Company Statement of Financial Position 171 Company Statement of Changes in Equity 172 Notes to the Company Financial Statements 173 Glossary 176 Shareholder Information IBC 1. Th is re po r t p rov id es al ter na tiv e pe r for m anc e m eas ure s ( “APM s” ) w hi ch a re not de n edo r sp ec i e d und er t he re qui re me nts of U K-a do pted I nter na tio na l Acc ou nt ing S ta nd ard s. We b el ieve t he se A P Ms p rov ide r ead e rs wi th i mp or tan t ad di tio na l info rm ati on on o ur b usi ne ss an d ai d co mp ar abi li t y. We have in clu de d a c om pre h ens ive l is t of the AP Ms i n note 3 to the Co ns oli date d Fi nan ci al S t atem en ts , wit h de ni ti on s, an ex pl ana tio n of how t he y are c al cul ate d, w hy we us e th em a nd h ow th ey c an b e re co nc il ed to a sta tu tor y m ea su re wh ere r el eva nt . 2. In Feb ru ar y 202 0 the Gr ou p unde r we nt a rest ru ct ure at th e same ti me as acq ui ri ng Prox ibi d. F ull d et ails o f the r es tr uc tur e an d ac co un tin g im pli ca tio ns a re de ta ile d in t he F Y2 1 An nu al Rep or t and Ac co un ts. A s a resul t of the acc ou nti ng of the res tr uc tu re, th ere po r te d n anc ia l resu lts for F Y20 re pr ese nt on ly an eig ht- a nd - a - hal f mont h per io dto 30 S epte mb e r 20 20 . T o aid c om pa ri son s , F Y 20 h as b ee n pr ese nte d as if t he r es tr uc tur e and a cq ui sit io n had o c cu rre d o n 1 Oc tob er 2 019 and i nc lud e th e fu ll ye ar a ctu al re su lts fo r th is p er io d. 3. Th e F Y 21 re su lts h ave b ee n re st ated to a dju st th e fo rei gn c ur ren cy t ra nsl ati on r ese r ve s and na nc e inc o me by £ 2 .3 m. Fu ll de tai ls are p rovi de d in no te 1 of the Co nso li date d Financial Statements. 4. O pe ra tio na l KP Is are u nau di ted . Refe r to the gl oss ar y for ful l de ni ti on s. T he G rou p has mad e ce r t ain a cq uis it io ns th at ha ve af fec ted t he c om pa ra bil it y of t he G rou p’s re sul ts . T oa id co m par is on s bet we e n F Y2 2 an d F Y 21, ope ra tio na l KP Is have b ee n pre se nte d toinc lu de th e res ul ts as if th e acq uis it io n of Live A uc ti on ee rs a nd Au ct io n Mob ili t y ha d oc cu rr ed o n 1 Oc tob e r 20 20 . STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 01 Collec to rs Professionals Bidders Cost savings Technology Tr us t Convenience Selection Casual Business Dealers Industrial machinery, construction & farm equipment Consumer surplus & retail returns Ar t, antiques & collectables Consignments driven by equipment upgrades/downgrades, insolvencies, and by transformative life events BIDDERS AU CT ION HOUSES V I R T U O U S C I R C L E V I R T U O U S C I R C L E D I S C O V E R 26.355 mm S E L L A t a G l a n ce Creating a vir tuous circle that bene ts both auctio neers and bidd ers A TG is an ag gre gator in t he la rge an d fra gme nted au cti on in dus tr y. We simplif y and in tegrate mu ltip le pa r ts of th e onl ine au cti on pr oc ess , fro m the c atal ogu ing of items to mar ketin g, au cti on h osti ng , bid ding a nd mo st re ce ntly p aym ents solu tio ns . In doing so , we enabl e auct ion ee rs to bec om e gen uin e onlin e busi nes ses in a cos t- ef ci ent way. We also make the disc over y and purc hase of sec on dar y items a cc essi ble to anyo ne , any wh ere. For b id d er s , we p rovid e unpa rall ele d choice, con ven ience and trust w hen bidd ing for a nd bu yi ng uni que a nd spe cia lise d se co ndar y go ods o nlin e. For auctioneers , we prov ide gl oba l buy er reach, specialised market place technology and o pe ratio nal c ost s avin gs. We are a par tner to o ur auc tio ne er s and e nab le the m to com pete o n a glo bal sc ale . Mo re b id de r s par ticipating in online auc tion s resul ts in highe r realised prices for se co nd - h and i tems an d in tur n at tra cts more assets to be listed on o ur marketplaces. A TG oper at es many o f t he w o r ld’ s leading o nl ine au ctio n mark etplac es. W e enab le b id de rs fro m 1 71 co u ntrie s t o acce ss a n unde re xplo red w or ld of s eco ndary goods w hich ha ve been cura t ed by ar ound 3,800 trusted a ucti on eer e xp erts. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 02 Strategic Report Logistics & Support E-commerce & Auction Str ategy T ools & technology Va lue-added marketplace services Art & An tiques (“ A& A” ) Industrial & Commercia l (“I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform Analytics & Data Logistics & Support Marketing & Demand Generation Ecommerce & Auction Str ategy News & Industry Insight Verticals Marketplaces T ools & technology Va lue added marketplace services Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform BRANDS & VERTICALS Verticals Marketplaces Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) BRANDS & VERTICALS Payments Analytics & Data Marketing & Demand Generation M o r e a s s e t s c o m e t o a u c t i o n M o r e s e c o n d a r y a s s e t s s o l d & r e - u s e d M o r e a s s e t s b i d f o r o n l i n e M o r e c h o i c e & t r u s t f o r b i d d e r s M o r e a s s e t s c u r a t e d Logistics & Support E-commerce & Auction Str ategy T ools & technology Va lue-added marketplace services Art & An tiques (“ A& A” ) Industrial & Commercia l (“I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform Analytics & Data Logistics & Support Marketing & Demand Generation Ecommerce & Auction Str ategy News & Industry Insight Verticals Marketplaces T ools & technology Va lue added marketplace services Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform BRANDS & VERTICALS Verticals Marketplaces Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) BRANDS & VERTICALS Payments Analytics & Data Marketing & Demand Generation A t a G l a n ce The lar gest onli ne auctio n marketplac es crea ting a posit ive network e ffect A truly sus tainable business which facilitates the grow th o fthe circula r economy Seven leading bra nds, each with a rst mov er a dv antage A TG makes i t eas ier for c on sum er s to make gree n ch oic es . Ou r onli ne ma rketp lac es en sure th at milli ons of i tems are re sol d for re - us e or re pur po se ea ch yea r, extend ing th eir v alue wi thi n the ec on omy, preventi ng was te, and re du cing t he ma ssive c ar bo n emis sio ns that a re a der ivat ive of the m anufa ctu rin g pro ce ss for new i tems. A ll us ed i tems for s ale o n our m arket plac es h ave be en c urated by ex pe r t au cti on ee rs , the reby p rovidi ng tr ust a nd con d en ce in the pu rch ase of a seco nd ar y go od . Fac ili t ati n g tr us t , ch oi ce a n d co nve nie n ce in se c on da r y a ss et s p ur ch as in g 17 2 m bidding sessions 10 3 m bi ds p lac e d 7 4 , 000 auctions facilita ted £ 1 0 .1 b n tot al h am me r va lu e 7m lot s so l d on li ne We oper ate seven mar ketpla ce s acros s two se ctor s: Indus tr ial &Co mm erci al (“ I& C ” ) an d Ar t & Antiqu es ( “ A& A”). Ea ch mar ketpla ce has a r st mover ad vant age in its ver tic al and geo grap hy, creatin g com peti tive advant ages . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 03 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS O u r H i s to r y 1 971 19 7 1 Antiques T rade Gazette i s founded 19 9 8 AT G b e g i n s listing au ctio n calendars online 19 9 8 2 010 A TG par tne rs wi th Bid Sp ot ter. co m in Nor th A me ri ca to laun ch a ser vic e for ins olve nc y auc tion ee rs in th e UK 20 0 6 20 07 2 0 10 2006 Fir st li ve bidd ing for A r t & Antiq ues auct ions on thesa leroom.com 2007 i- bidder is launched to c ate r to c o ns u me r surplus & reta il return s aucti ons A TG has enab led th e aucti on ind ustr y to transact o nl ine since 2 006 and has d eep roo ts as a mark eti ng c han nel f o r au ctio nee rs, da ti ng b ack t o 19 71. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 04 Strategic Report 2 0 13 2 0 18 2 0 13 Acq uisit ion of B idS pot te r .com , exp and ing ou r reac h for Ind ust ria l & Commercia l aucti ons 2 0 18 Acq uisit ion of Lot-tis sim o, the le adin g A r t & A ntiq ues marketplace in Germany 2 0 13 Global Auction P latform (“ GA P ” ) is laun ch ed , a comprehensive cloud- based auction management SaaS 2020 2020 Acquis ition o f Auct ion Mobili t y, a US - bas ed provid er of c ustom ised auction software, websit e desig n and e- commerce solution s for auctioneers 2020 A TG an d Proxib id me rge under A TG Management 20 21 20 21 Acquisi tion of LiveAuctioneers in October 2021 , extendin g A TG ’s offeri ng in to the Nor th A me ri ca A r t & Antiques market 20 21 Lis ting on th e Lond on S toc k Exc han ge Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 05 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS O u r I n v e s t m e n t C a s e 02 Unpara l lele d c ompe t itive p o sit ion Our ma rketp lac es ran k rs t in each of the ge og rap hies and ve r tic als i n whic h the y op erate, g en era ting a l ow cos t to acqu ire bid de rs an d new inve ntor y. A cri tic al mass of bi dde rs g ene rates hi ghe r reali sed p ric es for sec on d - ha nd ite ms; this i n tur n at tra cts m ore as set listings on our marketplaces. Our shar ed success mod el e nsur es ou r auc tion e er par tne rs a re abl e to growalo ngs ide us . 01 03 A large and growing secondary goodsma rk et tran si tioni ng from ofi net oonli ne Th e growin g po pula ri t y of auct ion s as a cha nne l for sec on dar y go ods s ales a s well as th e str uc tur al shif t onli ne ofthe ind ustr y creates po siti ve tailwi nds for A TG . The growin g at tra ctive ne ss of se co nda r y go od s due to th e value they of fer, as well as the ir su stai nabi lit y c red enti als, s ho uld also prov ide a t ailwin d for A TG, even i n a cha lle ngin g economic backdrop. Sc a la ble pr opr ieta r y a uc t ion plat for m tec h nolo g y Our te ch nol og y ena ble s inc rem ent al volu me an d mar ket share g ains at l ow marg inal c ost . We also a cqu ire new bidd er s cos t ef fec tivel y. This co mbi natio n en abl es hig h margi n pro tab le grow th . We invest steadil y to ensure wecan sc ale an d innovate at a pace un match ed bycom pe titi on . Fin d ou t mor e on pag e 18 Fin d ou t mor e on pag e 18 Fin d ou t mor e on pag e 1 5 A TG si ts a t the int ersecti on o f t hous ands of a uction eers wan t ing to b u ild a com peti tiv e online pr esenc e and mi ll io ns o f bi dde rs seeking unique and specialised i tems. Our ab i lity t o le ad the transf ormati on o f t he au ctio n indus tr y u nd erpins our k ey in ve stmen t pil lars. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 06 Strategic Report 05 06 04 Prove n , at t ra ct ive a nd res i lien t nancial model We have a stron g tra ck re co rd of grow th . O ur exp osu re to amix of indus tri es and ge o gra phie s, co mb ine d with th e devel op me nt of a stead y stre am of new re venu e sou rce s, resul ts in a cyclic all y diver si e d revenu e base. O ur high ope rati ona l leve rage l ead s to att rac tive an d expa ndi ng pro tma rgins an d our ca pit al - lig ht mod el ens ures st ron g cash generation. Exp erienced ma nagemen t te am capabl e of execu tion Our m ana gem en t team has a b road r ang e of techn ol ogi cal , commerci al an d e- commerce ex perience comb ined w ith a de ep und er sta ndin g of the aucti on ind ust r y. In the last year we have adde d to the b read th an d dept h of our tea m to ensu re we are well p lac ed to pu rsu e the m ulti ple opp or tuni ties i n fro nt of us. Si x prove n grow t h d r ivers 1 . Ex tend the total add ress able m arket 2. G row the c onve rsio n rate 3. En hanc e the ne two rk ef fec t 4. E xp and op er atio nal leve rag e 5. G row the ta ke rate via valu e - a dd se r vi ce s 6. Pu rsu e ac cret ive M& A We have pulle d the se dr ive rs for th e pas t thre e year s. We will co ntinu e to pull all s ix into th e fu ture. Fin d ou t mor e on pag e 20 Fin d ou t mor e on pag e 10 Fin d ou t mor e on pag e 32 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 07 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Chair m an ’ s S tat e m e nt It is my pl easure to introduce A TG’ s results for t h e yea r en de d 3 0 Se p tem b er 2 02 2 , ou rr s t ful l year a s a pub li cco mp any. Our F Y 22 re sul ts de mo nstr ate the st ren gth and res ilie nc e of A TG ’s busine ss mo de l. T he Grou p has c onti nue d to deli ver ro bus t grow th , lapp ing th e str ong p er forma nc e in th e pri or year wh ich h ad se en an a cc el erati on in t he shif t o nli ne of auc tio ns du e to the C ovid -1 9 pand em ic , and as t he ma cro ec on omi c bac kdrop has b e co me in cre asin gly un ce r t ain. Th e auc tion i ndu str y has co ntin ue d its str uc tural s hif t o nlin e an d the re rema ins signi can t headr oo m for grow th. A TG’s lead ing p osi tio n and sh are d suc ce ss mo de l makes us i deall y pla ce d to con tinu e to lead this tran sform atio n, for the b ene t of both auctioneers and bi dders. F Y 2 2 has bee n a year of signi c ant prog ressa s we contin ue d to grow and diver sif y o ur b usin ess . A TG ha s integr ated the ac quisi tio n of Live Auc tio ne ers an d strengt hened its competiti ve pos ition in theN or thAm er ic an onli ne auc tio n market . Th eGrou p has also prove n its abili t y to addad diti ona l layers of diver si e d grow th thro ugh th e growi ng ado ptio n of valu e - ad d ser vices , including marketing and paym entss olu tio ns. T his en han ce d revenu edive rsi cati on ac rossg eo gra phi es, indu str ies a nd pro du ct prov ide s both g row th opp or tuni ties as wellasi nc reasi ng the resili enc e of ou r busi nes s mo del . In the pas t year, A TG has also st reng th ene d itspa ssio nate and amb iti ous Lea der shi p T eam , wi th a bro ad ran ge of re levan t ski lls and ex pe r tis e, as wel l as a de ep ex pe rie nc e withi n the a uct ion i ndus tr y. Th e team is well plac ed to de live r the n ex t st age of gr ow th andto dri ve long -ter m value for sha reh old ers . I would like to thank the ent ire A TG team for thei r unwaver ing fo cus an d hard wo rk i n the last ye ar an d con gr atulate the m for an othe r year of st rong r esul ts. Financial performa nce an d st ra te gic h igh li gh ts A TG has m ainta ine d its s tron g tra ck re co rd ofnan cia l per for man ce in F Y2 2, del iver ing revenu e of £1 1 9.8 m (F Y 21 : £ 70. 1m ) and adjus ted EBIT DA of £5 4 .0m (F Y21 : £31 .8 m). A TG ’s high op era tion al leve rag e and cap ital -l ight m od el res ulted i n stro ng c ash gen er ation e nab lin g invest me nt into the busi nes s to supp or t fut ure grow t h. T he B oar d will revi ew th e Co mpa ny ’s divid en d pol icy o n anon goi ng basis but do es not exp ec t t o de cla re or pay any d ivid en ds for th e fores eea ble f utu re. Th e Grou p mad e fur the r stro ng p rog ress again st i ts six s trategi c grow t h dri vers i n the year. A TG grew its i mme diatel y add ress abl e mar ket with 2 2 % T HV g row th at c ons tant cur ren cy, drive n by new au cti on ho use s usin gA TG ’s marketpl ace s, reta inin g existi ng auc tion ee rs o n the p lat form , as we ll as du e tothe inc rease in se co nda r y asse t pric es . Y o uca n read more ab ou t prog ress on ou r stra tegy an d our f ut ure pr ior iti es on p age s 20 to 24 of this repo r t . A TG’ s resul ts d emo nstra t e the stre ngth, incr eas ed div ersica t io n and re si lien ce o f our bus ines s mod el. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 08 Strategic Report Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 08 “ A T G h a s mu lt ipl e grow t h opp or t u n it ie s a head , a s it leverages its ma rket -l ead i ng p os it ion a nd lea d s t he t r a n s for m at ion of t he a uc t ion i nd ustr y . ” Board membe rs and priorities In the last 1 2 mon ths , we have conti nue d to stre ng the n our B oa rd and h ave welc om ed Pauli ne Rea de r , Suz ann e Ba x ter an d T am sin T od d as ind ep en den t Non - E xecu tive Dire ctor s. Eac h of our new Dire cto rs brin gs tothe Board thei r own se t of uniqu e sk ills , exp er ien ce a nd kn owle dge i n areas t hat are c ru cial to ou r busi nes s inclu ding mar ketin g, na nc e and tech nol og y. As a resul t of thes e app oint me nts the B oard wa s full y co mpli ant wi th th e UKC or po rate Gover nanc e Co de forthe majo ri tyof 20 2 2, as set out in the Cor po rate Gover nan ce Re po r t f rom pa ges 74 t o 8 3 of this repor t . Pen ny Ladk in - Bra nd step pe d down from the Bo ard af ter th e AGM in J anua r y 2 02 2 du e to her oth er co mmi tm ents . I would like to than k Pen ny for he r valua ble c on trib uti on to the Bo ard du rin g her t ime o n the B oa rd and as our r st Aud it Co mm it tee Ch air. We beli eve that m ainta inin g a dive rse B oar d isimp or tant an d I am please d to rep or t that our B oar d co mpo sit ion is i n line w ith th e rec om me ndati ons fro m the F T S E Women Lead er s Review. Look ing ah ead , we plan to fur the r enh anc e the d iver sit y of o ur B oard and yo u can re ad mo re ab ou t our p lans fo r diver si ty i n the N om inati on C om mit te e Rep or t o n pag es 95 to 97 . In Feb rua r y 20 2 2 , the Bo ard co ndu cted anef fec tiven ess rev iew to obtain fee db ack on th e prog ress of t he B oard a nd it s Co mmi t tees si nce IP O. Th e nd ing s of this review highlighted the relevant experie nce ofour Bo ard me mb er s, the hi gh level s of eng age me nt an d deb ate in me etin gs an d theB oard ’s focus on th e right are as. Fur the r deta ils are se t ou t in th e Co rp or ate Gover nan ce Re po r t o n pag e 75. I would like to than k my fellow Boar d mem be rs for t hei r co ntri bu tion to A TG sinc e their respective appointments. T heir input, exp eri en ce an d co mmi tm ent to bui ldin g a framew ork of strong corporat e gov ernance have be en in tegra l in sup po r ti ng th e busi nes s in exec uti ng it s str ategy th rou gho ut th e year. Environment, Social and G ov e rnance (“E SG” ) Envi ronm ent al sust aina bili t y is centr al to A TG. T his is t ru e both i n how we op er ate buta lso in our rea son for be ing: p rovidi ng acha nne l of “re - co mm erc e” by facili tatin g the sale of se c ond ar y g oo ds an d ex ten ding t hei r life cycl es thr oug h re - u se, s upp or ting t he circ ular e co no my . I am also pleas ed to repo r t that th e Bo ard es tab lishe d th e Sus tain abil it y and Climat e Risk Commit tee during F Y22 , demo nstrating the Boa rd’s commitme nt toasustai nab le fu ture. T his Co mmi t tee hasapr ima r y obj ec tive to suppo r t th e impl em ent atio n of the re co mm end atio ns of the T as k For ce o n Clim ate - rel ated Fi nan cial Disc los ures ( “ TCF D ” ), in add iti on to fur th er climat e - relat ed developmen ts and wider sust aina bili t y topic s as req uire d in th e fu ture. Th ere are f ur ther d eta ils on th e Gro up’s con tri bu tion to sust ainab ilit y an d ES G stra tegy o n pag es 52 to 71. Looking ahead A TG has multiple growth oppor tunities ahea d, as i t leve rag es it s mar ket- lea ding posi tio n and l ead s the tr ansfor mati on of theau cti on ind ust r y as well as acc ele rati ng the grow th of the ci rcu lar e co no my . Wh ilst the macroeconomic outlook remains unc er tain , theG roup has bu ilt a resili ent an d diver si e d busin es s mod el whic h posi tio ns itwell to create valu e for aucti one e rs , bidd er s,e mpl oyee s and sha reho ld ers , whil stm ini mis in g risk . On be hal f of the Bo ar d, Iwant to thank all A TG ’s stakeho lde rs , and Iloo k for ward to work ing c olla bo rative ly asA TG co ntin ues to unlo ck th e value in these c ond ar y go od s market . Breon Corcoran Chairman 1 Dec em be r 20 22 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 09 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS C h i e f E x ec u t i v e Of c er ’ s S t a te m e n t A TG ’s pur po se i s to u nlo c k th e val ue o f th e secondary goods mark e t and in doing so, tosi gn i c an tl y acc el er at e grow t h of the ci rc ul ar ec on om y . Thr ou gh ou r seven on li ne marketplaces, w e enable a large, diverse, an d fr ag me nt ed b u yer b as e to bi d on a w id e ra ng e of se c on d ar y g oo d s cu ra te d by th ou sa nd s of expe r t auc t io ne er s. We en a ble au ct io ne e rs to l is t c ur at ed a ss et s o nli ne i n a co st- ef c ie nt way, t h ro ug h our sp ec ia lis ed marketplace technology, whilst also enabling auctioneers to access a large, global bidder bas e. Ever y yea r our mar ket pl ac es en su re th at m ill io ns o f sp ec ia li se d an d un iq ue u se d ite ms a re r es ol d fo r re - us e or r ep ur p ose , prev enting w aste and carbon emissions fro mt he man u fac t ur in g of new items . A year o f fur th er g row t h an d p rog re ss In F Y 22 we have con tinu ed to deli ver stro ng revenu e grow t h, eve n as we ann ualis ed o ur stro ng p er for man ce i n F Y 21 that h ad ben e ted fro m the Cov id -1 9 pan de mic . Our grow th als o rem aine d rob us t as we face d an increasingly uncertain macroeco nomic envir onm ent , pa r ti cula rly i n the s ec on d half of the year. We have diversi e d our bu sine ss thro ugh th e acqui siti on of Live Au ctio ne er s, whic h hel ps A TG to gene rate a cycli cal ly balan ce d mix of re venu es ac ross A & A an d I& C and inc rease s our exp osu re to the larger US m arket . We have also p roven ou r abili t y to add ad diti ona l layer s of grow th th rou gh the roll ou t of valu e - a dd se r vi ces i ncl udi ng mar keting a nd pay me nts, w hic h now acc ou nts for 16 % of Group re venu e. Our str ong opera tiona l cash generat ion driv en by our pro tab le and ca pit al - ligh t nan cial mod el h as ena ble d us to ca refull y man age our b alan ce sh ee t, w hilst a lso prov idin g us with t he abi lit y to inves t in grow t h. We have invested i n imp rovin g ou r prod uc t for ou r cus tome rs an d auc tio ne ers , an d have also invested to s tren gth en an d deve lo p the team at A TG , not on ly at th e lea der shi p leve l, wh ere we welc om ed th ree n ew B oard m em be rs an d ve new Lea der shi p T eam me mbe rs , but als o acro ss th e busi nes s whe re we add ed spe cia list ro les i n areas s uc h as tech nol og y, mar keting and nan ce. We have made thes e invest men ts whilst mai ntai ning a at marg in year- o n - year, highli ghtin g the s tren gt h of our nancial model. Gr ow th a cr os s bo th of o ur ve r ti ca ls In F Y 22 we deli vere d anoth er year of stro ng growth , demo nstrating the streng th of the A TG mo de l as well as t he resi lien ce of th e str uc tural s hif t o nlin e of the a uct ion i ndus tr y with g row th de live red i n both o ur ver tic als. Acti vi t y in onl ine au cti ons h as rem aine d stro ng in F Y2 2 , as ev ide nc ed by th e 2 2% TH V ² g row th th at our m arket plac es d eli vere d. In a peri od of eco no mic un ce r tai nt y, we would ex pe ct a uct ion a cti vit y to be r obu st , dri ven by th e spe e d of sale an d pr ice realis ation b ene ts of the aucti on cha nne l, co mbin ed wi th an i nc rease i n the vo lum e ofsec on dar y goo ds com ing to aucti on . Wi thin I& C , revenu e grew by 1 3 % on a profor ma basi s³ d rive n by stro ng g row th in GM V ² of 29 % , wh ich i n tur n was dri ven by volum e, m ix an d pri ce grow th of asse ts liste d on ou r mar ketpl ace s. We have wel co me d new au cti one er s to our m arket plac es , and our ex istin g auc tio ne er s have co ntin ued to list as sets wi th us . As t he e co no mic o utl oo k deter ior ated in th e se co nd ha lf, the rate of pri ce in cre ases of se c ond ar y a sset s sof tene d. H owever, this was par tly of fse t by imp rovin g volum es of as sets c omi ng to the I& C aucti on mar ket, wh ich als o beg an to see a ben e t from an in crea se in the rate of business insolvencies. In A& A , reve nu e grew 1 0% on a profor ma basis ³, dri ven by s tron g grow th i n valu e - ad d ser vices, including pa yments and adv er tising, as we were ab le to mon etis e mo re par ts of the a uction tr ansaction and e xperience. Thisd em ons trates th at A TG has the sam e mar ketpla ce m one tisati on o ptio ns as se en i n othe r onli ne ma rketp lac es aro und t he wor ld and th at we can d iver sif y o ur reve nue g row th lever s by followi ng a wel l -tro dd en pat h of mar ketpla ce d evelo pm ent . GM V s aw a small de clin e co mpa red to the p rio r yea r and a normali sation in onl ine auct ion acti vity followin g the C ovi d -1 9 pan dem ic an d as physical auc tions reo pene d. Su cc ess fu l ro ll ou t of va lu e- ad d services driving incremental gro wth In the pas t 1 2 mo nths , A TG has prove n its abili t y to expan d be yond t he ini tial a uct ion transa ction in to the br oader auct ion ec osys tem. We have evo lve d and ex pan de d our auctioneer marketing pr ogramme, Adjusted EBITDA 1 £5 4 .0 m (F Y21 : £31 .8m ) Reve n ue £ 11 9 . 8 m (F Y 21 : £ 70. 1 m) Stro ng ful l year r esults as th e bus iness c on ti nu es t o deli ver o n i ts six stra t egi c drive rs. 1. Th is re po r t p rov ide s al ter nat ive p e r for ma nc e me asu res ( “APM s” ) whic h are n ot de n ed o r sp ec i e d und er t he re qui re me nts of U K-a do pte d Inte rn ati on al Ac co un tin g S ta nd ard s. We be li eve the se A P Ms p rov ide r ea de rs wi th i mp or tan t add it io nal i nfor ma tio n o n ou r bus in es s and a id co mp ara bi lit y. We have i nc lu de d a c om pre he ns ive lis t of th e AP M s in no te 3 to the C o nso li date d Fi nan ci al S ta tem en ts , wit h de ni ti on s, an exp la nati on o f how t hey a re c al cul ate d, w hy we us e the m an d ho w the y ca n be r ec o nc ile d to a st atu tor y measu re where releva nt. 2. Re fer to the g los sa r y for f ull d e ni tio ns . 3. Th e Gr ou p has m ad e ce r ta in a cq uis iti on s th at have af fec ted t he c om pa ra bil it y of th e G rou p’s res ul ts . T oa id co m par is on s bet we e n F Y2 2 an d F Y 21, op er ati on al K PIs ha ve be en p res ente d to inc lu de th e res ul ts as if th e acq uis it io n of Live A uc tio n ee rs an d Auction Mobility ha d occurred on 1 October 2 020, wit h gro w th r ates s how n on a c on st ant c ur re nc y bas is us ing a ver ag e exc han ge r ates fo r th e cu rr en t n anc ia l per io d ap pli ed to th e co mp ara tiv e pe rio d , and a re use d to eli min ate th e ef fec ts of u ct uat io ns in assessing performance. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 Strategic Report provid ing a re venu e op por tuni t y for b oth auctioneers and A T G. Auction s supported with m arketi ng have p roved to del iver b et ter resul ts; for exa mpl e Proxi bid au ctio ns saw anavera ge 72% in cre ase in reg istere d bidders and 38 % increase in winning bidders whe n they we re sup po r ted by AT G’s digi tal marketing programme. We ha ve upgraded the on sit e adv er tisi ng exper ience on ourm arket plac es , suc h as throu gh the intro duc tio n of rotatin g ban ner s and fe ature d auc tion l ots. H owever, with ou r mar keting revenu e cu rre ntly at 0 .4% of GM V , we s till sees igni can t opp or t uni t y to grow , throu gh inc reasi ng au ctio ne er a dop tion of m arketi ng as well as th rou gh deve lo ping n ew ma rketin g solu tio ns , inc lud ing , for exam ple , a ne w SM S feature th at remi nds re gis tered bi dde rs th at an auct ion is ab ou t tostar t . Our i ntegr ated pay me nts sol uti on ro ll ou t has con tinu ed to grow. Ove r 75% of US - base d auc tion ho use s on Live Au cti one e rs have nowado pted the pay me nts solu tio n and inS eptem be r , 42% of US - bas ed gros s transa ction value on LiveAuctioneers waspaid for usin g the solu tio n. Pay me nts provid es b oth co nveni en ce to bid der s, wi th a99.8 % paym ent rate for bidd er s who have acre dit ca rd on le , as well as spee d and relia bili t y to aucti one e rs , with a t wo to thre e time s faster di sbu rse me nt cyc le wh en th e solu tio n is use d. We have b eg un th e roll ou t of paym ents o nto Proxib id an d are en co ura ged by the rate of ado ptio n we have se en so far. In the c omi ng yea r , we will foc us on g rowing t he adoption of pa yments across marketplaces as well as la unc hin g an integ rated d eli ver y solution on LiveAuctioneers. Strengt hening our competiti ve pos iti on w it h ou r foc us o n im pr ovin g th e En d-to - E nd E x pe rie n ce We are ear ly in o ur jo urn ey to unl oc k the val ue of the se co nd ar y g oo ds mar ket . Th e auc tio n indu str y rema ins well b eh ind e - c omm er ce in its d igiti sation journey , whi ch repr esent s signi can t oppo r tu nit y for futu re grow th . Wehave made goo d progre ss with phas e oneof our visi on , “Fo und atio ns”, to transfor m the au cti on in dus tr y an d we are now i n the sec on d phase , “E nd - to - En d E xpe ri enc e”. STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Auc t io n T ec h no lo gy G r ou p p lc A n nu a l Re po r t 20 2 2 11 Inthis phas e, we are enabli ng auc tion ee rs tocom pete even mor e effec tive ly with othe rsell er s of spe ci alise dand uni que sec on dar y good s as we signi can tly impr ove the o nlin e bidd ing ex pe rie nc e and a s we simp lif y an d stre amli ne h ow auc tion l ots are listed o nlin e. T his will c on tinu e to drive o ur vir tuou s circl e that bene ts both auc tion ee rs and bi dde rs; m ore b idd er s par ticip ate in onl ine auc tion s resul tin g in hig her r ealise d pr ic es forse co nd - h and items an d in turn att rac ting more a sse ts to be liste d on ou r mar ketpl ace s. We have invested in our S earc h Engi ne Opti misati on ( “S E O” ) func tio nali t y to dri ve bidd er a cqui siti on , whils t also i mprov ing ourm arket plac e taxo nomy, lter an d searc h fun ctio nali t y to dri ve bidd er c onve rsio n. Newe ditor ial featur es on our ma rketp lac es as well as n ew co ntent- r ich e mai ls have driven bidder engagement to fur ther stre ng the n therel atio nship th at we have with our bi dde r bas e. O ver th e me dium te rm we bel ieve the re is a signi c ant op por tuni t y to unlo ck t he n ex t ge ne ratio n of bid der s, w ho are you nge r, web- native b ut ti me po or. For auc tion ee rs , we have de velo pe d and a re rollin g ou t ou r integr atin g bidd ing wi dge t, whic h will e nabl e auc tio ne er s to seaml ess ly cross- list assets across our market places and o ur whi te labe l sol uti ons to rea ch an e ven wide r audi en ce. We c onti nue to fac ilit ate the shif t to ti med o nli ne - onl y auc tio ns wi th T HV on timed auction s gro wing 31 % year - on -year . Ti me d auc tion s both i ncr ease o ur co nver sio n rate and re duc e c osts for o ur au cti on ee r par tner sand have co ntin ue d to grow even asthe phys ica l live auct ion for mat has returned post pandemic. Ret ention rat es of auctioneers remain s very high demonstrat ing the val ue th at we create th roug h our s hare d success model. Acc ele r ati ng t he g row t h of t he circular econom y Th e A TG team h as co ntinu ed to wor k steadil yto make the buyi ng and se llin g of sec on d - ha nd go od s easi er, and this sha red soc ial c ons cie nc e is key to our pu rp ose . A TG ’s onlin e mar ketpla ces e nsu re that millio ns of ite ms are res old fo r re - u se or repu rp ose e ach ye ar, exten ding t hei r valu e withi n the e co no my, preventin g waste, a nd redu cin g the m assi ve car bo n em issi ons th at are a de riv ative of th e manu fact uri ng pro ce ss for new ite ms . Arec en t sur vey co mm issi on ed by A TG evi den ce d th e growin g co nsum er prefere nc e towards bu yin g se co ndar y go ods , with 4 4% of resp ond en ts in th e sur ve y mo re likely to bu y se co nd - h and tod ay than t hey were thre eyear s ago and on ly 1 3% les s likely. Fur th er mo re, of th ese re spo nd ents , 47 % cite d the im po r ta nc e of sust aina ble b uy ing as a dri ver to bu yin g sec on d - ha nd , highl ighti ng how co nsu me rs are l oo kin g to make gre ene rch oic es . However, with over 40 % of resp ond en ts in th e sur ve y still n ot reali sing that bu yi ng se co nd - h and f ur nitu re is mo re sust aina ble th an bu yi ng new, we be lieve th ere is a hug e op por tuni t y for A TG to be the voi ce of the in dus tr y in e du cati ng c onsu me rs o n the be ne ts of buy ing se co nd han d. A TG is c omm it ted to ma kin g real re du ctio ns in the car bo n impac t of o ur ope rati ons . Duri ng the year , we implemented governance processes over our sustain abili t y as the Boar desta blis he d a Sus tain abil it y an d Clim ate Risk C om mit te e, whos e pri mar y obje c tive is to sup po r t th e impl em ent atio n ofthe rec om me ndati ons ofthe TCFD, in addi tio n t o ensuri ng that clim ate - rel ated risksan d oppor tuni tie s are ide nti e d, moni tore d and integ rated into thebu sin ess . “ O ur busi ness is more d iv er s i e d tod a y t ha n where i twas a y ear a go , a n d we h ave prove n our a b il i t y t o ad d add it ion a l l ayer s of g ro wth thr o ug h th e suc ce ss f ul ro l l ou t o f va lue-add se r v ices . ” Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 Strategic Report Chief Executive Ofcer’ s Statement continued Lea di ng t he t ra ns for mat io n of t he auction industry A TG rem ains u niqu el y pos itio ne d to lead thetr ansfor mati on of the auct ion ind ust r y. F Y 2 2 has be e n anoth er ye ar of grow th andd evelo pm ent . Our bu sine ss is more diver si e d today by revenue and by ver ti cal than wh ere i t was a yea r ago , and we have proven o ur ab ilit y to add a ddi tio nal laye rs ofgrow th thro ugh th e succ ess ful roll ou t of value - add se r vi ce s. Ours tro ng trac k rec ord ofnan cia l and ope ratio nal pe r for man ce , aswell as our de epk nowl edg e and sca le toinvest , gives usco n den ce in our ab ilit y toconti nue to execu te against ou r grow th stra tegy. Impor tantl y, our shared su cc ess mod el wil l ens ure ou r auc tio ne er pa r tn er s are able to grow a lon gsid e us . Th e A TG team at all leve ls has d one a s up er b job , and wh ilst th e ec on omi c outl oo k isunc er t ain , par ti cul arl y inthe mo re cycli cal A & A ver tic al , we are con d ent of the value we can co ntin ue tocreate within th e aucti on ec osy stem . Jo hn -P aul S avan t Chief E xe cu tive O f ce r 1 Dec em be r 20 22 Six g row th dr ive rs un de rpi n our s ucc es s. We have exec ute d stro ngl y agai nst th ese i n the past yea r and se e signi c ant op po r tu nit y ah ead: • E x te n d the ad d re ss ab le ma rke t : OurT H V has grown 2 2% at co nst ant cur ren cy in th e las t 1 2 mont hs as we have add ed ne w auc tio n hou ses , and new lot s to our mar ketpl ac es. We have acti vely id ent i ed ne w TH V that we wish to brin g onli ne over t he me diu m term . • Gr ow th e co nver si o n rat e (p rev io us ly “onl in e sh ar e” ): Even as physic al auc tion s have retur ne d po st pa nde mic , our co nver sio n rate has remain ed at . For auct ioneers w e wil l conti nue t o acti vely fa cili tate the s hif t f rom li ve to time d auc tio ns , and for b idd er s, we will invest to ma ke the bid ding e xpe ri en ce even ea sier d ri vin g bidd er a cqui siti on , engagement and con version. • En ha nc e th e ne t wor k ef fe c t: We a re con tinu ing to make i t easie r for auc tion ee rs to cro ss - lis t ass ets on o ur marketplaces and grow bi dder reach aswe roll out in tegrate d biddi ng. Cross-listing als o encourages bidders to use A TG as thei r pri mar y sear ch p or t al by prese ntin g the m wi th the b road est arr ay of onlin e inven tor y. • E xp an d op er a tio na l leve ra ge : We are investi ng in a s ingl e tech no log y plat for m, wh ich w ill prov ide b oth agil it y and ex ibili t y to our op er atio ns, whil st also e nabli ng th e ac cel er ation of n ew prod uc t deve lop me nt. We ex pe ct c api tal exp end itur e to incre ase to a ran ge of £8 m to £10m for t wo year s whic h inc lud es the c ap itali sed e xpe ndi ture o n the tec hn olo gy p lat form , whi lst we als o exp ec t the pl at form to le ad to ope rati ona l cos t savin gs of ap proxim ately £ 2 m per annu m fro m F Y 25 onward s. • Gr ow th e take r ate vi a val ue - ad d ser vices: We have expand ed o ur mar keting of fer ing s, ro lle d ou t paym ent s acro ss Li veA uct ion ee rs an d have begu n to roll ou t paym ent s on Prox ibid . We are focus ed o n rolli ng ou t pay me nts an d dri vin g ado ptio n acro ss Proxi bid an d othe r mar ketpla ce s in F Y23 a nd pla n tolaunc h an integr ated deli ver y solu tio n later in the year o n Live Au ctio ne er s. • Pu rs ui ng a cc re ti ve M& A : We hav e integr ated Li veA uct ion ee rs an d remain acti ve in lo ok in g for valu e acc reti ve opp or tuni ties to ad d to our foot pri nt and to incre ase val ue ac ross o ur n et wor k . Execu t ing against our six gr owth dr iv ers Ex te nd the addressable ma rket Grow t he conversion rate En h a nce th enet work ef fect Grow t he ta ke ra te vi a va lue -add ed serv ices Ex p an d ope rat ion a l leverag e Pu rsue accret ive M&A Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1. Manag e me nt es ti mate s No vem be r 20 2 2 . 2. In c lud es e Bay A & A auc ti on s onl y. 3. Refe r to glo ss ar y fo r full d e ni tio ns . 4. C or e I&C ma rket cl as si e d as grey, gree n and yel low iro n and tr ans po r t . Do esn ot inc lu de oth er in dus tr ial se gm e nts su ch as mini ng an d util iti es , ch em ic al man ufa ct ur ing . UK, North America and W. Europe A&A market 2 A&A auction market including “Big 4” 4 and eBay A&A auction market excluding “Big 4” 3 and eBay Immediately addressable market (A TG THV) AT G GMV North America & UK total used I&C equipment market Core 4 I&C market Core 4 I&C auction market Immediately addressable market (A TG THV) AT G GMV Arts & An tiques £4.3bn £0.7bn Industrial & Commercial £5.7bn £2.6bn £47bn £23bn £9bn £64bn £41bn £13bn Ar t s & A nt iq ues A& A TH V ³ ( im m ed ia tel y a dd re ss ab le m ar ket) £4 . 3 b n F Y 2 2 + 15 % Ar ts & A ntiqu es re pres ents a l arge , low grow th mar ket, d rive n by dem and fo r a rang e of cate gor ies f rom f urn itu re, watch es an d jewell er y , to ar ts an d othe r co lle ct able s. W hils t A TG ’s addres sab le mar ket sits l arge ly wi th au ctio ne er s in th e mid - m ar ket spac e, wealso par tne r with t wo of the “Bi g 4” aucti on ee rs , large ly on thei rlower- p ric ed l ots. We would the refore exp ec t our total addre ssa ble m arket to als o grow as we grow o ur sh are of sale sfro m these au ctio ne er s. Th e glo bal A & A mar ket has se e n mod es t grow th i n the la st t wo year s, dri ven by a return of buyer co n den ce po st Covi d -1 9 as well as a fa vour abl e pric ing envi ron men t. De cli ning co nsu me r sentim en t and an u nc er tain ma cro ec on om ic ou tlo ok a re exp ec ted to impa ct the pr ic ing o utl oo k in 20 23 . Howe ver, the overall m arket is s till forec ast to se e mo de st grow th to 2024 as m acro fa ctor s imp rove. Indus trial & Commer cial I& C TH V ³ ( im me d iat el y ad dr es sa bl e ma rke t) £ 5 .7 b n F Y22 +28% Th e I&C use d equ ipm en t market is mad e up of several ver tic als inc ludi ng c ons tru cti on , agr icu ltu re and m anufa ctu rin g. A TG has see n st rong d em and for u sed a sse ts acro ss ma ny of thes e ver t ica ls in F Y2 2 , as well as at t rac ting n ew t yp es of as sets to its mar ketpla ces i ncl udi ng real e state , as evid en ce d by stro ng gr ow th in both T H V an d GM V . Th e use d mar ket has se en a sse t pri ce in cre ases c aus ed by Covi d -1 9 rela ted sup ply c hain i ssu es and t he k no ck- on im pac t onle ng the nin g equi pme nt rep lac em ent cyc les . However, this has be en pa r tl y of fset by re duc ed ava ilabi lit y of us ed e quip me nt du e tolong er rep lac em ent cyc les . As su ppl y chain is sues are ex pe cted to unwind in F Y2 3 , this is ex pe cted to bot h ne gative ly im pac t th e pri cin g envi ronm en t, wh ilst als o imp rovin g the vo lum e availab le ofused as sets . Fur th er mo re, an exp ec ted inc reas e in the rate of busi nes s inso lven ci es sh ould i nc rease t he vol ume of us ed as sets for sal e. T o get her t his is ex pe cted to resu lt in a s tab le ou tlo ok fo r the use d equ ipm ent ma rket in both N or th Am eri ca an d the UK . Mark et O v er view The t otal use d asse t mar ke t is v ery large and is expecte d to con ti n ue t o sho w gr owth eve n in a n uncertain macr oecon omic ou tloo k. A shi ft to o nl ine auc tion s andtotimed a uctions ar e also posi tive dri ve rs f or A TG. T ota l used ass et mark et for A T G ¹ Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 Strategic Report % of I&C Auctions (core market) that are online 1 FY19-FY22E 38% CAGR online auctions % of A&A auctions (excl eBay and Big 4) that are online 1 FY19-FY22E 19% CAGR online auctions 2022E 2019 21% 57% 2022E 2019 31% 41% Aucti ons a s a channel f or useda sset sale s are gro wing inpopul arity Auc tion s as a for mat for se c ond ar y g oo ds sa les have g rown in pop ular it y in bot h the A& A an d I&C ma rkets in the las t thre e year s, s upp or ted by grea ter inn ovatio n and fas ter onli ne ad opti on . Co nsig nor s are at tr acte d to the poten tial high er pr ic e realis atio n and t rans pare ncy t hat au ctio ns of fer, as well as the spe e d of sale of assets. Fo r the I& C sec tor, a retur n to histor ic al leve ls of liqui datio ns , whic h have re ce ntly be en ar ti cial ly sup pres sed by Cov id - re lated bus ine ss supp or t pac kag es , would b e a fu r th er gr ow th dr iver i n theau cti on cha nne l over the nex t two year s. Auc t io ns s ha re of t he s ec o nd ar y go od s ma rke t The structural shif t from ofine t o onl ine aucti ons i s conti nuing For th e pas t 1 6 year s, th e auc tio n ind ustr y has b ee n gra dual ly movi ng onli ne. T his shif t has acc ele rated in th e last ve yea rs , par ticul arl y dur ing t he C ovid -1 9 p and emi c as bid de rs an d auc tion ee rs re co gnis ed the e co no mic be ne t , pra cti cali t y and ease of th e onl ine c han nel . As t he gl obal e c ono my has re op en ed in the l ast ye ar, the stru ctu ral sh if t o nlin e of the au ctio n in dus tr y has prove n to be resil ien t with o nly s om e imp act f rom th e retu rn of physic al bi dde rs . Fur th er mo re, th e mid - mar ket A& A s ec tor hasse en a high er on line p ene trati on tha n the total A& A auction mark et. Loo ki ng for ward , the shi f t onli ne is expe cte d to continu e, alb ei t at a more m od er ate rate with so me s low down e xpe c ted followi ng the “p ull for wa rd” ad opti on of on lin e auc tion s dur ing C ovi d -1 9 as well as a mo de st im pac t fro m the re tur n of physic al bi ddin g. A & A¹ , ² 42 % +9 % CAG R F Y19- F Y2 2 I&C¹ 32% +2% CAG R F Y19- F Y2 2 1. Manag e me nt es ti mate s No vem be r 20 2 2 . 2. A & A au ct io n mar ket e xcl udi ng e B ay. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS I&C online auction market by format¹ % of total Online Hammer V alue, 2019–2024E Timed Live 2020 2021 2022 2023E 2024E 2019 36% 40% 44% 48% 52% 56% 64% 60% 56% 52% 48% 44% Timed auction s as a fo rmat hav e headro om for g row th Ti me d auc tion s provi de gre ater visi bili t y of lots an d co mpar abl e item s, wh ilst al so of ten prov idin g eq uival ent hamm er p ri ces at a l ower c ost . As s uc h, th e tim ed for mat has gai ne d share of t he over all on line m arket . Wi thin A & A (excludi ng the “ B ig 4” a nd e Bay), tim ed au cti ons repre sen t a smal l prop or tio n of the o nlin e auc tion m ar ket today. Alth oug h this p en etrat ion h as dou ble d in th e las t thre e year s, the re is still sig ni c ant hea dro om for grow th . Whil st we would ex pe ct t he live a uct ion for mat to re main b et ter suite d to the sal e of high er val ue i tems , the re is stil l a growin g pref erence for timed a uctions f rom man y auct ioneers andbi dde rs , par ticul arl y for lower valu e items . Wi thin I& C , time d aucti ons re pres ent 4 8 %¹ of the onli ne auc tion ma rket , an inc rease fro m 36% ¹ in 201 9. However, anA TG bid de r sur vey sh ows that 60 %¹ o f custo me rs prefer time d auc tion s, wi th a fur t her 2 3%¹ withou t a preferen ce bet we en li ve and ti me d, hi ghlig htin g the ad dit ion al hea dro om for time f ormats. 1. M ana ge me nt e st ima tes N ove mb er 2 02 2 . Strategic Report Market Overview continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 M o r e a s s e t s c o m e t o a u c t i o n M o r e s e c o n d a r y a s s e t s s o l d & r e - u s e d M o r e a s s e t s b i d f o r o n l i n e M o r e c h o i c e & t r u s t f o r b i d d e r s M o r e a s s e t s c u r a t e d As c ons ume rs an d bus ine sses b e co me increasingly conscious of their carbon and waste footp rint , au ctio ns pl ay a cri tic al rol e in facili tati ng th e grow th of th e circ ula r ec ono my by ensu rin g milli ons of i tems are re - use d an d avoidin g the c ar bo n emis sio ns ass oci ated wit h the ma nufa ctur e of new ite ms. A cc ordi ng to ex tern al res earc h, a b asket of 1 5 pop ular i tems sold o n A TG marketp lac es in F Y2 2 wo uld have saved 3 m tonn es of car bo n ver sus th e ca rb on impa ct f rom bu yi ng th ese i tems ne w. Fur th er mo re, as a n onli ne ma rketp lac e, A TG also he lps to red uc e the c ar bo n emis sio ns asso ciate d with t ravelli ng to a physi cal au cti on . Th ere is als o a growin g tre nd towards “re - co mme rce ” as co nsu me rs want to pu rch ase more s ust aina bly, expre ss pe rs onal it y in th eir purc hasi ng , at the s ame t ime as b arga in hun ting , whic h is likel y to be par tic ular ly im po r ta nt in time s of mac roe co no mic u nc er t aint y. We are passi ona te abou t sp readi ng th e awaren ess of the su stai nab le im pac t of auc tion s and we ai m to show how eve r y b usin ess an d co nsu me r can make a real c han ge to protec t fu ture g ene rati ons by not bu yin g new. 4 4% ¹ of re sp on d en ts a r e mo re li ke ly to bu yse c on d - ha nd t ha n th ey we re t h re e yea rs a go a nd o nl y 13% are l es s li kel y. 47 % ¹ of th es e re sp on de n ts c i te su st ai na bi li t y as r ea so n to bu y mo re s e co nd - h an d. 42 % ¹ of re sp on d en ts d o n ot re al is e th at b uy in g se c on d - ha nd i s gr ee ne r t ha n bu y in g ne w, hig h lig h ti ng t he o pp o r tu ni t y for ATG to spr ea d awa re ne ss . A TG ma k es it eas ier f or consum ers t o mak e green choi ces 1. ATG exte rn al su r ve y S epte mb e r 20 2 2 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Logistics & Support E-commerce & Auction Str ategy T ools & technology Va lue-added marketplace services Art & An tiques (“ A& A” ) Industrial & Commercia l (“I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform Analytics & Data Logistics & Support Marketing & Demand Generation Ecommerce & Auction Str ategy News & Industry Insight Verticals Marketplaces T ools & technology Va lue added marketplace services Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) Auction Marketplace Platform Auction House Management System Auction White-Label Platform BRANDS & VERTICALS Verticals Marketplaces Art & An tiques (” A& A” ) Industrial & Commercia l (”I&C”) BRANDS & VERTICALS Payments Analytics & Data Marketing & Demand Generation Our Bus ine ss Mo del A TG po wers critica l c omponents o f the auctio n va lue cha in • Ba ck of ce au c tio n ser vic es & s up po r t • Dig it al mar keti ng so lu tio ns • Antique T rade Gazette • Auction hosting • Bid management • White label a uction pr oducts and servic es • Analy tics, insight and account management • In teg ra te d pay m en ts • Pla ns to ad d and i nteg rate fur ther ser vices Consignment, cataloguing, ma rke ti n g an d auc t io n pr e pa ra ti o n Bi dd e r re gi st r at io n an d ho st i ng of au c ti on a nd bi d di ng Pay me n t , de li ve r y, pos t- sa le su pp o r t an d an c il la r y se r v ic e s A TG’S SERVICES W e enab le a ucti on eer s to c om pete e ffecti ve ly o nli ne b y pr oviding them wi th t he t ools and t echno logy t o acce ss a gl obal o nl ine bi dde r base in a cost -ef cient way . Wh at w e do A TG e n ab le s au ct io ne e rs to b o th d ig it ise t he ir b u si ne ss w hil s t al so ac c es sin g a g lo ba l au die n ce o f bi dd er s t ha t th ey wou ld s tr ug gl e to do so al on e. Th ro u gh t he co mb in e d of fe rin g of te ch no lo g y , dig it al m ar ket in g cap a bil it ie s and a gl ob al bid d er b ase , auc t io ne er s op er a ti ng la rg el y in t he mi d- ma rke t ar e abl e to ope r at e mor e ef ci en tl y an d gr ow th ei r bus in es s. We off er mu lt ip le au c ti on se ll in g for ma ts f ro m tim ed o nl in e -o nl y au c tio ns , to live o nl in e -o nl y au c tio ns , to hyb ri d au ct io ns . Bid d er s fr om ove r 170 coun t rie s us e ou r seve n ma r ket pl ac es to d is cove r, bid on a n d pay fo r a wi de r an g e of u niq u e cu ra te d sec o nd ar y mar ket it em s. In A r t & A nt iq ue s , collectors, dealers or individual buy ers can disc over a ra nge of us ed assets across several different catego ries, suc has watches an d jewellery, furniture, nea r t ,de co rati ve ar t , collec tables, vintag e fashio n an d clas sic c ars . In I nd us t ri al & C om me r ci al , individual or prof essional buye rs c an bi d on us ed equipment, machinery andc om mer cial vehi cle s from a r ang e of ind ustr ies suc h as man ufac tur ing , war ehousing, con struction, agri cul ture o r real e state. I& C also inclu des sur pl us stoc k of con sum er g oo ds and retai lretur ns . TH E AU C T I ON P R OC E S S ATG’ S M A RK E TP L AC ES Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 18 Strategic Report A TG di f ferent iat es itsel f through scal e, techno logy and a sh ared succ ess mod el A TG i s wel l positi oned t o crea t e va lue f or all stak eholde rs For t he e nv i ro n me nt We provid e a cha nne l of gre en co mme rce by fa cili tatin g the sale of us ed g oo ds , ex tend ing thei r life cyc les an d avoidi ng the c arb on i mpa ct fro m th e manu fact ure of new i tems . £5 4 m adjusted EBITDA 7m lot s so l d 3m ton ne s of ca rb on s ave d fro m p op ul ar 1 5ite ms v s ca rb on i m pac t of bu y in g ne w 9 1% engagem ent score £ 12 0 m reve n ue F or ou r cons u mers: bidde rs We enab le bid de rs to discover specialised and uniq ue ite ms in a tr us ted, conve nie nt an d sec ure way. F or our shareho lde rs We invest to dri ve lo ng - term sustainab le value through growing rev enues and earnings, and p rud ent ly ma nagi ng ou r balan ce s he et . We have a large addressable mark et and strong competiti ve pos ition. F or o u r p e opl e We ensur e our p eo pl e can beat thei r best and have th e opportunity to develop a rewardi ng ca ree r at A TG. We foster a cu ltu re whe re ever yon e feels t hey b elo ng , has a vo ice and c an rea ch th eir f ull pote ntial . Creati ng v alue Cr itic a l ma ss of auction e ers a ndbi dde rs Our lar ge aucti oneer base with ver yhigh rete ntio n rates demo nstrates the value that our multiple mark etplaces and net wor k ef fec t of fer to our auc tion ee rs . At tra cted by a s cal ed collection of unique curated sec on dar y go ods , we also h ave the larg est o nlin e bid der b ase for c urate d auc tion s with ove r 1 72 m bidd ing se ssi ons in F Y2 2 whic h he lps dr ive a vi r tu ous c ycl e. H i g h e r o n l i n e p r i c e s M o r e a s s e t s t o l i s t M o r e e y e s o n a s s e t s Ho w we d o it Shared success m o del aligni ng i nt erests For ove r 5 0 year s we have worke d in par tne rsh ip wi th auc tion ee rs . Ou r sha red su cc ess m od el ali gns A TG’s ambi tio ns with t hose of o ur au cti one er p ar t ne rs su ch th at toge the r we are uni ted in growi ng th e auc tio n indu str y. Propr i eta r y au c t ion pl at for m a nd tec h nolo gy Our te ch nol og y ena ble s inc rem ent al volu me at mi nim al addi tio nal c ost . We are co mmi t ted to co ntin uall y imp rovin g theo nlin e biddi ng exp eri en ce . Ownin g mul tipl e market plac es allows us to ap ply b est p rac tic es ac ros s the pl at form , whil st also offerin g more oppor tunitie s f or our a uctioneers. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 19 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 10 3 m bids F or our custom ers: auc t ioneer s We emp ower au ctio ne er s to acc ess a g lob al po ol of o nlin e bidders and ach iev e operat ional cost savings through dev eloping technology f or their bu siness. 1 . E x te nd t h e tot a l addressab le m a rke t 2. Gr ow th e convers ion rate 3. Enhance the net work ef fe c t 4. Ex pa nd op er at i on a l lever ag e 5. G row t ake ra t e via value - add ser v ices 6. P u rs ue acc ret ive M& A Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les We are foc use d on t hre e mai n are as: wo rk ing with e xis tin g auc tio n ho use s to list m ore of the ir as sets o n A TG mar ketp lac es; b ri ngi ng new au ct ion h ou ses a nd n ew ass ets o nto each marketpl ace and moving into new ver tic als that can be ne t from our tec hno lo gy and bidders. Co nver sio n rate is a f unc ti on of how of ten A TG m arke tpl ace s prov id e the wi nni ng b idd er and re pre se nts G MV a s a pe rce nt age of T H V . On th e au cti on ee r sid e, we a re fac ilit atin g th e move from live auction s t o timed auction s, bri ngi ng m ore e xclus ive inv ento r y to A TG bid der s. O n th e bid de r sid e, we wi ll en han ce the e nd - to - end u se r exp er ie nc e to dri ve higher conv ersion. By enabl ing auct ioneers t o cro ss- list on multiple mark etplaces, they can ga in access to a larg er bi dd er p oo l in a co nven ie nt an d cos t- ef fe ct ive way wi th hi ghe r vis ibi lit y fo r the ir au cti on s. Bi dd er s can a lso e asil y ac ce ss a larg er a nd wi der r an ge of i tems avai lab le. We ope rate a di sci pli ne d hub a nd sp oke mo del w ith c en tra lise d co sts to e nsu re we areab le to improve pro t abil it y and ge ne rate cas h as we grow, whi lst al so en ab ling o ur busi ne sse s to rema in ni mbl e an d resp on d tomar ket con dit ion s. We offe r auc tio ne e rs a wid er s ui te of ser vic est hat will simp lif y th eir op er atio ns , imp rove th e use r exp e rie nc e for b idd er s whilst simultaneously enabling us to grow ourre ven ue. S uc h ser v ic es incl ud e market ing and a n integ rate d pay me nts so lu tio n. Acq uisi tio ns and inves tm ent s are a s igni ca nt co mp on ent of o ur gr ow th s trate gy. Our fo cu s is on ex pan din g into n ew ver tic als o r geographies by acquiring businesses t hat enh an ce o ur le ade rs hip p osi ti on in t he o nlin e auc tio n sp ace , en han ci ng th e valu e of th e network t o auctioneers a nd bidder s, and/ or acc el er atin g ou r abil it y to of fer n ew value -add ed ser vices . How w e measure progress How w e measure progress How w e measure progress How w e measure progress How w e measure progress How w e measure progress • THV¹ • Co nver sio n rate¹ • GMV¹ • Adju sted EB IT DA mar gin • Ta k e r a t e 1 • All m eas ure s cove red i n oth er strat egicd rivers Ou r pr og res s in F Y22 Our p rog re ss i n F Y2 2 Ou r pr og res s in F Y22 Ou r pr og res s in F Y22 O ur p ro gr ess i n F Y 22 O ur p rog re ss i n F Y2 2 • TH V g rew 2 2% o n a profo rm a basi s at co nst ant c ur ren cy to £10. 1bn drive n by more a uction ho uses l isting more assets onou r mar ketpl ac es , the mix of ass ets on our marketpl aces and higher prices for secondar y go ods. • New a uc tio n hou ses i nc lud ed t he larg es tauc tio ne er of com me rci al tru cks inNo r t h Ame ri ca . • Even as physic al auc tio ns have retur ne d pos t pa nde mi c, o ur c onve rsi on r ate has rem ain ed at year- on - ye ar at 33% . • TH V at ti me d au cti ons i nc reas ed 3 1 % in F Y 2 2 as we fac ili tated t he sh if t f rom li ve totime d. • Inves ted in our Se arc h Engi ne Opti mis atio n and i mpr oved t he us er ex pe ri en ce o n ou r webs ites in cl udi ng re de sign ing c ateg or y lan din g pag es . We reac he d 172m bid din g ses sio ns an d 103m b ids we re pla ce d in theye ar. • GM V gre w 20 % on a p rofor ma ba sis at co nst ant c ur ren cy to £ 3. 3b n, g rowin g on thep rio r year whi ch had be ne te d from the tailw ind s fro m the C ov id -1 9 p and em ic . • Deve lo pe d an integr ated bid din g solu tio n to mak e it ea sier f or auctioneers t o cross-list assets on our marketplaces and grow bidder reach. • Adju sted EB IT DA mar gin at 45 % was at onF Y21 as the ben e ts of stro ng reven ue grow t h and t he Gr oup ’s high o pe rati ona l leve rag e of fse t the a dve rse i mp act f ro m fully ear pub lic co mp any cos ts , plann ed inves tme nts to d rive f ut ure g row th as we ll as the m ix im pa ct fr om th e grow th in lowe r margin payments rev enue. • T ake ra te of 3.3 % was d own 0. 2p pt fro m F Y 21 as th e im pac t fro m grow th of low co mmi ssi on re al es tate of fse t the g row th ofvalu e - ad d ser v ic es . • E xp ansi on of our mar ketin g solu tio ns , roll ou t of an inte gra ted pay me nts s olu tio n acr oss Li ve Auc tio ne e rs and the ini tial rol l ou t of the i nteg rated p aym ent s sol ut ion across Proxibid. • Sucessfull y i ntegr ated Liv eAuctioneers’ op era tio ns , team an d cu ltu re into A TG. • Shared best practices across businesses inc lud ing t hro ug h the ro ll ou t of pay me nts . Ou r pr ior iti es fo r F Y2 3 an d beyo nd O u r pri or iti es fo r F Y2 3 an d beyo nd O u r pri ori tie s fo r F Y2 3 an d beyo nd Ou r pr ior iti es fo r F Y2 3 an d beyo nd O u r pri or iti es fo r F Y2 3 an d beyo nd O u r pri ori tie s fo r F Y2 3 an d beyo nd • Continue to activ ely ident ify new a uction hou ses a nd as set s that we wa nt to br ing onl ine i n the m ed ium te rm . • The macroeconomic backdrop can in ue nc e the volum e and valu e of ass ets co nsig ne d thr oug h au cti on . We will wo rk collabora tively with auctioneers to make itea sie r to list ass ets on our mar ketp lac es to help f acil it ate the gr ow th of th e auction chann el. • Faci lit ate the m ove to tim ed au ct ion s through our account management teams. • Deve lo p and grow our mar ketin g solu tio ns to ide ntif y p oten tial bi dd er s, t he un de rb idd er and to dr ive b idd er a cqu isi tio n and convers ion. • Up gra de th e use r ex pe rie nc e an d roll o u t paym en ts to make pu rc hasi ng o n our marketplaces ea sier . • Roll o ut of i nteg rated b idd ing to m ake it easier for auctioneers to cross-list a ssets. • Thi s cro ss - lis tin g en co ur age s bid de rs to use AT G as th eir p ri mar y sea rch p or tal by pres en ting t he m wit h the b roa des t ar ray ofonli ne inven tor y. • Inves tme nt in a single tec hn olo g y platfo rm , whic h will provi de both agi lit y and e xib ili t y to our o pe rati ons , wh ils t also e nab lin g the accelerat ion of new product de velopment. • Th e roll o ut of p aym en ts an d growi ng marketing across market places in FY23 . • Thi s will b e foll owed by t he de vel op me nt and ro ll ou t of oth er va lue - ad d ser vic es , including deliv er y . • Activ ely look f or acquisit ion opportunities to add to ou r foot pri nt an d to inc rea se val ue across our network. Associated risks Associated risks Associated risks Associated risks Associated risks Associated risks Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . All r isk s as fu r th er d eta ile d in th e Pr in cip al Risk s and U nc er tai ntie s se cti on of th is re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 5 and 9 a s fur the r de tail ed i n the Principal Risks a nd Uncer tainties section ofthis rep or t. 1. Refe r to the gl oss ar y for ful l de n iti on s. O u r Si x S t r a t e g i c Dr i v e r s A TG execu t es against six stra t egi c gr o wt h dr iv ers t o un lock the disco ve r y and value o f m il lions o f it ems. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 20 Strategic Report 1 . E x te nd t h e tot a l addressab le m a rke t 2. Gr ow th e convers ion rate 3. Enhance the net work ef fe c t 4. Ex pa nd op er at i on a l lever ag e 5. G row t ake ra t e via value - add ser v ices 6. P u rs ue acc ret ive M& A Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les Wha t ar e th e pr in cip les We are foc use d on t hre e mai n are as: wo rk ing with e xis tin g auc tio n ho use s to list m ore of the ir as sets o n A TG mar ketp lac es; b ri ngi ng new au ct ion h ou ses a nd n ew ass ets o nto each marketpl ace and moving into new ver tic als that can be ne t from our tec hno lo gy and bidders. Co nver sio n rate is a f unc ti on of how of ten A TG m arke tpl ace s prov id e the wi nni ng b idd er and re pre se nts G MV a s a pe rce nt age of T H V . On th e au cti on ee r sid e, we a re fac ilit atin g th e move from live auction s t o timed auction s, bri ngi ng m ore e xclus ive inv ento r y to A TG bid der s. O n th e bid de r sid e, we wi ll en han ce the e nd - to - end u se r exp er ie nc e to dri ve higher conv ersion. By enabl ing auct ioneers t o cro ss- list on multiple mark etplaces, they can ga in access to a larg er bi dd er p oo l in a co nven ie nt an d cos t- ef fe ct ive way wi th hi ghe r vis ibi lit y fo r the ir au cti on s. Bi dd er s can a lso e asil y ac ce ss a larg er a nd wi der r an ge of i tems avai lab le. We ope rate a di sci pli ne d hub a nd sp oke mo del w ith c en tra lise d co sts to e nsu re we areab le to improve pro t abil it y and ge ne rate cas h as we grow, whi lst al so en ab ling o ur busi ne sse s to rema in ni mbl e an d resp on d tomar ket con dit ion s. We offe r auc tio ne e rs a wid er s ui te of ser vic est hat will simp lif y th eir op er atio ns , imp rove th e use r exp e rie nc e for b idd er s whilst simultaneously enabling us to grow ourre ven ue. S uc h ser v ic es incl ud e market ing and a n integ rate d pay me nts so lu tio n. Acq uisi tio ns and inves tm ent s are a s igni ca nt co mp on ent of o ur gr ow th s trate gy. Our fo cu s is on ex pan din g into n ew ver tic als o r geographies by acquiring businesses t hat enh an ce o ur le ade rs hip p osi ti on in t he o nlin e auc tio n sp ace , en han ci ng th e valu e of th e network t o auctioneers a nd bidder s, and/ or acc el er atin g ou r abil it y to of fer n ew value -add ed ser vices . How w e measure progress How w e measure progress How w e measure progress How w e measure progress How w e measure progress How w e measure progress • THV¹ • Co nver sio n rate¹ • GMV¹ • Adju sted EB IT DA mar gin • Ta k e r a t e 1 • All m eas ure s cove red i n oth er strat egicd rivers Ou r pr og res s in F Y22 O ur p ro gr ess i n F Y 22 O ur p rog re ss i n F Y2 2 Our p ro gre ss i n F Y2 2 Ou r pr og re ss i n F Y22 O u r pr og res s in F Y22 • TH V g rew 2 2% o n a profo rm a basi s at co nst ant c ur ren cy to £10. 1bn drive n by more a uction ho uses l isting more assets onou r mar ketpl ac es , the mix of ass ets on our marketpl aces and higher prices for secondar y go ods. • New a uc tio n hou ses i nc lud ed t he larg es tauc tio ne er of com me rci al tru cks inNo r t h Ame ri ca . • Even as physic al auc tio ns have retur ne d pos t pa nde mi c, o ur c onve rsi on r ate has rem ain ed at year- on - ye ar at 33% . • TH V at ti me d au cti ons i nc reas ed 3 1 % in F Y 2 2 as we fac ili tated t he sh if t f rom li ve totime d. • Inves ted in our Se arc h Engi ne Opti mis atio n and i mpr oved t he us er ex pe ri en ce o n ou r webs ites in cl udi ng re de sign ing c ateg or y lan din g pag es . We reac he d 172m bid din g ses sio ns an d 103m b ids we re pla ce d in theye ar. • GM V gre w 20 % on a p rofor ma ba sis at co nst ant c ur ren cy to £ 3. 3b n, g rowin g on thep rio r year whi ch had be ne te d from the tailw ind s fro m the C ov id -1 9 p and em ic . • Deve lo pe d an integr ated bid din g solu tio n to mak e it ea sier f or auctioneers t o cross-list assets on our marketplaces and grow bidder reach. • Adju sted EB IT DA mar gin at 45 % was at onF Y21 as the ben e ts of stro ng reven ue grow t h and t he Gr oup ’s high o pe rati ona l leve rag e of fse t the a dve rse i mp act f ro m fully ear pub lic co mp any cos ts , plann ed inves tme nts to d rive f ut ure g row th as we ll as the m ix im pa ct fr om th e grow th in lowe r margin payments rev enue. • T ake ra te of 3.3 % was d own 0. 2p pt fro m F Y 21 as th e im pac t fro m grow th of low co mmi ssi on re al es tate of fse t the g row th ofvalu e - ad d ser v ic es . • E xp ansi on of our mar ketin g solu tio ns , roll ou t of an inte gra ted pay me nts s olu tio n acr oss Li ve Auc tio ne e rs and the ini tial rol l ou t of the i nteg rated p aym ent s sol ut ion across Proxibid. • Sucessfull y i ntegr ated Liv eAuctioneers’ op era tio ns , team an d cu ltu re into A TG. • Shared best practices across businesses inc lud ing t hro ug h the ro ll ou t of pay me nts . Ou r pr ior iti es fo r F Y2 3 an d beyo nd O u r pri or iti es fo r F Y2 3 an d beyo nd O u r pri ori tie s fo r F Y2 3 an d beyo nd Ou r pr ior iti es fo r F Y2 3 an d beyo nd O u r pri or iti es fo r F Y2 3 an d beyo nd O u r pri ori tie s fo r F Y2 3 an d beyo nd • Continue to activ ely ident ify new a uction hou ses a nd as set s that we wa nt to br ing onl ine i n the m ed ium te rm . • The macroeconomic backdrop can in ue nc e the volum e and valu e of ass ets co nsig ne d thr oug h au cti on . We will wo rk collabora tively with auctioneers to make itea sie r to list ass ets on our mar ketp lac es to help f acil it ate the gr ow th of th e auction chann el. • Faci lit ate the m ove to tim ed au ct ion s through our account management teams. • Deve lo p and grow our mar ketin g solu tio ns to ide ntif y p oten tial bi dd er s, t he un de rb idd er and to dr ive b idd er a cqu isi tio n and convers ion. • Up gra de th e use r ex pe rie nc e an d roll o u t paym en ts to make pu rc hasi ng o n our marketplaces ea sier . • Roll o ut of i nteg rated b idd ing to m ake it easier for auctioneers to cross-list a ssets. • Thi s cro ss - lis tin g en co ur age s bid de rs to use AT G as th eir p ri mar y sea rch p or tal by pres en ting t he m wit h the b roa des t ar ray ofonli ne inven tor y. • Inves tme nt in a single tec hn olo g y platfo rm , whic h will provi de both agi lit y and e xib ili t y to our o pe rati ons , wh ils t also e nab lin g the accelerat ion of new product de velopment. • Th e roll o ut of p aym en ts an d growi ng marketing across market places in FY23 . • Thi s will b e foll owed by t he de vel op me nt and ro ll ou t of oth er va lue - ad d ser vic es , including deliv er y . • Activ ely look f or acquisit ion opportunities to add to ou r foot pri nt an d to inc rea se val ue across our network. Associated risks Associated risks Associated risks Associated risks Associated risks Associated risks Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . All r isk s as fu r th er d eta ile d in th e Pr in cip al Risk s and U nc er tai ntie s se cti on of th is re po r t . Risk s 1, 2, 3, 4 , 5 , 6 and 9 as f ur t he r det ail ed in the Principal Risks and Uncer tainties section of this re po r t . Risk s 5 and 9 a s fur the r de tail ed i n the Principal Risks a nd Uncer tainties section ofthis rep or t. 1. Refe r to the gl oss ar y for ful l de n iti on s. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 21 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Addi ng n ew auc ti o n hous es A TG is c onti nuall y lo ok ing to ex ten d its a ddre ssa ble m arket by a ctive ly at trac tin g new au cti one e rs to our m arket plac es . On e exam ple i n F Y 2 2 was Indi ana Au to Auctio n who se r ve som e of Nor t h Am eri ca’s large st auto moti ve and tr uck m arkets in clu din g in Detro it , Chic ago an d India nap olis . Th ey run regu lar h eav y an d light d ut y t ru ck au ctio ns , featur ing a r ang e of tru cks a nd trailers for sale . At trac ted by Proxi bid ’s exte nsive b idde r rea ch an d mar ketpl ace te chn ol og y, Indi ana Au to Auctio n co mpl eted its rst on line au cti on wit h A TG in Apr il 20 2 2 and saw imm ed iate succ es s, ge ne ratin g stron g web traf c , a signi c ant num be r of onlin e bid de rs an d imp or tantl y Proxib id prov idin g a larg e num be r of winni ng bids for th e ver y r st auc tio n. Si nc e then , the pa r tn ers hip has c onti nue d to grow , with Ind iana Au to Aucti on ru nni ng 38 au cti ons on Proxi bid to the end of Se ptemb er 2 0 22 , re ce ivi ng over 120,0 0 0 c atal og ue vi ews and at t rac ting ove r 1 0, 5 0 0 bidd er s at the au cti ons . Proxi bid is l oo kin g for ward to c onti nuin g to help Indi ana Au to Auctio n reac h new bidd er s and grow the ir busi nes s in F Y2 3. Gr o w ing our a uct ioneer mark eting programme Digi tal mar ketin g is a k ey dri ver of aucti on su cc ess . We know that if we canh elp au ctio ne er s to reach bid der s more ef fec tive ly, this will incre ase the num be r of bidd ers l oo ki ng at au cti on c atalo gu es, d ri ve auc tion re gis trati ons and ul tim ately res ult i n mor e bids b ein g pla ce d and hi ghe r valu es. F or examp le, P roxibi d auc tio ns saw an aver age 7 2% in cre ase in re gis tered bidd er s and 3 8 % inc reas e in win ning b idd ers w he n supp or ted by dig ital mar keting . We have upg rad ed o ur on site adve r tis em ent e xpe ri enc e on o ur mar ketpla ces , su ch as t hrou gh th e intro du ctio n of rotatin g ban ne rs an d spo nso red au cti on l ots. We co ntin ue to de liver n ew ma rketin g so luti ons , inc ludi ng a ne w SM S featur e that re mind s bid der s that a n auc tion i s abo ut tostar t. Al tho ugh we h ave see n great s uc ces s in th e deve lop me nt an d ado ptio n of our auctioneer marketing pr ogramme, with marketing revenue current ly less than 0.4% of our GM V , we still see sig ni c ant op por tuni t y to expand th e prog ram me to mo re auc tio ne er s and au cti ons i n the c omi ng yea r . +7 2 % in cr ea se i n re gi st er e d bi dd er s on P roxi b id w he n su p po r te d by digital marketing Gr ow ou r conversion rate E x te n d th e tot al addressable market Strategic Report Case Studies: Our Strategy in Action Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 22 E xp an d i ng t he t ak e r a t e via the dev elopment a nd a do p t i on o f ou r i n t egra t ed pa ymen t s so lu ti o n Buil t to coll ec t fu nds wi th th e high est l evels of e ase, s pe ed and se cu ri t y in the i ndu str y, A TG’s integrate d paym ent s solutions enable auction houses to seamlessly accept paym ents f rom wi nnin g bid de rs. AT G’s sol uti ons re pla ce alarg ely of i ne and c omp lex pay men ts proc es s, ena blin g auc tion ee rs to ope rate more ef cie ntl y, inc ludi ng thro ugh payin g the ir co nsig no rs mo re qu ick ly, and wi th grea ter con d en ce , as the integrate d solu tio n redu ces th e overall risk of fr aud , ch arge ba cks , disp utes an d no n - pay me nt. Apaym ents so lu tion als o provid es bidd er s with a more famili ar, ef cie nt and tru sted ch ec kout ex per ie nc e. We have see n great s uc ces s in th e ado ptio n of our integr ated paym ent s solu tio n on Live Au cti one e rs so far, with ove r 75% of U S - bas ed au cti on ho use s havin g be en onb oar ded a nd in S e ptemb er, 42% of US - b ase d gros s tran sac tion v alue was p aid us ing th e paym en ts sol uti on . We have adde d new feat ures d uri ng the y ear in clu din g Inst ant Au topay, which enab les c redi t card pay me nts from wi nni ng bid de rs to be c aptur ed im me diatel y upo n invoic ing . We have rec entl y be gun to ro ll ou t our paym ents s olu tio n to Proxibi d and p lan to roll o ut th e solu tio n to othe r mar ketpla ces ove r the n ex t ye ar . Gr ow th e ta ke ra te vi a value- add ser vices 75 % of US a u ct io n ho us es onL ive Au c tio n ee r s have b ee n on b oa rd ed wi th pa ym en t s STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Auc t io n T ec h no lo gy G r ou p p lc A n nu a l Re po r t 20 2 2 23 STRATEGIC REPORT W e are ex e cu ting ag ainst o u r p u rp o s e in t h r ee p h a s e s Ho rizo n 1 E xpansio n • Lau nc h value - add se r vi ces • E x tend in to nanc ing , insu ran ce , restoration, repair , maint enance and lo gisti cs • E xpa nd ec osy stem digi tall y to leverage insights E2E experience • Buil d high s tan dard e - c om mer ce capabilities • Upgrade user experience • Integr ate aucti on valu e chain • Provid e mul tip le tie rs of se r vi ce Fou nd ati on • Deve lop tec hn olo gy to work ac ross multiple geographies and ver ticals • Unify fragmented market • Buil d sha red su cc ess re venu e mo del Ho rizo n 2 Ho rizo n 3 A TG i s uniq uely posit ioned t o lead t he tran sf ormati on o f the in dustr y , with deep kno wledge and t he sca le t o inv est. W e are ex ecuting ag ain st our purpose i n three ph as es : Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 24 Strategic Report Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 25 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS K e y P er f o rm a n c e I n d i c a t or s 1. I n Feb ru ar y 20 20 th e Gro up un de r we nt a res tr uc tu re at the s am e tim e as acq ui ri ng Pr oxib id . Full de ta ils of th e res tr uc tur e and ac c ou nti ng im pl ic ati on s are de tai le d in the F Y 21 A nnu al Re po r t an d Ac co un ts. A s a resu lt of th e ac co un tin g for th e res tr uc tur e, th e rep o r ted na nc ial re sul ts fo r F Y 20 re pre se nt on ly an e igh t- an d - a - h alf mo nt h pe ri od to 30 S e ptem b er 2 02 0. To aid co mp ar iso ns , F Y20 h as b e en p res en ted as i f th e res tr uc tu re an d ac qui si tio n ha d oc cu r red o n 1 O cto be r 20 19 and in clu de t he f ull y ea r act ua l res ul ts for t his p er io d . 2. T hi s rep or t prov ide s al ter nat ive p er fo rm an ce m eas ur es ( “APM s” ) wh ic h are not d e ne d or s pe ci ed un de r th e req uir em en ts of UK- ad op ted In ter nat io nal A cc ou nti ng S ta nd ard s. We b el ieve t he se A P Ms p rov ide r ead e rs wi th i mp or tan t ad di tio na l info rm ati on o n ou r bu sin es s an d aid c o mpa ra bil it y. We have i nc lu de d a co mp re he nsi ve li st of the A P Ms in n ote 3 to the na nc ial s tate me nt s, wi th d e ni tio ns , an ex pla na tio n of how th ey are c al cul ate d, wh y we use th em an d how th ey c an be re c on cil e d to a statu tor y measu re where releva nt. Financial K PIs Reve n ue (£ m) £ 11 9 . 8 m 22 21 20 1 £119.8m £70.1m £52.3m Adjusted EBITDA 2 (£ m) £5 4 .0 m 22 21 20 1 £54.0m £31.8m £22.2m Adjusted EBITDA margin 2 (%) 4 5% 22 21 20 1 45% 45% 42% Adj us te d fr e e ca sh ow c onve r si on 2 (%) 9 2 .5 % 22 21 20 92.5% 95.7% 88.0% Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Revenu e is us ed to mea sure th e Gro up’s overall g row th an d tradi ngp er for ma nce . Adjus ted EB IT DA is the mea sure use d to assess th e ope ratin g per form anc e of the G roup . Adjus ted EB IT DA margi n repre sen ts the Gro up adjus ted EB IT DA as a pe rce ntag e of total Grou p reven ue an d is use d to asse ss the operati ng performance of the Gr oup. Th e Group m oni tors its o pe ratio nal ef ci enc y with refere nc e to ope rati ona l cash co nver sio n, de n ed as adjus ted fre e cash ow as a perc enta ge of adjus ted EBI T DA . Performance Performance Performance Performance Revenu e in crea sed 7 1 % v s F Y 21, driven by th e co ntri bu tio n from L ive Auc tio ne er s, grow t h acros s eac h of the two repo r ti ng seg me nts and a foreig n exchan ge be ne t . Th e Group ’s adjusted EB IT DA inc reas ed 70 % year- on -ye ar dri ven by stro ng reve nue g row th an d inc lud ing th e acq uisi tio n of LiveAuctioneers. Th e Group ’s adjusted EB IT DA marg in was at year- o n - year as the ben e ts of stro ng reven ue grow th an d the Gro up’s high ope rati ona l lever age of fs et th e adve rse i mpa ct fro m ful l year p ubli c co mpa ny cos ts, p lan ne d invest men ts to dri ve futu re grow t h as well as th e impa ct f rom th e grow th i n lower m argi n paym ents r evenu e. Th e Group g ene rated £49.9m of adjusted fre e cash ow 2 in F Y2 2 (F Y21 : £3 0.4 m) and achie ved adju sted EB IT DA to adjusted fre e cash ow conve rsi on of 92 .5% (F Y21: 95.7%). Principal risks Principal risks Principal risks Principal risks Link t o remunerati on Link t o remunerati on Link t o remunerati on Link t o remunerati on Y e s – see pag es 1 06 to 1 1 2 of the Direc tors’ Re mun er ation Re po r t for fur the r de tails Y e s – see pag es 1 06 to 1 1 2 of the Direc tors’ Re mun er ation Re po r t for fur the r de tails No No Strategy/focus area Strategy/focus area Strategy/focus area Strategy/focus area W e mo nit or p rog re ss against the d el iv er y of o ur stra te gi c drive rs us ing na ncial and n on - na nci al key p e r f or ma nc e i n d ic ator s . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 26 Strategic Report Financial K PIs Fin d ou t mor e on pag e 20 Strategy/focus area Reve n ue (£ m) £ 11 9 . 8 m 22 21 20 1 £119.8m £70.1m £52.3m Adjusted EBITDA 2 (£ m) £5 4 .0 m 22 21 20 1 £54.0m £31.8m £22.2m Adjusted EBITDA margin 2 (%) 4 5% 22 21 20 1 45% 45% 42% Adj us te d f re e ca sh ow c onve r si on 2 (%) 9 2 .5 % 22 21 20 92.5% 95.7% 88.0% Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Revenu e is us ed to mea sure th e Gro up’s overall g row th an d tradi ngp er for ma nce . Adjus ted EB IT DA is the mea sure use d to assess th e ope ratin g per form anc e of the G roup . Adjus ted EB IT DA margi n repre sen ts the Gro up adjus ted EB IT DA as a pe rce ntag e of total Grou p reven ue an d is use d to asse ss the operati ng performance of the Gr oup. Th e Group m oni tors its o pe ratio nal ef ci enc y with refere nc e to ope rati ona l cash co nver sio n, de n ed as adjus ted fre e cash ow as a perc enta ge of adjus ted EBI T DA . Performance Performance Performance Performance Revenu e in crea sed 7 1 % v s F Y 21, driven by th e co ntri bu tio n from L ive Auc tio ne er s, grow t h acros s eac h of the two repo r ti ng seg me nts and a foreig n exchan ge be ne t . Th e Group ’s adjusted EB IT DA inc reas ed 70 % year- on -ye ar dri ven by stro ng reve nue g row th an d inc lud ing th e acq uisi tio n of LiveAuctioneers. Th e Group ’s adjusted EB IT DA marg in was at year- o n - year as the ben e ts of stro ng reven ue grow th an d the Gro up’s high ope rati onal lever age of fs et th e adve rse i mpa ct fro m ful l year p ubli c co mpa ny cos ts, p lan ne d invest men ts to dri ve futu re grow t h as well as th e impa ct f rom th e grow th i n lower m argi n paym ents r evenu e. Th e Group g ene rated £49.9m of adjusted fre e cash ow 2 in F Y2 2 (F Y21 : £3 0.4 m) and achie ved adju sted EB IT DA to adjusted fre e cash ow conve rsi on of 92 .5% (F Y21: 95.7%). Principal risks Principal risks Principal risks Principal risks Link t o remunerati on Link t o remunerati on Link t o remunerati on Link t o remunerati on Y e s – see pag es 1 06 to 1 1 2 of the Direc tors’ Re mun er ation Re po r t for fur the r de tails Y e s – see pag es 1 06 to 1 1 2 of the Direc tors’ Re mun er ation Re po r t for fur the r de tails No No Strategy/focus area Strategy/focus area Strategy/focus area Strategy/focus area E x t en d th e to ta l addressable market Grow the conversion rate Enhance the network effect Expand operational leverage Gr ow ta ke ra te v ia value -add ed ser vices Pursue accretive M&A Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 27 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Strategy/focus area 1. I n Feb ru ar y 20 20 th e Gro up un de r we nt a res tr uc tu re at the s am e tim e as acq ui ri ng Pr oxib id . Full de ta ils of th e res tr uc tur e and ac c ou nti ng im pl ic ati on s are de tai le d in the F Y 21 A nnu al Re po r t an d Ac co un ts. A s a resu lt of th e ac co un tin g for th e res tr uc tur e, th e rep o r ted na nc ial re sul ts fo r F Y 20 re pre se nt on ly an e igh t- an d - a - h alf mo nt h pe ri od to 30 S e ptem b er 2 02 0. To aid co mp ar iso ns , F Y20 h as b e en p res en ted as i f th e res tr uc tu re an d ac qui si tio n ha d oc cu r red o n 1 O cto be r 20 19 and in clu de t he f ull y ea r act ua l res ul ts for t his p er io d . 2. T hi s rep or t prov ide s al ter nat ive p er fo rm an ce m eas ur es ( “APM s” ) wh ic h are not d e ne d or s pe ci ed un de r th e req uir em en ts of UK- ad op ted In ter nat io nal A cc ou nti ng S ta nd ard s. We b el ieve t he se A P Ms p rov ide r ead e rs wi th i mp or tan t ad di tio na l info rm ati on o n ou r bu sin es s an d aid c o mpa ra bil it y. We have i nc lu de d a co mp re he nsi ve li st of the A P Ms in n ote 3 to the na nc ial s tate me nt s, wi th d e ni tio ns , an ex pla na tio n of how th ey are c al cul ate d, wh y we use th em an d how th ey c an be re c on cil e d to a statu tor y measu re where releva nt. 3. T he F Y21 re su lts h ave be en re st ate d to adjus t th e fore ign c ur ren cy t ran sl ati on res er ves an d n an ce in co m e by £2 . 3m . Full d eta ils a re prov id ed i n note 1 of the C ons ol id ated Financial Statements. Bas ic l os s pe r s ha re ( p) ( 5 .1 ) p 22 21 3 20 (5.1)p (31.0)p (34.3)p Adj us te d d il ute d e ar ni ng s pe r s ha re 2 ( p) 2 9.5 p 22 21 29.5p 9.2p Why we us e th is me asu re Why we us e th is me asu re Basi c los s pe r shar e repre sen ts the l oss fo r the ye ar at tri bu tab le to ordinary shareholder s. Adjusted dilut ed earnings per share (previously calle d “adjust ed earnings per share” ) represents the adjust ed earnings for the year at trib ut abl e to ordin ar y s hare hol de rs div ide d by th e dilu ted weig hted averag e num be r of ordi nar y share o uts tan ding d ur ing th e year. Performance Performance Basi c los s pe r shar e of 5. 1p improved f rom a lo ss of 31.0p in F Y 21 dri ven by th e red uc tion i n los s af ter ta x year- o n - year. Adjus ted dilu ted e arn ings p er s hare of 2 9.5p in crea sed f rom 9.2 p in F Y21 du e to an inc rease i n adjus ted ea rni ngs af ter t ax year- o n -ye ar. Principal risks Principal risks Link t o remunerati on Link t o remuneration No Y e s – see pag es 1 06 to 1 1 2 of the Direc tors’ Re mun er ation Re po r t for fur the r de tails Strategy/focus area Strategy/focus area Financial K PIs E x t en d th e to ta l addressable market Grow the conversion rate Enhance the network effect Expand operational leverage Gr ow ta ke ra te v ia value -add ed ser vices Pursue accretive M&A Fin d ou t mor e on pag e 20 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 28 Strategic Report Key Performance Indicators continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 29 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1. Refe r to the gl oss ar y for ful l de n iti on s. Operating K PIs Strategy/focus area T ot al h a mm er va lu e (“ TH V ” ) 1 (£ b n) £ 1 0 .1 b n 22 21 20 £10.1bn £7.8bn £6.1bn Conv ersion rate 1 (%) 3 3% 22 21 20 33% 33% 31% Gr os s me r ch an di se va lu e (“ GM V ” ) 1 (£ b n) £ 3.3bn 22 21 20 £3.3bn £2.6bn £1.9bn T ake r at e 1 (%) 3.3% 22 21 20 3.3% 3.5% 3.8% Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Th e Group ’s THV rep rese nts th e total nal sale valu e of all lots listed o n the m arket plac es o r the p lat form . Th e co nversi on r ate (pre vio usl y call ed “on lin e share ” ) is cal culate dbase d on the GM V as a per ce ntag e of the TH V . Itre prese nts th e %of t otal na l sale valu e of lots listed and soldo nA TG’s marketp lac es whe re the winn ing bid was plac edo nan A TGm arketp lac e. Th e Group ’s GMV rep rese nts the total na l sales valu e of all lots sold v ia win nin g bids p lac ed o n the m arketp lac es o r the pl at form . T ake rate rep rese nts mar ketpl ac e revenu e as a p erc ent age of GM V .I t repr ese nts how we mone tise th e value of items so ld onou rmar ketpl ace s. Performance Performance Performance Performance TH V gre w 29 % at ac tual exc han ge rates a nd 2 2% at c on stan t cur ren cy to £10. 1 b n, d rive n by mo re auc tio n hou ses lis tin g asse ts on A TG marketp lac es , high er p ric es for s ec on dar y go ods an d the mix of assets on our marketplaces. Th e conve rsio n rate was at year- o n - year, as the im pac t of a return to physic al auc tio ns was of fse t by the c onti nue d shi f t to time d auc tion s and i mprove me nts ma de to the bi dde r exp er ien ce o n A TGmark etplaces. GM V has in cre ase d 27 % year- o n - year at a ctu al excha ng e rates and2 0% at co nsta nt cur ren cy dri ven by the grow t h in TH V and aat co nvers ion rate year- on - yea r . T ake rate de cre ased by 0 .2p pt to 3.3 % as th e imp act f rom g row th of low co mmis sio n real es tate of fset t he roll o ut a nd ri sing ado ptio n of market ing an d pay men ts ser vic es . Principal risks Principal risks Principal risks Principal risks Link t o remunerati on Link t o remunerati on Link t o remunerati on Link t o remunerati on No No No No Strategy/focus area Strategy/focus area Strategy/focus area Strategy/focus area Fin d ou t mor e on pag e 20 E x t en d th e to ta l addressable market Grow the conversion rate Enhance the network effect Expand operational leverage Gr ow ta ke ra te v ia value -add ed ser vices Pursue accretive M&A Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 30 Strategic Report Key Performance Indicators continued Operating K PIs T ot al h a mm er va lu e (“ TH V ” ) 1 (£ b n) £ 1 0 .1 b n 22 21 20 £10.1bn £7.8bn £6.1bn Conv ersion rate 1 (%) 3 3% 22 21 20 33% 33% 31% Gr os s me r ch an di se va lu e (“ GM V ” ) 1 (£ b n) £ 3.3bn 22 21 20 £3.3bn £2.6bn £1.9bn T ake r at e 1 (%) 3.3% 22 21 20 3.3% 3.5% 3.8% Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Why we us e th is me asu re Th e Group ’s THV rep rese nts th e total nal sale valu e of all lots listed o n the m arket plac es o r the p lat form . Th e co nversi on r ate (pre vio usl y call ed “on lin e share ” ) is cal culate dbase d on the GM V as a per ce ntag e of the TH V . Itre prese nts th e %of t otal na l sale valu e of lots listed and soldo nA TG’s marketp lac es whe re the winn ing bid was plac edo nan A TGm arketp lac e. Th e Group ’s GMV rep rese nts the total na l sales valu e of all lots sold v ia win nin g bids p lac ed o n the m arketp lac es o r the pl at form . T ake rate rep rese nts mar ketpl ac e revenu e as a p erc ent age of GM V .I t repr ese nts how we mone tise th e value of items so ld onou rmar ketpl ace s. Performance Performance Performance Performance TH V gre w 29 % at ac tual exc han ge rates a nd 2 2% at c on stan t cur ren cy to £10. 1 b n, d rive n by mo re auc tio n hou ses lis tin g asse ts on A TG marketp lac es , high er p ric es for s ec on dar y go ods an d the mix of assets on our marketplaces. Th e conve rsio n rate was at year- o n - year, as the im pac t of a return to physic al auc tio ns was of fse t by the c onti nue d shi f t to time d auc tion s and i mprove me nts ma de to the bi dde r exp er ien ce o n A TGmark etplaces. GM V has in cre ase d 27 % year- o n - year at a ctu al excha ng e rates and2 0% at co nsta nt cur ren cy dri ven by the grow t h in TH V and aat co nvers ion rate year- on - yea r . T ake rate de cre ased by 0 .2p pt to 3.3 % as th e imp act f rom g row th of low co mmis sio n real es tate of fset t he roll o ut a nd ri sing ado ptio n of market ing an d pay men ts ser vic es . Principal risks Principal risks Principal risks Principal risks Link t o remunerati on Link t o remunerati on Link t o remunerati on Link t o remunerati on No No No No Strategy/focus area Strategy/focus area Strategy/focus area Strategy/focus area Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 31 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Th e nan cial resu lts for F Y 2 2 are presen ted for the ye ar en de d 30 S e ptemb er 2 02 2 . O n 1Oc tobe r 2021, the Group co mpl eted its acq uisit ion of Live Au cti one er s. T he resul ts for Live Au cti on ee rs are inc lud ed with in the A& A ope rati ng se gm ent i n F Y 2 2. Ful l det ails of the acc ou nting i mpl ica tion s are de taile d in n ote 1 1 of the C o nsol idated F ina nci al S tate men ts. Th e imp act of th e acq uisi tio n affe cts thec om para bili t y of the Group’s resul ts. Th erefore , to aid co mpa ris ons b et wee n F Y 21and F Y2 2 , alter nati ve per for ma nc e meas ures ( “APMs ” ) have be e n pres ented . Th e pri or p eri od p roform a unau dite d resul ts have be en p rese nted as if th e ac quisi tio n of Live Au cti on ee rs and Au cti on Mo bili t y had oc cur red o n 1 O ctob er 20 2 0 on a co ns tant currency basis. Note 3 of the C ons olid ated F inan cial S tatem ents i nc lud es a ful l rec on ciliat ion of allA PMs pr ese nted to the repo r ted res ults forF Y 2 2 and F Y21. Group Grou p reven ue o n a rep or te d basis i ncr ease d 71 % year- o n - year to £1 1 9.8m , dr iven by th e con tri bu tion fro m Li veA uct ion ee rs , grow th acro ss ea ch of th e rep or t ing se gm ent s and due to the foreig n exchan ge be ne t fro m the stre ng the ning of t he U S doll ar wi th 82 % of the G roup’s reven ue d eri ved i n US d olla rs. Profor ma reve nue g row th of 1 1% was driven by GM V grow th , as th e str uc tur al shif t of the auc tion i ndu str y onli ne prove d to be resi lie nt, as well as s tron g grow th f rom th e roll o ut of value - added ser v ices including mar keting ser vices and payments. Va lue - add ser vices acro ss A& A an d I&C grew 4 0 % year- on - yea r at co nsta nt cu rre ncy a nd now a cc oun t for 1 6% of t otal reve nue . Th e take rate ac ross th e Grou p de cre ase d sligh tly to 3. 3% as t he posi tive i mpa ct fro m valu e - a dd se r vi ces wa s offs et by th e grow th of re al est ate which h as a high l ot valu e and lowe r take rate, re sul ting in marketp lace prof orma revenue gr owth of 1 1 % to £108.0 m. Reve nu e F Y22 £m F Y21 £m Move me n t reported Move me n t profor ma 3 Ar ts & A ntiqu es ( “ A& A”) 55.3 1 6.2 2 4 1% 10 % Indu str ial & Comm erc ial (“ I& C ” ) 5 2 .7 4 3 .7 2 1% 13 % T otal marketplace 10 8 . 0 5 9.9 80% 11% Auction Ser vices 8.6 7.1 2 1% 9% Content 3.2 3 .1 3% 3% T otal 119 . 8 7 0 .1 7 1% 11% Reve n ue £ 11 9 . 8 m F Y 21 : £70. 1m Adjusted EBITDA 1 £5 4 .0 m F Y 21 : £31.8m Pro t /(lo ss) be for e ta x £ 9. 3 m F Y 21 : £(25.0)m 2 Adj us te d d il ute d e ar ni ng s pe r s ha re 1 2 9.5 p F Y 21 : 9 .2 p Bas ic l os s pe r s ha re ( 5 .1 ) p F Y 21 : (31 .0)p 2 Adj us te d f re e ca sh ow 1 £ 4 9 .9 m F Y 21 : £3 0.4 m C h i e f F i n a n c i a l Of c er ’ s R e v i e w Anoth er y ear o f stro ng g ro w th a nd inv estmen t w hil e m ain tainin g a d ju st e d E B ITD A m ar gin s. 1. T hi s rep or t prov ide s al ter nat ive p er fo rm an ce m eas ur es ( “APM s” ) wh ic h are not d e ne d or s pe ci ed un de r th e req ui rem e nts of UK- a do pted In ter na tio na l Acc ou nt ing S t an da rds . We bel ie ve the se A PM s prov id e rea de rs wi th imp o r ta nt ad di ti on al info r mat io n on o ur b usi ne ss a nd ai d co mp ar abi li t y. We have in clu de d a c om pr eh en sive l is t of the A PM s in no te 3 to the Co nso lid ate d Fin an ci al S ta tem en ts , wit h de ni ti on s, an ex pl an ati on of how th ey ar e cal cu late d , why we u se th e m and h ow t hey c an b e re c on cil ed to a s ta tuto r y m ea sur e wh ere r el eva nt . 2. T he F Y21 re su lt s have be e n rest ate d to adjus t th e fore ign c ur ren cy t ran sl ati on re ser ves an d n an ce in co m e by£ 2. 3 m. Fu ll de tai ls are pr ovi de d in note 1 of th e Co nso li date d Fi nan ci al S ta tem en ts . 3. O pe ra tio na l KP Is are u nau di ted , Refe r to the gl os sar y for ful l de n iti on s. T he G rou p has ma de c er tai n acq ui sit io ns th at h ave af fec ted t he c o mpa ra bil it y of t he G ro up’s re sul ts . T o aid c o mpa ri so ns b et we en F Y2 2 a nd F Y 21, ope rat io nal K PI s have be e n pre se nted to in cl ud e the re sul ts as if t he ac qu isi ti on of Li ve Au ct io ne er s and Auc ti on M ob ili t y ha d oc c ur red o n 1 O cto be r 20 2 0 sh own o n a co ns ta nt cu r ren cy b asi s usi ng ave ra ge e xch an ge rate s for the c ur re nt n an cia l pe ri od ap pl ie d to the co mp ar ati ve pe ri od an d are us ed to el imi nate th e ef fe cts of u ct uat io ns in as ses si ng pe r fo rm an ce . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 32 Strategic Report Revenue by geography £107.9m 18% 3% 79% FY21 proforma £119.8m 15% 3% 82% FY22 North America Europe UK Ar t & A n tiq ue s Rep or te d reven ue in A & A in crea sed by 241 % to £55 .3m a nd o n a profor ma bas is, g rew 1 0% . G M V de clin ed by 5 % at co nst ant currency against challenging comparatives inthe pr io r year whic h had be ne ted fro m the Covi d -1 9 tailw ind . Wh ilst T H V grow t h on ou r mar ketpla ces re mai ne d rob ust as we ad de d new au cti on ho use s and n ew asse ts , the conve rsi on rate in A & A de c rease d fro m 1 9 %to 1 6%, impa cted by the re op eni ng of physi cal au cti ons a nd newe r T HV o n ou r marketplaces, including THV from global auc tion h ous es , whic h tend s to have a lowerc onver sio n rate. Revenu e grow th wasenh anc ed by an inc reasi ng upta ke of ourp ayme nts so luti on on L ive Auc tio ne er s, as well as gr ow th in ma rketi ng reve nue . As a res ult , th e take rate in A & A inc reas ed by1 .2p pt to 8.0% . In du st ri al & C om mer ci al Rep or te d reven ue in cre ased 21% to £52.7 m and o n a profor ma bas is reven ue gre w 1 3% . This wa s larg ely d rive n by grow th i n the va lue and vol um e of sec on dar y asse ts listed o n ou r mar ketpla ces w ith T H V up 2 8% at c ons tan t currency . Seco ndar y asset prices increased in the ye ar, driven by s hor tag es of eq uip men t in pr imar y mar kets , alth ou gh the r ate of pric e in ation di d begi n to soften in the se c ond hal f of the yea r . High s ec on dar y asset p ri ces we re par tially dr ive n by leng the ne d I&C e quip me nt repl ace me nt cyc les , whi ch in t urn n eg ative ly impa cted t he vol ume avai labl e for se co nd ar y mar kets. T he co nversi on rate in I& C was at at 4 5% , d rive n by bidd er c onve rsio n an d a con tinu ed g row th in th e ado ptio n of tim ed auc tion s. Pe r form anc e in I& C was impac ted by the grow th of real es tate whic h has a hi gh lot valu e and l ow co mmis sio n rate resu ltin g in a de cre ase in t he take rate fro m 2 .3 % to 2.0 % . E xclu din g the imp act of real est ate, theta ke rate in I&C would have be en at . Auc ti on S er v ic es Auc tion S e r v ice s reven ue of £ 8.6 m grew 21% year- o n - year a nd 9 % on a pr oforma b asis , ben e tin g from cu stom er ac quisi tio n at Auc tion M ob ilit y. We conti nue to se e th e ben e ts of offer ing au cti one e rs a suite of integrat e d products, which pro vides them optio nali t y wit h ac ces sing t he on line a uc tion market. Content Co ntent reve nue g rew 3 % to £3 .2m , dr iven bythe on goi ng rec over y in adver tising volum es foll owing t he im pac t of the C ovid - 1 9 pand em ic , alth ou gh we woul d exp ec t co ntent revenu e to rever t to its histo ric tr end s of moderate declines going forward. Op er at ing p ro t Op erat ing pro t in crea sed by 1 82 % to £1 6 .8 m dri ven by th e inc rease i n reven ue an d a sma ll de crea se to the Gr oup’s adm inist rati ve expe nse s year- o n -ye ar. Gros s pro t incre ased 75% to £79. 7m re ec ting the inc reas e in revenue and high ow throu gh of revenue to gross pro t. Th e gross pro t mar gin of 67% was slight ly up year- o n - year a s the grow th of high m argin co mmis sio n revenu e of fset t he dil uti ve marg in impa ct f rom th e grow th of p ayme nts reve nu e. STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Auc t io n T ec h no lo gy G r ou p p lc A n nu a l Re po r t 20 2 2 33 Th e Grou p’s admin istr ative ex pen ses of £6 3.6 m slig htly d e creas ed c om pare d to the pri or yea r larg ely d ue to the i mpa ct of on e - of f excep tion al co sts of £ 21.8m in cur red i n the pri or year (F Y2 2 : nil ) relati ng to the IPO an d the ac quis itio n of Auc tio n Mo bili t y and Live Au cti on ee rs as det aile d in note 3, offs et tin g the ot her i nc rease s in th e Grou p’scost ba se with th e incl usio n of Live Au cti on ee rs . The sh are - base d payme nt exp ense i n F Y 2 2 of £5. 2m re pres ents t he pre - a dmis sio n awards at IPO, the o ne - of f Live Au cti on ee rs L T IP s and the 20 21 and 20 2 2 L TI Ps whic h have bee n issu ed to Dire ctor s and sen ior ma nag eme nt , incl udi ng new ad diti ons to th e A TG ma nag eme nt team in 20 22 . T hisexp en se com pare s to a cha rge of £1 1. 9 m in F Y21 w hic h inc lud ed th e one - of fsh are awards that were iss ue d to Dire ctor s and em ploye es as par t of the IPO. We would ex pe ct sh are - base d pay men ts to inc rease i n F Y 23 , in clu ding t he im pac t of awards for n ew sen ior m anag em ent . E xclu ding th e year- o n - year im pac t of exceptional costs and share -base d payments , administrative expenses inc rease d by £ 25.6 m , dri ven by a £ 1 2.9m inc rease i n amo r ti satio n, t he ad diti ona l cos tsfro m Live Au cti one e rs , full year co sts asso ciate d with b ein g a liste d co mpa ny as well as pl ann ed inves tm ents to su ppo r t fut ure grow t h, in cl udin g in ne w role s in ours enio r mana ge men t team. Adjusted EBITD A Adjus ted EBI T DA de nit ion s and rec on ciliat ion s to the rep or ted resu lts are prese nted i n note 3 of the C ons olid ated Financial S tatements. Adjus ted EBI T DA inc rease d by £2 2 .2m year- o n - year to £5 4 .0 m, d ri ven by st rong revenu e grow t h and th e ac quisi tio n of Live Au cti on ee rs . The adju sted EB IT DA margi n of 45% was at fro m F Y 21 as the ben e ts of stron g revenu e grow th and th e Grou p’s high op er atio nal le verag e of fset t he adve rse i mpac t fro m full y ear pu bli c co mpa ny cos ts, p lan ne d invest men ts to dri ve futu re grow th as we ll as the m ix im pac t fro m the grow th in l ower ma rgin p ayme nts reve nu e. Ne t n an ce c os ts Net nanc e cos ts were £7 .5 m com pare d tonan ce co sts of £4.4 m ¹ in F Y21. Finan ce cos ts of £ 9.6m (F Y21: £1 7 . 1m ) p rim aril y rela te to interest o n ou r US d olla r de nom inated Se nio r T e rm Fac ilit y w hic h car ri es an in terest rate linked to US D LIB OR . In the se co nd hal f of the year, the in cre ase inLI BO R as well as the stre ng the nin g of thedoll ar resul ted in aninc reas e in the interes t cos t. F inan ce cos ts also i ncl ude c om mi tme nt fee s on theun draw n Revolvi ng Cre dit Fac ilit y andam or tisati on of prep aid na nc e cost s of£0.9m , as well as the movem ent in con ting ent c ons ide ratio n forAuc tio n Mob ilit y of £1. 1m, and £ 0.7 m relate d to the unwin d ofthe disc ou nt on the Li ve Auc tion e ers con ting ent c ons ide ratio n. Inth e pri or year, Statutor y nancial performance F Y22 £m F Y21 Restated 1 £m M ove me nt Rev enue 119 . 8 7 0 .1 7 1% Cos t of sal es ( 4 0 .1 ) (24 .5 ) 6 4% Gross prot 79.7 45 .6 75% Administrative expense s (6 3 . 6) ( 66.5) (4)% Other operat ing i ncome 0 .7 0.3 13 3 % Operating prot/ (loss ) 16 . 8 (2 0. 6) 18 2 % Adj us te d EB IT DA ( as de n ed in no te 3) 54.0 31. 8 70% Finance inco me 2 .1 12 .7 (8 3)% Finance cos t (9.6) ( 1 7. 1 ) (4 4 ) % Ne t na n ce cos t s ( 7. 5 ) (4 . 4 ) ( 70)% Pro t /(los s) befor e ta x 9. 3 ( 25.0) 13 7 % T ax ex pense ( 15 . 4 ) (2 .4) (5 42 )% Los s fo r t he ye ar a t tr ib ut a bl e to t he e qu it y h ol de r s of t he C om pa ny ( 6 .1) ( 2 7. 4 ) 78% 1. T h e F Y2 1 res ult s have be e n res tate d to adju st th e fore ig n cur re nc y tra nsl ati on re se r ve s and nan c e inc om e by £ 2. 3 m. Ful l det ail s are pr ovi de d in note 1 of the Co ns oli date dF ina nc ia l S tate me nts . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 34 Strategic Report Chief Financial Ofcer’ s Review continued Th e average F Y2 2 excha ng e rate of po und ster lin g agains t the US d olla r signi c antl y weaken ed by 7 . 3% an d appr eci ated by 3.5% ag ains t the euro c om pare d to F Y 21, as shown in the t abl e bel ow. Av erage rate Closing rate F Y22 F Y 21 Move me n t F Y22 F Y 21 Move me n t Euro 1 .1 8 1.1 4 3.5 % 1 .1 3 1.1 6 (2 .6) % US dollar 1.27 1. 3 7 ( 7. 3 % ) 1 .1 2 1. 3 5 ( 1 7. 0 ) % Wh en c omp ari ng reve nue i n F Y 21 to F Y 2 2, c han ges to cu rre nc y exchan ge r ates had a favou rabl e imp ac t on reve nue of £6 . 1m. The Group also has a $ 20 4 .0 m Se nio r T e rm Fac ilit y w ith i nteres t cos ts whi ch are al so se nsit ive to movem en ts in forei gn cu rre nc y, resultin g in an unfavo urab le movem ent of £ 31.8m o n the Fa cili t y as at 30 S e ptemb er 2 02 2 . na nce c osts re lated to interest c osts on bor rowin g inc lud ing e arl y repay me nt fee s forthe O ld Se nio r Facili tie s agree me nt and interes t on th e prefer enc e sh ares whi ch we re full y set tle d as par t of the IP O rest ru ctu re. Fin anc e inc om e of £2 . 1 m (F Y 21 : £1 2 .7m ¹) related to fore ign exc hang e gai ns pr imar ily arisi ng fro m ou r cas h, ex terna l and in tergro up loan ba lan ces he ld inU S doll ars and th e app rec iatio n of the USdo llar ver sus po und sterl ing in theye ar. Th e F Y 21 resul ts have be en res tated fol lowin g a reass ess me nt of the G roup’s sub sidia r y fu nc tion al cu rre nci es. This res ulte d in a £2 .3 m gain with in na nc e inc om e; fu r th er d etail s are prov ide d in note 1. Pro t /(lo ss) befor e ta x Af ter the im pac t of net nan ce cos ts , the Grou p repo r ted a pro t befo re tax of £9.3 m (F Y21 : los s of £25 .0 m 1 ). T axa tio n Th e overal l tax ex pe nse for t he yea r was £1 5.4 m (F Y21: £2 .4m 1 ), ari sing f rom th e pro tin th e year and a deferre d tax ex pen se on un realis ed fore ign exc han ge dif fe renc es . Th e unre alise d forei gn exch ang e dif fere nc es were not rec og nise d in the Grou p’s prot forthe yea r due to differe nc es in the fun ctio nal c ur ren cy basi s und er ta x and acc ou nting r ul es for th e US h old ing e nti ties . Th e Grou p’s effe cti ve tax r ate for F Y 2 2 of 1 66% (F Y 21 : 9.3%¹ ) is higher tha n the UK ta x rate of 1 9 % du e to the ne t imp act of al lowabl e ded uc tion s for th e exercis e of share o ptio ns and th e defer red t ax li abili t y on th e forei gn exchan ge m ovem ents i n the ye ar . Th e Grou p is co mm it ted to payi ng i ts fair share of t ax an d man ages t ax m at ters in linewi th the Grou p’s T a x S trateg y, whic h is app roved by th e Bo ard an d is pub lish ed o n our websit e w ww.aucti ontechnologygroup .com. Los s pe r sh ar e an d ad jus te d di lu ted earnings per share Basi c and d ilute d los s pe r share wa s 5. 1pcomp ared to a loss of 31 .0 p 1 i n F Y 2 1, dri ven by th e redu cti on in l oss af te r tax year- o n - year. The wei ghted aver age n umb er of share s in issu e du rin g the p er iod was 1 2 0.3 m (F Y21: 88. 2m s hares), wit h the increase year -on - year p rimarily a ttributable t o the fu ll year i mpa ct of th e equ it y ra ise for th e Live Au cti on ee rs acq uisi tio n which o ccu rre d in Jun e 2021 an d shares iss ue d for the IPO inMar ch 20 21. Adjusted dilut ed earnings per share was 29.5p c om pare d to 9.2p in F Y21, and is base don los s afte r tax adjus ted to exclude share -based payment expense, exceptional items (ope ratin g and na nce c osts), amor tisation o f acquired intang ible assets and any re lated ta x ef fec ts. T h e inc rease year- o n - year is d ue to the i nc rease i n adjus ted ear ning s, p ar ti ally of fs et by an in cre ase in th e weighte d averag e num be r of ordi nar y share s and dil uti ve opti ons i n the ye ar . A rec on ciliat ion of th e Gro up’s dilu ted earnings per share to adj usted diluted ear ning s pe r share i s set o ut in n ote 3. Liv eAuctioneers acquisiti on On 1 O ctob er 2 021, the Gro up ac qui red 100 % of the equi t y share ca pit al of Live Auc tion e ers for total co nsid era tion of £4 0 4.0 m. O f th e total con side rati on , £ 28 .3 m was set t led v ia equ it y ins tr ume nts in t he C om pany. Whe n deter min ing th e co nsid er ation , th e equ it y inst ru men ts were fai r value d bas ed o n the share p ri ce as at th e date the a cqu isiti on co mpl eted . Live Au ctio ne er s is the large st cur ated onl ine m arket plac e for A r t & A nti que s in No r th A m er ica a nd th e pur po se of the acq uisit ion was to fu r th er s tren gt hen t he Grou p’s prese nc e in this s egm en t. T he f ull acq uisit ion a cc oun ting is d etai led i n note 1 1. For eig n c urr e ncy i mp ac t The Grou p’ s reported performance i s sens itive to moveme nts i n both th e U S doll ar an d the euro a gains t th e pou nd ste rlin g wit h a mix of revenu es in clu de d in th e tabl e be low. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 35 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS S ta tem en t of na nc ial p osi ti on Ove rall n et ass ets at 3 0 S eptem be r 20 2 2 have inc reas ed by £ 9 9. 9m to £5 3 9.3m si nc e 30 S e ptemb er 20 21. T otal asse ts in crea sed by £187 .9m, m ainl y due to th e acq uisi tio n of Live Au cti on ee rs wit h signi c ant ad diti ons to goo dwil l and in tan gibl e asse ts of £4 49. 1m and a net ca sh ou t ow of £3 5 8. 8m for th e acq uisit ion . T he weake ning of p oun d ster ling again st th e US d olla r dur ing t he yea r has give n rise to a gai n of £1 15.3m o n asse ts hel d. T he G roup’s go od will an d inta ngib les were tested fo r imp air men t at 30 S e ptemb er 20 2 2 and wh ilst n o imp air men t was rec og nise d, th e A & A and Au cti on S er vic es cash g en er ating u nits a re ver y sens iti ve to the key ass ump tion s use d in th e mod el . Referto note 1 2 for fur t he r detail s. T otal li abili ties i nc rease d by £ 88 .0 m , pri mar ily due to the inc lusi on of Live Au ctio ne er s whic h inc lud ed a de ferre d ta x liabi lit y of £42 .2m that aro se du e to acqu isiti on ac co unti ng , foreig n excha nge m ovem ents o n th e ex tern al loan of £ 31.8m an d a defer red t ax li abili t y of£1 5 .9m on unre alise d foreig n exchan ge dif fere nc es. A n £ 86 . 1m gain was rec ogn ise d within the foreign curren cy translation rese r ve rel ating to th e net i mpa ct of foreig nexcha nge dif fe ren ces ar isin g onth etran slati on of foreign op er atio ns. Cas h ow a nd a dj us te d ne t de bt Th e Grou p ge ne rated st ron g cas h from ope rati ons at £49.4 m (F Y21: £1 5.9m) drive n bythe high ow throug h of revenu e to ad juste d EBI T DA . Capi tal expe nd iture in the peri od was £4.5 m (F Y21 : £ 2. 1m ) and p rim aril y rela ted to the incl usio n of Live Au cti one e rs capi tal expendit ure, inv estments in technology to supp or t plat for m en han ce me nts in ad diti on toinfrast ru ctu re investme nt to supp or t more seamless dual l isting across our marketplaces. As we mi grate towards a sin gle te chn ol og y plat for m, we wou ld ex pe ct ou r total ca pit al exp end itur e to incre ase to £8 m to £10m fortwo year s before norm alisin g from F Y 25onwards . Adjusted net debt 1 as at 30 S e ptemb er 2 02 2 was £129.0m, a n inc rease f rom £ 1 19 .7 m as at31 March 20 2 2 as oper atin g cash ow gen er ation wa s offs et by th e foreig n excha ng e impa ct o n our $ 2 0 4.0 m S en ior T erm Fa cili t y. Th e Grou p had c ash i n bank of £51.8m a nd bor rowin gs of £180. 8m wh ich wa s also impa cted by t he yea r- on - ye ar move me nt in the U S do llar ve rsus p ou nd ste rlin g (31 Marc h 20 2 2: c ash i n ban k of £3 5. 2m an d bo rrowi ngs of £1 5 4.9m). As deta ile d in ou r pos t bala nc e she et eve nts , we pre - paid $ 4 3.7m of our Se nio r T e rm Fac ilit y a t the s tar t of O cto ber 20 2 2. We ex pe ct to co ntin ue to make prep aym ents to our Se nior T e rm Loa n through FY23. Th e adjuste d net de bt / adjus ted EBI T DA ratio was 2.4x a nd if re ca lcu latin g adjus ted ne t debt u sin g an avera ge fore ign exch ang e rate, the le vera ge rat io woul d be 2 .2 x . Th e Group ’s adjusted fre e cash ow 1 was £49. 9m (F Y21: £30 .4m), a co nver sio n rate of 92 .5 % (F Y21 : 95.7%). A reco nci liatio n of cas h gen er ated fro m op erat ion s to adjusted f re e cash ow 1 and adjus ted fre e cash ow conve rsi on¹ is inc lud ed in note 3 of the Consolidated Financ ial Statements . Dividends Th e Grou p se es st ron g grow th o pp or t uni ties through organic and inorganic investments and , as su ch , inten ds to retain a ny fut ure ear ning s to nanc e suc h investm ents . No di vid end s have bee n paid or pro pos ed forF Y 2 2 or F Y 21. Pos t ba lan ce s he et eve nt s Th e Grou p pre - paid $ 4 3.7m of their S en ior T er m Faci lit y at th e sta r t of O ctob er 2 02 2 usin g the G roup’s availa ble c ash . Related parties Related p ar t y d iscl osu res are d etail ed i n note 23 to the C on soli dated F inan cia l S tatem ent s. Going concern Th e Direc tors have unde r ta ken the goin g con ce rn a sses sm ent for t he Gro up for a mini mum of 12 months fro m th e date of signi ng thes e nan cial statem en ts. Th e Dire ctor s have assesse d the Group ’s pros pe cts , bot h as a goi ng c onc er n and i ts lon ge r-ter m viabili t y as set outon pag e 45 . As par t of the goin g con ce rn review th e Direc tors have revie wed th e Gro up’s forec asts a nd proje c tion s, as ses sed t he he adro om o n the Grou p’s Facili ties a nd th e bank in g coven ants . This h as be en c on side red u nd er a bas e cas e and se veral p laus ibl e but s evere d ownsi de sce nar ios , tak in g into co nsid era tion t he Grou p’s prin cip al ris ks and u nc er t ainti es se t out o n pag es 4 0 to 4 4. Refer to n ote 1 for fur th er details . These scenarios individually, or collectively donot thre aten the abili t y of the Grou p to con tinu e as a goin g con ce rn . Even in the mos tex tre me downs ide sce nar io mo dell ed (the co mbi natio n of all dow nsid e sce nar ios oc cur ri ng at on ce) the G roup wo uld b e abl e to ope rate wi thin th e leve l of its c urre nt avail able debt fa cili tie s and c ovena nts. A f ter du e con side rati on , the Dire ctors have con clu de d that th ere is a re ason abl e exp ec tatio n that t he Grou p has ad eq uate reso urc es to con tinu e in ope rati ona l existe nc e for at lea st 1 2 m on th s from t he date of this re po r t . Fo r this rea son , the Dire c tors co ntinu e to adopt the go ing con ce rn b asis in p rep arin g the C o nsol idated Fin anc ial S t ateme nts for th e Gro up. T om Hargrea ves Chief F inan cia l Of ce r 1 Dec em be r 20 22 1. T he G rou p pro vid es al ter na tiv e pe r for ma nc e me asu res ( “AP Ms” ) whic h are n ot de n ed o r sp ec i e d und er th e re qui re me nts of U K-a do pte d Inte rn ati on al Ac co unt in g S ta nd ard s. We b el iev e th ese A P Ms p rov id e rea de rs wi th i mp o r ta nt ad di tio na l info r mati on o n o ur bu si ne ss an d ai d co mp ar abi li t y. We have inc lu de d a co mp reh en si ve lis t of the A PM s in note 3 to the C on so lid ate d Fin an ci al S tate m ent s, wi th d e ni tio ns , an ex pl ana tio n of how th ey ar e cal cu late d, why we u se th em a nd h ow th ey c an b e re co n cil ed to a s tat uto r y m eas ur e whe re re le van t. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 36 Strategic Report Chief Financial Ofcer’ s Review continued STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Auc t io n T ec h no lo gy G r ou p p lc A n nu a l Re po r t 20 2 2 37 Board & Audit Committee Senior management 1st Line of Defence 2nd Line of Defence 3rd Line of Defence Management controls Internal control measures Financial Controller Security Risk Management Internal audit Quality Inspection Compliance External audit Regula to r Th ree L in es of D efe nc e mo de l Risk M anag e m e nt The Boar d seeks t o mai nt ain a n effecti ve a pp ro ach t o r isk manageme n t w hilst remaini ng alert fo r ne w and eme rg ing risks. Risk mana gement f rame work We aim to appro ac h risk m anag em ent inasim ple an d prac tic al mann er, whilst rema inin g agil e to cons ide r any new a nd eme rgin g ris ks. T he B oa rd has over all resp onsi bili t y for de term inin g the na ture and ex te nt of its p rin cip al and e me rgin g risks , th e ex tent of th e Gro up’s risk app eti te, and for m on itor ing an d revi ewin g the ef fec tive nes s of the G rou p’s systems of risk m anag em ent a nd inter nal c on trol . Th e Bo ard is res po nsib le for id ent if yi ng the sig ni ca nt str ategic , op erat ion al, na nci al, co mp lian ce and re pu tatio nal risks a nd e nsur ing t here i s an app rop riate risk management framework i n place to mana ge th ese r isks . On an a nnu al basi s theB oard for mal ly app roves the Gro up’s stra tegic ris kreg ister. Th e Bo ard has i mpl em ented a m on itori ng system to e nsure t hat ris k man age me nt and all asp ec ts of inter nal c ont rol are c on side red on a re gula r basis . Th e mo nitor in g system assis ts in de term inin g the n ature an d ex tent of the signi c ant r isks the B oard is willi ng to take in ac hiev ing i ts st rategi c obje c tives . Th eGrou p appl ies the pr in cipl es of the “ T hre eLi nes of Defen ce” m ode l, as illu str ated in the d iagr am be low. Whilst havin g overall respo nsibilit y for riski den ti ca tion an d manag em ent , theB oard d ele gates the day - to - d ay responsibility for ri sk management totheLea der shi p T eam . The overallm on itor ing and rev iew of the ef fecti ven ess of th e inter nal c ont rols andr isk mana ge me nt is dele gated to theAu dit C om mit te e. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 38 Strategic Report 1 Se t ti ng r is k app e ti te Th e Bo ard takes a p ru de nt app roac h wh en de cidi ng up on i ts app eti te for risk a nd has reassessed its risk appetite during the year . Th ere are a reas of th e Grou p’s busin ess whe re it is n ec ess ar y to ac ce pt ris ks to achi eve a sati sfactor y retu rn for shareholders. These higher risk decisions are inc or po rated i nto the B oar d’s overal l risk appetit e. Th e Grou p wants to be b es t in cl ass an d highly respected across the industry. The Bo ard will n ot acc ep t any ne gati ve impa ct on rep ut atio n with a ny key stakeh ol der s and wil l onl y toler ate minim um ex pos ure suc h as min or n egat ive pre ss cove rag e. Th e Bo ard will n ot ac cep t neg ative i mpa cts on em ploy ees . In the pur sui t of the Group ’s strategy an d obje ct ives , the B oa rd is willi ng to acc ept that in s om e circ ums tan ces r isks m ay resul t in som e nan cial l oss or exp osu re. Th e Bo ard is not w illin g to acce pt reve nue opp or tuni ties o r co st sav ing in itia tives unless a positiv e return is probable. Th e Bo ard is on ly will ing to ac ce pt low tomode rate exp osu re on ope rati onal per form anc e su ch as infor mati on i ntegr it y, disas ter rec over y or su cc ess ion p lann ing . 2 Ri sk id e nti ca ti on Risks are id enti ed both th rou gh a top down an d bot tom u p app roac h , and onc eid enti e d , the risks are c aptur ed inthe Gr oup’s strate gic and o pe ratio nal riskre gis ters . 3 Ri sk as se ss me n t Eac h risk are a ide nti e d is assess ed toasce r tai n the likelih oo d of the risk oc cur ri ng , the im pac t if i t doe s oc cu r and the ac tio ns be ing t aken to man age th e ris k to the des ired l evel . 4 Ri sk ma na ge me n t Eac h of the Grou p’s princ ipal ris ks has a desi gnated own er fro m the Lead er ship T eam . Ris k regi sters a re main tain ed to mon itor c han ges in t he r isks du rin g the year an d the m itig atin g acti ons a nd con trols i n pla ce to man age th e ris ks. 5 Mo ni to ri ng , re po r tin g an d revi ew Th estr ategic and op er atio nal risk s are monit ored on an ongoing basi s. Monit oring also includes cons idering new and eme rgi ng ris ks whe re th e ex tent of th eir impa ct o n the G rou p is not yet f ully k n own and th erefor e they n ee d to be tr acke d. T he out pu t fro m the G roup’s ris k mana ge me nt pro ces s is sub jec t to per io dic rev iew an d chal len ge with th e Leade rs hip T eam , the E xec uti ve Direc tors and su bse que ntl y, the Grou p’s prin cip al ris ks and u nc er t ainti es are sub mit ted to th e Audi t C om mit te e before nal B oard ap proval ahe ad of the Group’s interi m and f ull yea r resu lts . Th e prin cip al risks id enti ed for the Gro up linked to th e Gro up’s strate gic pr io rit ies are shown i n the t able o n pag e 4 0. Risk mana gement proces s and o versight 1 2 3 5 4 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 39 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Our risk assessmen t matrix prior to mitigating actions: 1 IT infr astr uc ture – sta bili t y andb usin ess co ntin uit y of auction pla tforms 2 IT infr astr uc ture – ina bili t y to kee p pac e with i nnova tion a nd ch ang es 3 Data se cur it y/data loss 4 Comp etiti on 5 Fai lure to de live r exp ec ted ben e tsf rom acq uisi tio ns and /or integr ate the bu sin ess in to the Group ef fe ctivel y 6 At tracting and retaining skills/ capabilities and succession planning 7 Regula to r y compl iance 8 Govern ance a nd in terna l cont rol 9 Eco no mic an d geo - po liti cal unce r taint y Likelihood Seve ri t y Medium Medium Low High Low Low Medium High Cri tical Identifying, monitoring and managing th e Gr ou p’ s p ri nc ip al ri sks Th e Bo ard has c ar rie d ou t a rob ust asse ssm ent of th e pr inc ipal r isks fac ing t he Grou p, inc lud ing th ose t hat woul d thre aten itsbu sin ess mo de l, fu ture pe r for man ce , sol venc y or li quidi t y. This in clud ed a n asse ssm ent of th e likeli ho od an d imp act ofeach r isk ide nti e d, an d the miti gatin g acti ons b ein g taken . Ris k leve ls were mod i ed to ree ct th e cur rent vi ew of there lative sig ni c anc e of each ris k . The principa l risks and uncertainties ide nti e d are detai led in thi s sec tion . Addi tio nal ri sks an d unc er tain ties to the Grou p, inc lud ing th ose t hat are n ot cur ren tly kn own or th at the G rou p cur ren tly de e ms immat erial, ma y indi vidually or cumula tively also have a mate rial ef fe ct o n the G roup’s busi nes s, re sult s of ope rati ons a nd/or na nci al con diti on . Whil st we ope rate in an evolv ing e nviro nm ent wi th se veral c lea r ris ks, we take a proa cti ve and ro bus t app roac h to ide ntif y ing a ny new r isks , and ev aluati ng an d miti gatin g all k nown r isks th roug h a reg ular review process. New a nd e me rg in g ris ks Th e Bo ard co ntin ues to rev iew an d mo nitor external and internal business environments to estab lish an d und er sta nd ris ks an d issu es that are n ew, devel opin g, g rowin g or be co min g more p rom ine nt . We do this thro ugh a c om binat ion of o pe ratio nal r isk asse ssm ents a nd oth er ho rizo n sca nni ng init iative s. T his en abl es us to pla n our stra tegy an d op er ation s to minimi se thre ats of this natu re. Em er gi ng ri sks The Group ’ s ongoing risk m anagement pro ces s ens ures th at em ergi ng r isks are ide nti e d and asse sse d by the Grou p’s mana gem en t to deter mine t he im pac t on thebu sin ess . Eme rgin g risks , inc lud ing clim ate - rel ated ris ks and e nviro nm ent al rep or t ing , were rev iewe d by the S us taina bili t y and Cl imate Ris k Co mmi t tee an d the A udi t Co mmi t tee du rin g the ye ar an d rep or ted tothe Boa rd. A s a provide r of digita l mar ketpla ce tec hn olo gy o ur c arb on fo otpr int and e nviro nme ntal i mpa ct are l ow. Based o n the nat ure of the G rou p’s ope ratio ns , it has been assessed that climat e change actually prese nts o pp or tuni ties for t he Gro up as we can fa cili tate and a cc ele rate the g row th of the ci rcul ar e co nomy, creat ing a gl ob al channel of sustainable commerce . From th e anal ysis pe r for me d wit h our ex tern al co nsu lta nts it h as be en c on clu de d that the nanc ial im pac t of climate - re lated risks o n th e Grou p’s ope ratio ns is l ow. The Sus tain abil it y an d Clim ate Risk C om mit te e has ide nti e d a range of potent ial tran siti onal , physi cal an d inves tor- related r isks a nd opp or tuni ties , ac ros s the G roup’s valu e cha in , including platforms, custome rs, consum ers and e mpl oyee s, wh ich h ave be en o utli ne d in deta il on pa ges 5 9 to 60 . On th is basis t he Bo ard has c on clu de d the re is no p rin cip al risk for the G rou p in resp e ct of cli mate cha nge . Risk assessment matrix Y ear-on -year mov ement Prin cipal Risk s and U n c e r tainties Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 40 Strategic Report Tr e n d k e y Heightened risk No c ha ng e Reduced ri sk Ris k a nd p ote n ti al i mp ac t Change during the y ear Mitigating action / controls Lin k to s t ra te gy Tr e n d 1 . IT infr as t ru c tu re – sta bi li t y and business continuity of auction platforms An inability to maintain a consistently high - qualit y experience, including network orse r ve r failure for the Gro up’s auction house a nd bid der customers across its marketplaces or platform, coul d affe ct t he G rou p’s repu tati on , increa se its operation al cost s and cause losses. IT ser vic e disr upti on co uld oc cu r due to in terr up tio n in th e prov isio n of se r vi ce f rom key sup pli er s whe the r tha t be fr om natu ral di sas ters , th e imp ac t of clima te change, cyber - attacks ortec hn ol og y failure . Th e Gro up ha s grown w ith t he a cqu isi tio n of Live Au cti on ee rs and now op er ates seven mark etplaces across three tech no lo gy p lat for ms , whi ch re qui res continuou s rea l-time monit oring. A new glob al Chief T e ch no lo gy Of c er was app oin ted du ri ng th e yea r to overs ee t he fu ture of th e Gr oup’s pl at for ms , with a v iew to acc el era tin g the n et wor k ef fe ct ac ros s the Group . A new c ros s -f unc tio na l team ha s also b e en est abli she d to foc us o n ens uri ng s tab ili t y in th e Gro up’s plat fo rm s. Th e Gro up ma int ains a s ca lab le an d resil ien t IT infras tr uc ture wi th real - tim e mo nito rin g and a le r ts . Pro c ess es are i n pla ce to en sure t hat d edi ca ted tec hni ca l and cl ient opera tions tea ms ar e mobil ised to m inimise client impact. We have a de dic ated tea m wh o have modernised the Gr oup’ s monit oring and ale r ti ng fr am ewor k to inc lu de re al use r monitor ing f eatur es t o gain perspecti ve onou r custo me rs’ ex pe rie nc e in the marketplaces. Th ere a re pla ns in p lac e to tra nsi tio n all mar ketp lac es to a sin gl e tech no lo gy plat for m , cent ral ise key back of ce functions and streamline processes overth e nex t two yea rs . Ow ne r : Ch ief T ec hn o lo gy O f ce r 2 . IT infr as tr u ct u re – inab il it y to kee p pa ce w it h in n ovat io n and changes If the Grou p fails to kee p pace with i nn ovati on an d ch ang es i n tech no lo gy th is co ul d resu lt in few er auction hou ses and/ or bidders using the marketplaces or pl at for m and t her efore a l oss of reve nu e. T o e nsu re the G rou p kee ps pa ce wi th t he requir ements for t he auct ion house s and bid der s usi ng o ur ma rket pla ce s the r ole ofglo bal Chi ef Prod uc t Of ce r was established during the y ear . A road map h as be e n est abl ish ed to migr ate ou r thre e tec hn ol og y sta ck s to a sing le te chn ol og y pl atfo rm . T his pl at for m will all ow us to b ec om e eve n mo re agil e in our re sp on se to tec hno lo gy i nno vatio ns . Th e new ly ap po inted r ole of C hie f Pro du ct Of c er will be key to deve lo pin g the Gro up’s valu e - a dd se r v ic es. T h ey will a lso over se e the d ed ic ated pr odu ct te am wh o are res po nsi ble fo r kee pin g pa ce wi th changes in cust omer expectation s and tech no lo gic al deve lo pm ent s and de nin g the ro adm ap of feat ures fo r th e plat for ms and market places. New functionality is tested w ith a s ubs et of th e use r bas e, to gath er re al - tim e usa ge d ata an d fee db ack , to then o pti mise t he u ser e xp er ien ce . Ow ne r : Ch ief Pr o du c t Of c er 3. Dat a sec ur it y/dat a los s A key asse t to our b usi ne ss is our dat a. Like many tec hn olo gy businesses, the risk of s ecurit y breaches and/ or targeted at tac ks an d oth er di sru pti ons i s ever p res ent . W hils t we de sign se cur it y i nto the way we o pe rate , we are ac ute ly aware t hat a ny co mpr omi se to ou r sys tems co uld di sr upt th e Gro up’s business, compromise sensitive and co n de ntia l inform atio n, affe ct t he G rou p’s repu tati on , increa se its operation al cost s and cau se poten tial n anc ial los ses i n the fo rm of p en alt ies . Th rou gho ut t he ye ar, we have per form ed aran ge of conti nu ous imp rove me nt act ivi tie s to red uc e the i mpa ct a nd likelihood of potential cyb er-at tac ks inth efu ture . We have also e ng age d a se nio r res ou rce , as Head of Inform atio n Arc hi tect ure and Se c uri t y, who has f ur the r en han ce d ou r str ategi c se cu ri t y pro gra mm e, a nd wil l be co nsid er in g addi ti ona l tool ing to re spo nd to the evo lv ing t hrea ts. Th e Gro up ha s an in tern al gove r nan ce fra mewo rk fo r dat a prote cti on an d se cu ri t y pol ici es an d pro c ed ures i n pla ce a lon g wi th rob ust IT an d secu ri t y cont rol s. An nua l penetrat ion t ests are performed on al l pro pri et ar y s ystem s alo ng w ith s ec ur it y recom mendations from third - par t y se cur it y p rovi de rs wh ich a re rev iewe d each month. Th e Head of Inform atio n Arc hi tect ure and Securit y overs ees all data security matters, with i nd ep en de nt ass ur anc e fro m ou r Gro up Data Prote cti on Of c er, who both wor k wit h sta keho ld er s acr oss t he Gr oup to revie w, devel op an d im prove o ur s ec uri t y practices and processes. Ow ne r : Ch ief T ec hn o lo gy O f ce r Fin d ou t mor e on pag e 20 Strategy/focus area E x t en d th e to ta l addressable market Gr ow t he conversion rate Enhance the network effect Expand operational leverage G row t ake r a te vi a value -add ed ser vices Pursue accretive M&A STRA TEGIC RE PORT CORPORA TE GOVERNANCE FINANCIAL ST A TEMENTS Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 41 Ris k a nd p ote n ti al i mp ac t Change during the y ear Mitigating action / controls Lin k to s t ra te gy Tr e n d 4. Compe tition The Group’ s business model may com e und er sign i ca nt pres sur e shou ld a signi c ant number o f auct ion hous es cho os e to take bid de r generati on, technol ogy developmen t and cust omer service ( amongst other things ) in - h ous e or to a c omp et itor marketplace, and so bypass our mar ketp lac es . Th is als o inc lud es auc tio n ho use s who u se th e Gro up’s whi te lab el of fer in g to main tai n or bu ild t hei r own bra ndpr ese nc e and ope rat ion s onl ine r ath er th an usi ng t he Gr o u p’s pl a t fo r m . We h ave s uccessfully int egrated Li veA uc tio ne er s, an d our reven ue is noweve nl y split be t wee n A& A and I&C , prov idin g A TG with e xp osu re to a ran ge ofend mar kets . A TG also be ne ts from sc ale and a rs t mover advan tage i n the online auction mar ket . As th e Gr oup g rows th e num be r ofbidd er se ssi ons , reac hin g 1 7 2m in F Y 2 2,t his will likel y resul t in highe r realis ed valu es an d the refo re at tr act m ore a sse ts tobe listed on A TG’s market pla ces . Due to the se scal e ben e ts , the Gro up has a high reten tio n rate wi th au cti on ee rs wh o se e th e be ne t of the A TG mod el . Fur th er mo re, with c . 3, 8 0 0 au cti on h ou ses o n the mar ketp lac es , th e Gro up has a l ow reve nu e co nc ent rati on , me ani ng th at th e chu rn of any sin gl e auc tio n ho use w ill not h ave a larg e ef fec t on re ven ues . We have also c on tin ue d to imp rove ou r use r exp er ie nc e in o rde r to enh anc e th e bidder journey on our marketplaces. Th e co mb inati on of o ur l ead er shi p, pe op le , agil e way of wor ki ng an d st ron g ind ust r y kn owle dg e and n et wo rks h el ps to ens ure that we s tay up -to - date wi th th e competiti ve l andscape withi n whi ch weop era te. We are co ns tant ly in nova tin g wit h our technology and engaging our cust omers for fee db ac k . We also u nde r t ake reg ula r horizon-sc anning activities to understand competiti ve t hrea ts and oppor tunities. Th e Grou p is inves tin g in its End - to - E nd E xp er ie nc e to sign i ca ntl y improve th e onl ine b uy ing e xp er ien c e at auc tio n as we ll as simplifying and streamlining how auc tio n lots a re lis ted o nlin e to fur the r strengt hen its competit ive po sition. Ow ne r : Ch ief E xe cu t ive Of c e r 5. Fail ur e to deli ver exp e c ted be ne ts fr om ac qu is iti o ns and/ or integrate the business into the Group effectively Th e Gro up ha s rec en tly m ade and i n the f utu re may u nd er take fur ther acquisitions and inves tme nts , wh ic h may prov e unsu c ces sfu l or di ver t its reso urc es , res ul t in op er atin g dif c ult ies , and othe r wis e disr upt t he G rou p’s ope rat ion s. At the s tar t of F Y 2 2 , the a cqu isi tio n of Li veA uc tio ne er s com pl eted , a signi c ant acq uisi tio n for t he Gr oup . Integ rati on of Live Au cti on ee rs into the Gro up has prog res se d well. Key senio r man age me nt fro m Live Au cti on ee rs have be en re tai ne d and t aken o n glo bal r ole s with in the Lea de rsh ip T ea m. Be st pra cti ce s have bee n shar ed acr oss Li ve Auc tio ne er s and t he Gr oup i nc lud ing i n the deve lo pm ent a nd ro ll ou t of pay me nts star ting on Proxibid. We have an ex pe rie nc e d Hea d of M& A wh o takes a d isci pli ne d app roa ch to id ent if y ing and tes tin g ac quis iti ons to e nsu re the y woul d be an appro pri ate strate gic t for theG rou p as well as ear nin gs enh an cin g. Cle ar pl ans a nd ro ute ma ps are p rep are d to successfully int egrate ne wly acquired busi ne sse s into the Group . It is im po r ta nt that we re tai n key exp er tise i n our n ewl y acquired businesses. Post the acquisitions co mpl eti ng we c ont inu e to revi ew operation al struct ures to ensure they areop timi se d glob ally. Per form an ce of th e ac qui red b usi nes ses are rev iewe d ag ains t th e ini tial i nvest me nt cas es pr epa red to e nsu re the ir p er fo rm an ce is in li ne wi th or igi nal e xp ec tati ons . Ow ne r : Ch ief E xe cu t ive Of c e r Fin d ou t mor e on pag e 20 Strategy/focus area E x t en d th e to ta l addressable market Gr ow t he conversion rate Enhance the network effect Expand operatiiona l leverage G row t ake r a te vi a value -add ed ser vices Pursue accretive M&A Tr e n d k e y Heightened risk No c ha ng e Reduced ri sk Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 42 Strategic Report Principal Risks and Uncer tainties continued Ris k a nd p ote n ti al i mp ac t Change during the y ear Mitigating action / controls Lin k to s t ra te gy Tr e n d 6. Att ra c ti ng an d ret ai ni n g skills/capabilities and succession planning Ou r bus ine ss de p end s on hi ri ng and reta ini ng rs t clas s talen t inth e highl y com pet iti ve tech no lo gy ind ust r y. Inabili t y to at tra ct a nd ret ain c ri tic al sk ill s and capabilities could hinder oura bili t y to de live r on our strategic objectives. Dur in g the year the Gro up has rec ru ited anum be r of senio r hires , incl udi ng a new Chi ef Peo ple O f ce r, to hel p ensu re we at tra ct and ret ain rs t clas s talen t throu gh our remuneration p ackages, working pra cti ce s and c ul ture . Th e Gro up h as focu se d on stren gt he nin g its Lead ers hip T ea m, w ith a b roa d ran ge of re lev ant ski llsan d expe ri en ce as well as a de ep experience within the a uction in dustry. Thi s stre ng th eni ng h as not o nl y be en at the l ead er shi p leve l wi th thr ee n ew B oar d me mb ers an d ve new Lead er shi p T eam me mb ers , b ut al so ac ros s the b usi nes s whe re we have ad de d sp ec ial ist ro les i n area s suc h as tec hn ol og y, market ing andnance. As a gl ob al bu sin ess i t is im po r t ant t hat wepe r for m regul ar revi ews of our remuneration packages, share incentive sch em es , an d tra inin g prov id ed to ou r employees. Annual emplo yee surveys andp er fo rm an ce revi ews are unde r t aken acr oss al l leve ls . Th e Chief Pe op le Of c er rol e is worki ng to ens ure th e inte gra tio n of cul tur e acr oss t he dif fere nt bus ine sse s. Th e CEO and CF O reg ular ly t ravel to b usi nes ses o ut sid e the UK to assist wit h talen t retenti on . The No min atio n Co mm it te e has c on tinu ed to revi ew su cc es sio n pla nni ng for t he B oar d and senior management. Fur t he r det ails o n ou r pe op le c an b e foun d in th e Su sta ina bili t y Rep or t on p age 6 6 . Ow ne r : Ch ief Pe op l e Of ce r 7 . Regulat ory compliance Th e Gro up o pe rates i n a constantly changing and complex regula tory envir onment, increasingly so fol lowing its list ing on the Lon do n Sto ck E xch ang e duri ng F Y 21. T h ere is a ris k that t he Gr oup , or i ts subs idi ari es , fail to c om ply w ith these requir ements or toresp on d to c ha nge s in regulations, including the Financia l Conduct A uthority ’s rul es and gui dan ce , or spe ci c leg isl atio n in th e ter ri tori es in whic h th e Gro up o pe rates including the Competition and Mar kets Aut ho ri t y in the UK . Thi s co uld l ead to re pu tati on al dam age , nan ci al or crim ina l pe nal tie s and i mpa ct o n ou r abil it y to do b usi nes s. Th ere c on tinu es to b e fur the r re gul ator y req uire me nts a nd foc us p lac ed o n lis ted busi ne sse s. In F Y 22 th e Group is req uire dto repo r t for the rs t time on clim ate - re late d issu es i n lin e wit h the T as kFor ce on Clim ate - re late d Fina nci al Disclosures framework. Whi lst n ot mate ria l for th e Gro up, theev olu tio n of sanct ion s law, and in par tic ular ly w ith re fere nc e to Russi a, willc ont inu e to be clo sel y mon itore d bythem ana ge me nt team. Co mp lian ce fo r the G ro up is ove rse e n by the A udi t Co mm it te e and t he B oa rd has ult imate re sp ons ibil it y. The B oa rd an d its co mmi t tee s are su pp or ted by ou r le gal , co mpa ny sec reta r y, nan ce , ope rati ons and te ch nol og y team s. We e nsu re that a ll our p e opl e are a ppr op riate ly tr ain ed i n co mpl ian ce , rel ative to th ei r rol es. We have deve lo pe d a de tail ed g over na nc e fra mewo rk to m oni tor o ur le ga l and reg ulato r y ri sks , an d to ensu re tha t we co mpl y wi th th e pri nc ipl es , ru les a nd guidance applicable t o our regulated act ivi tie s. T he se ar e reg ula rly r ep or ted upward s to the Au di t Co mm it te e and B o ard . Ow ne r : Ch ief Fi n an ci al Of c e r / Chie f Op e ra ti ng O f ce r STRA TEGIC RE PORT CORPORA TE GOVERNANCE FINANCIAL ST A TEMENTS Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 43 Ris k a nd p ote n ti al i mp ac t Change during the y ear Mitigating action / controls Lin k to s t ra te gy Tr e n d 8. Gove rn an ce an d int er na l control Any fa ilu re and /or weak ne ss inthi s area (nan cia l and non - na nc ial ) coul d have an impact on the operations of theG rou p. As a s till re lati vel y new ly lis ted G rou p, establishing and maintaining corpo rate gove rna nc e be st p rac tic e, a n ef fec tive a nd ef cie nt ris k manag em en t and intern al co ntro l sys tem , pro po r ti on ate to the ne e ds of the G rou p, is a key pa r t of ou r sh or t and long-term success. Dur in g the year, a review of the Grou p’s pol ici es an d pro c ed ures w hic h were est abli she d at the time of IPO was co ndu cte d to ensu re th ey re mai n app rop ri ate for the e nl arg ed G rou p. Revi ews on the na nci al con tro ls in par tic ular we re un de r t aken by inter nala udi t . Th e Audi t Com mi t tee ful ls a vita l role inth e Group ’s gove rn anc e fra mewo rk , providi ng independent challenge and over sigh t of the ac co unt ing , na nci al repor ting and internal control processes. Th e Bo ard h as ul tim ate resp on sibi lit y fo r ens uri ng c om pli anc e wi th th e Co rp or ate Govern ance Code. F or further in format ion on ac tiv it ies u nd er t aken by t he B oa rd and Co mm it te es du rin g th e year s ee p age s 73 to 10 0 . Ow ne r : Ch ief Fi n an ci al Of c e r / Chie f E xec u ti ve Of c er 9 . Economic and geo-pol itical uncer tainty Gro up p er fo rm anc e co ul d be adverse ly impact ed by f actors beyo nd o ur c on trol s uc h as thee co no mi c con dit ion s andp oli ti cal un ce r ta int y inkeyma rkets . Th e Grou p bene ted from th e Covid -1 9 pan de mic i n F Y 21 an d the refor e fac ed toug h co mpa rati ves i n F Y 2 2. H oweve r, the Gro up c onti nu ed to grow a nd di d not s ee asign i c ant rever sio n in the numb e r of onl ine auc tio ns be ing he ld . Impac ts to glo bal s upp ly c hai n follo wing B rex it al so increased demand and pricing for second - hand goods , par ticularly in the I& Cmar ket . Th ere h as als o be en a n inc rea se in macroeconomic uncer taint y globally , esp ec iall y in t he se c ond h alf of F Y2 2 as a resu lt of th e war in U k rai ne , risi ng e ne rgy and in ati on cos ts and the ris ing inter est rates . Co nc er ns o n the i mp act o n consumer s entiment could i mpact them ore cyc lic al A& A busi ne ss . Ou r bus ine ss ha s be co me i nc reas ing ly dive rsi ed in F Y2 2 as we have rolle d out value -add ser vic es, including marketing and p aym ent s, w hic h grew 5 2% i n F Y 2 2 and n ow ac co unt fo r 1 6% of Grou p reve nue . Mo re de tail o n the i mp act i n F Y2 2 ca n be foun d in th e Mar ket O ver vie w se cti on o n page 1 4. Man age me nt a nd th e Bo ard ke ep a brea st of macroeconomic d evelopment s and ens ure th at th e Gro up re spo nd s swif tly toany chan ges as they mate ria lise . The Group demonst rated through the Cov id -1 9 p and em ic th at it h as a st ron g busi ne ss mod el and it s diver si e d revenu e streams and geographical markets help tomiti gate the imp act of poli tic al or econo mic instability in any particular co untr y or re gi on . Th is has b ec o me fur the rrei nforc ed wit h the acqu isi tio n of Li veA uc tio ne er s, wi th the Grou p’s revenu e now evenl y spli t bet we en the A& A and I& C markets which provides a cyclical ly dive rsi ed reve nue mix . Th e Gro up’s co mm issi on re ven ue s trea m is dire ct ly li nked to as set p ri ces w hic h prov id e a natu r al in at io n he d g e. T he dive r si c a ti o n of the G rou p’s reven ue s trea ms as we ro ll ou t and g row val ue - add se r v ic es in clu din g paym en ts an d mar ketin g als o prov ide s dive rsi cat ion in mor e unce r ta in economic periods. Th e Gro up’s exp os ure to th e se co nda r y go ods ma rket may ben e t in per io ds of ec on om ic un ce r t aint y a s bu yer s lo ok forval ue in sec on d - ha nd asse ts and alsoas th e suppl y of seco nd - hand asse tsat auc tio ns inc reas e due to the need for liquidity, including through business insolvencies. Ow ne r : Ch ief Fi n an ci al Of c e r / Chie f E xec u ti ve Of c er Fin d ou t mor e on pag e 20 Strategy/focus area E x t en d th e to ta l addressable market Gr ow t he conversion rate Enhance the network effect Expand operational leverage G row t ake r a te vi a value -add ed ser vices Pursue accretive M&A Tr e n d k e y Heightened risk No c ha ng e Reduced ri sk Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 44 Strategic Report Principal Risks and Uncer tainties continued V ia bili t y S t at e m e n t Ove r vi ew Th e Dire ctors have ass ess ed the Gro up’s pros pe cts , bot h as a goi ng co nc er n and i ts viab ilit y l ong er ter m . Und er sta ndin g of the Group’ s business model, strat egy , principa l and e me rging r isks i s a key ele me nt in th e asse ssm ent of th e Gro up’s pros pe cts , as well as the for mal c on side rati on of vi abili t y. The Grou p’s strateg y is de tail ed o n page s 20 to 21 and th e Gro up’s prin cip al ris ks de scr ib ed on page s 4 0 to 4 4 . Th e Grou p’s prosp ec ts are as ses sed pri mar ilyth rou gh its ann ual lon g - term deta ile d plan nin g pro ces s whic h co nsid er s pro ta bili t y, the Gro up’s cash ows , co mmi t ted faci liti es, l iqui dit y an d fore cas t fun ding re qui rem ents . T his exerc ise is co mpl eted an nual ly an d was sign ed of f by th e Bo ard in S ep temb er 20 2 2 . As p ar t of t his the Bo ard co nsid er s the a ppro pr iatene ss of key assu mptio ns , tak ing i nto acc ou nt the ex terna l envir onm ent a nd th e Gro up’s strate gy. Liq uid it y a nd n an cin g po si tio n Th e Grou p’s mod ellin g has b ee n pre pare d base d on the Gro up’s nan cin g arr ang em ents w hic h inc lud e the foll owin g: • a $2 0 4.0 m S en ior T er m Facili t y. The S eni or T er m Faci lit y was d rawn in f ull im me diately pri or to comp let ion of the Li veA uc tion e ers acq uisit ion o n 30 S e ptemb er 2 0 21 and wil l be du e for rep aym ent o n 1 7 Jun e 20 26; an d • a $ 49.0m mu lti - cur ren cy Revo lvi ng Cre di t Facili t y. Any sum s out stan din g und er th e Revolv ing C red it Fac ilit y w ill be d ue for repay me nt on 17 June 2 025 , su bje ct to theo ptio nali t y of a 1 2- mo nth ex ten sio n. The assessm ent period Th e Dire ctors c onsi de red a num be r of factors in dete rmi ning t he p eri od c overe d by the asse ssm ent . T his in clud ed t he Gr oup’s pri nci pal ris ks , the c urre nt an d fu ture na nci ng arr ang em ents , and th e cer tain ty over fu ture au cti on a ctiv it y. By th eir nat ure, forecasts inherent ly becom e less accurat e and m ore un ce r t ain as th e plan nin g hor izon ex tend s. Wh ile we prep are a ve - yea r plan , the pla n’s f oc us is mainl y on the r st thre e year s with t he ou ter t wo year s rel yin g mor e on exp e cted tre nds a nd ex t rap olat ions . Th e Direc tors have asse sse d the app ropr iaten ess of thi s asse r ti on as d etail ed business planning focuses on the near-t erm bud get p roc es s base d on th e infor mati on availab le to the G roup fo r the m arkets a nd operati ng en vironmen ts in which the Gr oup ope rates , wit h de cisi ons o n fu ture fu ndi ng and c api tal all oc atio ns foc use d on th is pe rio d. In this con text , the lo ng - term vi abili t y asse ssm ent h as be en b ase d on a th ree -ye ar time f ram e, c over ing th e pe rio d to 30 Se ptemb er 20 25 . On this basis the Di rec tors have deter min ed t hat thr ee ye ars was th e mos t app rop riate pe ri od for as ses sing t he Group’ s prospects. Forecasts and prospects Th e Grou p’s prosp ec ts have b ee n asse sse d mainl y wit h referen ce to th e Grou p’s strateg ic plan ning an d asso ciate d long - ran ge na nci al forec ast . T his in co rp orates a d etai led bot tom - up bu dge t for eac h par t of the business. The budg eting and planning pro ces s is tho rou gh an d inc lud es in put fromd ep ar t men t manag er s, as well as theLe ade rsh ip T eam . Th e Dire ctors pa r ti cipa te in strategic pl anni ng and rev iews th e det aile d bot to m - up b udg ets . Th e ou tpu ts fro m this p roc ess i ncl ude f ull na nci al forec asts of reven ue, ad justed EBI T DA , adju sted an d statu tor y ear nin gs , cash ow, workin g cap ital an d netde bt . The Dire ctor s con side r that the pl anni ng pro ces s and m onth ly fore ca st up dates prov ide a sou nd und er pinn ing tomana ge me nt ’s exp ec tatio ns of the Grou p’sprosp ec ts. Assessing the Group’ s viability Th e viab ilit y of th e Gro up has b e en ass ess ed , tak ing into acc ou nt the curren t nanci al posi tio n, i ncl udi ng ex ter nal f und ing for t he Grou p in pl ace ove r the as ses sme nt p eri od , and the im pac t of ce r ta in sc ena rio s arisi ng fro m th e pri nci pal ris ks , whic h have the g reatest p otenti al impa ct o n via bilit y i n that p er iod . A num ber of s ce nar ios have b ee n mo de lle d, con side re d severe b ut p lausi ble , that en co mp ass th ese iden ti e d ris ks. Whil st ea ch of the ris ks for th e Gro up ou tlin ed o n pag es 4 0 to 4 4 ha s a potenti al imp act a nd ha s be en con side re d as par t of the ass ess me nt, o nly those that r epresent severe but plausible sce nar ios we re sel ec ted for m od ellin g. For e ach s ce nar io, th e mo de lling c aptu red the imp ac t on key measure s of prot abil it y, cash ow, liquidit y an d debt c ovena nt head roo m. T h e sce nar ios h ave be en r un bot h individually and combined (the combination of all downs ide s cen ari os o ccu rr ing at o nc e is co nsid ere d to be rem ote) . Th e sc ena rio s are hyp othe tic al and p ur pos efull y seve re wit h the ai m of creati ng ou tco mes t hat have th e abili t y to threaten t he vi abili t y of the G rou p. Th e Grou p has m ulti ple c ont rol m easu res in plac e to preve nt and m itig ate the sc en ari os from taking place. Al tho ugh e ach of t he dow nsid e (and the combine d) scenarios result in increased lever age t hey al l resul t in he adro om ove r theba nk facil itie s and cove nants at all testin gpoi nts , even whe re non e of the mitigating actions ha ve been applied suc hasred uci ng disc reti ona r y cap ita l and operati ng e xpenditur e. Viability statement Based on these severe but plausible sce nar ios th e Dire ctors c on r m that they have a reasonable expectation that the Grou pwill be ab le to contin ue in op er ation and m ee t its lia bili ties a s they fa ll due ove r the th ree - year p er iod to 3 0 S eptem be r 20 25. Downside scenario Associated principal risks Descriptio n Si gn i c a nt re d uc ti o n in commission revenue due to TH V red u c tio n • IT infr ast ru ctu re – stabili t y and busi ne ss continu ity of a uction p latforms • IT infr ast ru ctu re – inabili t y to kee p pace with i nn ovati on an d ch ang es • Data se cu ri t y/ data los s • Competition • Eco no mic an d geo - po lit ic al unc er taint y Thi s sc ena ri o assu me s an abso lu te red uc tio n in T H V of 21 % vers us th e bas e cas e over th e th ree - year period. Si gn i c a nt re d uc ti o n in commission revenue due to sha re de c li ne • IT infr ast ru ctu re – stabili t y and busi ne ss continu ity of a uction p latforms • IT infr ast ru ctu re – inabili t y to kee p pace with i nn ovati on an d ch ang es • Data se cu ri t y/ data los s • Competition Thi s sc ena ri o assu me s an abso lu te red uc tio n in th e Gro up’s co nver sio n rate of 1 3% ove r the t hre e - ye ar period. De lay in th e rol l ou t of payments technology across the Group • Failu re to de live r expe cte d ben e ts fro m acq uisi tio ns a nd/or in tegr ate the busi ne ss in to the G roup e f fec tive ly This scenario assumes that t he ro ll ou t of the payment s t echnology is del ayed u ntil A p ril 2 0 23 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 45 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS S ta k ehol der En ga ge men t an d S e ct ion 1 7 2 S t a t ement Enga ging wi th our stakeh old ers is int egral t o the Boar d’ s d ecisi on -making and achi ev em en t of o u r strat egy . Effectiv e stakeh ol de r engagem en t hel ps us bett er unde rstand the im pact of o ur deci si ons o n al l our stak eho lde rs. Se ct ion 172 of the Co mp anie s Act 20 0 6 requ ires dire c tors to act in a way that promotes the su cc ess of the co mp any for the be ne t of share ho lde rs as a w hol e, wh ilst hav ing re gar d to the intere sts of it s othe r sta kehol de rs . This s ec tio n of the re po r t se r ves as o ur S e cti on 172(1 ) S tatem ent , set ti ng ou t how Dire ctor s have taken into consi der atio n the intere sts of materia l stakeh old er s in their d eci sion - mak ing . Th e Bo ard has re gar d to the mat ter s set o ut i n Se c tion 172(1 ) of th e Co mpa nies A ct 2 0 06 w hen p er formi ng i ts du ties u nde r S ec tio n 1 72 to act in a way it consid ers , in go od fait h, woul d be most like ly to promote the suc ce ss of the Co mpany an d for the ben e t of its stakeh old ers . Th e Boa rd con side rs i ts du ties u nd er S e ctio n 172(1 ) in all i ts disc ussi ons a nd de cis ion - mak ing . A refere nc e to Se cti on 172(1 ) and t he du t y to con side r stake hol der in terests is hig hligh ted at each me eti ng. In tak in g dec isio ns, th e Direc tors c onsi der th e balan ce of interes ts of the stakeho ld ers whomi ght be af fecte d, det ails of which are re co rde d in the Boa rd minu tes. Th e prin cip al stakeh ol der s ide nti e d by the Board are set ou t be low. Th e followi ng tab le su mm aris es ou r key stakeh ol de rs , how we have eng age d wit h the m and the o utp ut s of that eng age m ent du ri ng the nan cia l year. Metri cs are b ein g deve lo pe d to enab le th e Bo ard to meas ure i ts eng age me nt wi th sta keho lde rs an d to trac k the o utc ome s of that eng age me nt. In as sess ing the c om pos itio n of the Boa rd, th e Chair an d the No minat ion C om mit te e are keen to ensure tha t the ski lls and exp eri en ce of th e Bo ard match t he in terests of o ur pr in cipa l stake hol der s. Our stakeholders How we e ng age Wha t we did Peo ple Ou r pe op le are o ur m os t valu abl e reso urc e and asse t. En sur in g that weat tra ct , nur t ure and reta in our pe op le an d foc us th em o n ac hiev in g our s tra tegy i s key to A TG ’s suc ce ss . Th e Bo ard is ke en ly awar e that t he intere sts of o ur p eo pl e sh oul d be consider ed when making deci sions that m ay imp ac t the m an d the wide rbu sin ess . All of o ur p eo pl e ac ross t he gl ob e re gul arl y joi n glo bal a nd re gio nal v ir tual “All Ha nds ” me eti ngs whe re the CEO and his Lea de rsh ip T ea m brin g ever yon e up to sp ee d wi th ou r lates t pro je cts , ou r str ateg y and o ur b usin es s pe r for ma nc e. T he ou tpu ts of the Leade rs hip and B oard st rateg y ses sio ns are a lso c asc ad ed to th e wid er management team for on ward communication tothei r teams. Th e Boar d and Lead er shi p T eam are keen to und er sta nd th e vi ews of ou r pe op le a nd th erefo re we co ndu ct a n ann ual e mp loye e en ga ge me nt sur vey an d puls e sur veys to se e ho w pro gres s is bei ng m ade o n are as of foc us . Bre on C orc or an is the Boa rd’s desi gnate d Dire ctor for wor k for ce e nga ge me nt an d he is c om mi t ted tohol din g empl oye e enga ge me nt sess ion s bian nu ally, the o ut pu ts fro m wh ich a re re po r ted tothe Boa rd . We aim to at tra ct a nd re tain o ur p eo pl e and s tr ive to be a co mp any wh ere p e opl e of all b ac kgrou nds , eth nic iti es , reli gio ns an d be lie fs ca n wor k and thr ive. A ll e mp loye es a re iss ue d wit h an e mpl oye e han db oo k whe n th ey joi n whi ch in cl ud es all app rop ri ate pol ici es in t his re gar d. An nua l pe r for ma nc e revi ews are c on du cte d and fee dba ck is re gu lar ly p rovi de d to emp loye es . T he UK /E U teams are give n this opp or tun it y to chec k in an d prov ide /rec ei ve fee db ack t wi ce a ye ar an d at the e nd of a p rob atio n pe ri od . We were de lig hted to wel co me a n ew g rou p of emp loye es to A TG wi th ef fe ct f rom 1 O c tobe r 20 21, followi ng th e ac quis iti on of Live Au cti on ee rs . We are acti vel y work in g to integ rate the Li veA uc tio ne er s emp loye es into the A TG be ne t s, po lic ies and pro gra mm es . We are als o in th e pro ce ss of up dat ing o ur Co mp any val ues to b et ter a lign w ith o ur C om pa ny str ateg y. As we e me rge d fro m th e pan de mic we l iste ne d to our p eo pl e and int rod uc ed a hybr id appr oac h to wor k loc atio n and ex ibl e wor kin g pr ac tic es . Th e Bo ard f ull y sup po r te d the a cti on to imp le me nt exi bl e work ing pr act ic es goin g for ward for emp loye es , fol lowi ng th e over ri din g fee dba ck f rom t he employee engagement s ur vey . Th e resu lts of t he F Y2 2 e mpl oye e en gag em en t sur vey (excludi ng Live Au ct io ne er s) we re pres ente d to t he Boa rd in May 20 2 2 an d de mo ns trate d a hig h app roval r ate for th e Lead er shi p T eam . Fur th er det ails can be found und er Lis teni ng to our Pe o ple i n the S us tai nab ili t y Rep or t on p age 6 6 an d un de r Em ploye e Eng age m ent in the Cor po rate Gover na nc e Repo r t on page 80 . Live Au cti on ee rs emp loye es will be incl ud ed in the 2023 engagement sur vey . All o ur e mp loye es we re gif ted an awar d of sha res o n Adm issi on to alig n their intere sts wit h sh are hol de rs . Addi tio nal ben e ts also include par ticipation in an al l- employee share purchase plan. Bre on Co rco ra n, the Boa rd’s desig nated Dire cto r for work fo rc e engagement, conducted engagement sessions with rep rese nta tive s of the G rou p’s emp loye es d ur ing t he ye ar an d rep or ted ba ck to th e Bo ard to dis cus s any is su es an d act io ns tobe taken, inc lud ing del eg atio n to B oa rd Com mit te es wher e appropriat e. Outputs included pos itive r eactions from emp loye es to the seni or app oin tme nts made to the Lead er shi p T ea m, s ug ges tio ns fo r imp rovi ng c om mun ic atio n an d cul tur e acr oss al l bra nds , an d fee db ac k on pr oje ct g over na nc e, al l of whic h were taken f or wa rd by t he Chief E xec uti ve and his Lead er shi p T eam . Thi s year we l aun ch ed d ive rsi t y, equa lit y a nd in clu sio n tr aini ng to all em ploy ee s and we c on tin ue to mo ni tor div ers it y i n our recruiting , hiring and promotion processes. Fur t he r det ails o n ou r en gag em ent w ith o ur p eo pl e ca n be foun d in O ur Pe o ple a nd C om mu nit y o n pag es 6 6 to 6 8. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 46 Strategic Report Cas e st ud ies to s up po r t S ec ti on 172( 1 ) S ta tem en t K ey decisi on : Relocat ion of Pro xibid ofce Dur ing th e year, the B oard was pre sente d with t he de cis ion as to wh eth er to app rove a leas e for new p rem ises for t he Proxi bid team in Oma ha. In tak in g this de cisio n, th e Bo ard co nsid ere d all of th e factor s set o ut in s. 172 of the Co mp anie s Act 2 0 0 6. Peop le Wh en co nsid er ing the of c e move, the Bo ard too k acc ou nt of the i mpa ct on emp loye es . Th e lo cati on of the p revi ous of c e spac e on a busi nes s park la cked loc al am en itie s. T he l oc atio n of the n ew of c e at Blac kston e Plaz a enab les emp loye es to walk to lo cal a men iti es, thereby suppor ting loc al businesses, and provid es othe r be ne ts su ch as a wellne ss cen tre on -s ite. T he lo c ation , bu ildi ng an d ame niti es will a ssis t in reta inin g and at trac tin g talen t in the Om aha of ce . Community and the environment Th e loc atio n of the previo us of c e requ ired emp loye es to dri ve to loc al am eni tie s. Retai ning an of ce in Om aha foster s a collabora tiv e cult ure w ith a n operat ing rhythm of in- person meet ings depen ding on busi nes s nee ds . The for me r of c e was a repu rp ose d ware hou se whi ch re quire d continuous maintenance and its CO 2 emis sio ns rep rese nted 62 . 1 % of the Gr oup’s Sc op e 1 and S c op e 2 em issio ns du rin g F Y 2 2. We estim ate that the new of c e’s CO 2 emis sio ns rep rese nt 20 % of the fo rm er of c e. T he new of ce is small er, reduci ng the overa ll footpr int of of c e spac e by 80% . Th e ben e ts of the new of c e are set ou t inthe S ust ainab ilit y Re po r t on pag e 64 . Suppliers Relati ons hips wi th m ost l oc al sup pli ers a re unaf fec ted. T he lo cati on of the new of ce at Bla cks tone Pl aza is c los er to lo cal amenities, thereby enabling employees tosupp or t loc al busin ess es . Shareholders Competitive pricing was achieved f or a ve - yea r lease an d was ben chm ar ked with ot her p rop er ties in t he O mah a dist ric t. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 47 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Our stakeholders How we e ng age Wha t we did Cus tome rs Our cust omers ( auction hou ses ) and ourc on sum er s (bid de rs) are key to our suc ce ss . We str ive to pro vid e the b es t leve l of ser vic e to the m wh ile c ar r y ing ou t rob ust d ue d ilig en ce c he ck s to ens ure we ma int ain a re pu tati on fo r the high es t sta nd ards of b usi nes s co nd uc t. We con sta ntl y str ive to im prove t he customer experience. For a uc tio n hou ses , we p rovid e ac ce ss to a gl oba l bid der b ase e nsu ri ng o ptim al ass et va lue s are ach ieve d, as well as Saa S back- of ce sol ut ion s, paym en ts se r vi ce s, n ew se r v ic es to red uc e auc tio n ho use s’ co sts a nd b es t- in - clas s whi te lab els a lon g wi th rel eva nt co nten t and bid deri nsi ghts . We give bi dd er s acc es s to a wide r ang e of un iqu e and s pe cia lise d se c ond - han d ite ms in a tr us ted , sim ple , sus tai nab le an d co nve nie nt ma nne r. We eng age w ith b idd er s via o nsi te req ue sts fo r fee dba ck as we ll as o nsi te sur veys . We offe r em ail sup po r t o n all of ou r ma rket pla ces a nd li ve ch at onth e majo rit y. The mar ketin g team revie ws all fee dba ck as t he ba sis for n ew ma rket ing i nit iati ves and p rod uc t featu re req ue sts . We pur sue a t ru e “sha red s uc ce ss” b usi nes s mo del , wh ere by we ea rn o nly i f ou r auc tio n ho use customers earn rev enue throug h using our ser vic es . We have ove r a 50 - yea r his tor y of wor kin g in p ar t ne rsh ip wi th th e auc tio n in dus tr y. Eng ag em ent with auc tio n house s is c on du cte d throug h str uc tur ed an d ri go rous a cc ou nt ma nag em en t co mbi ne d with a h igh l eve l of sup po r t b efore , dur in g and af ter auc tio ns . Dur in g the year the Chi ef Ope rat ing Of c er prov id ed the Bo ard wi th d em ons tra tio ns of tim ed a nd li ve on lin e auc tio ns , prov idi ng an i nsig ht in to the au ct ion h ou se andb idd er exp er ie nc e. Rob ust d ue di lig en ce c he ck s are un de r ta ken b efore n ew auc tio n ho use s are o nb oard ed a s cus tom er s, to pr otec t fro m fra ud an d mo ney l aun de ri ng . We have sp ec i c pol ici es with reg ard s to proh ibi ted item s on ou r ma rket pla ces a nd we e mp loy a c om plia nc e team to mo nito r adh ere nc e to the se res tr ict io ns. We have t he abil it y to rem ove au cti on h ou ses wh o we be lie ve are une thi cal o r se llin g or p rom oti ng go o ds in c ont rave ntio n of our c on tra ctu al ter ms an d po lic ie s. T he B oa rd req ue sted and re c eive d a pr ese ntat ion o n th e app lic ati on of th es e pol ici es du ri ng th e yea r, t o gai n a de ep er u nde rs tan din g of the impact on cust omers. As d eta ile d in ou r S tr ateg y in Ac ti on: c ase s tud ies o n pag es 2 2 to 23 we have d eve lop e d and ro lle d o ut mar ketin g an d paym en ts so lu tio ns in F Y2 2 to b oth impro ve t he bidder experience whil st enabl ing a uctioneers to oper ate more ef cie ntl y. Suppliers Ou r key sup pl y cha ins c on sist of : technology servic e providers including outsourced so ft ware development, managed hosting ser vices, clou d solutions, soft ware licences and hardware supply; people ser vices including recr uitment agenci es, professional ser vice advisers and be ne ts p rovi de rs; a nd fa cili tie s management inclu ding building maint enance, refr eshment provi ders andof c e cons um abl e supp lie rs , transpor t and logist ics. We are co mm it te d to impr ovin g ou r pra cti ce s to ens ure slave r y and hum an traf ck in g have no pla ce in a ny par t of ou r bus ine ss o r our s up ply cha in. T hi s is de tail ed i n our M o der n S laver y S tate me nt pu blis he d on t he Gr oup ’s websi te. Weexp ec t the same co mm it me nt from ou r suppliers, contra ctors an d business partners. We eng age i n bus ine ss re lati on ship s wit h established and reputable business partn ers/ clie nts , wi th wh om we a im to bui ld lo ng -ter m par tne rs hips . A s par t of our i nit iati ve to ide ntif y and m iti gate ris k , we have ap pro pr iate c ont rols and s yste ms in p lac e, r igo ro us su ppl ier onb oa rdin g , whic h in clu de s infor ma tio n se cur it y and d ata pr otec tio n due d ilig en ce , as we ll as che c ks on nan ci al viabi lit y an d sanc tio ns , andfa irco ntr ac tua l terms . We con tin uall y en gag e wi th key ou tso ur cin g partners to discuss opera tional performance andt he stab ili t y of ou r platfo rm s. We have co ntin ue d to pay all o ur su pp lie rs p rom ptly a nd inac co rda nc e with the ir paym en t terms . We se ek to work with a r an ge of su pp lie rs , big a nd sm all , to ens ure we rec ei ve the b es t se r vi ce s app ro pri ate for ou r bus ine ss . As d eta ile d in th e Su sta ina bili t y Re po r t o n pag es 52 to 6 5 we wor ked cl ose ly w ith o ur T ie r 1 sup pli er s in F Y2 2 to obta in mor e spe ci c emi ssi ons dat a, over sig ht of which is prov ide d by th e Su sta ina bili t y and C lim ate Ris k Co mm it te e on b eha lf of th e Bo ard . Strategic Report Stakeholder Engagement and Section 172 Statement continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 48 Our stakeholders How we e ng age Wha t we did Communities and environment Envi ron me nta l susta ina bili t y is at the hea r t of ou r op er atio ns , wi th ou r on lin e auction marketplaces ensuring that milli on s of item s are re sol d for re - use o r rep ur pos e eac h ye ar, exten din g th eir valu e wit hin t he e co no my and p reve nti ng wasted raw materials. Th e Gro up’s pu rp ose i nfor ms ou r busi ne ss st rate gy an d co mm it me nt to bei ng a s upp or tive a nd tr us ted pa r tn er to the i ndu str y, our pe op le a nd ou r communit y . We exist to m ake it e asie r to bu y and s ell at auction, thereby suppor ting the trans forma tion o f the au ct ion i nd ust r y in i ts s tru ct ura l shif t to onli ne , as well a s bri ngi ng exc iti ng n ew op po r tu ni ties to fur the r en abl e au cti ons to pl ay the ir p ar t i n acc el er atin g the g row th of t he c irc ular e c on omy. We do this b y gen er atin g a vi r tu ous c irc le of grow t h bet we en a uc tio n ho use s, th os e who consign to auction, and bi dders. We are co mm it te d to mak ing a n imp ac t not o nly for ou r ind us tr y, bu t also fo r the c om mu nit ies a nd ind ust rie s tha t we op era te in. T o this e nd , we ru n a num be r of pro gr amm es a nd in iti ative s that e na ble our b usi nes s an d our p e opl e to make a di f fere nc e. In line wit h our aim to be a trus ted par t ne r to the auc tio n ind ust r y, we supp or t ed uc atio na l pro gra mm es , pro mot ing auc tio ne er in g, i ndu str y sta nd ards a nd th e tra de i n se co nda r y g oo ds . We supp o r t th e S oc iet y of F in e Ar t Auc tio ne er s (“ S OFA A”) and the Br itis h Ant iqu e Deal er s’ As so ciat ion ( “ BA DA”) in the UK , and the Natio nal Auc tio ne er s’ As so ciat ion ( “ N A A” ) and the Inter nati on al Auc tio ne er s’ As so ciat ion ( “I A A”) in the US . We ena ble P ayro ll Gi vin g as a si mpl e way for o ur p eo pl e to sup po r t cau ses cl ose to them wit h tax- fre e givi ng . Dur ing F Y 2 2 we ach ieve d th e Sil ver P ayr oll Gi vi ng Q uali t y Ma rk Award for o ur c om mit me nt to Pay roll G iv ing . We facil ita ted ch ari t y au cti on s on ou r ma rket pla ces , waiv ing o ur fe es to en sure t hat all p ro ce ed s go to th e cha ri tie s. In the past 1 2 mont hs , char it y auc tio ns hos ted on ou r ma rket pla ces h ave rai sed ove r £6 .0 m (F Y21: £7 .0 m) for go od c aus es . Fur t he r det ails o n ou r en gag em ent w ith t he c om mun it y and e nvir on me nt ca n be fo und i n our S us tai nab ili t y Rep or t on pa ge 5 3 . Inv estors We aim to ens ure t hat a go o d dial og ue is mainta ined with shareholders, in vest ors and a nal ysts . We want to e nsu re tha t inve stors un derstand our bu siness, our str ateg y and t he e nviro nm en t wit hin whic h we wor k , an d tha t inves tors ’ issu es a nd co nc e rns a re un de rsto od andc on sid ere d by the Board an d Lead er shi p T eam . We are hap py to en gag e in o pe n and t ran spa ren t relat ionships w ith our shareholders. The Boar d reviews and appro ves mat e rial communications toinvesto rs , suc h as res ult s anno unc em en ts. We have inves ted in our Inves tor Relati on s fun cti on and th e Direc tor of Investor Rel atio ns isres po nsib le for overa ll investo r enga ge me nt, ens uri ng th at th e Bo ard is awa re of inves tor v iews and that th e Exe cu tive s’ time is opti mise d . Th e resu lts a nn oun ce m ents a nd i nvesto r pres en tatio ns , al ong w ith t he AG M, a re an imp or tan t op po r tu nit y fo r the B oa rd to sha re dire ct ly wi th sh are ho lde rs t he p er fo rm anc e an d str ategi c dire c tio n of the G rou p. T he Company’ s AGM wil l be h eld o n 26 Ja nu ar y 2 02 3 . Reg ula r fee dba ck o n inves tor vi ews is p rovi de d byour co rp or ate broker s. Th e Chair an d the Sen io r Inde pe nd ent Dir ec tor are availa ble fo r me et ing s wit h majo r sh are hol de rs . We con tin ue to wor k cl ose ly wi th TA Asso ciate s, amajo r share ho ld er. Th e forma lit ies of this rela tio nshi p are d eta ile d in th e Rel atio nsh ip Agre e me nt; s e e the D ire ctor s’ Re po r t o n pag e 1 1 5 . We hos ted mu lti ple m e etin gs wi th ex isti ng an d pros pe ct ive sh are ho lde rs d ur ing F Y2 2 . T his i ncl ud ed in - p er son m e eti ngs , vi de o ca lls , co nfere nc es an d thr oug h the results roadshows. All Di rec tor s appo inted at the tim e atten de d the AGM hel d in January 20 22 . Ove r 9 0% of o ur is su ed sh are c api tal w as voted at o ur AGM in J anu ar y 20 2 2, w ith t he ma jor it y of re so lut ion s rec ei vin g over 9 9 % su pp or t. In Novem be r 20 21, t he Rem un era tio n Com mi t tee Chai r wrote to 1 3 majo r sh are hol de rs , rep res ent ing 7 3. 8 3% ofthe reg ister at that tim e, ou tlini ng the Co mm it te e’s app roa ch to Exec u tive rem une rat io n. Th e remu ner ati on pol icy wa s app rove d at th e 20 2 2 AGM . Inves tors and an alys ts were invi ted to vir tua lly at tend ou r resu lts a nno un ce me nts , wh ich i nc lud ed a d ed ic ated que sti on an d ans wer s ec tio n. A ll i nvesto r ann ou nc em ent s are avail abl e on o ur we bsi te. We inc reas ed a nal yst c over ag e of A TG , whi ch wi ll he lp pros pe ct ive an d exi stin g sh are hol de rs to b et ter understand our business and stra tegy . Th e Bo ard c on sid ere d the i mp act of a p ar tial re pay me nt of the S eni or T e rm Loa n Facili t y on the Co mpa ny ’s nanc ial pos iti on . Fur the r det ails c an b e fou nd in n ote 1 8 of the Consolidated Financial Statements. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 49 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS K ey deci si on: A cquisit ion o f Liv eAuctioneers Dur ing th e previo us rep or ting pe rio d and as discl ose d in la st yea r ’s Ann ual Re po r t , the Bo ard was pre sen ted wit h the d eci sio n as to whet he r the acqui siti on of Live Auc tio ne er s would b e mo st likel y to prom ote the su cc ess of the Group for the be ne t of its mem be rs as a who le. T he fa ctor s taken in to acc oun t by the B oard i n co nsid er ing S e cti on 172(1 ) were se t out i n the F Y21 A n nual Re po r t . T he acq uisit ion c om ple ted on 1 O ctob er 2 0 21 . Th e imp act of th e acq uisi tio n and th e integr atio n of LiveA uct ion ee rs on ou r stake hol der s dur in g F Y 2 2 is set o ut b elow. Peop le Dur ing F Y2 2 the Boa rd has overse en the integr atio n of Li veA uc tion ee rs into A TG, taking into account organisational and cul tura l integr atio n, e mpl oym ent te rms a nd inc enti ve sc hem es an d tec hnic al in tegrati on . Th e Bo ard is re gula rly u pd ated on p rogr ess and wel co me s the in cre ase d kn owle dge a nd tech nic al exp er tise ad de d to the Gro up by LiveAuctioneers employ ees. Community Th e acq uisi tion h as allowe d the G rou p to expa nd it s footpr int a nd bro ade n our i mpa ct on th e co mmu nit y by g rowing a cc ess to th e sec on d - ha nd go od s mar ket in wid er m arkets . Customers Th e acquis itio n of LiveAu cti on ee rs has give nour UK and E U A& A auctio ne er bas e the o ppo r t unit y to b egi n cros s - list ing o n Live Au cti on ee rs and the US auc tio ne er base the opp or tuni t y to cros s - list in the UK and EU. We have obs er ve d an increa se in the volum e of auc tio ns cro ss - lis ted be twe en Live Au cti on ee rs , the saler oo m and Lot-tis sim o, a proce ss whic h is beco min g autom ated wit h the i ntro duc tio n of integr ated bid din g referre d to in the C hief E xec uti ve Of ce r ’s repor t on pages 10 to 1 3 . Th e acq uisi tion a lso exp and ed th e inven tor y offe red to our UK and EU A& A bidde r base. Itals o allowed us to acc el era te the devel op me nt and ro ll ou t of an inte grated paym ents s olu tio n to othe r A TG ma rketp lac es star ting w ith o ur N or t h Am er ic an cu stom ers . Fur th er d etail s on th e pro gres s of whic h can be foun d on p age 2 3. Shareholders Live Au cti on ee rs is the le adin g A& A marketplace in Nor th Amer ica and thepr op ose d acqu isiti on was stro ngl y supp or ted by votin g share ho lde rs at t he gen er al me etin g he ld on 2 0 Aug ust 2 02 1 . Th e Bo ard co nsu lted wi th th e Co mpa ny ’s majo r inst itu tio nal sh areh old er s ahe ad of announcing the proposed acquisition. Th eBo ard , via the CEO, C FO and Inves tor Relati ons f unc tio n, h as kept sh areh old er s up to date with t he inte grati on of th e Live Au cti on ee rs bus ines s and its im pac t onGro up reve nue s via the inter im resul ts ann oun ce me nt in May 2 02 2 , inve stor prese ntat ion s and in t his rep or t. Strategic Report Stakeholder Engagement and Section 172 Statement continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 50 In addi tio n to the infor mati on de taile d on pag es 4 6 to 50, th e table b elow de tails th e loc atio n of fur th er infor mati on thro ugh ou t this An nua l Rep or t as to how the Dire ctor s con side r the ir resp onsi bili ties un de r Se cti on 172(1 ) of the Act. Responsibility Report Page Numbers Consequenc es of decision-mak ing Chairman’s Statement Chi ef Exe cu ti ve Of ce r ’s St atem ent Ou r Six S trate gic Dr ive rs Key Per for ma nc e Indi cato rs Chi ef Fina nc ial Of c er ’s Revi ew Principal Risks a nd Uncer tainties Corporate Governance R epor t Audit Committee R epor t Remunera tion Committee R eport 08 10 20 26 32 40 74 88 98 Ou r e mp loye es Chairman’s Statement Chi ef Exe cu ti ve Of ce r ’s St atem ent Ou r Bus ine ss M od el Sustainability Repo r t Principal Risks a nd Uncer tainties Corporate Governance R epor t Nomina tion Committ ee Report Remunera tion Committee R eport 08 10 18 66 40 74 95 98 Fostering of business relationships with suppliers, customers and o thers Purpose Ou r Investm en t Case Chairman’s Statement Chi ef Exe cu ti ve Of ce r ’s St atem ent Ou r Bus ine ss M od el Ou r Six S trate gic Dr ive rs Key Per for ma nc e Indi cato rs Sustainability Repo r t Insi de fron t cover 06 08 10 18 20 26 52 Th e Co mp an y ’s desi ra b ili t y to m ai nt ai n a re pu t ati o n for h ig h s ta n da rd s Purpose Chairman’s Statement Chi ef Exe cu ti ve Of ce r ’s St atem ent Sustainability Repo r t Corporate Governance R epor t Insi de fron t cover 08 10 52 74 Th e ne ed t o ac t fa ir ly a s be t wee n me mb er s of t h e Co mp an y Chairman’s Statement Chi ef Exe cu ti ve Of ce r ’s St atem ent Ou r Bus ine ss M od el Stakeholder Engagemen t R eport Corporate Governance R epor t Remunera tion Committee R eport 08 10 18 46 74 98 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 51 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS S us tainabilit y Re p o r t Auc t io n T ec h no lo gy G r ou p p lc A n nu a l Re po r t 20 2 2 52 Strategic Report T h e e nv i r o n me nt Th e Grou p’s pur pos e is to prom ote the circular economy , with our marketplaces ensu rin g that m illio ns of use d item s are reso ld for re - use o r re - p ur pos e, pre venti ng waste and c ar bo n emis sio ns fro m the manu fact uri ng of new i tems . Th is is the rs t year the G roup is req uire d to compl y with t he T as k Forc e on C limate - relate d Fin anc ial Disc los ures an d has made go od prog ress i n doi ng so. C lima te chan ge is notcu rre ntly de e me d to be a pri nci pal riskto the Gro up and du e to the nature ofthe Gro up’s oper atio ns it pres ent s pot entia l opportunitie s. People a nd c u lt u re Our b usi nes s dep en ds on h irin g and retai ning rst cl ass tale nt in the hig hly competitive t ec hnology industry. We have be en foc use d in F Y2 2 o n stre ng the ning n ot onl y the Lead er ship T e am bu t also anum be r of k ey dep ar t me nts acro ss the Grou p and i ntegr ating c ult ures as t he Grou p has gr own thro ugh a cqu isiti on . Cor p orate go ver n a nc e Th e Bo ard are c om mit te d to buildi ng afram ewor k of stron g cor po rate gover nan ce . Thi s has be e n evid ent d uri ng the ye ar thro ugh t he ap poi ntm ent of a num be r of new Non - E xecu tive Di rec tors with rel evan t nan cial an d busin ess exp eri en ce an d the e stab lish me nt of the Sus tain abil it y an d Clim ate Risk C om mit te e. This s ec tio n of the re po r t prov ide s an over v iew o n the G roup’s key deve lop me nts on Envi ron men tal , So cial , Gover nan ce (“ E SG ” ) mat te rs dur ing F Y2 2 . Our commitment: W e are commit t ed to opera tin g a respon sible, susta ina ble busi ness for the bene t o f a ll our sta k e holders . 1. Fi na nc ial S t abi li t y Bo ard , 20 2 2 . TCF D. Avail abl e: h t tps : / /w w w.fsb - tcfd .o rg / . 2. TC F D, 2017 . Re co mm en da tio ns of th e T a sk Fo rc e on Cli ma te - re late d Fi nan ci al Di sc los ur es . Available: https:// assets.bbhub.io/company/ sites/60/2021/1 0/FI NA L -201 7- TCFD - Repor t .pdf. The En vir onment Climat e change co ntinu es t o be a signican t glob al chal len ge. W e rec ognise that the chang ing climat e could im pact o ur busin ess, em pl oyee s and our cust ome rs and, t o ensure w e are re silien t to the changing c li mat e a nd r egulat ory requirem ent s, we tr ea t t he climat e crisisa s a Board - lev el go ve rna nce ma tter . T ask F or ce o n Cl ima te -r el ate d Financial Disclosures Th e Group is rep or ting for the rs t time oncli mate - re lated iss ues in line wi th the T askFo rc e on Climate - r elated F inan cial Disc los ures (“ TCF D” ) fram ewor k , reco gnis ing the n ee d to provid e “cle ar, comp rehe nsi ve and high - qual it y infor mati on o n the im pac ts of climate change” 1 . We have beg un to disc los e in this A nn ual Re po r t ac ros s the fou r pilla rs ofTCFD, ens uri ng con sisten t and trans pare nt clim ate - rel ated repo r ti ng ande nc our agin g thewid esp read ad opti on ofthe fra mewor k . Compliance statement On pa ge 5 4 to 5 5 we have ou tline d th ose clim ate - rel ated nan cial dis clo sures th e Grou p has ma de thi s year wh ich a re con sisten t with t he 1 1 re c om men de d discl osu res se t ou t in S ec tio n C of the “R ec om men dati ons of th e T ask F orc e onCli mate - re lated Fi nan cial Disc los ures ” pub lishe d in June 2017 by t he TCFD 2 and ide nti es th e rec omm en dati ons whe re con sisten t disc losu res have n ot be en m ade. It is wide ly rec og nise d that , for most co mpan ies , the p ath to full d iscl osu re in linewi th the TCF D rec om me ndat ion s is aco mpl ex proc es s which ta kes a numbe r ofyears . For this rea son , in the Gro up’s rs t year we are n ot yet in a p osi tio n to make a fulldis cl osure , however, we are clo se to bei ngab le to disclo se in line wi th all 1 1 rec om me nde d disc los ures . Th e wor k und er taken to date and s et ou t wit hin thi s rep or t l ays the fou nd ation fo r our wo rk infu ture year s as we move towards full discl osu re. We have set o ut h ow we plan tocom ply wi th the rec om me ndat ion s in futu re year s. R i s k M a n a g e m e n t M e t r i c s & T a r g e t s G o v e r n a n c e S t r a t e g y Co re e le me nt s of th e recommended climat e-related nancial disclosures Gov ernance The o rganisati on’s gover na nc e arou nd climat e - relat ed risks and opportunities. Strategy Th e actu al an d potenti al impacts of clima te- related risks and o ppo r tuni ties onth e organ isati on’s businesses, strategy , andnancial planning. Ri sk Ma na ge m en t The processes used by theo rgani satio n to identif y, assess, and manage climat e - relat ed risks. Me tr ic s & T ar ge t s The metrics and targets use d to asses s and ma nag e relevant cl imate- relat ed risks and opportunit ies. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 53 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS TCFD compliance index TCFD fram ework pillars Recommended disclosures F Y22 compliance Descripti on, locati on of disclosur e progress to date and reason for om ission (if appropr iate ) Gov ernance a) Des cr ibe th e Boa rd’s oversi ght of clim ate - rel ated ris ks and o pp or tuni ties Full • Th e Bo ard’s over sigh t of clim ate - rel ated issu es an d the Grou p’s gover nanc e st ru ctur e is ou tline d in th e “G overn anc e” section on page 56. b) Des cr ibe ma nag em ent ’s role in assessing and managing climat e - related risks and o ppo r tuni ties Full • Management are represented in the Sustainability and Climat e Risk Committee and are responsible for assessing clim ate risks as s hown o n pag e 56 . Fut ur e pla ns fo r co mp li an ce a nd im p rove me n t: We will c onti nue to revi ew th e ef fecti ven ess of o ur gove rna nc e on clim ate - rel ated issu es , par tic ular ly wi th reg ards to th e newl y cre ated Su stai nabi lit y an d Cli mate Risk C om mi t tee to ensu re the term s of referenc es are t for pu rp ose . Strategy a) Des cr ibe th e clima te - rela ted risks ando ppo r t uni ties the o rgan isatio n has ide nti e d over the sho r t , me dium an d lon gterm Full • Th e iden ti ed cl imate - r elated ri sks and op po r tu niti es and th e app roac h to analy sis over va rio us tim e ho rizon s are sh own in the “ S t rateg y ” se ctio n on p age s 5 8 to 60. • Future wo rk wi ll focu s on pr io ri ty r isks a nd tim e ho rizon s in more dep th. b) D es cri be the imp act of climate - re lated risks and o ppo r tuni ties o n the orga nisation’s busi nes ses , strateg y and nan cial plan nin g Full • A quali tati ve revie w of the im pac t of clim ate - rel ated ris ks and opp or tuni ties o n th e orga nisati on’s busi nes ses , st rateg y and na nci al plann ing c an be found in th e “S trateg y ” sec tio n on page s 5 8 to 60. • Future wo rk wi ll focu s on un de rst and ing th e qua ntit ative impa ct o n our b usin ess , foll owing t he c olle ct ion of fu r th er data and e nsur ing th at any nan cial ri sk is inco rp or ated into nancial planning. c) Des cr ibe th e resilie nc e of the organisation’ s strategy , tak ing into consideration different climat e scenarios, inc ludi ng a 2° C or lowe r sc ena rio Full • Co ncl usio ns o n the res ilie nc e of the Gr oup, c ons ide rin g the resul ts of sc ena rio a naly sis, c an b e foun d in the “ S trateg y ” section on page 58. Fut ur e pla ns fo r co mp li an ce a nd im p rove me n t: We will bu ild o n the c om preh ens ive ap proa ch we have ta ken this ye ar to clim ate - rel ated risk an d opp or tuni t y ident i cat ion , sce nar io anal ysis ac ross all ge o gra phie s and busi nes s ope rati ons . We plan to inves tigate pr io ri ty r isks a nd o ppo r tu nit ies in m ore d epth a cro ss tim e ho rizons . We also p lan to co ndu ct a ta rge ted quan titat ive revi ew of the i mpa ct of pr ior it y r isks a nd op po r tu niti es. Risk Management a) Des cr ibe th e orga nisati on’s pro ces sesfor id enti f yi ng and assessing climate- relat ed risks Full • Our p roc es ses for i den tif y ing an d ass essi ng cli mate - re lated risks a re show n with in the s ec tio n “ Year one p rog ress an d materi alit y ” o n pag e 55 a nd in th e dia gram s et ou t on p age 5 8 . b) Des cr ibe th e orga nisati on’s proc ess es for manag ing climat e -related risks Full • Our p roc es ses for m anag ing c limate - related r isks a re con side re d as par t of our wid er r isk ma nag em ent fr am ewor k and dis cus se d in “ Risk M ana gem en t” s ec tio n of the A nn ual Rep or t o n pag e 3 8. • Give n the nat ure of ou r busi nes s, c limate ch ang e ris ks are gen er ally c ons ide red to be l ow, and the refore are n ot de em ed a pri nci pal ris k for th e Grou p. Cli mate - re lated r isks have b ee n con side re d whe re app rop riate wit hin th e Gro up’s prin cip al risks . Give n the low risk th ere has not b ee n signi c ant foc us yet on m itig ating t he p otential r isks a risin g fro m clim ate cha nge . As ex po sure is c urr entl y asse sse d to be low, we will focus o n im provi ng ou r man age me nt of clim ate - rel ated ris ks in fu ture ye ars wh en i nterac tio ns wi th pr inc ipal r isks b ec om e more pr ominent. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 54 Strategic Report Sustainability Repor t continued TCFD fram ework pillars Recommended disclosures F Y22 compliance Descripti on, locati on of disclosur e progress to date and reason for om ission (if appropr iate ) Risk Management ( c ontinued) c) Des cr ibe h ow proc ess es for ide ntif y ing , assessing and managing climat e - related risks a re integ rated in to the org anis atio n’s overall risk management Full • An ove r vi ew of how we are i ntegra ting c limate - related r isks and o ppo r t uni ties in to our exis tin g risk m anag em ent pro ces ses c an b e found i n the “ Pr in cipa l Risks a nd Unc er tain ties” se ct ion ofthe re po r t on pag e 4 0. • As o ur exp osu re is low, we will co ntin ue to mo nitor o ur clim ate - rel ated ris ks and o pp or tuni ties a nd up date our processes accordingly. Fut ur e pla ns for co m pl ian c e and im pr ove me n t: We will co ntinu e to review o ur r isk ma nage me nt fr ame wor k and th e be st wayto ef fect ivel y integrate clim ate - rel ated risks into our proc ess es , consi der in g how climate chang e may interact wit h our pri nci pal ris ks whil st not b ei ng a pr inc ipal r isk i tsel f. We will moni tor our p roc es ses an d adju st if n ec ess ar y. Addi tion ally, we will con tinu e to build u po n pro ce sses to mi tiga te risks (e.g. en sur ing c ar bo n emis sio ns are for mal ly co nsi dere d in ac qui siti ons). Metrics & T argets a) Disc los e the met ric s use d by the organisation t o assess clima te- related risks a nd o ppo r tu nit ies in l ine wi th it s strategy and risk management process In prog ress In subse qu ent yea rs we will ensu re that we inclu de me tri cs in line wi th ou r bus ine ss str ateg y and r isk ma nage me nt pro ces ses as re c omm en de d, h owever, fur th er wor k is ne e de d rs t to identif y appro pri ate metri cs for ou r growing bu sin ess . b) Disc los e Sc op e 1 , Sco pe 2 , and , if appropri at e, Scope 3 greenhouse gas (“ GHG ” ) e mis sion s, a nd th e related r isks Full A co mpre he nsive b reakdow n of Sc op e 1, 2 and Sc op e 3 GHG emis sio ns ca n be fou nd in th e “ Me tri cs an d T arg ets” s ec tion . c) Des cr ibe th e targe ts use d by the or g an is at i on to m an a ge c li ma te - r el ate d risks and oppor tunit ies and performance against targets In prog ress We are in the proc ess of deter mini ng cli mate - re lated K PIs and targ ets an d have co mmi t ted to a Sc ie nce B ase d T ar get ( “ S BT ” ) in F Y23 . Pro gres s on th is is disc uss ed in t he “ Me tri cs an d T arget s” sect ion. Fut ur e pla ns fo r co mp li an ce a nd im p rove me n t: In sub seq ue nt years we will ens ure that we disc los e wider m etri cs in lin e with ou r busin ess s trateg y and ris k manag em ent pro c esse s as reco mm en de d, howeve r , fur t he r work is ne ed ed r st to ide ntif y ap pro pri ate metri cs for our grow ing bus ine ss. We are also in the pro c ess of deter mini ng clim ate related K PIs and targ ets , and wil l pub licl y co mmi t to a SB T in F Y23 . Y ea r o ne pr og re ss a nd ma te ria lit y As n oted above , ou r imp lem ent atio n of the TCFD re co mm en datio ns is expe cte d to be aniter ative pro ce ss. In ou r rs t year, w e have foc u se d o n: • buil ding a s oun d und er sta ndin g of how clim ate chan ge may af fec t ou r busi nes s and customers; • continuing t o comprehensively understand and ad dres s the di rec t and i ndi rec t greenhouse gas (“GHG” ) emissions associated with our operations and valuec hai n; • investi gating which metrics and targets aremo st app rop riate for our growi ng business; and • developing our governance processes rega rdin g the ove rsig ht of cli mate - re lated issues . As su ch , we have disclos ed in line wi th TCF D rec om me ndati ons as l isted ab ove, n otin g whe re we have provi ded f ull dis clo sure s and whe re pro gres s has be e n made a gain st rec om me nde d disc los ures w hic h we are not yet ful ly co mp lyi ng wi th. O ur a im is to full y co mpl y with a ll 1 1 re co mm end ed d iscl osu res of the TCFD by 20 25. Mater ialit y i s con side re d in term s of the impa ct on nan cial pe r for man ce (revenue s and ex pe ndi tures), as well as c api tal a nd na nci ng imp lic ation s. Mater iali t y is also con side re d with re spe c t to lega l and repu tati ona l hazar d. Du e to the nature of the Grou p’s busin ess a nd op er atio ns, we b eli eve our ove rall ex pos ure to cli mate - re lated ri sk is low, and we the refore do n ot in clu de cli mate cha nge as a p rin cip al ris k to our bu sin ess . Our d iscl osu res are th erefo re pro po r tio nal toour exp osure . We review c limate - related r isks a nd opp or tuni ties a nnu ally, both to ens ure wediscl ose in lin e with iss ues pe r ti ne nt toinvestors an d stakeh ol der s and also toensure th at our disc los ures re main in prop or tio n to our exp osu re give n the n ature and sc ale of o ur bu sin ess . We rec ogn ise that clim ate chan ge af fec ts all in dus trie s, c an intera ct wi th ou r pri nci pal r isks , and t hat the re is an op po r tu nit y for t he Gro up to co ntr ibu te to com batin g the c limate cr isis . We have be en su pp or ted in this p roc ess by c ar bo n and sustainability consultants ClearLead Co nsul tin g Ltd. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 55 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS The Board meets at least six times per annum, with additional ad-hoc meetings where required. The Audit Committee meets at least four times per annum. The SCRC meets twice annually. External experts and senior management are consulted as necessary. Investors and stakeholder views are monitored by the Board and by the Director of Investor Relations. Stock exchange listing, disclosure rules and relevant legislation are monitored by senior management, and supported by external advisers. Frequency Entity Role and membership Governance Structure External experts Role: Provide expert climate, carbon accounting and management knowledge and TCFD guidance. Senior management Role: Provide insight into the climate-related specific risks and opportunities to their area of the business (e.g. CTO to pro vide insight into climate impact on data centres). A TG Board Role: Oversight of climate-related risks and opportunities. Members: CEO , Chairman, CFO , Non-Executive Directors. Audit Committee Role: Overall responsibility for reviewing the Company' s risk management framework and principal risks. Members: Independent Non-Executive Directors. SCRC Role: Support the implementation of the recommendations of the TCFD. Members: COO , CFO , Group Financial Controller , Head of Risk & Internal Audit, Non-Executive Directors. Investors and stakeholders Role: Provide insight as t o what climate-related issues, metrics and targets are sufficiently important to them. External listing rules, legislation Role: Guide what should be measured and publicly reported. Stock exchange listing, disclosure rules and relevant legislation Sustainability and Climate Risk Committee (”SCRC”) Audit Committee Investors and stakeholders Senior management External experts A TG Board A TG’ s climate-related Gov ernance structure Go v ernance Th e Bo ard over se es th e clim ate - rel ated iss ues , with c limate - relate d risks a nd o ppo r tu nit ies bei ng th e focu s of the S ust aina bili ty a nd Clim ate Risk C om mit te e (“ S CR C ” ), a n ewly esta blis hed Co mm it tee , setup this nan cial year by the Board of Dire cto rs. Th e SC RC m ee ts tw ice p er ye ar, primar ily to mon itor an d ide ntif y eme rgin g cli mate - re lated risks a nd o ppo r tu nit ies , revi ew ris ks and opportunities under di fferent clima te scenarios and incorp orate t hese into scenario analysis documentation. Th eSC RCre po r ts at leas t annu ally to the Audit Committee, ens uring cl imat e - relat ed risks arei nc or po rated into orga nisat ion al riskm anag em ent , str ategy an d nan cial plan ning . T he Au dit C om mi t tee rep or ts ris ks annu ally to th e Bo ard , provi ding t he B oard with ove rsig ht of cli mate - re lated r isks an d opp or tuni ties . T he S CR C also rev iews wid er climate- related issues and sustainability top ics a s req uir ed. Me mbe rs of th e S CRC i ncl ude m em be rs of the Lead er ship T ea m. Bo ard repres ent atives . E x ter nal advis er s are also invited to t he SC RCto provide ex ter nal veri cati on of clim ate - rel ated ris ks, o pp or tuni ties a nd iss ues . An ove r vi ew of the G rou p’s govern anc e arou nd cli mate - re lated r isks an d op po r tun iti es, mem be rs hip of key Co mm it tee s, as we ll as expa nde d res pon sibi liti es of the S C RC are show nbe low. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 56 Strategic Report The Environment continued Revi ewi ng c li ma te - re la te d ris ks a nd opportunities • Th e SC RC s hal l mo nito r and i de ntif y em erg ing c lim ate - re lated r isk s and oppor tunities, reviewing risks and opportunities un der diff erent c limat e scenarios , adding these t o scenario anal ysisd o cum en tati on . This will sup po r t theo ng oin g asses sm ent of nan ci al clim ate - re late d ris ks an d op po r tu nit ies i n theG rou p and asso cia ted plan s for future . • Th e Co mm it te e will wo rk w ith rep rese nta tive s/ manag em en t from thew hol e Grou p and stake hol de rs to ens urere lev ant clim ate - re late d risks and opp o r tu niti es are ide nti e d (i.e ., throu gh wor ksh ops a nd m ee tin gs to disc us s climate-related risks and oppor tunities) andi nteg rated into rou tin e risk managementprocesses. • T ra inin g will b e pr ovid ed a s de em ed necessar y to improv e the understand ing ofclim ate - re late d issue s and supp or t the developmen t o f such expertise acro ss theC om pa ny (inc lud ing the B oard ). Reporting to the Audit C ommittee • Th e SCR C shall rep or t ndi ngs to and work clo sel y wi th th e Aud it C om mi t tee to en sure cl im ate - r el ate d r i sk s a re i n co r p o ra ted in to organisational risk management, strategy and na nc ial plan nin g. T he Audi t Co mmi t tee will also p rovi de re leva nt in pu t into th e S CR C. Ensuring compliance w ith the T CFD • Th e SC RC s hal l ens ure c om plia nc e wi th th e TCF D, overse ei ng the imp le me ntat io n of the rec om me nd atio ns of the TCFD and en gag ing ex ter nal ex pe r t s as ne ed e d to assis t. Rev ie w the rem i t of the Co mm i t te e, s tr a te gy an d pol ic y an nu al ly • Th e Bo ard wi ll be r esp on sibl e for re vie win g (andif nec es sar y) expand ing th e remit of the Co mm it te e to cover f ur the r env iro nm ent al an d natu re - re late d ris ks an d opp o r tu niti es , as wel l as broader sustainability topics as required. Th e Bo ard wi ll be r esp on sibl e for u pd atin g Co mm it te e term s of refere nc e if th e re mit is expa nd ed , whi ch wi ll in clu de re vie win g any applicable Group policies. Climate-related repor ting • Th e SC RC s hal l rep or t to the Au di t Co mm it te e af ter ea ch m ee tin g (or ann uall y in li ne wi th th e Au dit C o mmi t tee me eti ngs) on all m at ter s wit hin i ts du tie s and responsibilities, including on the natu re and c on tent of di scu ssi on , recommendat ions, decis ions ma de anda cti ons to be taken. • Th e Co mm it te e Cha ir sh all pr ovid e fee dba ck di re ctl y to the B oa rd at th e Board m eetin g following each Commi ttee mee tin g. • Th e min utes of al l Co mm it te e me eti ngss hall be in clu de d in the agen da of the B oa rd me et ing fo llowi ng ea ch Commi ttee meet ing. • Revi ew any i nci de nts , co nc er ns a nd material planned for public disclosur e. SCRCresponsibilities Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 57 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Ou r ap p ro ac h to id e nt if y in g cl im at e- re l ate d ri sk s an d op p or t un it ie s un de r d if fe re n t sc en ar io s 1. H ou se of Co m mo ns Env ir on me nta l Aud it C om mi t te e, 20 2 2 . Gre e nin g im po r ts : a UK ca rb o n bor de r app ro ac h. Avai la ble : ht tp s: // co mm it te es .p ar lia me nt .uk / publicat ions/9570 /d ocuments/1 621 1 5/def ault. 2. D ep ar tme nt fo r Bus in ess , E ne rgy & in du st ria l S tr ateg y, 20 22 . P ar t ici pa tin g in the U K E T S . Availa bl e: ht t ps: //ww w.go v.uk /gove rn me nt /p ub lic at io ns/p ar t ic ipa tin g - in -th e - u k- ets/participating- in -the - uk- ets. S t r a te g y Our approach to identifying climate- rel ate d ri sks a nd o pp or tun iti es In orde r to fully und er stan d the ris ks and oppor tunities posed by climat e change, in our rs t year we focuse d on co ndu cti ng a thorough assessment of the implications ofclima te chang e acros s our bus ine ss , operations, por t folio, geographies and value chai n. We co nd ucte d a lon g - term (to 205 0) sce nar io an alysi s base d on d ata fro m the Net wor k for G ree nin g the F ina nci al S ys tem (“ NGFS ” ), across three scenarios that repre sen t a mix of b est , avera ge an d wors t- c ase sc en ari os as sh own in th e tabl e. Th e sce nar io an alys is cove red all p hysic al risks ava ilabl e fro m NG FS dat a. A c arb on pri ce un de r eac h of the th re e sce nar ios was use d to mod el th e pol icy an d le gal tr ansi tio n risks , ste mmi ng fro m the i ntro duc tio n of the prop ose d EU C arb on B ord er Adju stm ent Mechanism (“CBA M” ) 1 and existi ng UK Emis sio ns T radi ng S ch eme s (“ U K E T S ” ) 2 . NGFS data: Net Zero 2050 Opportunities: Resource efficiency Energy source Products and services Markets Resilience Delayed Tr ansition Risks: Physical Acute Chronic Prioritisation and materiality impact on financial performance: Revenues Assets and liabilities Capital and financing Expenditure Prioritisation Impact Likelihood Qualitative review of vulnerability Tr ansition Policy & Legal Technology Market Reputation Current Policies Review of business, operations, portfolio, geographies and value chain Long-term (2050) scenario analysis Identification of risks and opportunities Identification of business impacts Focused workshop medium- (2030) and short-term (2025-2030) scenario analysis Prioritisation of risks and opportunities Review of materiality and agreement by SCRC Our approach to identifying climate-related risks and opportunities Incorporation into Audit Committee and corpor ate risk management Strategic response Repeated annually Sc en ar io s us ed t o an al yse f ut ur e cl im at e- r el ate d ri sk s an d op p or t un it ie s po se d to A TG NGFS scena rio Key charac teristic s Justi cation Net Z ero 2050 Poli ci es in al ign me nt wi th th e Par is Agree ment goals . Ali gn me nt wit h the P ar is Ag ree me nt goa ls co nsi stent w ith a t ran sit io n to a lower- ca rb on ec on omy, as per TCFD recommendat ions. Delay ed T ransition As sum es n ew cli mate p oli cie s are n ot intr odu ce d un til 20 3 0 wi th th e avail abil it y of carbon dioxi de reduction technologies kept low, pu shi ng c arb on p ri ce s hig he r than i n Ne t Zero 2 05 0. Simulates higher transition risks co mpa red to oth er s ce na rio s and i s use d to show wo rs t ca se sc en ari o fortr ansi tio n risk s. Current Policies Assumes t hat on ly curren tly im plemented pol ici es ar e pres er ved , and n o fu r th er pol iti ca l inter vent ion o n cl imate c han ge is under taken, lead ing t o 3°C war min g and seve re phys ic al ri sks . A scenario that s imulates low tran si tio n ris ks bu t seve re physi ca lris ks. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 58 Strategic Report The Environment continued Both p hysic al an d tran siti on r isks an d opp or tuni ties have be en id ent i ed an d further ca tegor ised ( as per cat egories de ne d in the TCF D Impl em enta tion Guid anc e); the n anc ial im pac t on reve nu e, expen ditures , assets an d liabilities , and cap ital an d nan cin g were the n iden ti ed . Th e materi alit y of r isks an d op po r tu niti es was deter min ed t hrou gh a likel iho od a nd impa ct s co rin g me cha nism . Fol lowin g this , asce nar io wor ksho p was facili tated for the SC RC to ide ntif y risks a nd op po r tu niti es und er the “ D elaye d T rans itio n” sce nar io inthem ed ium - ter m (203 0). Discus sion s astowheth er cli mate chan ge po ses any sho r t- term r isks (20 25 -20 3 0) were also h eld . Full det ails of ou r app roac h are sh own in th e ow-char t opposit e. Cli ma te -re la te d ris ks an d th ei r im pac t By foll owin g the p roc ess s umm aris ed we ide nti e d 22 cli mate - re lated ris ks to the Grou p. T he top th ree p rio ri t y risk s, wi thin them ediu m - term (20 30) are ou tlin ed and disc usse d be low, the re maini ng r isks are documented interna lly . No mat erial ri sks were id enti ed in th e sh or t-ter m; lo ng - term risks m irr ore d me dium -ter m risk s and , whils tlon g - term ris ks were investi gated indet ail , these have not be e n inclu de d inthe se disc losu res . Priority risks • Dat a ce n tr e dow nti me l ea di ng to lo ss of reve nu e an d exp e nd it ur e on cu s to me r compensation Risk: Du e to the digital natu re of the Grou p’s ope ratio ns , the h ighe st r isk to ouro pe ratio ns is third - par ty dat a cen tre downti me an d the i mpli cati ons of t his on revenue and expenditure. We understand that , whils t we do not o pe rate data cen treso urs elve s, th e impac t of physic al clim ate - rel ated ris ks on o ur dat a ce ntre supp lie rs , resul tin g in us b ein g una ble to acc ess o ur ser vic es , would be sig ni c ant . T op r a nke d cl im ate - re la te d ri sks t o A T G Rank Ri sk t y pe Risk denition Risk sub-category Geography Business operatio n Financial impact category Materialit y risk 1 T ransition and physi cal Data ce ntr e downtim e lead ing to los s of reve nue a nd ex pe ndi tu re on cust omer compensation Acute (Physical), Market and Repu tation ( Tr a n s i t i o n ) All Data ce ntr es Revenues and expendit ures 2 T ransitio n Carbon pricin g mechanisms lea din g to inc reas ed c os ts an d red uc ed s ale s and c om mis sio n Poli cy and Le gal All All Revenues and expendit ures 3 T ransitio n Inc rea sed co mp eti ti on in the secondar y go ods market result ing i n more choice, di luting our market share Ma r ket A ll All Revenu es Resilienc e: In ord er to mitigate again st datac ent re downtim e, we have moved ourm arket plac es to two key supplie rs , redu cin g the r isk of dow ntim e. We have aco mpre he nsive bu sine ss con tinu it y plan . Whil st th e seve rit y of th is ris k is high , th e likelih oo d of our s upp lier s be ing i mpa cted by physic al cl imati c cha ng es and e vents is low and t he re is also hi gh resi lien ce wi thi n the sect or. • Ca rb on p ri ci ng me c ha ni sm s lea di ng toin c rea se d co s ts an d re du c ed sa le s and commission Risk: A fu ture c ar bo n pri ce m ay pose a num be r of risks to th e Grou p. A s alread y see n in this nanc ial year in the UK with risin g en erg y and li vin g co sts , a ca rb on pri ce in t he fu ture m ay pu t fur the r stre ss on our la bo ur co sts , in crea sing ex pe ndi ture s and redu cin g overall pro ta bili t y of the Group . Fu r th er mo re, any i ncr ease d co sts associa t ed with data centr e operat ions cou ld res ult in a ddi tio nal c osts b ein g pas sed on to the G roup by o ur su ppl ier s. A ssu min g a reaso nab le wor st c ase th at all co sts are pass ed th roug h at $ 20 0 -3 0 0/ tC O 2 e, inc rease d ho stin g co sts du e to a car bo n pri ce are n ot co nsid ere d to have a signi can t advers e impac t on overa ll busi nes s viab ilit y, but t his will b e mo nitore d . Fin ally, there is u nc er taint y a roun d how a car bo n pr icin g me ch anis m may be a ppli ed to sec ond - hand g oo ds . Sh oul d se co nd - ha nd goo ds b e subj ec t to a car bo n pri ce , de man d may red uc e and s ales m ay be af fec ted. Resilien ce: Due to the glob al and ex ibl e nature of th e Gro up’s busi nes s op erati ons , we are abl e to adjust o ur o pe ratio ns in resp ons e to chan ging l abo ur c ost s and taxat ion . Ou r resil ien ce is f ur t her i nc rease d as our b usin ess o pe rati ons a re alrea dy lean an d ef c ie nt. We will con tinu e to mon itor ou r cost s and imp rove ef c ien cy. Th eGrou p has an und ers tan din g of the Sc op e 3 em issio ns as soc iated wi th dat a hos ting s er v ic es an d has be gu n to use supp lie r-s pe ci c e missi on fac tors for top supp lie rs in this year ’s footprin t. Data cen tre prov ide rs are p ur suin g the ir own de car bo nisa tion a cti viti es an d we plan toimprove ef ci enc y in futu re years . • In cr ea se d co mp e ti tio n in th e se co nd ar y go od s mar ket r es ul ti ng in m or e ch oic e , dil u ti ng th e Gr ou p’s marke t sha re Risk: W hilst i t is un likely t hat th e bread th ofthe Gro up’s busin ess op er ation s would be e quall ed by a n exist ing o r new e ntra nt tothe mar ket, overa ll com pe titi on in the sec on dar y go ods m arket h as be en highl ighted a s one of th e mo st mater ial risks to th e Gro up. T his ris k rec og nise s thatwi th growin g awarene ss of the envir onm ent al ben e ts of the circ ula r ec on omy, cons ume rs wil l likely h ave more options t o purchase secondar y - market goo ds in t he fu ture . Resilience: Key to the Gr oup’s busin ess mod el is t he eas e of use an d the re ach of all plat for ms . Th e Gro up is de ep ly invo lve d in the wo rld of te chn ol og y and in novati on , so is well p osi tio ned to ta ke advant age of any em ergi ng tec hn olo gy to en sure se lle rs and b uye rs of se co nda r y - ma rket g oo ds con tinu e to cho ose o ur pl atfo rms w he n face d wit h inc reas ed o ptio ns. M ainta inin g con tinu ed aware ne ss of opti ons wi thi n the sec on dar y go ods m arket wi ll be key to maintaining this position . Low risk Min or r isk Me diu m ris k Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 59 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Climate-related oppor tunities an dth eir i mp ac t From th e pro ces s ou tline d , a num be r of clim ate - rel ated opp or tuni ties wer e ident i ed . The highest-ranking climate- related opp or tuni ties i n the m edi um ter m (20 30) are disc usse d an d out line d in th e tab le be low, whils t the re main ing o pp or tuni ties ar e do cum ente d inter nall y and rev iewe d by theS CR C. Priority opportunities • Hi gh er d em an d for se c on da r y g oo ds du e to in cr ea se d pu bl ic awa re ne ss of th e env ir on m en ta l im pl ic at io ns of bu y in g newi te ms a nd th e ci rc ul ar e co no my, in cr ea si ng ove ra ll sa le s and c om mi ss io n Oppor tunity: The Group ’s business model ena bles t he ci rcul ar e con omy, facili tatin g the sa le of se co nda r y go o ds, ke epi ng materi als in ci rcul atio n for lo nge r . As a resul t, i n the f utu re it is li kely th at the re willbe in cre ase d publi c awarene ss of the envir onm ent al im pac ts of purc hasi ng ne w items a nd a c onsu me r shif t to sec ond ar y items . T he Gro up is al read y a lea ding player i n this ma rket , is well p lac ed to max imis e this o ppo r tu nit y a nd fu r th er facili tate the c irc ular e co no my. T op rank e d climat e-related opportunities to A TG Rank Oppor tunity type Oppor tunit y denition Oppor tunity sub-category Geography Business operatio n Financial impact Materiality opportunity 1 T ransitio n Hig he r de man d for se c ond ar y go ods d ue to in cre ase d pu bli c aw areness of the en vironment al imp lic atio ns of b uy ing n ew i tems and t he ci rcu lar e co no my, inc rea sin g overa ll sal es a nd com missio n Products / Ser vices/ Ma r ket s All All Reven ues 2 Physic al Supply chain disruption due t o climatic changes increasing de man d for se c ond ar y goo ds and increased sales Ma r ket s All All Revenue 3 T ransitio n Inves tor prefere nc es to invest inlow ca rb on co mp anie s increasing A TG's ability to raisenance Ma r ket s All All Capital and nancing Response: We will co ntinu e to investi gate how we ca n fur the r co ntri bu te to the circ ular e co no my and t he rol e we ca n playin en abli ng the re - use of goo ds. • Su p pl y ch ai n dis ru p tio n du e to cli ma ti c ch an ge s in cr ea si ng de m an d for se co nd ar y goo d s and i nc re as ed sa le s Oppor tunity: Due to climati c chan ges arou nd th e worl d, th ere is a r isk th at sup ply chai ns for ne w go ods a re disr upted , whi ch will co nse qu entl y inc reas e the d em and for secondar y goods. Response: The G roup’s mar ketpl ac es are idea lly pl ace d to provi de bu yer s wit h the abili t y to purc hase s ec on dar y goo ds , provid ing a n alter nati ve to buyi ng n ew items . In turn, this pro motes the circu lar ec on omy, reduc ing t he c arb on e miss ion s asso ciate d with t he ma nufac ture of n ew item s. • Inve st or p refe r en c es to inve st i n low ca rb on c om pa ni es i nc re as in g the G ro u p’s ab ili t y to ra is e na n ce Opportunit y: Increasi ngl y investor s will belo ok in g to invest in comp anie s that areprov idin g goo ds and /or ser vi ces th at are ben e cia l to the environ me nt. Response: T he G roup’s ac tivi tie s con tri bu te to the circ ular e co no my, and weare acti vely re duc ing ou r own car bo n footpr int . Th e Gro up th erefore i s likely to bewell pl ace d to attr act e nviro nme ntall y con sci ous i nvestor s in fu ture ye ars . Ou r re sili en ce to c li mat e- re la ted r is ks Foll owing a t horo ug h revie w of clim ate - rel ated ris ks and o pp or tuni ties , it hasbe e n conc lud ed that th e Group’s overall exp osure to cl imate - r elated r isks is l ow. Ong oin g mo nitor ing i s requ ired to eva luate the sc ale of identi ed and em erg ing ris ks. Th e materi alit y of r isks wil l be rev iewed a nnu ally, and th e imp act of m ateria l risk s will be u sed to inform nan cial pla nnin g withi n cor po rate risk m anag em ent p roc es ses . Th e Gro up rec og nises t he pi votal rol e we can p lay in facili tati ng th e circ ular e co no my, and we see this as a pr io ri t y opp or tuni t y for ou r busi nes s. Critical opportunity Major oppor tunity Me diu m op po r tu nit y Minor opportunity Low opp or tuni t y Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 60 Strategic Report The Environment continued 1. ATG, 20 2 2 . Car bo n Im pa ct Re po r t . Avail ab le : ht tps : / /w w w.au cti on tec hn ol o gyg ro up.c o m/m ed ia /rc 4 ms b 0b /atg- ca rb on -i mp ac t- re po r t -2 02 2 -2 . pdf. Risk Management Risk management overview Th e Bo ard has ove rall re spo nsi bili t y for determining principal and emerging risks tothe Com pany. The Boa rd ensu res there is an appropriat e risk mana gement framework in plac e to ide ntif y and man age sig ni c ant stra tegic , ope rati onal , na nci al, co mpli anc e and re pu tatio nal r isks to the C o mpany a nd annu ally a pprove s the G rou p’s strategi c ris k regis ter . Th e Bo ard is al so resp on sibl e for und ers tan din g risks a nd is sues t hat are new, devel opi ng , growin g or b ec om ing more p rom ine nt . This i s don e thro ug h aco mbin atio n of op erat ion al risk asse ssm ents a nd oth er ho rizo n scanninginitiatives. Day -to - day respo nsib ilit y of risk mana gem en t is del eg ated to the se nio r mana gem en t team , whils t the ove rall mon itor ing an d revi ew of the ef fe cti vene ss of the inte rnal c on trols a nd ri sk man age me nt is del eg ated to the Au dit C o mmi t tee. The Group’ s risk management framew ork appl ies the p rin cipl es of the “ T hre e Lin es ofDefen ce” an d sets ou t a proc ess for identif ying, assessing, managing , miti gatin g and m oni tori ng ri sks. Fu r th er details o f our risk management approach can b e foun d on pa ge 3 8. Integrating climate-related risk s Th e Bo ard has c on duc ted a ro bus t asse ssm ent of th e pr inc ipal r isks fac ing t he Grou p, inc lud ing th ose t hat woul d thre aten our business model, future performance, sol venc y or li quidi t y. Whilst c lim ate chan ge is not c onsi dere d to be o ne of the se pri nci pal ris ks , the c han ging c lima te may intera ct wi th ou r pri nci pal r isks an d affe ct our val ue c hain . For exa mpl e, as a p red omi nantl y on line busi nes s, we are re lian t on dat a ce ntre provid er s, a nd ac kn owle dg e that th e risk s pos ed by cl imate ch ang e on ou r key provid er s may af fect u s. C limate ch ang e may pos e a thre at to our o nlin e plat for ms through climate - dri ven weather events affe ctin g ou r data c ent res whi ch im pac t the s tabil it y an d co ntinu it y of ou r auc tio n plat for ms, o ne of o ur pr inc ipal r isks . Climat e - relat ed issues may also increa se co mpe titi on wi thin t he se co nd ar y g oo ds market, ex acerbating our principal risk of competition . Additionally , climate change may wors en th e pr inc ipal r isk of e co nom ic and g eo - po liti cal u nc er t aint y, leadi ng to risin g ope rati ng cos ts . Due to these int eractions, we c losely monit or climat e cha nge r isk an d the i ntera ctio n wit h our pri nci pal ris ks an d will fu r th er bu ild o n thisinte grati on in the fu ture r isk management processes. Integrating climate-related opportunities Climate- related oppor tunities are reviewed as par t of our bu sin ess d evelo pm ent acti vi ties . Las t year we con duc ted a review of the c arb on s aving s asso cia ted with buy ing s ec on dar y items i n pla ce of new and pu blis he d this in o ur 20 2 2 C arb on Impa ct Rep or t 1 . We intend to bui ld up on th e integrat ion of cl imate- related oppor tunities in our business plan in future y ears. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 61 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1. ATG, 20 2 2 . Car bo n Im pa ct Re po r t . Avail ab le : ht tps : / /w w w.au cti on tec hn ol o gyg ro up.c o m/m ed ia /rc 4 ms b 0b /atg- ca rb on -i mp ac t- re po r t -2 02 2 -2 . pdf. 2. H M Gove r nm en t, 2 0 21. Gre en C lai ms C od e. Av ail abl e: h t tps : / /gree n cla im s.c am pa ign .g ov.uk / . Metrics and T argets In our r st year of disc losi ng und er th e TCFD rec om me ndati ons , we have co ntin ue d to build upon our comprehensive understanding of our cl imate impact across our operations and val ue c hain th rou gh ca lcu latin g our Sc op e 1, 2 and 3 car bo n footpr int as re po r te d for the r st-t ime in F Y21 and ag ain cal cul ated in F Y2 2 . This i nc or po rates water, waste, emis sio ns inten sit y an d en erg y use . In subse qu ent yea rs we will ensu re that wediscl ose wid er me tri cs in lin e with our business strat e gy and risk management pro ces ses , howeve r , fur the r wor k is ne ed ed to ident if y ap prop ria te metr ics . We are also inthe pro c ess of deter mini ng cli mate related KP Is and targ ets , and have pub licl y co mmi t ted to an S BT in F Y2 3. Envi ronm ent al sust aina bili t y cont inu es to beat the he ar t of our oper atio ns , with our growin g reac h of onli ne au cti on pl atfor ms facili tati ng th e resal e, re use o r repu rp ose ofmillio ns of items eac h year, extend ing prod uc t lifesp ans , preve ntin g wasted r aw materi als an d maint ainin g valu e wit hin th e circular econo my . This y ear, we have investigate d and comm unicated the positive co ntributio n ouro nlin e auct ion pl atfo rms pl ay in moving towards a resourc e ef cie nt , low car bo n ec on omy th roug h the fa cili tatio n of the purc hase of s ec on dar y goo ds in t he pub lic ation of our 20 2 2 Car b on Imp act Report 1 . Al ong side t his , we have con tinu ed tomeasu re and man age ou r direc t and indi rec t GH G emis sio ns ass oci ated wi th our ope rati ons a nd valu e ch ain , buil din g on ou r rs t year app roa ch as disc usse d in deta il within this section . Our continued comm itment to understanding, manag ing and re po r ti ng ou r c lim ate i mpa c t Las t year we com mi t ted to fully cal cula ting our G HG e missi ons , ac co unti ng for all emissions associat e d with our operations tothe bes t of our knowl ed ge to provide uswit h an unde rs tand ing of our larg es t emis sio n sou rce s, wh ere we n ee d to focus fut ure ef for ts and an u nd ers tan din g of ourc limate - related r isks . Dire ct emis sio ns (Sco pe 1 and 2) were quan ti ed , as requ ired by the C om pani es Ac t 20 0 6 and t he Co mpa nies (D ire ctor s’ Repo r t , Reg ulatio ns 2013 ) an d Lim ited Li abili t y Par tne rshi ps (En erg y and Car b on Rep or t) Regulati ons 2018, and wewent be yond ou rstat utor y dut ya nd co mpre he nsi vely ca lcu lated and reported in direct (Scope 3 ) emissi ons. Our fo cus t his yea r has be e n on th e followi ng: • Building on our understanding and quan tif y ing o ur dire ct e mis sio ns (Sc op e 1 and 2), wh ich a re rep or ted as pe r our statu tor y du t y in S tre amli ned En erg y Carb on Rep or t ing , “S EC R data” table on page 65, and c onti nuin g to com pre he nsive ly c alc ulate and re po r t ou r ind ire ct S co pe 3 e miss ion s. • Imp rovin g our cal cul ation m eth odo lo gy and ex pan ding o ur foot pri nt to cover o ur newly acquired businesses. • Investi gatin g redu cti on str ategie s and agre ein g red uct ion t arge ts in lin e wit h the Sc ien ce B ase d T arg ets i niti ative ( “ SB Ti ” ) and th e Par is Agre e me nt ’s goal of lim itin g glo bal tem per ature r ise to 1 .5°C a bove pre - industr ial levels. • Ensu rin g we disclo se our G HG emis sio ns inlin e with the M etri cs an d T arge ts rec om me ndati ons of TCF D. Eac h year, we will str ive to improve our meth od ol og y to ensure we f ully u nd ers tan d and are re po r ti ng up on t he GH G em issio ns asso ciate d with o ur bu sin ess an d wid er ope rati ons . T his app roa ch is in li ne wi th theTCF D and th e UK ’s Comp eti tio n and Mar kets Au tho ri t y (“ CM A”) G ree n Clai ms Code 2 , whic h ens ures g ree n clai ms are truthful, accurate, clear and unambiguous, donot hid e or omi t imp or tant infor mati on , con side r th e full li fe cycle of a p rodu ct o r ser vice, and are substantiated. Method ology Th e met hod ol og y use d to calc ulate ou r greenhouse gas emissions, our “ GHG inventor y ”, is based o n the Wor ld Res our ces Insti tu te GHG Protoc ol , a Cor po rate Accounting and R epor ting Standard, Revised Editio n 4 (the Protoc ol ) an d follows th e Protoc ol ’s guidin g pri nci ple s of relev anc e, completeness, consistency , transparency and ac cu rac y. W e were su ppo r te d to do this by energy and sustainability consulting co mpany Cl ear Le ad Co nsul ting Ltd. A nan cial c ontro l app roac h has be en taken , mea ning t hat th e inventor y cove rs em issi ons from a ll op erat ions t hat are u nde r the G rou p’s na nci al con trol , incl udi ng op erati ons in th e UK , U S and Ge rma ny. Emis sio n factor s have be en c hos en bas ed o n the l oc atio n of the emis sio ns. H owever, where e missi on fa ctors are not availab le, U K Gover nm ent em issi on factor s have bee n appl ied . Emis sio ns are rep or te d in li ne with the Group’s n anci al year . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 62 Strategic Report The Environment continued Carbon summary T ot al gr e en ho us e gas em is sio n s GH G e mi ss io ns (t C O 2 e) 3 F Y22 F Y21 % Ch a ng e Scope 1 32 .5 35 .2 -8% Scope 2 3 9 1. 3 25 1. 3 +5 6% T ot a l (Sco pe s 1 & 2) 423.8 286.5 +4 8% Scope 3 2.4 4 5 .4 19 0 0 . 3 +29 % T ot a l (Sco pe s 1, 2 & 3 ) 2 , 8 69. 2 21 86.8 + 3 1% GH G e mis s io n in te ns it y – Sc o pe 1, 2 & 3 T ur nover (£) £ 119 . 8 m £ 7 0 .1 m +7 1% Average em ploye e numb er (“ F T Es” ) 3 42 24 3 + 41% Car bo n inten sit y (emiss ion s per £ mil lion t urn over) 2 3 .9 3 1. 2 -23% Car bo n intensi ty (emissi ons pe r average F T Es) 8.4 9. 0 -7 % We cont inue to us e pri mar y data wh ere ver pos sibl e, an d this ye ar have wor ked wi th repre sen tative s fro m all sites to im prove dat a col le ctio n. T o full y und er stan d ou r indi rec t emis sio ns so me se co nd ar y d ata has b ee n use d and as sum ptio ns mad e to calc ulate Sc op e 3 em issio ns wh ere p rim ar y d ata was unavail abl e. T his year we h ave impr oved th e emis sio n factor s app lie d with in th e Sc op e 3 “P urc hase d Go od s and S e r vi ces c ateg or y ” (by far our larg est so urc e of emi ssio ns), andthe Sc op e 3 - “C api tal Go o ds categ or y ”. W e have acti vely wo rke d with o ur su ppli er s in ord er to obtai n supp lier sp ec i c emis sio n factors , whic h is par tic ular ly im po r ta nt for so me of our la rge r emi ssio n sou rce c ateg ori es . We cont inue to c alc ulate emi ssio ns fro m all relev ant S co pe 3 c ateg ori es , cove rin g nine out of t he GH G Protoc ol ’s 1 5 ca tego rie s, inc ludi ng th e use of ou r sol d pro duc ts an d rem ote work ing e miss ions , e nsur ing we acc ou nt for all e miss ions t hat exi st as a resul t of our o pe rati ons . Th e rem ainin g Sc op e 3 cate gor ies , in clu din g emis sio ns from upstr eam and do wnstream lea sed assets, franchises, processing o f sold prod uc ts and i nvestm en ts, re mai n not appl ica ble to A TG. Ins uf ci ent data was avai lable for up stream transportation and distribution emissions to be established. Th e sco pe of o ur ca rb on fo otpr int this y ear has ch ang ed: as a g rowin g busi nes s our ser vices have expanded with the acquisition of Live Auc tio ne er s. As a resu lt , our F Y2 2 footpr int i ncl ude s the di rec t and i ndir ec t emis sio ns from L ive Auc tio ne er s and wider operat ions. In our las t repo r t , we outli ned th at our base line ye ar, i.e., our s tar ting p oin t for GHGe mis sion s, woul d be F Y 20 . Sinc e this per io d, th e Gro up’s total emis sio ns have grown by 31%, larg ely d ue to the a cqu isit ion of Live Auc tio ne er s. T o ens ure that we can accurately measur e the carbon impact of our growing business and set realistic, achiev able targ ets , we have be en gu ide d by the G HG Protoc ol an d have upd ated ou r base lin e year to F Y21 fo r the p urp ose of o ur S ci enc e Ba sed T arget. We continue to monit or our carbon int ensity ( tCO 2 e per £ mill ion tu rn over). Ou r F Y2 2 ca rb on fo ot pr in t In the cur ren t nan cial ye ar, 1 5 % of emissi ons fall into S co pe 1 an d 2 , whe reas 8 5% of emis sio ns fall in to Sc ope 3 . Ou r car bo n foo tp ri nt in F Y2 2 . Scope 1, 32.5 tCO2e, 1% Scope 2, 391.3 tCO2e, 14% Scope 3, 2445.4 tCO2e, 85% Sc op e 3 em issio ns , whic h are u nde r a rep or t ing org anis atio n’s inue nce b ut not con trol , t yp ica lly ma ke up the l arge st prop or tio n of a com pany ’s ca rb on e miss ion s, par ticul arl y whe n S co pe 3 e miss ions a re co mpre he nsive ly c overe d. T his yea r , the Grou p’s large st em issi on so urc e co ntinu es to be fro m pu rcha sed g oo ds an d ser vic es (4 0% of total footpr int), whi ch p redo min antl y aris e from t he ho stin g of our o nlin e plat for ms in data centr es opera ted by o thers. Other signi can t Sc op e 3 catego rie s incl ude th e use of ou r pro duc ts (1 1 %), employ ee co mmu tin g and re mote wor kin g (9%) and business tra vel ( 9%) . Wi thin o ur S co pe 1 a nd 2 em issi ons , purc hase d el ec tri ci t y (1 0 %) is the lar ges t con tri bu tor to our over all footp rin t, foll owed by purc hase d he at (3%). Sta tion ar y combustion, i.e., fuel combust ed within stati ona r y e quip me nt su ch as a b oile r, acc ou nts for 1% o f the fo otpr int an d fug itive emissions ( refrigerants ) and mobile co mbu stio n ac cou nt for l ess th an 1 % of overall e missi ons . In line wi th the GH G Protoc ol an d to ensu re co nsiste ncy wi th ou r previ ous ye ar ’s rep or ting , we are re po r tin g location - based emissions from purchased electricit y in place o f market-based emis sio ns, to e nsure we f ully a cc oun t for the emis sio ns fro m the e le ctr ici t y we co nsu me. Th e ele ctr ici t y in our Lo ndo n head qua r ter s however c on tinu es to be so urc ed f rom a renew able energy pr ovid er . 3. GH G em iss io ns re po r te d in m et ri c ton nes C O 2 e qui val en t ( “ tC O 2e” ). 4. W RI G HG P roto co l Co rp or ate S ta nd ard . Avai lab le : ht tp s: // g hg pro toc ol .o rg /cor po r ate - st an da rd . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 63 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Ou r 202 2 im pa ct Th e Grou p ac ce pts that o ur over all e missi ons have and m ay con tinu e to rise as a gr owing and ac quis iti ve co mpany. We are however working to min imise increases in ab solute emis sio ns to ensu re that o ur grow t h is sustainable. Our absolute emiss ions across all sc op es have grown by 31%, pre do min antl y due to the acq uisi tion of Li veA uct ion ee rs cou ple d wi th the o rgan ic grow th of the Gr oup and a retur n to our of c es as Covi d -1 9 restr ic tio ns have lif ted. D espi te this, ou r car bo n inten sit y i .e. ou r mea sure of c arb on emis sio ns as a pro po r ti on of ou r overa ll acti vi t y, has decr ease d by 23 % , ind ic ating that we are bec om ing mo re car bo n ef cie nt as we expa nd. Our a bso lute S co pe 1 a nd 2 em issi ons h ave inc rease d by 4 8 % , th e majo ri t y of whic h is aresul t of an increa se in purc hase d heat thro ugh th e acqui siti on of Live Auc tio ne er s and a g ene ral i ncr ease in t he d ema nd for ele ct ric it y sin ce s lowly m ovin g bac k to work in g from ou r of c es. Our S c op e 3 em issio ns have als o inc reas ed by 29 % . Thi s rise is at t rib ut able to an i nc rease in pur chas ed h osti ng se r vi ce s and th e use of our s old p rodu cts re sul ting f rom t he grow t h of our o nlin e auc tion p lat for ms, a nd an increase in business travel and commu ting whic h is mo re rep rese ntati ve of our a ctiv iti es pri or to the C ovi d -1 9 pand em ic. This y ear we have als o buil t up on o ur understanding of our emissions by impro ving our c alc ulati ons for a n um ber of c atego ri es , inc ludi ng bu t not li mite d to Sc op e 3. Fue l and othe r ene rgy n ot in clu ded i n S co pe 1 o r 2, by including well -to -tank emissions asso ciated with m obi le c omb ust ion a nd bu sine ss trave l. We have also red uc ed as sum ptio ns ac ross the foot pri nt, s uc h as by gath er ing p rim ar y co mmu tin g data , data a sso ciate d with t he Antiques T rade Gaz ette, and allocating hos ting se r vi ce s to speci c bran ds. Reducing our impact As this is our rst ye ar of active ly add ressi ng our e miss ion l evels , on e of our m ain pr io ri ties this yea r has b ee n invest igati ng ca rb on redu cti on s trateg ies an d mo del ling t arge ts in line wi th th e S BTi a nd th e Par is Agre e me nt ’s goal of li mit ing gl oba l temp erat ure ris e to 1 .5°C a bove pr e - in dus tr ial le vels . Due to the natu re of our busin ess , whic h span s mul tipl e ge ogr aph ies , we felt i t was vit al that all our of ce s and bra nds were aware of thei r GH G emis sio ns and t hat reduction strat egies were discussed directly with re prese ntat ives fro m each of c e. Wealso wanted to ensure th at we had thorough ly in vesti gat ed wha t reduct ions cou ld real isti call y be m ade b efore co mmi t ting to a ta rget . We met v ir tuall y with eac h lo cati on to disc uss th eir e mis sio ns and possible strat egies for reduction. Overall, we con r me d that our o pe ratio ns are alrea dy ef cie nt, howe ver, som e areas for fu ture focus have be e n ident i ed , inc ludi ng: Consolidating our hos ting pro viders: As o ur data c en tre prov ide rs ac co unt fo r 32 % of our G HG em issi ons , we have co nso lidate d our d ata ce ntre s to two key sup plie rs . We con tinu e to loo k at ways in whi ch we c an ratio nalis e our u se of data c en tres an d associated GHG emissions. We have fur t her l on g -te rm pl ans to imp rove the ef cie nc y of our market plac es thr oug h power ing al l plat for ms fro m on e set of share d se r vi ces , wh ich wi ll lea d to a redu ctio n in our e mis sio ns fro m hos ting s er vic es. Im pr ovi ng t he e ne rg y ef ci e ncy o f our phy sic al of c es: In futu re year s, we will loo k clo sel y at our of c es to ident if y whe re emis sio n redu ctio ns cou ld be m ade . We will im prove the mon itor ing of e nerg y c onsu mpti on in o ur of c es to ident if y whe n usag e is usuall y high . We reco gni se that wo rk ing p rac tic es have cha nge d and s om e of our e mpl oyee s now work re motel y or c om bin e hom e wor ki ng with so me of ce days . As the h eatin g and ele ct ric it y ne ed s of our of c es con tri bu te 92 % to our S co pe 1 a nd 2 e missi ons , we willca refull y loo k at how we can minim ise emis sio ns from ou r of c es whils t co ntinu ing to provid e work in g spac es to sui t the n e eds of our bu sin ess an d em ploye es . On e of the pr ima r y ste ps we will ta ke in F Y 23to reduc e our ele ctr ici t y cons umpt ion will be t hrou gh th e rel oc atio n and s trateg ic downsiz ing of our Omaha of ce. Cur ren tly, ele ct ric it y use in the Omaha of c e acco unt s for a signi c ant po r ti on of our car bo n footpri nt; with t his rel oc atio n we are exp ec tin g to see a signi can t decli ne in our Sco pe 2 emissi ons . Continuing to invo lve staff across our brands and geographies in the monitor ing an d ma na ge me n t of o ur G H G em is sio n s: We will co ntinu e to involve s taf f in ou r GH G management, to identi fy reduction st rat egies suit abl e for eac h si te. This m ay invol ve car bo n/ ene rgy ef c ien cy tr aini ng; th e int rodu cti on of e - bi kes; switc hing to gre e n ele ct ric it y su ppli er s whe re availab le; a dopt ing l ow car bo n pro cure me nt po lic ies; a nd th e redu cti on inthei tems we purchas e as a Group. Foll owing o ur rev iew of ou r abili t y to redu cee mis sion s, we have dec ide d to set anea r-term S ci en ce Bas ed T arg et in lin e withli mit ing glo bal tem per ature ri se to 1 .5°Cab ove pre - i ndu str ial leve ls. We have co mmi t ted to redu cin g our a bso lute S co pe 1 and 2 e missi ons by 42 % by 20 3 0 (from a F Y 2 2 base line ye ar), an d we will co ntin ue to mon itor an d rep or t our S c op e 3 emis sio ns. Our futur e commi tment We will co ntinu e to take a rig oro us ap proa ch to calc ulatin g ou r overal l clim ate impa ct byimp rovin g our app roac h to emissio n cal culat ion s annu ally a nd wor k ing to red uc e Sc op e 1 and 2 e mis sio ns to achi eve our S B T . We will also inve stig ate wide ning o ur inter naltar gets to cover so me of our Sc op e3em issio ns . We will co ntinu e to mon itor d evelo pm ent s in car bo n rep or ting a nd ma nage me nt to ens ure we are alig ned w ith s ec tor bes t- pr acti ce , ensu rin g we are ma kin g real re du ctio ns to our i mpa ct on t he cli mate. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 64 Strategic Report The Environment continued SEC R da ta Category Scope Current reporting y ear: F Y22 Baseline reporting year: F Y21 UK a n d of f sh o re Global ( excluding UK a n d of f sh o re) UK a n d of f sh o re Global ( excluding UK a n d of f sh o re) Emis sio ns from acti vit ies whic h the Com pany owns or co ntro ls in clu ding t he c omb ust ion of fu el a nd operati on of faciliti es ( tCO 2 e) 1 7.1 25.4 5.6 29. 6 Emis sio ns from purc hase of elec tri ci t y, h eat , steaman d coo ling pur chas ed for own use (locat ion- based, tCO 2 e) 2 20.6 37 0 .7 31. 3 220.0 T otal gr oss S c ope 1 a nd S co pe 2 e mis sion s (tC O 2 e) 1 & 2 2 7. 7 3 9 6 .1 3 6 .9 249.6 Ene rgy co nsu mptio n used to calcul ate the above e m i s s i o n s ( k W h) 1 & 2 1 25,265. 3 1 ,342,3 70 .8 17 0 , 3 4 1.7 5 3 0 ,19 0 . 5 T otal gros s Sco pe 1 and Sco pe 2 emissi ons UK andgl oba l (tCO 2 e) 1 & 2 423.8 28 6.5 Intensi t y ratio UK and glob al: emis sion s (tCO 2 e) perm illio n £ turnover 1 & 2 3.5 4 .1 SECR change log Ch a ng e in c o ns um p tio n , e mis s io ns a n d in te ns it y r a ti o be t we en t h e ba se li ne a n d re po r t in g ye ar Category Percentage change Ene rgy co nsu mptio n (k Wh) +11 0 % T otal gros s Sco pe 1 and Sco pe 2 emissi ons UK and glo bal (tCO 2 e) +48% Intensi t y ratio (Sco pe 1 and 2 emis sio ns tCO 2 e / millio n £ tur nove r) -13 % Des cr iptio n of cha nge s in consumpt ion, emiss ions an d intensi t y rati o bet we en th e base linea nd repo r ti ng year. As an e xpan din g busi nes s, we a cc ept th at our ove rall e miss ion s may ris e and we will wo rk to min imis e any inc rease i n abso lu te emiss ion s to ensure we g row sus tain abl y . A bsol ute em issio ns have g rown by 4 8 % , whe reas ou r ca rb on in tensit y, acro ss all s co pes , a me asure of o ur c arb on e mis sion s as a pro po r tio n of ou r overall ac tiv it y, has dec rease d by 1 3 % , indi cati ng that we are be co ming m ore ca rb on ef cie nt as we grow. Our a bso lute S co pe 1 e miss ion s have de clin ed s light ly sin ce t he pr ior r epo r t ing ye ar . Howeve r , our a bsol ute Sc op e 2 emiss ions have in crea sed sig ni c antl y. Thi s can be at tr ibu ted to an increa se in emis sio ns from purc hase d heat an d ele ctr ic it y, resulta nt from th e acqui siti on of Live Au cti one er s cou ple d with an in cre ase in the num be r of empl oyees wo rk ing ba ck in our of ce s pos t pand emi c. Al tho ugh not di rec tly rep or ted in our S ECR re po r t , we have contin ue d to me asure an d improve up on ou r und ers tan din g of our Sc op e 3 emissio ns . In total, our abs olu te Sc ope 1, 2 and 3 emis sio ns have incre ase d by 31 % , however, have dec line d by 23 % rela tive to tur nover. As last ye ar, we have includ ed re mote wor ki ng emis sio ns and e mis sion s asso ci ated wit h the us e of sol d prod uc ts in ou r ca rb on foot pri nt to ensu re we acc ou nt for ou r ho me - base d em ploye es a nd co ntin ue d grow th i n our o nlin e auc tio n ser vic es . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 65 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Our peop le b r ing talen t and experienc e t o A TG whi ch is k ey t o our succ ess. Our co re valu es ar e ingrained in our cultur e and he l p us achi ev eour stra tegy and purpose. A cu ltu re w hic h e nab le s pe op le toth ri ve Our e mp loye es un de rst and th at how th ey work is a s imp or tant as w hat th ey de liver, andeve r y me mb er of our teams k now what ’s exp ec ted of the m and h ow the y can s uc ce ed . In the pas t year, our team at all level s have don e a sup er b jo b of adapti ng an d mana ging the grow th and h ighe r exp e ctati ons t hat are hel d of us as a pu blic c om pany. In F Y 22 , we welc om ed th e Live Au ctio ne er s team to A TG and ove r the p ast ye ar, have worke d to integra te their tea m, c ultu re andways of work ing in to the busin ess . Thisi ncl ud es the pro moti on of two of Live Au cti on ee r ’s senio r lead er s to the A TG Lead er ship T e am , as well as throug h the col lab orati on an d sha rin g of bes t pra cti ces i n the d evelo pm ent a nd rol l ou t of the inte grated paym ents s olu tio n. We als o add ed a ne w role , Chief Pe op le Of c er, t o the Lead er ship T eam , wh ose fo cus wil l be to co ntin ue to buil d a stro ng gl oba l cul ture an d em ploye e exp eri en ce at A TG, as we re co gnis e that co mpany c ul ture is a c rit ica l dif fere ntiator inour su cc es s. Listening t o our people It is imp or tant that we co ntinu e to make A TGa great pl ace to work , an d we regula rly eng age wi th ou r em ploye es to un de rst and thei r valu es an d co nce rn s. Ever y yea r we run a Com pany - wid e sur ve y tounde rst and e mpl oyee se ntim ent an d eng age me nt, w hic h is followe d by focu s grou ps and a cti ons for t he c omi ng yea r . The mos t rec ent s ur ve y saw 91 % of resp ond ent s feeli ng p ers ona lly en gag ed wi th th e Co mp any and th eir ro les . T his is th e four t h co nse cu tive year th at we have se en an e nga ge men t sc ore of over 9 0% , d rive n by many fa ctor s inc ludi ng a favoura ble s co re for em ploye e tr ust i n the integr it y of o ur le ade rsh ip, the ir vis ion a nd Co mpa ny grow th a nd dire ct ion . T he emp loye es fro m Live Au ctio ne er s and Auc tionM ob ilit y will b e incl ude d in the 20 23e ngag em ent su r vey. Ove r the ye ar, we have also listene d to our emp loye es as we ma nag ed th e tran siti on from re mote wor ki ng to a hyb rid wo rk ing solu tio n as ma ny emp loye es retu rn ed to theof c e. Our em p lo ye es u nderst a nd t hat h o wthe y w or k is as impo r tan t as w hat the y d eli v er , and ever y memb er of ou r t eam k no ws w ha t ’ s expect ed of the m and h ow the y ca n succeed . Our Pe ople and C om munit y Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 66 Strategic Report Th roug hou t th e pe rio d of rem ote work ing , wecon tinu ed to supp or t our emp loye es and their wellbeing, including through offering ex ible wo rk ing pat ter ns for pare nts , as well as ens uri ng ou r em ploye es re main ed we ll con ne cted t hrou gh ou t the p eri od . We listen ed to ou r emp loye es’ fe edb ack o n th e retur n to the of c e, ado ptin g three hy bri d mod els a cc ordi ng to lo cal g over nme nt guideline s, whilst also offering permanent opp or tuni ties to wor k fro m ho me for som eem ploye es . An inclusiv e and diverse workforce A diver se A TG is imp or tant to us , and we str ive to be a c omp any wh ere all p eo pl e can work a nd th rive i n a sup por tive e nviro nm ent . We are full y co mmi t ted to the e limin atio n of unlaw fu l and u nfair disc ri mina tion , an d we value t he dif fe ren ces t hat a dive rse wo rk fo rce bri ngs to ou r orga nisati on . We kn ow that ou r con tinu ed s ucc es s relie s on b rin ging to get her pe opl e who h ave a wide r ang e of expe ri enc e and sk ills to of fer dif fe rent p er spe ct ives an d prom ote inn ovation . We are in t he pro ce ss ofimpl em enti ng our di vers it y and in clu sio n stra tegy in a cc ord anc e wit h our B oa rd and work fo rce di ver sit y p oli cies . T he wor k forc e diver si ty p oli cy is s hare d with a nd is avail abl e to all our p eo ple v ia th e emp loye e han dbo ok on th e Co mpa ny ’s intran et . Th e B oard diver si ty p oli cy c an be fo und o n our we bsi te at www.a uctiontechnologygr oup.com/ inv estor s/ corporat e -governance/ . We also con tinu e to trac k the g en der a nd et hnic mino ri t y bala nc e of our wo rk forc e an d are co mmi t ted thro ug h our i niti atives to en sure that we im prove this b alan ce . Ge nd er d ive rs it y Th e Grou p is dive rs e in term s of gen de r mixwi th wome n co mpr isin g 38 % of the total work fo rce . Th e Gro up’s emp loye e base is diver se at th e man age me nt leve l wit h two femal es on our Le ade rsh ip T eam , and ma ny more fe mal e lead er s in man age me nt rol es inmul tipl e par ts of the organis atio n. T he Grou p’s Leade rshi p T eam , as de ne d by theC or po rate Gover nan ce C ode , co mpr ises nine m ales a nd th ree fe male s, A s illu str ated on pag es 8 4 to 87 t he B oard c om pri ses vema les an d three fem ales . We strive to achi eve a ge nd er bal anc e ac ross al l level s ofthe org anisat ion an d have rece ntly achi eved th is balan ce in ou r UK and Germanbusinesses. Ethnic diversity A TG ’s empl oyee s are dive rse i n term s of ethn ici t y, with 25% hav ing dis clo se d as ide ntif y ing as n on - w hite. We are c om mit ted to incre asin g ethn ic di vers it y ac ross a ll leve ls throughout the organisa tion thr ough recruitm ent and succession planning . Th e Bo ard has c on side red t he Pa rker Rev iew rec om me ndati on for all F T SE 25 0 Bo ards to have at leas t on e dire ctor f rom an e thn ica lly diverse background by 202 4, and f ollowing con sul tatio n wit h the N omi natio n C omm it tee , the B oard c on side rs t hat it h as ach ieve d this targ et, w ith J ohn - Pau l Sava nt rep rese ntin g a Eurasian ethnically d iverse back ground. Employees with disabiliti es We stri ve to be an in clus ive em pl oyer an d are co mmi t ted to ensu rin g that p eo pl e with disab ilit ies are n ot disa dvan tage d in o ur hiri ng pro ces s. We offer exib ilit y an d supp or t to any em ploye es th at are dis abl ed upo n joi ning o r who b e co me so d uri ng employment. Initiatives to promote div ersity, inclusion and equal opportunities Init iatives to prom ote diver sit y, inclus ion an d equal oppor tunities include: • A tale nt revi ew to ide ntif y fe male h igh performers wit h clea r dev elopment a nd progression plans. The Board continues tofocus on suc ce ssi on plan ning an d devel op ing dive rsi t y within th e Leade rs hip T eam . Th e Chief Pe opl e Of c er trac ks and rep or t s on di vers it y me tri cs re gul arl y, ena blin g us to inc or po rate this dat a in to key pe opl e ini tiati ves, s uc h as a tale nt rev iews . • A revie w of all em ploye e pay, with step s taken to leve l up pay ga ps for ma le an d femal e emp loye es do ing t he sa me rol e wit h simil ar exp er ien ce l evels d uri ng pay rev iew. • Dive rsi t y, equ ali ty an d inc lusio n trai ning for all em ploye es . Th rou gh on line i ntera ctive train ing , we ed uc ate empl oye es and c reate awarene ss o n the foll owing to pic s: – Microaggression in t he workplace – Unco nscious bias – Workplace cultural competency andhu mili t y – Dive rsi t y, inclusi on and se nsi tivi t y • Celebration of int ernationally diverse days inc ludi ng a pai d hol iday in N or th A mer ic a for Junet eenth. • Actively soliciting employee feedback on what c an be d on e to fur t her s upp or t diversity, equality and inclusion , including thro ugh o ur em ploy ee e nga gem en t sur ve y. 96% of empl oye es fee l A TG re co gnis es diver si ty i s cri tic al to our f utu re su cc ess . However, 1 2 % feel t he re is mo re we can d o to value individual backgrounds and identities. • Su ppo r ti ng ap pre ntic eshi p sc hem es in t he UK and Ge rm any, t o offer youn g peo pl e, or thos e with ou t the o pp or tuni t y to stud y fur the r edu cat ion , a pla ce me nt at A TG. Thi s provid es qual i cat ions , trai ning an d on the job corpora te experience in en try level roles. • Creati ng m ore inte rns hip o ppo r tu nit ies in Nor th A me ri ca wi th qua lit y wo rk experience through the Univers ity of Nebraska supported s chemes. An e nvi ro nm en t whe re a ll e mp loyee s ca n bu ild a r ewar di ng c ar ee r T raining and dev elopment We ensur e that all e mpl oye es have ac ces s tothe train ing the y nee d to suppo r t th eir devel op me nt. A ll e mpl oyee s are re quire d tounde r ta ke mandator y train ing ann uall y toensure th ey und er stan d the ir leg al and regu lator y d uti es in re latio n to insid er tr adin g, cyb er s ec uri t y and d ata se cu ri t y. Prof essional qualication sponsorship is availab le for all employe es to apply for. Dur ing objective -set ting perio ds, employees review train ing n ee ds wi th the ir ma nag ers a nd train ing wi ll be of fere d on a c ase - by - c ase basis to suppo r t sp eci c develo pm ent al skill s. New jo ine rs re ce ive a 3 0/60/ 90 - d ay onb oar ding p rog ram me to hel p set t hem upfor suc ce ss and e nsure th ey rec eive a co mpre he nsive p lan to lea rn ab ou t A TG’s purpose and strat egic drivers, our infrastructure, processes and ways ofwork ing . Per fo rm anc e revi ews are c ond uc ted at leas tann uall y acros s the Group, to enable mana ger s to have mea ning ful di scus sio ns abo ut a n indi vid ual ’s progre ss an d care er devel op me nt. T o supp or t the se co nver satio ns , we offer a cc ess to de velo pm ent p lans a nd 360 feedback tools. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 67 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Recruitment We are co mmi t ted to the fair a nd e qual treatm en t of can didates th rou gh ou r rec rui tm ent p roc ess , re gardl ess of a n individual’s race, age, gender , ethnic background, rel igion or beliefs, gender reass ignm en t, se xual o rie ntat ion , mar it al or civ il par tne rsh ip stat us, o r dis abili tie s. O ur recruitme nt and selection processes focus on se le ctin g the b es t can did ate for each r ole and we hir e base d on m er it an d the r ight ski lls for th e role . In the last 12 mo nths , 4 0% of our ne w join ersh ave bee n femal e, not wit hsta ndi ng the sh or tag e of female a ppli ca nts that i s preval ent wi thi n the tec hn olo gy s ec tor . Ou r hiri ng st rateg y has lo oke d to incre ase th e num be r of female c an didates by e nga ging with wo me n in tec hno lo gy for ums a nd work in g with sp eci c agen ci es. A s well as imp rovin g gen de r bala nc e, we co ntin ue to increase our mix of ethn ic backgrounds. Inthe U S , we have a par tne rshi p with th e Professi onal Di ver sit y Ne t work wh ere ever y role is p os ted to 1 7 e thn ica lly di vers e job boa rds wi th the ai m to inc rease t he di vers it y of applying candidat es. Recognising high performa nce Eac h emp loye e is rewarde d for long se r v ice and p er for ma nc e thro ugh an e mp loye e vouc he r sch em e at key mile ston es an d co mme nd able ac hie veme nts . Emp loye e per form anc e is also c el eb rated wi th an annu al awards c ere mo ny kn own as th e A TGS potli ght Awards , bon uses to rec ogn ise excep tion al co mmi tm ent to wor k as well as regu lar c ele br ation of a chi evem ents at G rou p wide “All Han ds” me et ings . Em pl oyee be n e t s We beli eve it is n ec ess ar y to of fer a co mpe titi ve ben e ts pac kage to ensur e wecan rec ru it and ret ain the rig ht calib re of per so n. As well as som e key nanc ial ben e ts and pa id vac atio n leave , we ensu re dif fere nt dem og rap hic s are c atered for, such a s paid leave be ne ts for new pare nts . We sup po r t heal th and wellb ei ng sch em es inc ludi ng E A P con d ent ial help lin es in the UK , the U K Cyc le to Work sc he me, 24 / 7 G P ac ces s, as we ll as the pr ovisio n of eig ht vid eo c ou nse lling sess ion s with t rain ed th er apis ts eac h year. A TG prov ide s pe nsio n arr ang em ents fo r the ben e t of our em ploye es in the U K and US , inc ludi ng a de ne d con trib uti on sc he me in the UK an d a 40 1 (k) pla n in the US , whi ch also include life insurance and incom e protec tio n sche me s. Al l new UK and U S emp loye es , on ce el igib le, c an jo in the G rou p’s de ne d con tri but ion sc he me or 4 01(k), resp ec tive ly. Medi cal , de ntal an d visi on insu ran ces a re provi de d acro ss th e US . Ot he rcou ntr ies co mp ly with th e statu tor y lawwith in that co untr y. Employee share schemes T o en co urag e ou r emp loye es to alig n thei r interes ts with sh areh ol der s and to bene t from t hei r co ntri bu tion to A TG’s suc ces s, exist ing an d new e mpl oye es have be en gran ted eq uit y award s. Fur the rm ore , we have rec entl y set up a new sc hem e for all UK and Ger ma n emp loye es to have the o pp or tuni t y to take par t in a Share d Inc enti ve Plan ( “S IP ” ). For eve r y s hare an e mp loye e purc has es, AT G will match i t. U S e mpl oyee s will b e invi ted to buy sh ares un der th e Emp loye e Sha re Purc has e Plan (“ E S PP ” ), purc hasi ng share sata 1 5 % disco unt . Th e Long T e rm In ce ntive Pla n allow A TG to award em ploye es wi th e quit y e ac h year, vesti ng over a th ree o r four- yea r pe rio d. FromO ctob er 20 23 , A TG will be of feri ng all emp loye es equ it y un der th e L TI P plan r ules . This i s an exci ting p rosp ec t for e mpl oyee s and A TG is plea sed to be a ble to rewar d emp loye es at all l evels . Supporting our communitie s We are co mmi t ted to mak ing a n impa ct noton ly in our in dus tr y, but also in the co mmu niti es in wh ich we o pe rate. We ru n a num be r of prog ram mes a nd ini tiati ves tha t ena ble o ur bu sine ss an d our p eo pl e to make a di fference. Supporting educational programmes Deve lop ing th e nex t ge ner atio n of talent an d fosteri ng ne w ways to enc our age e ntr ants , ofall backgro un ds, in to the aucti on and tech nol og y se ctor s are im por tant to th e fut ure su cc ess of th e onl ine au cti on in dus tr y. An exam ple of this is our su pp or t of BA DA Frien ds – the Br itis h Anti que D eale rs Ass oc iatio n – whi ch prov ide s a plat for m forthe pu blic to supp or t the wor k of BA DA’ sCul tural an d Educ atio nal T r ust , and toprom ote learn ing and ex pe r tis e in the ne ar t an d anti que s trad e. Sponsorships and partners hips Eac h year we supp or t indu str y events , whet he r thro ugh s pon sor shi p or de votion of exp er t ise, h elp ing to sup po r t a v ir tu ou s circ le of grow th in t he au ctio n ind ust r y. Thes e events include: • Natio nal Au ctio ne er s Ass oc iatio n. Ever y year, we spons or th e N A A Co nferen ce an d Sh ow in No r th A m er ic a, an e vent wh ich explores innovat ive sol utions t o accelerat e the fu tur e auc tion i ndu str y . • Fir sts – Lon do n’s Rare Boo k Fair . Ever yye ar we spon sor th e Anti qua rian Bo oks elle rs’ A ss oc iatio n ann ual fai r , whic h prom otes the t radi ng an d col le ctin g of rare bo oks , map s, p rint s and m anus cri pts. • Asi an Ar t in Lond on . Ever y year we are a pri mar y spo nso r of the fes tival , whi ch prom otes co nn oisse ur ship of – an d tra ding in – Asian ar t and high light s Lond on’s key role as a g lob al ar t mar ket hub. • RIC S (Roya l Insti tute of Char tered Su r veyo rs) Glob al Valuatio n Co nferen ce . We sponsor this event, which presents new opp or tuni ties fo r co llab ora tion a nd th e adva nce me nt of th e valuati on p rofessio n. Charities Char iti es are fa cin g unp rec ed ente d fun drais ing c hall eng es as a re sult of t he pand em ic , whic h me ans th ey are m ore re liant than eve r on re gul ar do natio ns . We make an impact by suppor ting charities and causes that mat te r to our teams . UK em ploye es are of fere d a Payroll Gi vin g sch em e as a sim ple way for o ur pe o ple to supp or t cau ses c los e to them wi th ta x- fre e givi ng . In cele br atio n of the organis atio n’s de cisio n to foster a cu ltu re of phila nthro py and c om mit ted g ivi ng in th e wor kp lac e, by mak ing P ayrol l Giv ing avail abl e to empl oyee s, we have be en award ed wi th a Pay roll G ivi ng Sil ver Award by th e Cha riti es T r us t. We also faci litate hu ndre ds of ch ari t y auc tio ns on ou r mar ketpl ace s eac h year, waivin g our fees to ens ure th at all pro ce e ds go to the cha rit ies . In the past 1 2 mo nths , char it y auc tion s hos ted on o ur ma rketp lac es have raise d over £ 6m for g oo d ca uses ( F Y 21 : £7m). Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 68 Strategic Report Our People and Community continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 69 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS S ustainabilit y Gov e r nan c e and C om plianc e W e are co mm i tted t o ope ra ti ng in a transparen t, res pons ib le and e th ic al man ne r , withi n a stro ng go ve rna nce and c om pliance frame w or k. Regulatory and reporting environment Th e Grou p’s ope ratio ns are s ubje ct to var io us laws and regulations, including regulations with re spe c t to e - c om mer ce an d data protec tio n. Its op er atio ns are glo bal and soitis su bje ct to loc al laws and regu latio ns across multiple j urisdictions, but the Group’ s pri mar y focus is on the U K , US and E U. It is the refore pr ima ril y subje c t to a numb er of regu latio ns and nati ona l laws within th e EU, UK and U S . We have sought to align with th e TCFD discl osu res . Our TCF D discl osu res are deta ile d on pa ges 5 3 to 65 . Sustainabilit y and Climate Risk Committee Th e Bo ard ap proved t he es tab lishm en t of the S ust ainab ilit y a nd Cli mate Risk Committee during t he year , primari ly t o supp or t the imp le me ntatio n of the TCFD recommendat ions f or corporat e repor ting, but m ore w ide ly to cover c lim ate - rel ated developments and wider sustainability topic s. T he S us taina bili t y and C limate Ris k Co mmi t tee is chai red by Ric hard Lewi s, Chi ef Op erat ing O f ce r , and its me mb er s are T om Harg reaves , Chief F inan cial O f ce r, Suz ann e Ba x ter, Chair of the A udi t Co mmi t tee , and seni or rep rese ntati ves fro m Fina nc e, Inter nal Audi t, an d Clea rLe ad Co nsu ltin g Ltd, our external sustainabilit y consultants. Th e Co mmi t tee , whic h plays a p ivotal ro le in devel op ing an d imp lant ing A TG’s clim ate risk stra tegy, repo r ts d irec tly i nto the B oard a nd provi des regul ar updat es to help det ermine the foc us an d dire cti on of th e str ategy. Fur th er d etail s on th e gover nan ce of t he Sus tain abil it y an d Clim ate Risk C om mit te e can b e foun d in th e Co rp orate G overn anc e Rep or t o n pag e 5 7 . Fur th er d etail s on th e Gro up’s gover nan ce framework, its commit tees and k ey policies can b e foun d in ou r Co rp or ate Gover nan ce Rep or t o n pag es 72 to 8 3 . Introduction f rom Richard Lewis, Ch ie fOp e ra ti ng O f c e r an d Ch air oft he Su s ta in ab il it y a nd Cl im at e Risk Committee Th e Bo ard has ove rall re spo nsi bili t y for our ES G and sus tain abili t y strateg y, the lat ter be ing s po nso red by mys elf as Chief O pe ratin g Of ce r and overs ee n bythe Su stai nabi lit y and Cli mate Risk Committee. The Sustain ability R eport sum mar ises o ur st rateg y and th e acti ons t aken to ensu re that o ur ope rati ons h ave a posi tive i mpa ct on ours takeh old er s and the plan et and this sec tio n ou tlin es the g over nan ce of th is vit al area . We are pro ud to sha re our prog ress on E SG and sus tain abil it y govern ance, demonstr ating our co mmi tme nt to a sus taina ble f utu re. T he creat ion of th e Su stai nabi lit y an d Cli mate Risk C om mit tee by the B oa rd dur ing t he year ha s stre ng the ne d our g over nan ce arr ang em ents fo r the ove rsig ht of sust aina bili t y and ESG mat te rs on beh alf of the B oard , whil st als o mon itor ing materi al cli mate risks t hat im pac t on o ur busi nes s and re pu tatio n. T he B oa rd will continue to monit or our pr ogress again st our ES G and sus tain abili t y obje cti ves and ta rget s and we are c om mi t ted to providing clarity and transparency on these matters. Pro tec ti ng p er so na l dat a Protec ting p er son al data i s co re to the Gro up’s ope rati ons . We invest h eavil y in dat a se cur it y and p riva cy c ontro ls an d work h ard to ens ure our m arket plac es , whi te labe ls and S a aS bac k- of ce so lut ion s are safe to use , that the data we sto re is se cure a nd tha t we com pl y with al l appl ica ble d ata prote cti on le gisl atio n. We have unde r t aken bot h inter nal an d ex tern al aud its of ou r cy be r se cur it y an d data protec tio n con trols a nd c onti nue to rev iew and s tren gth en o ur pro ce sse s and p oli cies tomee t the new thre ats that fac e onlin e mar ketpla ces , whi te lab els an d S aaS prod uc ts. We have or ganis atio nal an d technical measure s implemented across t he Grou p to ensu re that o ur se r vi ces a nd dat a are prote cted . We unde r t ake per io dic an alys is to ident ify pot entia l vulne rabil ities a nd ri sks. We have proc ess es in p lac e to iden tif y potential incidents and mitigate acco rdingly. Dur ing F Y2 2 we appo inted a de dic ated Hea d of Informati on S ec ur it y resp ons ibl e for the coordina tion, ex e cution a nd reporting on theA TG informati on se cu rit y pro gr amm e. We have an inter nal gove rn anc e fra mewo rk for data p rotect ion a nd infor mati on se cu ri t y including various policies , procedures and train ing . Ou r po lici es are re gul arl y revi ewed and up dated . A ll em ploye es m ust c er tif y th at they h ave read an d und er stoo d our c ore policies. Further specialised policies and stan dard s are re quire d for e mpl oyee s in eng ine er ing , prod uc t and desig n. Ou r Data Protec tion O f ce r has exten sive exp er ien ce incy b er se c ur it y an d data pr iva cy, data bre ac h prev ention and reporting, policy complia nce, rec ord ke epi ng an d data su bje ct r ights . Card p aym ents f rom bi dde rs a re hand le d by third - par t y s upp lie rs on b eh alf of the G rou p and by au cti on ho use c lie nts. T he refore , the Grou p do es not s tore ca rd de tails an d do es not ne ed to c om ply wi th Pay me nt Ca rd Indu str y Data Se c uri t y S tan dard ( “ PC I DS S ” ) as it d oes n ot store b idd er c ard dat a. U nde r its c ontr ac t with t he Gro up, th e sup pli er agre es to comp ly wit h the PC I DS S in res pe ct of the stor age of b idd er c ard data . O nlin e subscriptions t o the Antiques T rade Gazette are man age d in a si milar fa shio n. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 70 Strategic Report Anti-money laundering In ac c o rd an c e wit h U K ant i - m o n ey la un d er i ng regu latio ns , auc tio n hou ses are re qu ired to conduct appr opriat e due dil igence on a ny bidd er s spe ndi ng m ore tha n €10,0 0 0 in anysin gle tra nsac tio n or ser ies of linked tran sac tion s. T he G roup wo rks c los el y withau cti on ho use s in orde r to suppor t thispro c ess and as sist wi th com plia nc e. Inpar ticu lar, the Group has de velo pe d and continues to develop practicable procedures for bid der s and a uct ion h ous es to follow. Th roug h the G roup ’s GAP T oo lbox , the Grou pis able to cen trali se this veri cati on process for bidders, reducing friction across different mark etplaces. Rest ric ted i tems Th e Grou p has r ule s in pla ce wi th re gard tothe listin g of prohib ited ite ms on its mar ketpla ces , su ch as of fen sive i tems , ille gal rea rms an d weapo ns , and ille gal wil dlife prod uc ts. We em pl oy a co mpli anc e team tomoni tor adhe ren ce to these r ule s. Se cu rit y of bu yi ng o n ou r marketplaces It is imp or tant that bid de rs ca n trus t the buy ing e xpe ri enc e on o ur ma rketp lac es an d that th ey k now that a uct ion ee rs ar e followin g bes t pra cti ce. We vet a ll auc tio n hou ses before al lowin g the m to sell o n our mar ketpla ces . Equal ly it is imp or tant to auc tion h ous es th at they a re protec ted again st fr aud ule nt bid der s. T o this en d we have bidd er s ec uri t y teams d edi cated to mini misin g the n umb er of ma rketp lac e bidd er s who d efault o n th eir p urch ases . Anti-bribery and corruption It is our po licy to con du ct all of our busi nes s in an ho ne st an d ethi cal m ann er. W e take azero - tole ran ce ap proa ch to brib er y and cor r uptio n and a re co mmi t ted to act ing professi onal ly, fairly a nd wi th integ ri ty i n allour b usin ess de alin gs and relat ion ship s where ver w e opera te and i mplementi ng ande nforcin g effe cti ve system s to counter bri be r y an d co rr uptio n. T h ere were n o inst anc es of br ib er y re po r ted w ithi n the Grou p dur ing t he yea r . Whistleblowing We are co mmi t ted to maint ainin g the high ests tan dards of hone st y, openn ess and accou ntabilit y both within the organisation and in a ll its b usin ess d eali ngs . A TG an d itse mpl oyee s must be have ho nes tly, and cus tome rs mu st be a ble to have ab solu te con d en ce in us . The Gro up re co gnise s that emp loye es have an i mp or t ant ro le to play in achieving the se goals. A whistl eb lowin g po licy h as be en a dopte d whic h inc lud es ac ce ss to a whis tleb lowin g tel ephone service run by a n independen t orga nisati on , allow ing e mpl oyee s to raise con ce rn s on a stric tly c on de ntial ba sis. Th eAudi t Co mmi t tee re cei ves reg ular rep or t s on th e use of th e ser vic e, a nd any issu es that are rais ed , the n ding s of any investigations and any actions arising. Th ere were n o rep or ts mad e und er t he Group’ s whistleblow ing policy during the year . Mo de rn s laver y We are co mmi t ted to ensu rin g that s laver y and hum an traf c kin g are not taki ng pla ce in any par t of our b usin ess o r our s upp ly c hain . We expe ct t he sa me c omm itm ent f rom o ur suppliers, co ntractors and business par tners. We will not tole rate the m istre atm ent of p eo ple in our e mp loy men t and , whe reve r pos sibl e, emp loye d in ou r sup ply c hain . O ur Mo de rn Slave r y S t ateme nt ca n be fou nd o n our websit e w ww.aucti ontechnologygroup .com. Dur ing F Y2 2 , no inc ide nts of mod er n slaver y or hum an rig hts abus e were ide nti e d within the G roup o r ou r supp ly c hain . Hu ma n rig ht s We are co mmi t ted to supp or tin g huma n righ ts thro ugh o ur c om plian ce w ith na tion al laws and th rou gh ou r inter nal p olic ies w hich adhere to internationally recognised human righ ts pr inc iple s. O ur C od e of Co ndu ct a nd associated policies require respect and equ aland fair tre atm ent of all per son s we co me into c onta ct wi th . We safegua rd our employees through a framework of policies and s tateme nts in re sp ec t of equ al oppor tunities and inclusion policies. T ax transparency Th e Grou p is co mm it ted to payi ng it s fair share of ta x an d man ages t ax m at ters in l ine with o ur ta x pr inc ipl es as se t out i n the C hief Fin anc ial Of c er ’s review on page s 32 to 36. Th e Grou p’s T ax S t rateg y, which is ap prove d by the B oard , is pu blis he d on ou r websi te ww w .auctiont echnologygroup.com. Th e S tra tegic Re po r t , co mp risin g the inform atio n on pa ges 0 2 to 71 in clus ive, was approve d by the Boa rd of Direc tors on 1 De ce mbe r 20 2 2 and sign ed on it s be half by : Jo hn - Pa ul S avan t Chief E xe cu tive O f ce r Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 71 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS Corporate Governance In t hi s se ct io n: Chairman ’ s Introduction 73 Governance Report 74 Board of Directors 84 Audit Committee Report 88 Nomination Committee Report 95 Remuneration Committee Report 98 Directors’ Report 113 Statement of Directors’ Responsibilities 117 C orp ora t e G ove r n a n c e Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 72 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 72 CORPORA TE GOVERNANCE STRATEGIC REPORT W e are co mm i tted t o pr om oting the hi ghe st standards ofc orpor at e gov ernance in or de r to d eliv er our purpose ofunlocking the valu e of the seco ndar y goods mark et and acc ele ra ting gro w th i n the circular eco no m y . Ch a irma n ’ s I nt r oduct ion Corporate Go vernance Report On be half of the B oard , I am pleas ed to intr oduce our Corpora te Governa nce Report for the na nci al year en de d 30 S eptem be r 20 2 2, ou r rs t to cover a full year of ope ratio n sinc e be c omi ng a liste d enti t y on 26 F ebr ua r y 20 21 . F Y 2 2 was a bus y tim e for the B oa rd as we got to kn ow eac h othe r as a Bo ard an d hel pe d the C om pany to co ntin ue i ts tran siti on to the he ighten ed d ema nds of lis ted co mpany life. In thi s repo r t , and in the sec tio ns that fo llow, we aim to provid e an insig ht into how c or po rate gove rna nc e ope rates at A TG and to exp lain h ow we as aBo ard have soug ht to apply th e prin cip les ofthe 2018 UK Cor po rate Gover nan ce Co de (the “C od e” ). A c opy of th e Co de c an be fo und at the F ina nci al Rep or ting C ou nci l’s websi te frc.o rg .uk . Th e Bo ard is c om mit te d to the high est s tan dards of c or po rate gove rna nc e and as a B oa rd we aim to lead by e xamp le. Sin ce A dmis sion we h ave con tinu ed to stre ng the n Bo ard me mb er ship a nd in t he las t year we wel co me d Paul ine Re ade r, Suzann e Ba x ter an d T ams in T o dd as in de pen de nt Non - E xec ut ive Direc tors . Eac h of our Dire ctor s bri ngs to the B oa rd the ir own se t of uniq ue ski lls, e xpe ri enc e an d kn owle dge i n areas t hat are cr uc ial to our b usin ess m od el . We also saw Penny Lad ki n - B rand step down fro m theB oard in Janu ar y 20 2 2 and I woul d like tothank Pen ny for her valuabl e contr ibu tio n tothe Boar d durin g her time with us. We beli eve that m ainta inin g a dive rse B oar d is impo r t ant to our de cisio n - m aki ng and I am ple ased to re po r t tha t our B oa rd co mp osit ion is in lin e with t he re co mm end atio ns fro m the F T SE Wom en Lea der s Revie w. Y ou can rea d more a bo ut th e dive rsi t y of our B oa rd and o ur plan s for the f utu re in th e No minat ion Co mmi t tee Re po r t o n page s 95 to 97 . Th e Co mpa ny ’s sec on d An nual G en era l Me etin g (“AGM” ) will b e hel d on T hur sday 26Janu ar y 20 2 3, an op po r tu nit y for the Bo ard to eng age wi th ou r inves tors . Full deta ils of the AG M, i ncl udi ng th e reso luti ons to be pro pos ed for s hare hol de r app roval, c an be foun d in the Notic e of Mee ting . In orde r tomaxi mise sha reh old er en gag em ent an d par ticipation, we encourage all shareholders to cast th eir votes by p rox y, and to send any que stio ns in re spe ct of AG M busi nes s to inv estorr elat ions@auctiont echnologygroup. co m. S hare ho lde rs wh o woul d prefer n ot, o r are una ble , to at tend th e AGM in p er son a re invite d to watch and lis ten to the AGM o nli ne via a li ve webc ast , de tails fo r whic h ca n be found i n the N otic e of Me etin g. T his re po r t expl ains in m ore d etai l the c or po rate gover nan ce s tru ctu res in p lac e, th e wor k of the B oard a nd i ts Co mm it tee s in F Y2 2 and our p lann ed fo cus for F Y 23 . Breon Corcoran Chairman 1 Dec em be r 20 22 No mi na ti on C o mm it tee R ep o r t p95 Board gender diversity Male (5) Female (3) Board independence Independent (4) Non-independent (3) Chair (1) Length of tenure 0-3 years (6) 3-6 years (1) 6-9 years (1) Governa nc e at a gla nc e Doc ume nt s availab le at ww w .auctiontechnology group. com • Ar ticles of Association • Mat ter s Rese r ved to th e Bo ard • T er ms of Refere nc e for Bo ard C om mit tees • Bo ard Dive rsi t y & Inclu sion Po lic y • Modern Sla ver y Statem ent 2022 • T ax S trateg y 20 2 2 • Notic e of A nnu al Ge ner al Me eti ng 20 2 3 Br eo n’s bio gr a ph y p8 4 Cha ir ma n’s St at em e nt p 08 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 73 FINANCIAL ST A TEM ENTS Corporate Governance Ove r v ie w Compliance w ith the Code The Company has assessed itself with referen ce to the C o de, w hic h the C om pany be cam e su bje ct to followi ng th e Co mpa ny ’s Admis sio n to listin g on 26 Fe br uar y 20 21. Th e Boa rd con r ms that the C om pany applied the principles and complied with the provis ions of t he C od e throu gh ou t F Y 2 2 and up to the Last P rac tic abl e Date, with the excep tion of th e follow ing: Und er p rovisi on 1 1 of th e C ode , at le ast ha lf the b oard of di rec tors of a c om pany lis ted in the UK , exclu din g the chair, should co mp rise non- executive d irectors determi ned by the boa rd to be in dep en de nt in ch ara cter an d judg em ent a nd fre e fro m rel ation ship s or circ ums tan ces w hic h are likel y to impai r , or cou ld ap pea r to impai r , this in de pe nde nc e. Atthe star t of the year under rev iew, the Board co mpr ise d two Exe cu tive Dire cto rs , two ind ep end ent No n - E xecu tive Dire ctor s , one addi tio nal Non - E xec ut ive Dire ctor plus th e Chair ( who w as i ndependent on appoin tment ) and th erefor e did not f ully c om pl y with t he Co de. P auli ne Rea der ’s appoi ntm ent o n 2De ce mb er 20 21 shif ted the bal anc e until Pen ny Ladk in - Bra nd’s resign atio n on 25Janu ar y 20 2 2 , following whi ch the re was asho r t pe rio d of non - c om plian ce unti l the appointment of Suzanne Bax ter and T amsin T od d as indep en den t Non - E xecu tive Di rec tors on 4 Fe br uar y 20 2 2. Th e movem en ts noted ab ove also i mpa cted the c om posi tio n of the B oa rd Co mmi t tee s. Provis ion 24 of the C o de re co mm end s that audi t co mmi t tees of c om pani es wi thin th e F T SE 35 0 sh oul d have a minimum of thre e mem be rs . The C om pany ente red the F TS E 35 0 dur ing F Y 21 . Th e Audi t C om mit te e experienced two period s with t wo members in F Y2 2 , for the p er iod f rom 1 O cto ber 2 0 21 to 2 De ce mb er 20 21 and for th e per iod fr om 25 Janu ar y 2 02 2 to 4 Fe br uar y 20 22 . Fro m 4Feb ru ar y 20 2 2 , the Audi t Co mmi t tee has co mpr ise d thre e inde pe nde nt No n - E xe cu tive Dire ctor s, as set ou t in the Au dit C om mit te e Rep or t o n pag es 8 8 to 94 . Th e Bo ard co nsi der s that t he ab ove movem ent s were ne c essa r y to ac hieve th e desi red c om pos itio n of sk ills , exp eri en ce an d co mpe tenc ies an d to con soli date the B oar d for its f utu re op erat ion s, as t he C omp any moved in to its rst fu ll year of ope rati on po st- I P O. Provis ion 2 0 of the C od e provi des t hat op en adve r tisi ng or a n ex ter nal se arc h co nsul tan cy sho uld g ene rall y be u sed fo r the a ppo intm ent of the Chair an d Non - E xec uti ve Dire ctor s. Whil st th e Co mpa ny use d exec uti ve sea rch co mpan ies to assi st wi th ide ntif ying candidates resulting in the appointment of Pauli ne Rea de r and S uza nne B ax ter , the Nomi nation C om mit tee also u tilised exis ting Dire ctor s’ own net wor ks to reco mme nd can didates fo r sho r tli stin g the p osi tio n subs equ ent ly ll ed by T amsi n T odd . Fur th er deta ils ca n be fou nd in th e No min atio n Co mmi t tee Re po r t o n page s 95 to 97 . Ot he r than t he ab ove, th e Co mpa ny has co mpli ed wi th th e pri nci ple s of the C od e for the p eri od u nde r revi ew. Directors’ independence Th e Bo ard has d eter min ed th at all of theN on - E xecu tive Di rec tors othe r than Mor ganS ei gle r are free fro m any busine ss oroth er relati ons hip that co uld imp air the ir independent judgemen t and are t heref ore ‘ ‘ i nde pe nd ent No n - E xe cu tive Dire cto rs’ ’ withi nthe me anin g of the Code . The Non - E xec ut ive Dire ctor s holdi ng shar es in theC om pany are not , nor do they rep rese nt , asigni can t share hol der. Th e Dire ctors b elie ve that the app oin tme nt ofMorg an S eigl er to the Bo ard by T A Associates, pursuant t o the Relationship Agre em ent , is ass isti ng the G rou p with t he impl em ent atio n of its grow th str ategy, par ticul arl y give n Mo rgan’s fami liar it y wi th the bu sin ess , tra nsac tio nal ex pe rie nc e and network of contacts thr ough T A Associates, whic h the Dire ctor s bel ieve will assis t the Group in sourcing acquisition opportunities. Th e Dire ctor s fur the r bel ieve that th e terms of the Re latio nshi p Agre em en t ena ble th e Gro up to func tio n ind ep end ent ly of T A A ss oc iates notwithstanding T A As sociates’ appointment of Morg an S eig le r to the Bo ard . Th e Bo ard is mi ndfu l that th e C ode l ists thatwh ere No n - E xe cu tive Di rec tors ho ld cros s - dir ec torsh ips or have signi ca nt links with oth er Dire cto rs thro ugh invol vem ent inothe r co mpan ies or b odi es, th is is likely toimpai r , or cou ld app ear to impai r , a Non - E xec ut ive Dire ctor ’s indep end en ce . Acc ord ingl y the B oa rd has as ses sed t he ind ep end en ce of S cot t F or bes a nd Suz ann eBa x ter, given that Sc ot t ser ves asind ep end ent C hair, and Suzan ne as anind ep en den t non - exec uti ve direc tor of Asc en tial plc , a UK liste d com pany. They are not invol ved i n execu tive d uti es for A sc enti al plc an d eac h have a sim ilar o blig atio n to be ind ep end ent fo r Asc en tial pl c as th ey do for the C om pany. The B oa rd do es not c ons ide r that S cot t F or bes ’ and S uza nne B a x ter ’s posi tio ns as ind epe nd ent N on - E xecu tive Dire ctor s of the Com pany are ad vers ely impa cted by t hei r role s on th e bo ard of Asc en tial plc an d is satis ed th at notwithstanding these appointme nts, theya re to be regard ed as ind ep end ent . Board composi tion Th e co mpo siti on of th e Bo ard has c on tinu ed to evolve du rin g F Y 2 2 wit h the ap po intm ent of Paulin e Reade r in De ce mbe r 20 21, the resig natio n of Penny La dk in - B ran d in Janu ar y 20 2 2 and th e app oin tme nt of Su zan ne B ax ter and T a msin T odd i n Feb ru ar y 2 02 2 . At th e date of this rep or t, o ur B oard c om pr ises e ight mem be rs: th e Chair, the CEO, the CF O, four ind ep end ent N on - E xecu tive Di rec tors an d one non-independent Non- E xecutiv e Dir ector . Ove r half th e B oard (exclud ing th e Cha ir) co mpr ises in de pen de nt No n - E xe cu tive Dire ctor s and the c omp osi tio n of all Board Co mmi t tees c om pli es wit h the C od e. Board meetings Th e Chair man , in co njun cti on with th e CEO and Company Se cretar y, plans an annual prog ram me of bu sin ess p rio r to the st ar t of eac h nan cial ye ar, to ensure that es sen tial topic s are c overed a t the ap pro pri ate time and th at spa ce is b uilt i n in ad vanc e to provid e the B oa rd wit h the o pp or tuni ty to hol d in - d ept h disc ussi ons a nd de ep d ives onkey stra tegic iss ues . Bo ard pap er s are ci rcul ated el ec tron ica lly inadv anc e of meeti ngs to ensu re suf cie nt time fo r the B oar d to absor b, th us fac ilit ating robust discussion. G ove r n a n c e Re p o r t Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 74 CORPORA TE GOVERNANCE STRATEGIC REPORT Th e Bo ard ge ne rall y sch ed ule s six me et ings eac h year to allow the Boa rd suf ci ent tim e to disch arge i ts du ties , wi th ad ho c me et ings conve ne d as and w he n requ ired . T her e were seven scheduled Board meetings during F Y2 2, excluding ad - hoc sub - commi ttee mee tings for tim e - sen sitive app rovals. Inform atio n on Dire ctor s’ at tenda nc e at Bo ard an d Co mmi t tee m ee tings i s set o ut onpag e 82 . Bo ard me eti ngs h ave gen era lly b ee n hel d in per so n at our Lond on of ce s for the majo rit y of F Y 22 . Gi ven h er lo c ation , P aulin e Read er joins Board and Commit tee meetings via vide o co nferen ce an d inten ds to at tend at leas t on e me etin g pe r ann um in p er son . T o ens ure th at the B oa rd has go od v isib ilit y ofthe key ope ratio ns of the busi nes s, mem be rs of the Lead er ship T e am at tend Board meetings regularly to provide prese ntat ion s on are as of str ategic fo cus . Board ev aluation In Feb rua r y 20 2 2 the Bo ard co ndu cted an ef fecti ven ess rev iew of i ts pe r for man ce an d that of its C o mmi t tees , le d by the C hai r and supp or ted by th e Co mpa ny Se c retar y. The Se nio r Inde pe nd ent Di rec tor led a revi ew of the C hair. As the B oard h ad be en c on sti tuted for a relat ivel y sho r t p er iod , th e focu s of the inter nal rev iew was to obt ain fee dba ck o n prog ress s o far, t o se ek re co mm end atio ns for imp rovem ent a nd to co nsid er th e key pri ori tie s for the b usin ess a nd th e Bo ard inthe se co nd hal f of F Y2 2 . The over all con clu sio n was that t he B oard a nd its Commit tees comprised high - qualit y , exp eri en ce d indi vid uals a nd that t hey we re eng age d in m eet ings a nd th e qual it y of deb ate was high an d ce ntre d on th e rig ht issu es. M os t revie w areas we re sc ore d as eit her g oo d or exc ell ent . C omm on o ut put s eme rgin g fro m this exe rcise we re as foll ows, alon g wit h agre ed a cti ons: Finding: Bo ard foc us du rin g the s ec on d half of F Y 22 a nd into F Y2 3 sho uld i ncl ude d ee p dives i nto key pillar s of the G roup’s str ategy. Ac tio n: Eac h Boa rd me etin g incl ude s a stra tegic u pdate by key me mb er s of the Lead er ship T e am and the se have be en buil tinto the pro gra mm e of meeti ngs goingforward. Finding: A Bo ard sk ills m atri x sho uld b e und er taken to ide ntif y t he sk ills a nd exp eri en ce alre ady o n th e Bo ard aga inst thos e mos t valu ed , wit h the o bje cti ve of a clear Board recrui tment plan to continuously imp rove sk ills a nd di vers it y. Ac tio n: Th e No mina tion C o mmi t tee ini tiated a ski lls revi ew dur ing F Y 22 , d etail s of whic h can b e foun d in th e No minati on C om mit tee Rep or t o n pag es 95 to 97 . Finding: Th ere s hou ld be m ore o pp or tuni ties for the No n - E xe cu tive Dire cto rs to learn abo ut th e bus ine ss , inc ludi ng si te visit s. Ac tio n: On e Bo ard me et ing p er an num wi ll behe ld in a signi can t ope ratin g loc atio n. Th e Bo ard me eti ng he ld in S e ptemb er 2 02 2 was hel d in Ne w Y o rk , w he re Bo ard me mb er s had the op po r tu nit y to enga ge wit hme mbe rs of the Live Au cti one e rs team. Th e Bo ard inten ds to co mpl y wit h Co de Provis ion 21 w here by an ex te rnal ly fac ilit ated evalu ation w ill take pla ce at l eas t ever y thre eyear s. The go vernance framew ork The Board Audi t Committee Remuneration Committee Nomination Committee Disclosure Committee Sustainability an d C limate Risk C ommittee The Bo ard Th e Bo ard is res po nsib le for l eadin g and dire ctin g the C o mpa ny and has ove rall authority f or the m anagement and conduct of its bu sine ss , str ategy a nd deve lo pm ent . Th e Bo ard is als o resp ons ibl e for ens uri ng the ma intena nc e of a soun d sys tem of inter nal c ontro ls an d risk m anag em ent (inc lud ing n anc ial , ope ratio nal an d co mpli anc e co ntro ls) and for revie wing t he overall e ffe cti ven ess of sys tems in p lac e as well as for th e app roval of any c han ges to thec api tal , cor po rate and / or man age me nt str uc ture of th e Co mpa ny. The Committees Th e Bo ard has e sta blish ed a n umb er of Co mmi t tees , wh ose ter ms of refere nc e aredo cu men ted formall y and updated as ne ces sar y and c an be fo und o n the C o mpany ’s websit e at www.auctiont e chnologygroup. com. Th e Co mmi t tees r epo r t b ack to th e Bo ard o n thei r act ivi ties at t he B oard m e etin g followi ng the res pe cti ve Co mm it tee m ee tin g. T he co mpo siti on of ea ch C om mit te e is de sign ed toensure co mm on mem be rshi p bet wee n Commit tees with shared responsibilities. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 75 FINANCIAL ST A TEM ENTS Audit Committee Th e Audi t C omm it tee h as be en c hai red by Suz ann e Ba x ter si nce 4 F eb rua r y 2 02 2 an d othe r me mbe rs a re Sc ot t Fo rb es an d T amsi nT od d. Th e Audi t C omm it tee m e ets at le ast fou r time s a year, and mo re fre que ntly i f requ ire d. Th e quo ru m ne ces sar y for th e tran sac tion ofbusin ess at any me eti ng of the Audi t Co mmi t tee is t wo me mb er s. Ap poi ntm ents to th e Audi t C omm it tee a re made by t he B oard , on re c omm en dati on bythe No min ation C om mit te e and in con sul tatio n wit h the C hair of th e AuditCommi t tee. Th e Audi t C omm it tee ’s role is to assis t theB oard wi th the dis cha rge of its resp onsi bili ties in rel atio n to nanci al repor ting, including r eviewing t he Group’ s annual and interim Consolidated Financial S tat ements and accounting policies, inc ludi ng clim ate - re lated na nci al disclosures, the i nternal control framework, inter nal an d ex ter nal au dits , rev iewin g and mon itor ing th e sc op e of the an nual a udi t and the ex te nt of the n on - au dit wo rk u nde r t aken by ex tern al aud itor s, ad visi ng on t he app oint me nt of ex ter nal aud itor s and revie wing th e ef fec tive nes s of the ri sk management framework, internal audit, int ernal control s, whistleblo wing and fraud system s in pl ace wi thi n the G roup. Th ere is f ur t her d etai l on th e Audi t Co mmi t tee’s ac tivi tie s on pag es 8 8 to 9 4. Aud i t Co mm i t te e Re po r t p 88 Remuneration Committee Th e Remu ne ratio n C omm it te e is chai red bySc ot t For be s and its othe r me mbe rs are Bre on C orc or an , Suz ann e Ba x ter an d T am sin T odd. The Remuneration Commit tee meets at leas t t wice a y ear, or more f requ en tly if requ ired . T he qu or um ne c ess ar y for t he tran sac tion of b usin ess at a ny me etin g of the Remu ne ratio n C omm it tee i s two m em ber s. The Remunerat ion Committee ha s delegat ed resp onsi bili t y fro m the B oar d for dete rmi ning the poli cy for Exe cu tive remun er atio n and set ti ng rem une rati on for t he Ch air, the E xec uti ve Direc tors and the Leade rs hip T eam . It reviews the remu ne ratio n of our pe opl e and related p oli cie s and th e alig nme nt of in ce ntive s and rewa rds wit h cul ture , tak ing t hem i nto acc ou nt when set tin g the polic y for E xec uti ve Dire ctor s’ remun er atio n. The resp on sibil itie s ofthe Remu ner atio n Com mit te e are cove red in its ter ms of refere nc e, w hich i nc lud e deter min ing an d mo nitor in g the s trateg y andp olic y on remune rati on , termin ation , performance- relat ed pay , pension arrangem ents, share incentive plans, and remuneration reporting and disclosure. Th ere is f ur t her d etai l on th e Rem une rati on Co mmi t tee’s ac tivi tie s on pag es 9 8 to 1 1 2. Rem u ne r at io n Co m mi t te e Re p or t p98 Nomination Committee Th e No minat ion C om mi t tee is ch aire d by Bre on C orc or an , and i ts othe r me mb er s areS cot t Fo rb es and Pau line Re ade r . The No minati on C om mit tee me ets at l eas t twi ce a year, or more f req uen tly if re qui red . Th e quo ru m ne ces sar y for the t rans ac tion of busi nes s at any me eti ng of the N om inati on Co mmi t tee is t wo me mb er s. The responsibilities of the Nomination Co mmi t tee in clu de rev iewi ng th e size, str uc ture an d co mp osit ion of th e Bo ard an d ensu rin g that t he B oard c om pri ses th e rig ht balan ce of s kills , k nowl edg e, d iver sit y a nd experience; iden tifying and nomin ating for app roval can didates to ll any vaca nci es on the B oard ; giv ing f ull co nsid er atio n to the organisation and succession planning for theG roup; a nd ma kin g rec om me ndat ion s tothe Boa rd con ce rn ing me mb er ship of the Audi t Co mm it tee a nd th e Rem une ratio n Co mmi t tee in c on sul tatio n with t he Ch airs ofthos e Com mi t tees . Th ere is f ur t her d etai l on th e No minat ion Co mmi t tee’s ac tivi tie s on pag es 95 to 97 . No mi na ti on C o mm it tee R ep o r t p95 Disclosure Committee Th e role of the Disc los ure Co mmi t tee is to ensure timely and accurate d isclosure o f all inform atio n that is re qui red to be d iscl ose d tothe mar ket to me et the l ega l and regu lator y obli gatio ns an d req uire me nts ari sing f rom the lis ting of t he C omp any ’s se cur iti es on theLo nd on S toc k E xcha nge , incl udi ng the Lis ting Rul es , the Disc losu re Guid anc e and T ran spare nc y Rule s and th e Ma rket A bus e Regulation framew ork . Th e Discl osu re Com mi t tee will me et at suc h time s as shal l be n ec ess ar y o r app rop riate, as deter min ed by the Cha ir of the Discl osu re Co mmi t tee o r , in his o r her a bse nc e, by any othe r mem be r of the Discl osure C om mit te e. Th e Discl osu re Com mi t tee is chai red by Joh n - P aul S avant an d its ot her m em be rs are T om H argre aves, t he C om pany S e cret ar y, and any on e Non - E xec uti ve Dire ctor. Sustainabilit y and Climate Risk Committee Th e Sus tai nabil it y an d Clim ate Risk Co mmi t tee was es tab lish ed in J uly 2 0 22 pri mar ily to sup po r t th e imp le men tatio n of the TCF D rec om men dati ons for co rp or ate rep or t ing , bu t mo re wide ly to cove r clim aterelated deve lo pme nts an d wider sust aina bili t y topic s as may b e requ ired . Th eCo mmi t tee is cha ired by Ric hard Lew is, Chief O pe ratin g Of c er, and memb er ship co mpr ises S uza nne B a x ter, T o m Ha rgreaves , and rep rese ntati ves fro m Fina nc e, Inter nal Audi t and Cle ar Lead C ons ult ing Ltd, ou r external sustainabilit y consultants. The Co mmi t tee m ee ts at lea st t wic e a year. Su st a in ab il i t y Re po r t p70 Th e followin g tab le de tails h ow the C o mpany has co mpli ed wit h the 2018 UK Cor po rate Governa nce Code (t he “Code”) during the year under r eview . Th e Co mpa ny has c omp lie d with t he provis ions of the C od e for the nan cia l year othe r than as d iscl ose d on p age 7 4. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 76 Corporate Governance Governance Report continued CORPORA TE GOVERNANCE STRATEGIC REPORT Pages Boa rd l ead e rs hip a nd C o mpa ny p urp os e Th e Bo ard is res po nsib le for se t ting a nd d elive rin g the G rou p’s strateg y and mon itor ing how it is pe r for min g agains t the agre e d strateg y for the be ne t of all its stake hol der s. T he Bo ard is also resp on sibl e for de ning , mo nitor in g and overs ee ing the G roup’s cul ture a nd en sur ing i t is alig ne d to the pu rp ose an d str ategy. Fur th er inform atio n onthea ppli cat ion of thes e prin cip les c an be foun d as follows: Chai rma n’s S tateme nt 08 Chief E xec ut ive Of ce r ’s St ateme nt 1 0 Our Si x St rategi c Drive rs 20 Key Per for man ce Indi cator s 26 Principal Risks and Uncer tainties 4 0 Gover nan ce , Bo ard an d Gro up pu rp ose 73 Committee R epor ts 88 Division of re sponsibilities Th e Bo ard has c lea r wri t ten gui del ines o n th e divi sion of re spo nsi bili ties b et wee n the Chai rma n, Chi ef Exe cu tive Of c er, S enio r Inde pe nd ent Dire ctor, Board and Co mmi t tees . Fur th er info rma tion o n the a ppl icat ion of th ese p rin cip les c an b e found a s follows: Div isio n of resp onsi bili ties 81 Board attendance 82 Board independence 7 4 Boar d Com mitt ees 7 5 Composition, succession and e valua tion Th e Bo ard has d ele gate d resp ons ibili t y to the N omin atio n Co mm it tee to kee p und er regu lar rev iew th e co mp osi tion of th e B oard an d its C o mmi t tees . Th e No min atio n Co mmi t tee is als o resp on sibl e for su cc essi on pl anni ng an d the G roup ’s polic y on diver si ty a nd in clu sio n. Fur the r infor matio n on t he ap plic atio n of the se pr inc iple s can b e foun d as follows: Board biographies 84 Bo ard co mp osi tio n 7 4 No minati on C om mi t tee Rep or t 95 Audit, risk and internal control Th e Bo ard has d ele gate d resp ons ibili t y to the Au dit C om mi t tee to overs ee th e Gro up’s na nci al fram ewor k , na ncia l cont rols an d intern al con trols , and tha t poli cies an d pro ce dure s are in pl ace to ma nag e risks a pp ropr iatel y. F ur t her i nform atio n on th e appl icat ion of th ese p rin cip les c an b e found a s follows: Principal Risks and Uncer tainties 4 0 Audit Committee Report 88 Remuneration Th e Remu ne ratio n C omm it te e is resp ons ibl e on be hal f of the B oard fo r deter min ing and m oni torin g the s trate gy an d po licy o n rem une rati on , term inati on , per form anc e - re lated p ay, pensio n arr ang em ents , sh are in ce ntive p lans to su ppo r t t he Grou p’s strateg y, and remu ne ratio n rep or ting a nd dis clo sure . Fur th er i nform ation c an be foun d as foll ows: Remunera tion Committee Report 98 Compliance with the Disclosure and T rans parency Rules Th e discl osur es requ ired un de r DTR 7 . 2 of the Discl osur e and T ran spare nc y Rules are co ntai ne d in this repo r t , exce pt for those re quir ed und er DTR 7 .2.6 whi ch are co ntai ned in th e Dire ctor s’ Rep or t . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 77 FINANCIAL ST A TEM ENTS Boar d lea de rsh ip an d G rou p purpose Th e Bo ard is res po nsib le for l eadin g and dire ctin g the C o mpa ny and has ove rall authority f or the m anagement and conduct of its bu sine ss , str ategy a nd deve lo pm ent . Th e str ategy is i ntend ed to dri ve lo ng - term sust aina ble g row th an d me et th e interes ts ofour key stakeh old er s. Th e Grou p’s pur pos e, as d etail ed th rou gho ut the A nn ual Re po r t , is to unlo ck th e valu e of the se c ond ar y g oo ds ma rket an d in do ing s o, to acce le rate grow th of th e cir cula r ec on omy. Through our seven onl ine marketplaces, w e ena ble a la rge , dive rse a nd fr agm ented b uye r base to bid o n a wid e rang e of asse ts cu rated by expe r t auc tio ne er s. In tur n, au ctio ne er s are abl e to acc ess a g lob al bu yer ba se in a cos t- ef ci ent way, through ou r spe cia lise d mar ketpla ce tec hno lo gy. Ever y year our mar ketpla ces e nsu re that m illio ns of use d items a re reso ld for re - use o r rep urp os e, preve nting wa ste and c ar bon e mis sio ns fromt he man ufac turi ng of new items . By ex tendin g the li ves of mill ion s of items , weare acc ele rati ng the grow th of the circul ar ec on omy an d crea ting a n ew glo bal c han nel of sust ainab le c om mer ce. O ur e mp loye es co me to work e ac h day to make the ir pie c e ofthe auc tio n eco syste m bet ter by mak ing buy ing o r se lling s ec on d - han d go od s easie r and fas ter . Th eir ef for ts le ad to more a uct ion ee rs se llin g more a ssets, i n more categori es, onlin e, and more b uye rs f rom aro un d the wor ld p laci ng more b ids . Th is gen er ates a vir tuo us circ le ofgrow th be twe en au ctio ne er s and bid de rs sear chin g ac ross an i nc redi ble r ang e of spe cia lise d and u niqu e se co nd - h and i tems; all red uci ng th e ne ed to bu y new. Our g oal of u nlo ck ing t his valu e und er pin s our e ntire b usin ess s trate gy as we c onti nue to com mit to le adin g the s tru ctu ral tran sform atio n of the au cti on in dus tr y as a tru sted pa r tn er to auc tio ne er s, bi dde rs , ou r pe opl e and o ur c om muni t y. Our purpose informs our business strat egy and c om mit men t to bein g a sup po r ti ve and tru sted pa r tn er to the i ndu str y, our peo pl e and our community. Our s trate gy, which is to le ad th e evolu tio n ofthe auc tio n indus tr y fr om of i ne to online by provid ing au cti on ee rs wi th the m os t complete and impactful set of int egrated online ser vices and capabilities in the world, sets th e dire ct ion th e Gro up ta kes in ord er to hel p it ac hieve i ts pu rp ose . Th e str ategy an d the p ur pos e are th e key dri vers to th e Bo ard ’s decis ion - mak ing a nd acti ons a nd en sur ing th ese a re imp le men ted suc ce ssfu lly ; thi s is par ticu lar ly key whe n integr atin g a new bu sin ess in to the Gro up aspar t of the Group’s M& A strate gy. Fur th er info rma tion o n the G rou p’s strateg y can b e foun d in th e S trate gic Re po r t o n page s 02 to 71. Ou r Si x S tr at eg i c Dr ive r s p20 Corporate Governance Governance Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 78 CORPORA TE GOVERNANCE STRATEGIC REPORT Boa rd a ct ivi tie s in F Y22 Th e areas of fo cus dis cus se d dur ing th e pe rio d un de r revie w inc lud ed: Boa rd a re as of fo cu s Strategy • Integ rati on of Live Au cti on ee rs into A TG follo wing th e acqui sit ion on 1 Octo be r 2021 • Reg ula r repo r ts fro m the CEO at each me eti ng det aili ng the pe r for man c e of the bus ine ss agai nst th e strate gic goa ls an d six gr ow th dr ive rs • Th e Grou p’s strateg y was reviewe d and refres he d at a t hre e - day offs ite Lead er shi p T eam me eti ng and tho rou ghl y sc ru tin ise d by th e Bo ard at m ee tin gs h eld i n Jul y an d S eptem be r 20 2 2 • Co ntin uo us ove rsi ght of th e M& A s trate gy at e ver y Bo ard m ee tin g • Th e Boar d rece ive d, dis cus se d and chal len ge d stra tegi c updates fro m mem be rs of the Lead ers hip T e am arou nd the Gro up’s key ver tic als – I&C and A & A both in the UK and US , and acr oss pe op le mat ter s, IT st rateg y and fu ture pla ns inc lud ing IT se cu ri t y, pro duc t deve lop me nt and the rol l out of marketi ng ini tiati ves • Rec ei ved up dates fro m the CEO on rec ru itm en t into senio r manag em en t posi tio ns and the re org anis ati on of the Lea de rsh ip T ea m Risk and risk manageme nt • A tho rou gh rev iew of t he G rou p’s risks a nd th e po tenti al im pac ts on t he b usin es s was un de r ta ken as pa r t of the i nter im an d ann ual re sul ts pr oc es s • A revi ew of th e ris k regi ster, pri nci pal a nd e me rgin g ris ks an d ris k app et ite st ateme nt , co nd uc ted by th e Au dit Committee Financial performa nce • Ap prov al of the f ull ye ar re sul ts for F Y21 a nd i nteri m res ult s for F Y2 2 • Rec ei ved re po r t s fro m the C FO at e ac h me eti ng d eta ilin g the G rou p’s pe r for man ce a nd p rog ress a gai nst budget and against analyst consensus • Disc us se d the susta ina bili t y strate gy and cr eated the S ust ain abil it y and Cli mate Risk Co mm it te e to s up po r t the imp le me ntat ion of the TCF D reco mm en dati on s for corp or ate repo r ti ng • Ap prov al of the F Y 23 an nu al bus ine ss p lan an d bu dg et • Ap prov al of the pa r tia l repay me nt of the Seni or T e rm Loa n Facili t y Gov ernance • Ap prove d th e res olu tio ns to be p u t to share ho ld er s at the AG M an d revi ewe d inves tor fee db ac k rec ei ved • Th e Gro up’s gove rn an ce s tru ct ure was re vie wed to en sur e co mpl ian ce w ith t he C od e. T he C o mpa ny Se c reta r y rev iewe d th e gove rn anc e fr am ewor k an d co nsi der ed th e im pac t of any re gu lator y cha ng es on t he govern ance struct ure • An e valu atio n of th e Bo ard , its C o mmi t tee s an d the C hai r ’s per form an ce • Revi ewed t he C om mi t tee s’ ter ms of refer en ce • Ap prov al of the M o der n S lave r y S t ateme nt • Co mp lete d the a nnu al rev iew of t he B oar d’s sui te of gove rn anc e p oli cie s Stakeholders • Fe edb ac k fro m sha reh ol de rs foll owin g th e F Y 21 fu ll yea r resu lts a nd F Y2 2 in teri m res ult s and fe ed bac k fro m inves tor road shows • Co nsi der ed rep or ts on the integ rati on of Live Au cti one e rs into the busi nes s • Rec ei ved re po r t s on sh are re gis ter an d move me nts w ith in th e reg iste r • Full yea r and i nter im re sul ts st atem ent i nc lud ing e valu atio n of mar ket g uid anc e • Eng ag em ent wi th majo r share hol de rs reg ard ing the pro po se d remu ner ati on pol icy, which was app roved at the AG M in Ja nu ar y 2 02 2 • Rec ei ved up dates fro m the desi gnate d Non - E xec uti ve Dire cto r followin g form al enga ge me nt with th e wor k forc e on a b ian nua l basis • Co nsi der ati on of th e resu lts of t he e mpl oye e en gag em en t sur vey • Th e approv al of a l eas e for new of c e premis es for the Proxi bid team in Oma ha. Fur the r detai ls on the pro ce ss an d co nsi de rati ons of t his de ci sio n are s et ou t in t he S . 172 S tatem en t on p age s 4 6 to 51. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 79 FINANCIAL ST A TEM ENTS Board priorities for F Y23 Th e key items p rop ose d for F Y2 3 are to: • Revie w the p rogre ss an d del iver y of the Group s trateg y • Co ntinu e to revie w any poten tial M& A opportunities • Revie w the c om posi tio n of the B oa rd to ensure progress to meeting diversity targets • Revie w suc ce ssio n pla ns for th e Bo ard an d the Lea der shi p T eam Ch ie f Ex ec u ti ve Of c e r ’s St at e me nt p10 Ch ai rm an’s S ta te m en t p 08 Ch ie f Fi na nc ia l Of c e r ’s Rev iew p 32 Culture Our innovati on and collaboration- driven cul ture is c ore to ou r suc ce ss. T he B oa rd plays a key rol e in en sur ing t hat this c ult ure is align ed wi th th e str ategy a nd that b eh avio urs are mai ntain ed o r ade qua tely ada pted to me et th e ne eds of f utu re and evo lvi ng ope rati ons . O ver th e last ye ar, the Grou p has maint aine d it s col lab orat ive cul ture , suc ce ssfu lly integ ratin g Live Au cti one er s into our b usin ess a nd cu ltur e. Ou r co llab or ative app roac h has b ee n de mo nstr ated by the per form anc e of the b usin ess d uri ng this t ime , suc ce ssfu lly de live rin g its s er v ic e to its cus tome rs , in a pe ri od of in crea sed d em and , larg ely d ue to the a cc ele rati on in au cti on acti vi t y migrati ng fro m of ine to onlin e. As th e Gro up exp and s, o ur inter nati ona l work fo rce h as grown an d the B oa rd be lieve s that i t is imp or tant to en sure th at the c ult ure is emb e dde d ac ross th e Gro up an d adap ted as ne ces sar y, t o cater fo r dif feri ng re gula tion s and requireme nts within different co untries. Th e Bo ard le ads by exam pl e and e nsure s that the ap pro pri ate poli cie s and p roc ed ures ar e in plac e to maint ain th e Gro up’s cult ure. Th e Grou p mo nitor s its c ul ture th roug h the u se of emp loye e sur veys, e mp loye e eng age me nt sess ion s, da ta on e mpl oyee t urn over an d via any brea ch es of ou r co des of c ond uc t and through ou r whist leblowing policy . Employee engagement Foll owing t he pan de mic th e Gro up intro duc e d ahybri d hom e/of c e work ing mod el d esig ne d to supp or t emp loye es , maximise collaboration and attract new tale nt. M ore de tail on th ese ex ibl e work ing pra ctic es c an be fo und i n the S ust aina bili t y Rep or t o n pages 6 6 to 69. The Lead ers hip T eam h as co ntin ue d to enga ge wi th the work fo rce d uri ng this t ime , and we h ave impl em ente d a num be r of initi atives to ensu re ou r emp loye es’ we lfare, f ur the r inform atio n on wh ich is d eta ile d in the S trategi c Repo r t . An e mpl oye e eng age me nt sur vey was con du cted d uri ng the y ear, the resul ts of whic h were sh are d with t he B oard i n May 20 2 2. T he B oa rd welc om ed t he 8 0% resp ons e rate and ove rall e nga gem en t sco re of 91 % , as well as the9 6% approval rate for the Lea der shi p T eam .O verall re sult s showed a high l evel of sati sfact ion a mon gst o ur emp loye es as 91% o f the re sp ond ents fe lt that th ey were p er son ally e nga ge d with t he Company and their roles. Th e Bo ard re co gnise s the i mp or t anc e of con tinu ing to en gag e with i ts wor k forc e and takes th eir vi ews into c onsi der atio n in B oard disc ussi ons an d dec isio n - ma kin g. De tails of how the wo rk fo rce h as be en c ons ulte d in relati on to spe ci c Bo ard de cisi ons , and th e outc om e of that e ngag em ent , is se t ou t in thes . 1 72 S tatem ent o n pages 4 6 to 51 . Th eBo ard has app oin ted Bre on Co rc ora n asits de sign ated Non - E xec uti ve Dire ctor for work fo rce e nga ge men t and th e B oard wil l revie w this ap poi ntm ent d uri ng F Y23 . B reo n met wi th a c ross - se c tion of th e Gro up’s emp loye es , spre ad ac ross o pe rati ons in Euro pe and th e US , in Se ptem ber 2 021 andJ une 20 2 2 . Th ese ses sio ns have bee n sch ed ule d at leas t t wic e a year to disc uss cul ture , stra tegy, remu ner atio n and any ot her key issu es the e mp loye es wish to dis cus s. Foll owing t he me eti ngs refe rre d to above, Bre on re po r ted b ack to th e Bo ard on t he outc om e of thes e ses sion s at the fol lowin g Bo ard me eti ng to disc uss a ny issu es and acti ons to be t aken , inc lud ing d ele gati on toBoar d Com mit tees whe re appr opr iate. These engageme nt sessions will be con du cted al on gsid e the an nua l emp loye e eng age me nt sur vey, the resul ts of whi ch are reviewed in feedback sessions i n smaller groups, to encourage fur ther feedback and par ticip atio n to help p repa re a list of a ctio ns that will i mpr ove the ne x t sur vey resu lts . Shareholder engagement Th e Bo ard re co gnise s the i mp or t anc e ofeng agin g with exis ting , and pote ntial , share ho lde rs . The Di rec tor of Investor Relati ons has d en ed an inves tor relati ons prog ram me th at aims to e nsure t hat exis tin g and p otential i nvestor s und er stan d the Grou p’s busin ess m od el , stra tegy an d per form anc e. T he B oar d ensu res a cl ear und ers tan din g of the vi ews of investo rs thro ugh th e var iou s met hod s set o ut in t he S takeh ol der E ngag em ent se c tion of this rep or t o n pages 4 6 to 51 . The E xe cu tive Dire ctor s made for mal pre sen tatio ns on thefu ll year and in terim res ults (i n Dec em be r 20 21 and M ay 20 2 2), whic h were m ade availab le on t he C om pany ’s websi te. Th e resul ts pre sen tatio ns were fol lowed by form alinves tor roadsh ows. Aco ntin uo us prog ram me of m eet ings w ith ex istin g and potenti al inves tors , fun d man age rs an d sell - s ide an alys ts cove rs a r ang e of topic s including st rategy , per formance, outlook andE SG mat te rs. T he Cha ir is also availab le for me etin gs wi th maj or sh areh old er s and the C hair of th e Rem une rati on C om mit te e con sul ted wit h share ho lde rs i n relati on to our remuneration policy , which was appro ved at the20 2 2 AGM . Th e Bo ard is kept info rm ed of sh areh old er a nd anal yst fe edb ack , v ia re gula r upd ates fro m the CFO, as we ll as sh are reg ister an alys es an d mar ket rep or ts provid ed by t he C om pany ’s broke rs , J.P . Mor gan S e cur iti es pl c and Num isS ec uri ties Li mite d. Private shareholders are encouraged t o acc esst he Co mp any ’s website for rep or t s andb usin ess infor mati on and to con tact theC om pany via e mail wit h any quer ies . Co ntac t infor mati on c an be fou nd o n the inside back cov er . Senior Independent Director Th e Co de als o rec om me nds th at the b oa rd ofdire ctors of a compa ny shoul d appoi nt one of the in dep en de nt no n - exe cu tive di rec tors to be th e sen ior i nde pe nd ent di rec tor to provid e asou ndin g board for the chai r and to ser ve as an inter me dia r y for th e othe r dire ctor s whe n ne ces sar y. T he S eni or Ind ep end ent Dir ec tor has an im po r ta nt rol e on th e Bo ard in l ead ing on co rp or ate gover nan ce is sue s and b ein g availab le to share ho lde rs if t hey h ave con ce rn s whic h have not b ee n res olve d thro ugh th e no rm al cha nne ls of the C hair, Chief E xe cut ive Of c er or other E xec ut ive Dire ctor s. Sc ot t For bes has be en app oin ted as the Se nio r Inde pe nde nt Dire ctor of the Board . Corporate Governance Governance Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 80 CORPORA TE GOVERNANCE STRATEGIC REPORT Whistleblowing A whistl eb lowin g po licy h as be en a dopte d whic h inc lud es ac ce ss to a whis tleb lowin g tel ephone service run by a n independen t orga nisati on , allow ing e mpl oyee s to raise con ce rn s on a stric tly c on de ntial ba sis. T he Audi t Co mm it tee re c eive s regu lar re po r ts o n the us e of the se r v ice , iss ues th at have be en raise d and the ndin gs of any investig atio ns and any actions arising. Co n ic t s of inte re s t In acc ord anc e with th e Com pany ’s A r tic les ofAss oc iatio n, th e Boa rd forma lly rec ord s any con ic ts of interest an d all Dire ctors are give n the opp or tuni t y to raise any con ict s ofinteres t at the star t of ever y Bo ard me etin g. A ny con ic ts that are raise d will bec onsi dere d for aut hor isati on . Any ex terna l app oint me nts or oth er signi can t com mit me nts of the Dire ctor s requ ire th e pri or ap proval of th e Bo ard . Fur th er d etail s abo ut t he B oard ’s ex tern al co mmi tme nts are d eta ile d on pag es 8 4 to 87 of this repo r t and d etail s abou t the Di rec tors’ interes ts in th e sha res of the C o mpa ny are deta ile d on pa ge 109. Independent advice Dire ctor s can rais e con ce rns at B oard me etin gs an d have acc es s to the adv ic e of the C om pany S e cre tar y. The re is a pr oc edu re in plac e, wh en ne ed ed , for Dire ctor s to obt ain ind ep end ent p rofessio nal a dvi ce at th e Co mpa ny ’s expe nse. N o su ch re que sts weremad e dur ing this nan cial yea r . Dire ctor s’ and O f ce rs’ Li abili t y insu ran ce ismain tain ed for all Dire ctor s. Internal controls statement Th e Bo ard , assis ted by the A udi t Co mmi t tee , has ca rr ied o ut a re view of t he ef fec tive nes s of the Gro up’s syste ms of inter nal c ont rol dur ing th e year e nd ed 3 0 S eptem be r 20 2 2 and th e pe rio d up to the d ate of approv al ofthe Co nso lidate d Fina nci al S tatem ents con tain ed in t he A nnu al Re por t. F ollow ing this rev iew, the B oard c on clu de d that alth ou gh the G rou p is stil l on it s jour ne y indeve lo ping , rolli ng ou t and em be ddin g itsc ontr ol and ass ura nce fr am ewor k , no signi can t failing s or weak nes ses had be e n ide nti e d and plan s were in plac e to address the issu es a gge d forimp rovem ent . Division of responsibiliti es Board b alance and independence Th e Boa rd cur rentl y com pr ises th e Chair man , t wo Exe cu tive Dire c tors and ve Non - E xec ut iveDire c tors . The re are clea r wri t ten guide lin es arou nd the di visio n of resp onsi bili ties a nd , in ac co rdan ce wi th th e Co de , the ro les of C hair man a nd Ch ief E xec uti veOf c er are he ld by sepa rate indiv idu als. Board b alance and independence Chairman • Lead er ship an d gover nan ce of the Bo ard • Ensu res co nst ru cti ve relatio nshi ps bet we en the E xec uti ve and No n - E xe cu tive Dire ctor s • Ensu res app rop riate en gag eme nt wit h key stakeho lde rs • Se ts the a ge nda an d tone of th e Bo ard m ee ting s • Revie ws the B oard ’s ef fecti ven ess an d mo nitor in g the Non - E xec ut ive Dire ctor s’ ind ep end en ce • Ove rse es th e su cc essi on an d co mp osi tion of th e B oard Ch ief E xec ut ive Of c e r • Day -to - day resp onsi bili t y for manag ing the b usin ess • Revie ws and re co mm end s the G rou p’s strateg y to the Bo ard an d ensu res i ts imp lem en tatio n • Provid es reg ular up dates to the Boa rd on all sign i ca nt ma t te r s • Del iver s the Gro up’s ESG st rateg y • Del eg atio n of autho ri ty to the Gro up’s Leade rsh ip T ea m • Responsible f or effective and ongoing communication with shareho lders Seni or In dependen t Director • Acts a s a sou ndin g bo ard to the C hair man • Acts a s an inter me dia r y for th e othe r Bo ard m emb er s and /or shareh ol der a nd oth er key st akeho lde rs • Evaluates th e Chair man’s pe r form anc e as par t of the annu al B oard ef fe cti vene ss rev iew Non-E xecutive Directors • Provide independent judgement, know ledge and commercial advice • Co nstr uc tive ly ch alle nge th e E xecu tive Di rec tors an d mon itor th eir p er forma nc e agai nst s trateg y • Mana ge ag en das an d key inpu ts an d issu es th rou gh the Boar d Com mitt ees Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 81 FINANCIAL ST A TEM ENTS Board and Committee meetings and attendance As d etail ed o n pag e 75 to 7 6 the B oar d has in pl ac e a num be r of Co mmi t tees th at sup po r t theB oard in pr ovidi ng overs ight of spe ci c are as of Audit , Rem une rati on , Nom inati on and Sus tain abil it y. The ta ble b elow d eta ils the n umb er of s che dul ed m ee ting s he ld dur ing t he yea r und er revi ew and the at ten dan ce by eac h Dire ctor at the me eti ngs the y were eligi ble to atte nd if the y were ap poi nted or re sign ed d uri ng th e year. Name Board Audit Committee Remunera tion Committee Nomination Committee Sustainability an d Cl i ma te Ri s k Committee Breon Corcoran 7/ 7 – 3/3 2 /2 – Jo hn - Pa ul S av ant 7/ 7 – – – – To m H a r g r e a v e s 7/ 7 – – – 1/ 1 Sc ot t Fo rb es 7/ 7 5/5 3/3 2/2 – S uz an n e B a x te r 5 /5 4 /4 2/2 – 1/ 1 Pauline Reader 6/6 – – 1/1 – T amsin T odd 4/5 4 /4 2/2 – – Morgan S eigler 6/ 7 – – – – Penny Ladkin - Brand 2/2 1/ 1 1/ 1 1/ 1 – Notes (i) Th e at ten da nc e ab ove re e ct s the nu mb e r of sch ed ul ed B oa rd and C o mmi t te e me eti ng s hel d du rin g F Y 2 2. T h e Bo ar d he ld si x ad di tio na l ad - h oc B o ard m ee ti ngs d ur in g th e rep o r ti ng p er io d to ad dre ss urg en t mat te rs , whi ch we re at ten de d by all D ire cto rs o r at lea st th e req uis ite qu or u m. T his i nc lud es mat te rs re so lve d by u nan im ou s wr it te n res ol ut io n. O ne m e eti ng wa s he ld i n Ne w York to en abl e th e Bo ard to g ain a d e ep er i ns igh t into t he U S bu si ne ss . (ii ) Pau lin e Rea de r was ap po inte d to the B oa rd on 2 De c em be r 20 21. Suz ann e Ba x te r and T am sin Todd were a pp oi nte d to the B o ard o n 4 Fe br ua r y 2 02 2 . (iii ) Pa uli ne Re ad er was a m em be r of the Au di t Co mm it te e fro m 2 De ce m be r 20 21 to 4 Feb ru ar y 2 0 22 . Th er e were n o m ee tin gs of t he A udi t C om mi t tee d ur in g th at pe ri o d. S uz ann e B ax te r an d T ams in Todd were a pp oi nte d as me m be rs of t he A udi t C om mi t tee o n 4 Fe br u ar y 2 0 22 . (iv) Pa uli ne Re ad er was a me m be r of the Re mu ne rat io n Co mm it te e fro m 2 De ce mb e r 20 21 to 4 Feb ru ar y 20 2 2 . Th er e wer e no m ee tin gs of t he R em un er ati on C om mi t te e dur in g th at pe r io d. S uz an ne B ax ter and Tamsin Todd we re ap po in ted as m e mb er s of th e Re mun e rat ion C o mm it te e o n 4 Feb r uar y 20 2 2 . (v) T ams in Todd se nt ap o lo gie s for o ne B o ard m e eti ng d ue to a not he r un avoi dab le c o mmi tm e nt sh or tly af ter s he j oin ed t he B o ard . Mo rg an S ei gl er wa s un abl e to jo in o ne B oa rd m ee tin g , whi ch to ok p la ce i n another time z one. (vi) Pe nny L ad ki n - B ran d res ig ne d fro m the B oa rd an d all Co m mit te e s on 25 Jan ua r y 20 2 2 . Eac h Dire ctor ’s at tend anc e at Board an d Co mmi t tee m ee ting s is co nsid ere d par t ofthe form al annu al review of their per form anc e. Wh en a Dire ctor is unab le toatten d a Board or Co mm it tee me eti ng , theyc om mun ic ate their co mme nts and obse r vat ion s on the mat ters tobe con side red in advan ce of the me etin g viathe Ch air, the SID or th e releva nt Boa rd Com mi t tee’s Chair for raisi ng , as app rop riate , dur ing th e me eti ng. Pri or to eac h Bo ard an d Co mm it tee m ee tin g, eac h me mbe r re cei ves th e age nda a nd asso ciate d Bo ard pa per s to supp or t tho se items on the ag end a. Th e Chief E xec uti ve Of c er provi des an upd ate on k ey com me rcial issu es an d proje c ts acro ss th e Gro up on beh alf of the Leade rsh ip T eam and the ChiefF in anc ial Of c er provi des upd ates onth e curre nt and fore cas t nan cial pos iti on at eachm ee ting . TheC o mmi t tee Chai rs alsoprov ide up dates on the work of the Co mmi t tees a nd hig hlig ht any are as whi ch requ ire co nsid er atio n by the fu ll Bo ard . O the r mat ters a re add ed to the a ge nda of sc he dul ed Board meetings , or Board meetings convened as and when ne ce ssa r y if a speci c time critical item needs cons iderat ion. Time comm itments Th e No minat ion C om mi t tee will c ons ide r theti me co mmi tm ent of any potentia l new app oint me nt to the B oard to en sure th ey are able to ded icate suf c ien t time to ful l thei r role . All Dire c tors are req uire d to seek pri or app roval befo re tak ing o n any add iti onal external appointme nts and they are exp ec tedto atten d all Boar d and rele vant Commi ttee meet ings . Corporate Governance Governance Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 82 CORPORA TE GOVERNANCE STRATEGIC REPORT Composition, succession ande valuation Board appointments Th e No minat ion C om mi t tee is res po nsib le for the app oin tme nt of new Dire ctor s to the Bo ard an d the C om mit te es , in co njun cti on with t he Ch air of eac h C om mit te e, to ens ure that any n ew app oin tme nt prov ide s the r ight balan ce of c apa bili ties i n line wi th th e Bo ard ’s pol icy o n dive rsi t y. The No minat ion Co mmi t tee is als o resp on sibl e for en sur ing successio n plans are in place at Board and senior m anagement level. Elec tion and re- elec tion In acco rda nc e with the Com pany ’s Ar ticl es of Ass oc iatio n and the Cod e, the Dire c tors intend to stand fo r ele ct ion o r re - ele ct ion at t he Co mpa ny ’s for thc o ming AG M and fo r annu al re - e le cti on at e ach s ubse qu ent AG M of the Co mpa ny. I n additi on , prio r to rec om men din g their r e - election t o shar eholders, the No minati on C om mi t tee, o n be half of th e Bo ard, c ar rie d ou t an an nua l re - as sess me nt ofeach of the Non - E xec uti ve Direc tors . T ak ing ac co unt of th e re co mme nd ation s of the N omi natio n Co mm it tee a nd th e resul ts of the B oard e valu ation c ar rie d ou t du rin g the year un de r revi ew, the Bo ard c onsi der s that all the cur re nt Dire ctor s cont inu e to be ef fecti ve, ar e co mmi t ted to thei r role s, a nd have suf cie nt tim e to per for m their du tie s. Th e Bo ard th erefore re c omm en ds th e re - e le cti on of all Dire ctor s and the el ec tion of Suz ann e Bax ter and T ams in T od d. Dir ec tors’ bio grap hie s can b e foun d on pa ges 8 4 to 87 and in t he N otice of M ee tin g. Suz ann e Ba x ter an d T ams in T o dd , who we re app ointe d to the Bo ard o n 4 Feb ru ar y 2 02 2 , will st and for e le cti on at th e Co mp any ’s for th co min g AGM o n 26 Janu ar y 2 0 23 , bei ng the r st AGM sin ce th eir app oin tme nt . All othe r Dire ctors wil l offer th ems elve s for re - e le cti on at th e AGM . Induction and continuing development Th e Co mpa ny S ec retar y in c onju nct ion wi th theC hair man is resp on sibl e for ensur in g thatne wly app oin ted Dire ctor s rec eive appropriate induction training, in accordance with t he C ode a nd th e Bo ard ’s own indu ctio n pol icy. Any newly ap poi nted Dire cto r will also be invi ted topar ti cipa te in a ran ge of me etin gs with m emb er s of the Leade rs hip T eam to fam iliar ise th ems el ves wit h the busi nes s, i ts str ategy a nd go als . Bo ard meetings generally include one or mor e prese ntat ion s from the Le ade rsh ip T eam onare as of strategi c focus . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 83 FINANCIAL ST A TEM ENTS Corporate Governance Bo a r d o f D i r ec t or s Ap po in te d to t he B oa rd: 25 J anu ar y 2 021 Independent: No Current external commitments: None Joh n - P aul join ed th e Group as CE O in Febr ua r y 2016, brin ging ove r 1 8 year s of expe ri enc e in di git al mar ketpl ace s and c om me rce . He was appo inted to the plc B oard pr io r to IP O in Janu ar y 20 21. Joh n - P aul sp ent a lmo st 10 years at e Bay/Pay Pal , whe re he s er ve d in a num be r of lea der shi p role s, la t terly a s Pay Pal ’s Vic e Pres ide nt of Prod uc t, E x per ie nc e, and C ons ume r Eng age me nt for EM E A . He also hel d lea der shi p role s at othe r onl ine b usin ess es. J oh n - Pa ul’s mos t rec ent rol e before joi nin g the Grou p was as CEO of Think F inan ce UK . Jo hn - Paul be ga n his care er at J.P . Morg an in New Y or k after grad uatin g from Ge o rgetown Un iver sit y in Washi ng ton DC. Heea rn ed his MB A at the Uni vers it y of Chic ago. Committee memberships Disc los ure Co mmi t tee (Chair) How J o hn - Pau l su p po r t s th e Co m pa ny ’s st ra te gy a nd l on g -te rm success Joh n - P aul is pas sio nate abo ut t he rol e A TG c an pl ay in ac cel er ating the ci rcul ar e co nomy t hrou gh di gita l tran sform atio n of the au cti on indu str y and in u nlo ck in g the i ncre dib le val ue pre sen t in th e massi ve sec on dar y go ods m arket . His fo cus is b uild ing o n A TG ’s lead ers hip posi tio n thro ugh c reati ve str ategie s to enha nc e the val ue A TG provid es to the auc tio n ec osys tem as i t und erg oe s the s tru ctu ral sh if t on lin e, and o n buil ding fo cus ed , co llab or ative le ade rs hip team s with t he abi lit y to execu te. He is c om mit te d to a share d suc ce ss mo de l and is exc ited by buil ding c apa bili ties a nd se r vi ce s that all ow both t he au ctio n indu str y and A TG to grow pro tabl y toget her. He leads and gu ides the A TG team with a c lea r visi on to grow A TG into a tru e onli ne gl obal mar ket lead er, to pursu e a stra tegy th at stead ily e nhan ce s A TG ’s co mpe titi ve pos iti on , to invest ag ains t the si x str ategic d rive rs , and to build an d deve lo p the team c ap able of d eli veri ng th e valu e. Favou ri te auc t io n nd Bo okca se from a baro nial es tate with ol d Englis h pine , coat s of arm sof the family th at onc e owne d it, le athe r dust aps wit h gold emb os sed eur de l ys. Committee membership ke y No mi na ti on C om m it t ee Au di t Co m mi t te e Re mu n er a tio n Co m mi t te e Dis c lo su re C om m it t ee Su s ta in ab il it y a nd C li ma te Ri sk C om m it t ee Co m mi t te e Ch ai r Jo hn - Pa ul S avan t Chief E xe cu tive O f ce r Breon Corcoran Chairman Ap po in te d to t he B oa rd: 25 J anu ar y 2 021 Independent: Ye s Current external commitments: None Bre on joi ne d the Grou p as Non - E xec uti ve Chair man in D ec em be r 20 20 and was app oin ted to the plc Boa rd pri or to IPO in Jan uar y 20 21. At the time , he was ser vin g as CEO of World Rem it (now know n as Zepz), a rol e from w hic h he step pe d down i n Aug ust 2 02 2 . Pr io r to that, he was CEO of Padd y Power B et fair plc (now known as Flu t ter plc). In 201 6 , Bre on le d the me rge r of Bet fair an d Padd y Power to for m one of th e wor ld’s lar ges t onli ne ga min g co mpa nies . Pri or to this, Bre o n was the CEO at Bet fai r until 2016 and COO of Padd y Powe r until 2 01 1. Breo n was for mer ly n on - execu ti ve dire ctor of Tiln ey Investm en t Manag em ent S er vic es and B es tinvest , both par t of the Tilne y Grou p. In the 1 99 0 s, Bre o n was a Vice - Pre side nt , Equi t y Der ivati ve T radi ng , at J.P . M orga n and he has also wor ked at Ban kers T r us t. H e has a B A (Mat he matic s) from T r init y C o lle ge, Dub lin and an MB A fro m INS E AD. In 2016, Breo n was awarded th e UK ’s Sund ay Tim es’ “ Bu sine ss Lead er of the Y ear ” award . Committee memberships Nomination Commit tee ( Chair), Remuneration Committee How Breon supports the Company’ s strategy and long-term success Bre on’s kn owle dge a nd ex pe rie nc e in str ategi c tran sform atio n are well res pe cted by hi s Bo ard co lle agu es and ot her s takeh ol der s alike. He is re co gnis ed for h is co llab orat ive le ade rsh ip and fo cus o n creat ing a s tron g, di ver se an d ef fecti ve Bo ard . Bre on e mb rac es his role as the d esign ated No n - E xe cu tive Dire cto r for work forc e eng age me nt, e nsu rin g that t he em ploye e p ers pe cti ve is bro ugh t into the Boardroom. Favou ri te auc t io n nd Jewel ler y and a r t . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 84 CORPORA TE GOVERNANCE STRATEGIC REPORT Ap po in te d to t he B oa rd: 25 J anu ar y 2 021 Independent: No Current external commitments: None T om jo ine d th e Grou p in Ja nuar y 2018 as Group C FO an d was app ointe d to the pl c Boa rd pri or to IPO in Jan uar y 2021. He joine d from Yell, wh ere, a s CFO, h e was a key me mb er of th e lead er ship team whi ch le d the ir di gita l tran sform atio n. P rio r to this , T om wo rked at Vodafone in the UK an d acros s EM E A befo re bec om ing C FO of Vodafone Rom ania . In all, T o m has over 1 0 years’ C FO exp er ien ce , train ed wi th Ar thur A nd er sen , is a quali e d Char tered Ac co unta nt and h olds a n MB A . Committee memberships Disc los ure Co mmi t tee , Sus tain abili t y and Clim ate Risk Co mmi t tee How T om s up po r t s t he C om pa ny ’s st ra te gy a n d lo ng -te rm s uc c es s T om is p assi onate ab ou t dri vin g bot h orga nic an d str ategic acq uisit ive grow t h, wi th ex ten sive ex pe rie nc e of both M & A and busi nes s fun ding . He i s well re gard ed for h is de ep un de rst and ing of the bu sin ess an d its d rive rs . He l eads a s tron g and we ll - res pe cted na nce team , cre ating ali gnm ent ac ross di f ferent lo c atio ns and ensu rin g a robus t and resili ent nan ce fun cti on . Favou ri te auc t io n nd An o rig inal f ram ed S mir nof f ad ver tise men t. Ap po in te d to t he B oa rd: 2 6 Feb ru ar y 2 021 Independent: Ye s Current external commitments: Chai r of Asc en tial pl c Chai r of Cars.c om L LC Sc ot t was app ointed to the Bo ard at IP O in Febr uar y 20 21 . He has over 4 0 year s’ expe ri en ce in op erat ion s, n anc e and M& A inc lud ing 1 5 ye ars at C en dant C o rp orat ion , for me rly t he largest provider o f travel and residenti al proper ty ser vices worldwide. S cot t est ablis he d Ce nda nt ’s internati onal h eadq uar ters in Lon do n in 1 9 9 9 and le d this divi sion a s grou p man agin g dire ctor u ntil he j oin ed Rightmove plc, whe re he was Chai rma n from July 20 05 to Dece mb er 2 019. He is cur rent ly Chai rm an of Asc enti al plc and C ars .co m LLC and has als o be en Cha ir of Orbi t z World wide an d Non - exec uti ve Dire ctor of T ravelp or t World wide , Inc . Sc ot t has hel d the role of Chai r of Nomination and Remuneration Commit tees multiple times. Committee memberships Remunera tion Committee ( Chair) , Audit Committee, Nomina tion Committee How S co t t s up po r t s th e C om pa ny ’s st ra te gy a n d lo ng -te rm success Sc ot t is an expe rie nc ed U K and US lis ted co mpany di rec tor and chai r with a s ec tor foc us pr inc ipall y on d igit al co mm erc e and o nlin e mark etplace s. Scott’s i ndependence an d extens ive experience as a non - exec uti ve dire ctor i n listed e nviro nm ent s has en abl ed hi m to suc ce ssfu lly sup po r t the B oard in i ts rs t cou ple of year s as a listed co mpany. Ot her B oa rd me mb ers v alue S c ot t ’s patien ce a nd so und judg em ent , alo ng with his ex pe rie nc e in M& A , na nc e and busi nes s ope rati ng st rateg y. Scot t is re spe cte d for his ab ilit y to co nst ru cti vely chal len ge an d co ntr ibu te to the Co mpa ny ’s strateg y, promot ing an ope n an d col lab orat ive env iron me nt ac ross th e Bo ard . Favou ri te auc t io n nd A sur pris e, m od estl y pr ice d pai nting by a B uc ks C oun t y ar tis t who painte d my rst ever p urch ase. T om Hargrea ves Chief Fin anc ial Of ce r Scott Forbes Se nio r Indep en den t Non - E xe cu tive Direc tor Board gender diversity Male (5) Female (3) Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 85 FINANCIAL ST A TEM ENTS Pauline Reader Ind epe nd ent Non - E xec uti ve Directo r Ap po in te d to t he B oa rd: 4 F eb rua r y 2 02 2 Independent: Ye s Current external commitments Non - E xec ut ive Dire ctor an d Audi t Com mi t tee Chai r for Asc enti al plc Ind epe nd ent me mb er of P wC Pub lic Intere st B ody E x ter nal Bo ard me mb er of Pinse nt Maso ns Suz ann e has su bsta ntial l isted c om pany ex pe rie nc e and ex pe r tis e gain ed in b oth exe cu tive an d no n - exe cu tive ro les . Sh e has h eld a r ang e of co mm erci ally focus ed nan cial , M& A and oper atio nal roles , inclu ding ser ving a s CFO of M itie G rou p plc , wh ere sh e sup po r ted t he bu sine ss thro ugh tr ansfo rmat ive ac quisi tive a nd org ani c grow th . Su zan ne is cur rent ly an Ind ep end ent Mem be r of th e PwC Publ ic Interest Bod y, a n E x ter nal Board Me mbe r of Pi nse nt Masons Inter natio nal LL P and a Non - E xec ut ive Direc tor and Audi t Com mit te e Chair f or Asc enti al plc. Suz ann e previou sly ser ve d as a No n - E xe cu tive Direc tor and Audit Co mmi t tee C hair of W H S mith p lc fro m 2013 to Januar y 20 21 . A Fell ow of the Insti tute of C har tered Acc oun tants in Englan d and Wales , she train ed with Pw C and sp ec ialise d in Co rp orate Fina nce at Deloi t te. Suz ann e also ha s a wealt h of exp eri en ce in wo rk pla ce in clu sio n and was form er ly a C o mmis sio ne r fo r Eq uali t y and Hum an Righ ts for G reat Brita in. Committee memberships Audit Committee ( Chair) , Remuner ation Committee, Sust ainab ility and Cl imate Ris k Co mmi t tee How S uz an n e su pp or ts t he C o mp any ’s str ate g y an d lo ng -te rm success Al ong side he r sign i ca nt nan cia l expe rie nc e and qua li cat ion s, Suzanne’s exper tise in grow ing businesses and corpo rate gover nan ce h as prove d invalu abl e to the Bo ard . Suz ann e’s pri or boa rd exp er ien ce e nab led h er to su cc essf ull y step into th e rol e of Audi t Co mm it tee C hair i mm edi ately up on a ppo intm en t and sh e con tinu ous ly provi des c ons tru cti ve chall en ge to the E xecu tive Dire ctor s and sup po r t and gu idan ce to the na nc e func tio n. Favou ri te auc t io n nd Car ved b ergè re sofa – in n ee d of ren ovatio n! Ap po in te d to t he B oa rd: 2 De ce mb er 2021 Independent: Ye s Current external commitments Chief M arketi ng Of c er, Podium Pauli ne ser ves as Chief M arketi ng Of c er of Podi um , a co mmu nic atio n and pay me nts pl atfo rm . Be fore Po dium s he se r ve d as the S e nio r Vi ce P resid ent of M arketi ng for S titch F ix , wh ere sh e led t he br and , cre ative , cus tome r acq uisi tio n, c ustom er re tentio n and ma rketi ng tec hno lo gy d epa r tm ents . Pr ior to th ese ro les , sh e hel d seni or mar keting p osi tion s at Minted , Kabb age and e Bay. Pauli ne rec ei ved he r Bac he lor of Ar ts deg ree in Ec on omi cs fro m Pri nce ton Un iver sit y i n 20 0 2 and b eg an he r ca ree r at Mo rga n S tan ley in 2 0 0 2, b efore jo inin g Th om as Weisel P ar tne rs as a resea rch a naly st , cover ing c o mpan ies in t he ret ail se ctor. Committee memberships Nomina tion Committee How P au li ne su p po r t s th e C om pa ny ’s st ra te gy a nd l o ng -te rm success Pauli ne br ing s over 20 y ears of m arket ing an d e - co mme rc e exp eri en ce th roug h rol es at a ran ge of gl oba l co nsum er b usin ess es and in i nvestm en t bank in g. P aulin e is high ly re gard ed by th e B oard for he r mar keting a nd co nsu me r insi ghts . He r kn owle dge of th e digi tal rea lm and of gl ob al co nsu mer t ren ds provi des a p lat form fo r her to br ing f resh t hink in g and p ers pe cti ves to disc ussi ons a bo ut A TG ’s nex t sta ge of grow t h. Favou ri te auc t io n nd Modern v ase. Suzanne Bax ter Ind epe nd ent Non - E xec uti ve Directo r Committee membership ke y No mi na ti on C om m it t ee Au di t Co m mi t te e Re mu n er a tio n Co m mi t te e Dis c lo su re C om m it t ee Su s ta in ab il it y a nd C li ma te Ri sk C om m it t ee Co m mi t te e Ch ai r Corporate Governance Board of Directors continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 86 CORPORA TE GOVERNANCE STRATEGIC REPORT Ap po in te d to t he B oa rd: 18 Janu ar y 2 021 Independent: No Current external commitments Co - hea d of T A Asso ci ates’ EM E A T e ch nol og y Bo ard dire ctor of Th e Acc ess Gro up, Eurowag , IT RS , N etr isk S ovos, thin kp roje ct , Uni t 4 an d Adc ubu m AG Mor gan jo ine d the G rou p in Fe br uar y 20 20 in c on ne ctio n wit h the acq uisit ion of th e Gro up by T A Ass oc iates and re pre sen ts T A Ass oc iates on t he B oard . Mo rgan wa s app ointe d to the Plc B oa rd pri or to IPO in Jan uar y 2021. He is an active investor of Co mp usof t , IFS , RL Dat ix and Wor k wave and form erl y ser ved on the b oard s of ( o r was acti vel y involve d wi th) 1 0 bis , AVG T ech nol ogi es , Big poi nt, CM OS IS , e Circ le , ION T ra din g, LI ST , M and M Direc t and Sm ar t S tre am T e ch no log ies . Mo rgan re c eive d a BA d eg ree i n Eco no mic s from Yale Univer sit y an d an MBA de gre e from th e S tanfor d Gra duate S ch oo l of Busi nes s. Committee memberships None How M o rg an s up p or t s t he C om p any ’s st r ate g y an d lo ng -te rm success Mor gan ha s provi ded c on tinui t y du rin g the tr ansi tio n of A TG to a listed b usin ess . Mo rga n acti vely a ssis ts the B oa rd with t he impl em ent atio n of the C om pany ’s grow th s trate gy, par ti cul arl y give n his kn owle dg e of the bu sine ss , tra nsac tio nal ex pe rie nc e and net wor k of cont acts th roug h T A As so ciates , whic h the Dire ctor s bel ieve will as sist t he Gr oup i n sou rcin g acq uisi tion o pp or tuni ties . Mor gan’s role fa cili tates go od s hare ho lde r en gag eme nt wi th T A Associates. Favou ri te auc t io n nd I enjoy browsi ng Jo hn De ere tra ctor s for sale on Proxi bid . Ap po in te d to t he B oa rd: 4 F eb rua r y 2 02 2 Independent: Ye s Current external commitments CEO of Fin dmy past Dire ctor an d T rus tee of the Imp er ial War Muse um T amsi n is curre ntl y CEO of Fin dmyp ast , one of the le adin g co mpan ies for fa mily r esea rch i n the wo rld , whe re sh e has over se en a per io d of tran sform atio n and g row th an d buil t a tec h - le d, mi ssio n dri ven or ganis atio n. P rio r to this , T amsi n was Chi ef Cus tome r Of c er at Addis on Le e. Sh e has also he ld role s at Ama zon and Mic rosof t , and was prev iou sly He ad of E- Co mme rc e at Bet fair and Mana gin g Direc tor of TU I - own ed Cr ysta l Sk i Holid ays. A r m bel iever i n the p osi tive im pac t of dive rsi t y and i ncl usio n on busi nes ses , T amsi n found ed the Fulh am cha pter of TED xWo men , whic h br ings tog eth er wo me n work in g in tec hno lo gy, and sh e is also a T rus tee of the Imp eri al War Muse um . T amsin h olds an M BA fro m Imp er ial Co lle ge Lon do n and a Bac hel or of Ar ts in Engl ish from Princeton University . Committee memberships Audit Committee, Rem unerati on Committee How T am si n su pp o r ts t h e Co mp an y ’s str at eg y a nd l on g-t er m success T amsin’ s digital transf ormation backgr ound, coupled with her que stio nin g mind set a nd co llab or ative s t yle , has p roved a valu abl e asse t to the Bo ard . T ams in br ings b road i nter natio nal ex pe rie nc e and a pa ssio n in exc elle nc e in cu stom er se r v ice , as well as e x tensi ve kn owle dge a nd inter est in t he im pac t of dive rsi t y in the b usi nes s and on th e Bo ard , whe re she p rovid es ins ight a nd ch alle ng e. Favou ri te auc t io n nd Herend Hungarian hand painted porcelain. Morgan Seigler Non- E xecutive Direct or T amsin T odd Ind epe nd ent Non - E xec uti ve Directo r Board independence Independent (4) Non-independent (3) Chair (1) Length of tenure 0-3 years (6) 3-6 years (1) 6-9 years (1) Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 87 FINANCIAL ST A TEM ENTS Suzanne Bax ter Audit Com mit tee Chair Members Number of scheduled meetings attended/eligible t o attend S uz an n e B a x te r 4 of 4 Sc ot t Fo rb es 5 of 5 T amsin T odd 4 of 4 Penny Ladkin - Brand 1 of 1 Pauline Reader 0 of 0 Corporate Governance I am de lig h ted to p re se nt my r s t re po r t of th e Aud it C om mi t te e, whi c h pr ovi de s a su mm ar y of th e Au di t Co m mi t tee’s rol e an d ac ti vi tie s for t he yea r en d ed 30 S ep te mb e r 202 2 . This r epo r t o utl ine s how the C o mmi t tee dis cha rge d the d uti es del eg ated to it by the B oa rd and e xpla ins th e key mat ters c on side red by it in d oing s o. Th e Com mit te e full s a vit al role in the Group’s govern anc e fram ewor k , providi ng independent challenge and oversight of the accounting, na nci al repo r ti ng and inte rnal c ont rol pro ces ses , risk ma nag em ent , inter nal au dit an d the re lati ons hip wi th the e x tern al aud itor. Dur ing its rst full year since admissi on to th e Londo n Stoc k Excha nge , the Com mit te e has con tinu ed to bu ild on and ren e the soli d f oun dati ons esta blis hed at the time of I P O. Th ere were some chang es t o the co mpo siti on of t he Com mit te e during the year . At the star t o f the na nci al year the Comm it tee com pr ised Penny Lad ki n - Br and as Cha ir of th e Co mmi t tee , alo ng wit h S cot t Fo rb es . Pauli ne Re ade r was app oin ted as afur the r indep end ent mem be r of th e Commi t tee on 2 D ec em be r 2021 . Pen ny Ladki n - B ran d stepped down from the Bo ard and the Co mmi t tee at the C om pany ’s AGM o n 25 Janu ar y 2 0 22 a nd th en o n 4 Feb ru ar y 2 02 2 , T amsi n T o dd and I, both inde pe nd ent Non - E xecu ti ve Dire ctor s , join ed the Co mmi t tee as a m em be r and C hair re spe ct ivel y at whic h po int Pa ulin e Read er also step pe d down. I wou ld like to thank Com mit te e memb ers , the A TG manag em ent tea m and t he ex ter nal au di tors for th eir h ard wor k and su pp or t duri ng th e year. Par ti cula r than ks go to my pre de ce sso r Pen ny La dk in - B ra nd f or her work as a me mb er and Chai r of the Com mit te e in the p er io d followin g the G rou p be co min g a pub lic c omp any. In its r st full yea r pos t IPO, th e Grou p is still at the be ginn ing of its jour ne y in deve lo ping , ro lling o ut a nd em be ddi ng i ts co ntrol a nd assu ran ce fr ame work s. T he refore it h as be en a n area of foc us for t he Co mmi t tee an d inter nal au dit d uri ng th e year, to consid er an d mo nito r the pr ogre ss an d imp lem en tatio n of a co nsisten t co ntrol f ram ewor k acro ss th e Grou p. T his will c onti nue to b e an area of fo cus fo r the Co mmi t tee in F Y2 3. At the sta r t of F Y 2 2 the Gro up acqui red Live Au cti one e rs , a m ateria l acq uisit ion fo r the G roup. T h e Co mmi t tee ha s co nsid ere d the im pac t of the ac quis itio n on t he bu sine ss an d its c ont rols sy stems a s well as th e acc ou nting j udg em ents m ade by m anag em ent a nd th eir ex ternal a dvi ser s. Th e Sus tai nabil it y an d Clim ate Risk C om mit te e was est ablis he d dur ing the ye ar to suppo r t the im pl eme ntati on of the TCF D rec om me ndati ons . I am also a memb er of this Co mm it tee an d am ple ased to re po r t th e Grou p has m ade g oo d pro gress i n term s of bei ng able to com pl y with the maj or it y of the TCFD dis clo sure s for F Y2 2 . Th e Group ’s disclos ures in resp e ct of its TCFD re po r tin g requ irem ent s are prov ide d in th e Sus tain abil it y Re por t on p ages 5 2 to 65. This r epo r t p rovid es fu r th er info rma tion o n the m at ters m ent ion ed above an d on oth er a cti viti es an d mat ter s co nsid ere d by the Au dit Co mmi t tee du rin g the ye ar un de r revie w, as well as thos e pro pos ed for F Y 23 . T his rep or t sho uld b e read i n co njun cti on wi th the ex terna l audi tor ’s rep or t on pag es 1 19 to 1 27 and t he C ons olid ated Fi nan cial S tatem ents o n pag es 128 to 1 70. My fellow Co mmi t tee mem be rs and I would be happy to answer any que stio ns ab ou t the wo rk of th e Co mm it tee at t he for thc omi ng AGM . Suzanne Bax ter Audit Com mit tee Chair 1 Dec em be r 20 22 A udit Commit t ee Repor t “ Duri ng i ts rst fu ll ye ar sin ce admissi on t o t h e Lo n d on S t ock Exc ha nge , the C ommi tt ee ha s co n ti n ue d t o bui ld o n and r ene th e so lid fou nd at ion s es t a bl i s he d a t the time o f I PO . ” Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 88 CORPORA TE GOVERNANCE STRATEGIC REPORT Co mp os it io n an d ro le o f th e Au di t Co m mit t ee Th e membe rs of t he Com mit te e provide a b read th of nan cia l, co mme rci al and s ec tor exp er tise, t he reby en abli ng th e Co mmi t tee to me et it s resp ons ibili ties a nd th e requ ire men ts of the C od e. T he B oar d is satis e d that the Com mit te e as a whol e has c om pe tenc e relevant to th e sec tor in whic h the Co mpa ny op era tes. As Cha ir, a Fellow of t he Institu te of Cha r tere d Accou ntan ts in E ngl and and Wales, a fo rm er CFO of a F TS E 250 com pany and an e xpe ri en ce d Audit Comm it tee Chair, I have recen t and relevan t nanci al exper ien ce and as s et out in thei r biogra phie s, Sc ot t For be s and T a msin T odd h ave a wealth of p er tine nt bu sine ss ex pe rie nc e. Th e Co mpa ny S ec retar y ac ts as S ec reta r y to the C om mi t tee. T he Co mmi t tee is com pr ised sol ely of inde pe nd ent Non - E xec uti ve Dire cto rs. Th e Co mmi t tee ha s a cle ar set of re spo nsi bili ties th at are se t ou t in itster ms of referenc e, whi ch are availa ble on th e Grou p’s website, ww w .auctiont echnologygroup.com. Me etin gs are h eld at l eas t quar terl y to coin cid e wit h key events , in par ticul ar the pu blic re po r tin g and audi t cycl e for the Grou p. I repo r t tothe Boa rd on the bu sine ss co ndu cted at the pre vio us Co mmi t tee me etin g, a nd infor m the B oa rd ab ou t the dis cus sio ns an d any rec om me ndati ons m ade by th e Co mm it tee . Foll owing my a ppo intm ent a nd th at of T amsi n T od d to the B oard a nd the C om mit te e dur ing t he yea r , ind uc tion p rog ram mes we re ar rang ed for each D irec tor in ord er to assist wit h the deve lop me nt of their und ers tan din g of the busin ess and o ur role s as Direc tors . Fur th er inform atio n abo ut the ex pe rie nc e and qual i cati ons of eac h mem be r of the C om mit te e can b e foun d on pa ges 8 4 to 87 . Co mm it t ee’s key act iv it ies d u ri ng t he ye ar e n de d 30S ep te mb e r 2022 Th e Co mmi t tee ha s est ablis he d an ann ual pl an lin ked to the Gr oup’s na nci al year and repor ting cycl e. This is conti nual ly reviewe d to e nsu re that i t is kept up to date and i s refres hed a s the b usin ess evo lves . At the inv itati on of th e Co mm it tee , the C hair ma n, th e Chi ef Fi nanc ial Of c er, Chief E xec uti ve Of ce r and senio r represe ntati ves of the na nc e and ma nag em ent team s also at ten d me eti ngs , as do re pre sent atives of both in tern al and ex terna l audi t. T he C o mmi t tee ho lds re gul ar me et ings with t he ex ter nal au di tor with ou t man age me nt pre sent , an d the se disc ussi ons as sist i n ens uri ng that re po r ti ng an d ris k mana ge men t pro ces ses ar e subje c t to rigo rous re view t hrou gh ou t the yea r . Th e Co mmi t tee re ce ive d upd ates on , disc uss ed an d de bated a ra nge of topics du rin g the ve me eti ngs it he ld du rin g the year, as summarised below: • Rec eive d an d con sid ere d rep or t s from m ana gem en t on th e key esti mates an d judg em ents m ade i n the i nteri m rep or t a nd in t he annu al C ons olid ated Fi nan cial S tateme nts . Th e Co mmi t tee chal len ge d the as sum ptio ns mad e, di scus se d alter nati ve treatm en ts, rev iewe d pro pos ed dis cl osure s and c ons ide red t he opin ion a nd wor k pe r for me d by the ex terna l audi tor an d othe r professi onal a dvi ser s. Fur the r det ails of th e chal len ges r aise d by theC om mit te e are outl ine d in the key areas of focus for F Y2 2 . • Co nsid ere d whe the r this A nn ual Re po r t an d the in terim r esul ts , taken as a wh ol e, are fai r, balance d an d und er stan dab le, p rovid e share ho lde rs wi th th e infor matio n ne ce ssar y to asses s the G rou p’s posi tio n, p er form anc e, b usin ess m od el an d stra tegy, and con side re d the c om plete nes s of the in clu de d disc losu res . T o ass ist the C om mit te e and B oa rd in co nc lud ing th e A nnu al Rep or t is fair, balan ce d an d und ers tan dab le ma nage me nt pre sen ted a rep or t to the C om mit te e whic h in clu de d a sum mar y of the key the me s discl ose d in th e A nnu al Rep or t, h ow the re po r t lin ks the G rou p’s stra tegy, risks an d key pe r for man ce in dic ators , is c onsis tent an d how A PM s are use d to aid co mp arab ilit y ye ar on y ear, par tic ular ly with th e signi c ant ac quis itio n of Live Auc tio ne er s in F Y 22 . • Rec om me nde d that t he B oard a pprove t he via bili t y state men t af ter con side rati on of th e basis of p repa ratio n and m ana gem en t’s key assu mptio ns an d stre ss tests . Fur the r deta ils of the key con side rati ons m ade by th e C omm it te e are sum mar ise d be low. • Revie wed an d chal len ge d man age me nt ’s forec asts , stre ss test s and as sum ptio ns in su ppo r t of th e use of th e go ing c on cer n bas is for pre para tion of th e A nnu al Rep or t and in terim r epo r t . • Revie wed th e overal l pres entat ion of A P Ms in th e An nua l Rep or t inc ludi ng evalu ating th e clar it y of de nit ions an d rec on ciliat ions . Sp ec i c det ails of the chall en ges p ose d by the Audit C om mit tee are out line d in th e focu s areas fo r F Y 2 2 . • Co nsid ere d the man dator y re qui reme nts for TCF D repo r t ing and th e Grou p’s discl osure s in tha t rega rd, a nd en sure d alig nme nt wi th the Sustainability and Climate Risk Commit tee in responsibilities and rep or t ing . As this was the C omp any ’s rs t year rep or ting un der TCFD th is was an additi ona l focus are a in F Y2 2 for the C om mit te e. • Rec eive d a rep or t on th e ac tivi tie s of the S ust ainab ilit y a nd Cli mate Risk C om mit tee and c ons ide red i ts ap proa ch to the c om pilat ion of and ass uran ce re gard ing TCF D related dat a acros s the Gro up. • Revie wed an d end or sed t he ou tp uts a nd re co mme nd atio ns of an ex tern al revi ew of disc los ures c ont aine d in th e F Y21 A nnu al Rep or t. • Revie wed the ris ks , nan cial inte grati on an d acc ount ing ass oci ated with th e acqu isiti on of Live Au cti one e rs. • Revie wed an d rec om me nde d the a pp roval by the B oa rd of the Group’ s treasury policy . • Co nsid ere d the o utp ut s of tax ad vic e, i n par ticu lar o n tran sfer pri cin g and th in ca pit alisati on s tudi es. • Revie wed an d co ncu rre d wit h the ev aluati on p rovid ed by mana gem en t of the su bsidi ari es’ fu nc tion al cu rre nci es an d the associated prior year adjustment. • Co nsid ere d the ad eq uac y of the C om pany ’s sys tem of inter nal con trol i ncl udin g co nsid er ation of t hos e relati ng to the a cqui siti on . • Fur th er d evel ope d , mon itore d and re viewe d the G rou p’s interna l con trols f ram ewor k and r isk m anag em ent p roc es ses , inc lud ing th e risk a ppe tite an d risk re gis ter . • Revie wed th e inter nal au dit p lan for th e pe ri od to ens ure it wa s app ropr iatel y plan ne d, res our ce d and ef fe cti ve and rev iewe d the prop ose d inte rnal a udi t pro gra mme fo r F Y 23 wh ich i ncl ude s a focus o n th e integr atio n and p ost- a cqu isit ion c ont rol e nviro nme nt of Live Auc tio ne er s and IT and da ta sec uri t y, aligning it wi th the Group’ s principal risks. • Revie wed inter nal aud it rep or ts on the IT c ontro l fram ewor k and sou ght inp ut fro m the new ly app ointe d Chief T e ch nol og y Of c er in light of the de c ien cie s ide nti e d. • Co nsid ere d the ef fe cti vene ss an d reso urci ng of the i nter nal aud it function. • Oversa w the independence, effectiv eness and r emunerat ion o f the Grou p’s ex terna l audi tor, includ ing th e sc op e of its wor k at th e year end a nd inter im , its r isk as ses sme nt , and th e ap prop riate nes s and ope rati on of th e po licy o n the s upp ly of no n - aud it se r v ice s. • Co nsid ere d the pro pos ed fu ture deve lo pm ents in U K cor po rate gover nan ce a nd aud it pr ac tic es ari sing f rom th e pu blic atio n of the UK Gove rn men t ’s Depar tme nt of Busin ess , En erg y and Ind ustr ial S trategy paper . • Mon itore d and c on side red t he Gr oup’s fra ud pre venti on pro c ess and whi stleblowing policy . • Hel d pri vate me etin gs wi th the C o mpany ’ ex tern al an d inter nal audi tors wi tho ut t he pre sen ce of m anag em ent . • Revie wed th e Co mmi t tee’s ter ms of referen ce a nd an nual s ch edu le of wor k . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 89 FINANCIAL ST A TEM ENTS Key are as of fo cu s fo r th e Aud it C om mit t ee d uri ng th epe rio d en de d 30 S e pte mb er 2 02 2 Si gn i ca n t jud ge me n ts an d est im at es A key role of th e Co mmi t tee is to c onsi der w het her s uit abl e acc ou nting p oli cie s have be en a dop ted by the C om pany a nd th e reasonableness of the j udgements and estimates that hav e been made by m anag em ent . T he C om mit te e, hav ing re ce ive d and rev iewe d pap ers fro m mana ge me nt and the ex ter nal au ditor, identi e d the areas s et ou t in th e tabl e be low an d note 2 as the key a reas of signi can t acc oun ting ris ks inc ludi ng jud ge men t and/or esti matio n made by t he C om pany du rin g the ye ar. Ot h er a re as o f foc u s In additio n t o the signi c ant acco unti ng estimates and judgem ent s the Co mmi t tee als o focu sse d on a n umb er of oth er key ac co unti ng an d rep or t ing m at ters for F Y2 2 . T hes e are also s umm ari sed i n the ta ble b el ow. Viability statement Th e Co mmi t tee rev iewe d and c hall eng ed t he pro c ess un de r ta ken and con clu sio ns rea che d to sup po r t th e Co mpa ny ’s Via bili t y S tatem ent whic h is set o ut o n pag e 4 5. O ur re view i ncl ude d: • chal len gin g mana ge men t on wh eth er th e thre e - ye ar tim e pe rio d ado pted rem aine d ap pro pri ate and alig ne d with t he lo ng - ter m forec ast ing of th e Gro up; • chal len gin g whet he r mana ge men t’s ass ess me nt of the p rin cip al and e me rging r isks fa cin g the G rou p and th eir p otentia l imp act was appro pri ate; • considering the lik elihood of t he risks occurring in t he time period sel ec ted and t he im pac t seve rit y i n the eve nt th at they d id oc cu r ; • chal len gin g mana ge men t as to the ap pro pri atenes s of the assu mptio ns us ed in s tres s testin g and m od elli ng sc en ario s; an d • revie wing th e discl osure to ensu re it was suf ci entl y fulso me andtransparent. Foll owing i ts revi ew, the C omm it tee c on cu rre d with t he st ateme nt made by t he C om pany. Sig ni c an t ac co un ti ng es ti ma tes a nd j ud ge me nt s Ke y issue cons idered How t he i ss ue w as a dd re ss ed by t h e Aud it C o mm it te e Go od wi ll an d o th er i n ta ng ib le a ss et s ar is in g fr om t he L ive Au c tio ne e rs a cq ui si ti on Th e Group acqui red Live A uc tio ne er s on 1 Oc tobe r 2021. O n acq uisi tio n of L ive Au ct ion e ers , judg em ent s were requ ire d to be made in res pe ct of t he fai r valu e of ass ets a nd lia bil iti es ac qui red a nd th e ide nti c ati on and valuati on of i nta ngi ble asse ts arisin g on a cq uisi tio n. At the d ate of a busi ne ss c omb ina tio n, g oo dwi ll is re qui red to b e allo c ated to the a pp rop ria te cash - ge ne rati ng u nit s (“ CG Us” ) and may on ly b e real lo cate d in li mite d cir cum sta nc es . Add iti on s to go odw ill for Live Au ct ion e ers wer e alloc ated on a spli t of 80 % and 20 % bet wee n A& A and I& C respe c tive ly. The allo cat ion was cal cul ated b ase d on th e ne t pre sen t valu e of se gm ent c on tri bu tio n marg in fr om th e rol l ou t of the p aym ent s plat fo rm . Th e dete rm inat ion of t he va lue of t he in tan gib le as sets r equ ire s sign i c ant jud ge me nts and est imates to be made by the Dire ctor s. Th ese j udg em en ts ca n in clu de , bu t are n ot limi ted to, t he c ash ows that an asse t is expe cted to gene rate in the fut ure and the app rop ri ate weigh ted aver ag e co st of ca pi tal . Of t he in tan gib les acq uire d , the c us tome r rel atio ns hip ba lan ce s are es pe ci all y sen sit ive to ch ang es in a ssu mpt ion s aro und d isc ou nt rates andc usto me r att ri tio n rates. Jud ge me nt was a lso re qui red i n de term ini ng th e ap pro pr iate usef ul ec on omi c lives (“ U E L ” ) of the int ang ibl e asse ts arisi ng fro m the acquisition. Full de tail s of the a cq uisi tio n an d the fa ir val ues of t he as set s and liab ili ties a cq uire d are s et o ut in n ote 1 1 of t he C on soli date d Fin an cial S ta teme nts and the U EL of the intang ibl e asse ts in note 1 . Man age me nt e ng age d wi th an ex tern al valu ati on ex pe r t to ass ist i n cal cu lati ng the fair valu e of the acqui red total net ide nti a bl e assets (with par tic ula r referen ce to the identi cat io n and valuati on of intan gib le asse ts). Manag em ent also pe r for me d a de tail ed b alan ce s he et re vie w to ide ntif y any fu r th er fa ir val ue asse ss me nts re qui red a nd th e go od will w hic h sh oul d be re c ogn ise d. Th e Co mm it te e revi ewe d the o ut pu t of the e xp er t ’s val uati on a nd th e pap er s pres en ted bymana ge me nt on the fair value ass es sme nts . The C om mit te e asse sse d an d ch alle ng ed t he ap pro pr iate nes s of the u sef ul ec o no mic li ves of th e inta ngi bl e asse ts ar isi ng fro m th e ac quis iti on , dis cus sin g the d if fere nt li ves at tac he d to eac h ass et c lass . T he C om mi t tee al so ch all eng ed c o ncl usi ons d rawn on am or tisa tio n pe rio ds t hat we re sub se que ntl y all oc ated to th ose a sse ts. In par t icu lar, the Com mit te e con sid ere d and chal len ge d whet he r the judg em ent invol ved i n the v alua tio n pro ce ss , in clu din g the d er iva tio n of fair va lue adju stm en ts, a nd th e Gr oup’s p oli cy on i nta ngi bl e asse ts has b e en a ppr opr iate ly disclosed in the Consolidated Financial S tatements. Foll owin g co nsi de rati on of pa pe rs f rom m ana ge me nt an d fro m the e x ter nal audi tor s, t he C om mi t tee c on cur re d wit h the p rop os ed t reatm en t and t he appropriateness o f the disclosures. Consideration arising o n the acquisiti on of Liv eAuctioneers Th e Grou p acqui red Li ve Auc ti one e rs on 1 Octob er 20 21 for total considera tion o f £40 4.0m Jud ge me nt was re qu ire d in de ter min ing w het he r the ro ll over o ptio ns and re str ic ted s tock u ni ts gr anted , pr ed omi nan tly to ma nag em en t, sho uld be classi ed as c o nsid er atio n or r em une rat ion for post- combination ser vices . Full de tail s of the a cq uisi tio n an d the e le me nts of c ons ide rat ion a re set o ut i n note 1 1 of the C ons oli date d Fi nan cia l S tate me nts . Man age me nt p rese nted to t he Au dit C o mmi t tee t he key fa cts of t he sh are pur cha se ag ree me nt , in clu din g the c o mp one nts of t he f ull c ons ide rat ion fo r the acq uisi tio n , the te rms a t tac he d to the ro llo ver o ptio ns an d res tri cte d stoc k un its and the in dic ator s unde r IFR S 3 “ Bu sin ess Co mb inat io ns” to assess whe the r the se sh oul d be t reate d as co nsi de rati on o r rem un era tio n. On e of the key indi cato rs und er IF RS 3 that supp or ted mana ge me nt ’s conc lus ion that the n anc ial im pac t of the sto ck opti on s shou ld all be treated as co nsid er atio n was that non e of the sha reh ol de rs , incl udi ng Live A uc tio ne er s man age me nt , were re qu ire d to con tin ue in e mp loy me nt in o rd er for t he o ptio ns to vest a nd th at no fo r fei t of any op tio ns co ul d aris e as th e resu lt of a n opti on h ol der leav ing t he b usin es s pos t ac qui siti on . Foll owin g co nsi de rati on of th e fac ts at th e tim e of th e acq uisi tio n an d af ter rev iew and c hall en ge of p ape rs f rom m ana ge me nt an d the e x ter nal au di tor, the Co mm it te e conc ur re d with the co ncl usi ons rea ch ed byman age me nt . Corporate Governance Audit Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 90 CORPORA TE GOVERNANCE STRATEGIC REPORT Sig ni c an t ac co un ti ng es ti ma tes a nd j ud ge me nt s Ke y issue cons idered How t he i ss ue w as a dd re ss ed by t h e Aud it C o mm it te e Goodwill impairment reviews As di scl ose d in n ote 1 2, t he G rou p’s goo dwi ll and o the r int ang ibl e asse t bal anc e was £ 73 5.5 m at 3 0 S ep temb er 2 0 22 . At eac h rep o r tin g date , or as re qu ire d, a n asse ss me nt for imp air me nt of go o dwill a nd ot he r inta ngi bl e asse ts is u nde r t aken co mpa ri ng th e bo ok va lue of e ac h ass et wi th it s rec ove rab le amo unt ( b ein g th e high er of v alu e in us e and fa ir val ue le ss c os ts to sell ). Value i n use is d eter mi ne d wit h refere nc e to pro je cted fu ture cas h ows disc ou nted at an appro pri ate rate. Both the cas h ows and th e disco unt rate invol ve a sig ni c ant de gre e of estimation uncertaint y. Th e resu lti ng c alc ula tio ns are s ens iti ve to the as su mpti on s in resp e ct of futur e cash ows , the disc ou nt rate and long -ter m grow t h rate ap plie d . Man age me nt p rese nted t he C om mi t tee wi th a d eta ile d im pair me nt p ape r ou tli nin g the ove ral l imp air me nt in di cator a sse ss me nt an d the key i npu ts to th e dis co unted cas h ow mode ls. Key inpu ts incl ud e the ration ale for the cash - ge ne rati ng unit allo c atio ns , the futur e cash ows , the disco unt rate and the long - ter m grow th rate. Th e disc ou nt r ate was cal cu lated by a n ex ter nal e xp er t and th ei r ful l rep or t was also c irc ulate d to the C om mi t tee for r evi ew an d co nsid er atio n . Th e fore ca sts u sed w ith in th e imp air me nt m od els a re co nsi stent w ith t he G rou p’s F Y 23 b ud get a nd l ong er- ter m fore ca sts w hic h were a pp roved by t he B oar d in Se ptem be r 20 2 2 . Ma nag em ent a lso p rese nte d sen sit ivi t y an alys is on t he imp air me nt m od els to th e Aud it C om mi t tee , hig hlig htin g th e imp ac t of inc rea sin g the d isc oun t rate, r edu ci ng th e lo ng - ter m grow th rate an d cal cu lati ng th e mini mu m CAGR on adjus ted EB IT DA over a ve - yea r per io d which wou ld resul t in the re be in g no he adr oo m be twe e n the v alu e in us e cal cul atio n an d the c ar r y ing valu e of the a sse t. Th e Co mm it te e revi ewe d and a sse sse d th e pap er s pre sen ted by ma nag em en t and fro m the ex tern al audi tor on the mat ter of impai rm en t. It cha lle ng ed man age me nt an d th e audi tor o n the ir as ses sm en ts of disc ou nt ra tes and t he r isk pre miu m alloc ated to each CG U. It also con sid ere d the Bo ard app roved ca sh ow fore cas ts an d th e asse ss me nt of ter min al grow t h rates d eter mi ne d by man age me nt . It discu sse d the poten tial fu ture im pac t of fu r th er vola tili t y in excha ng e and i ntere st r ates an d whe the r thi s ris k area h ad be e n ade qu ately re ec ted in the sen siti vi t y tests und er taken by manag em en t. Fo llowi ng this revi ew, the Com mit te e was satis e d that no impai rm en t was require d at 30 September 2022. Give n the s en sit ivi t y of th e imp air me nt tes ts to fu ture i nc reas es in t he dis co unt rate, the C om mit te e spe ci c all y con sid ere d and disc uss ed the pro po se d disc los ure s on th is mat te r and c hal le nge d th e ex ter nal a udi tor an d ma nag em ent as to the ir co mp le tene ss . Foll owin g thi s act ive dis cu ssi on , the C o mmi t tee co nc urr ed wi th th e dis clo su res pr op ose d by ma nag em ent . T he se dis cl osu res are set o ut i n note 12. Functiona l currency Foll owin g the acq uisi tio n of LiveA uc tio ne er s , a revi ew was performed by management to ensur e tha t the functiona l curr ency of eac h sub sidi ar y w ith in th e Gro up h ad be e n co rre ct ly d eter min ed give n the r evis ed s tr uc ture a nd o pe rati ons of t he G rou p. As a re sul t of the r evi ew, the fu nc tio nal c ur ren cy fo r all en tit ies was de em ed to b e the c ur ren cy of th e pr ima r y e co no mi c envi ron me nt in whi ch t he en tit ies o pe rate wi th n o cha ng es pr op ose d, e xce pt for A TG Me dia US In c. Proxi bid Bid co In c. Plat inu m Paren t Inc. Plati nu m Interm ed iate Inc . Platin um Purc ha ser In c. and Li veA uc tio ne er s Inc . The fun cti on al cur ren cy of these ent iti es wasde em ed to be poun d sterl ing rat her tha n US doll ars . Th e Live Au cti on ee r enti tie s (Plati num Pa ren t Inc, Pla tinu m Inter me di ate Inc, Plat inu m Purc has er Inc and Li ve Auc tio ne e rs Inc) have be e n tra nsla ted into th e ne w fun cti on al cu rre nc y, using t he excha ng e rate at 1 O ctob e r 20 21, the date th ey be c am e par t of theG rou p. As A TG Me dia US Inc . and Proxi bid Bid co In c. were par tof the Group pre vio usl y a prio r peri od adju st me nt is requir ed to be dis clo se d. A rest atem ent h as be e n rec o gnis ed fo r the ye ar e ndi ng 3 0 Se ptem be r 20 21 ad jus tin g forei gn c ur ren cy tr ans lati on re ser ves and n anc e inc om e by £2. 3m . Th ese ch ang es have no impa ct on the a djus ted m easu res u se d as par t of the G rou p’s alter nat ive pe r for man ce m eas ure s. Fu r th er d eta ils are p rovi de d in no te 1 . Man age me nt p rese nted to t he C om mit tee a de tail ed p ap er wh ic h co nsid ere d eac h sub sid iar y with in th e Gro up an d ass es sed i ts f unc tio nal c ur re ncy a gai nst the req uire me nts an d guida nc e of IA S 21. For the inter me diate hol din g enti ties man age me nt c ons ide re d the a uton omy of t hes e en titi es an d ap pli ed th e “ lo ok- up” or “ lo ok- down” a ppr oac h in t hei r ass ess me nt . Th e Co mm it te e revi ewe d the fa cts p res ente d and c ha lle ng ed ma nag em en t and the au di tors o n th e rati on ale for t he f unc tio na l cur re ncy c ha nge a nd th e bas is on whic h al tern ati ve ou tco mes h ad b ee n co nsi de red a nd as ses se d. T he C om mi t tee was satis e d that the dec isi on to ch ang e the func tio nal cu rre nc y for these enti ti es was ap pro pri ate. T he Au di t Co mm it te e also r evi ewed t he qu ant um of th e pr ior year a djus tm ent a nd ag re ed a re sta teme nt sh ou ld b e mad e, ba se d on ma teri ali t y. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 91 FINANCIAL ST A TEM ENTS Ot he r a rea s of fo cu s Ke y issue cons idered How t he i ss ue w as a dd re ss ed by t h e Aud it C o mm it te e Alternative performance measures (“ APMs”) Th e Gro up us es a nu mb er of A P Ms in a ddi tio n to tho se m easu res re p or te d in acc ord an ce wit h IFRS . Th e Dire ctor s bel ieve that the A PM s are impo r ta nt whe n asses sin g the und er lyi ng n anc ial and op er atin g per fo rm anc e of the Gro up. T he G rou p’s AP Ms a re set o ut i n note 3 . Th e A PMs a re us ed in ter nall y in th e man ag em ent of t he Gr oup ’s busin es s pe r for man ce , bud get ing an d forec asti ng , and for deter min ing E xe cu tive Dire c tors’ re mun er atio n and that of other man age me nt thro ug ho ut the busi ne ss . Th e A PMs a re als o pre sen ted ex te rn ally to m ee t inves tor s’ req uire me nts fo r fur the r cl ari t y, com par abi lit y a nd tr ans pare nc y of th e Gro up’s nan cia l per fo rm anc e. Dur in g the year mana ge me nt pres ente d the Audi t Com mi t tee wit h a be nc hma rk in g anal ysi s and fe ed bac k fro m a var ie t y of sta keho ld er s on th e ap pro pri aten ess of t he ad just ing i tem s inc lud e d with in th e Group’ s APMs. Th e Com mi t tee spe ci ca lly cha lle ng ed the excl usio n of the sha re - b ase d - pay me nts ch arg e (“ S BP C ” ) fro m the adjus ted EB IT DA and othe r AP Ms . Mana ge me nt prese nte d an analysi s of the pro l e of the S BP C and the ex tent to which it de ri ved fro m the IPO an d in year acq uisi tio n . Th e Co mm it te e disc us se d the i mp or tan ce of sh are - bas ed rem une rat ion to the Grou p and its mana ge me nt. It re co gnis ed bot h the unu sual tre nd in SB P C in the shor t peri od sin ce the IP O and whe re the Gro up is at i n its li fec ycl e. Man age me nt s ubs equ en tly s ou ght th e op ini on of th e Gro up’s an alys ts and s hare ho ld er s on th eir v iew o n th e cla ri t y and a pp rop ria tene ss of the Gro up’s AP Ms for a newly oate d busi nes s. Th is soun din g proc es s did not indi ca te that the APM s shou ld be red e ne d. Foll owin g dis cus sio ns an d en han ce m ents to th e dis cl osu res re gar din g AP Ms , the Co mm it te e has satis e d itsel f that the AP Ms ado pted by the G rou p are ap pro pr iate an d prov ide t he u ser of t he A nn ual Re po r t with g reate r cla ri t y, com par abil it y an d tr ansp are nc y of the G rou p’s underlying t rading performance. T ask Force for Climate-related Financial Disclosures (‘TCFD’) repor ting Th e TCFD is a framewo r k that publi cl y listed co mp anie s must use to disc los e clim ate - re lated ris ks and opp o r tu niti es to the nan cial pe r for ma nc e of the ir bu sin ess . Th e Grou p is req uir ed to repor t on TCFD for the rs t time in this An nua l Rep or t. Dis clo sure s requ ire d are on a com pl y or expla in basis . The Gro up’s TCF D discl osu res are set ou t withi n the Sus tain abi lit y Rep or t. Th e Su sta ina bili t y an d Cli mate Ris k Co mm it te e was es tab lish ed d ur ing th e year to supp o r t th e imp le me n tat io n of th e TCF D rec o mm en d ati on s. Th e Su sta ina bili t y an d Cli mate Ris k Co mm it te e en gag ed wi th a thir d - pa r t y c ons ult ant to as sist t he G rou p in c alc ulat ing i ts c arb o n footp ri nt for F Y2 2 and impl em en t the reco mm en dat ion s of the TCF D. Th e Aud it C om mi t tee h as rec ei ved p res ent atio ns f rom t he Su stai nab ili t y and C lim ate Risk C o mm it tee o n th e Gro up’s pro po se d ris ks and o pp or tun iti es an d rev iewe d the p rop os ed m etr ic s an d targ ets bei ng e sta blis he d in re spe c t of cli mate ch ang e. Th e Aud it C om mi t tee h as ch alle ng ed m ana ge me nt on t he s tatus ofwhe the r the requ ire me nts of each of the TCFD req uire me nts havebe e n met and revi ewed the dis clo su res out lin ed in the Sustainability Repo r t. Corporate Governance Audit Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 92 CORPORA TE GOVERNANCE STRATEGIC REPORT Key act ivi tie s pr op ose d fo r th e n an cia l yea r en di ng 30Se p tem be r 20 23 Th e Co mmi t tee ha s an ann ual pl an to guid e its a cti vit ies du rin g the year. Th e key activ itie s to be under taken in th e nan cial ye ar end ing 30 September 2023 include: • Ove rse e and sc ru tini se the pre par ation of the n anc ial state men ts for the ye ar en de d 30 S e ptemb er 2 02 2 a nd the i nteri m resu lts for the r st half of F Y 23 . • Co nsid er an d revie w key areas of nan cial ju dge me nt an d estim ates use d by manage me nt in the pre par atio n of the nan cial st ateme nts. • Und er take a for mal au dit ten de r pro ces s and re co mm en d the app oint me nt of an ex ter nal au ditor to b e pro pos ed for s hare hol de r app roval at the J anu ar y 2 024 AG M. T his wil l ena ble th e sel ec ted audi tor to comm en ce the ir audi t for the n anc ial year en din g 30 September 2024. • Co ntinu e to mo nitor l egis lative a nd re gula tor y ch ang es th at may im pac t the wor k of the C o mmi t tee , inc ludi ng Gove rn me nt pro po sals in re lati on to restori ng tr ust i n audi t an d co rp orate gove rn anc e, c ons ide rin g the impa ct o n the G rou p’s repor tin g and c ont rol env iron me nt . • Co ndu ct an i nter nal eval uatio n of the C o mmi t tee’s pe r for man ce and a rev iew of th e term s of referen ce. • Ass ess t he res ourc ing of th e inter nal au di t fun ctio n an d mon itor prog ress of th e inter nal au di t plan a nd th e co ntinu ing d evel opm en t of the Gro up’s syste ms of ris k mana ge men t and in tern al co ntro l. Internal audit Th e pur po se of inter nal au dit is to pr ovide t he ma nag em ent team a nd the B oard , th roug h the C o mmi t tee, w ith an i nde pe nd ent a nd ob jec tive asse ssm ent of th e ris k , co ntrol a nd gove rn anc e ar ran gem en ts in plac e in th e Gro up. Th e Group es tab lish ed an inter nal aud it fun cti on follow ing the IP O, havin g not previ ousl y had suc h a func tio n. Du rin g the year, there have be en c hang es in t he me tho d of de liver ing i nter nal au dit se r v ice s, utili sing b oth in terna l and ex te rna l reso urc es. T his m od el is st ill und er devel op me nt and m anag em ent a re wor kin g wit h the C om mit tee to ide ntif y t he ri ght lo ng - ter m reso urci ng st rateg y for inter nal au di t fun ctio n of the Grou p. We are satis ed that th e repo r ts re ce ived fro m the in terna l audi t fun cti on d uri ng the y ear have b ee n of a go od qu alit y and th at man age me nt have taken a cti ons to res pon d to the c ontr ol rec om me ndati ons id enti ed . Intern al audi t is only a par t of the inter nal c ontro l sys tem of the G roup a nd we have b ee n ple ase d to see a con tinu ed s tren gt hen ing of res our ces al lo cated to th e devel op me nt and o pe ratio n of a stre ng the nin g co ntrol s ystem a cros s the G rou p dur ing the ye ar . This has in clu de d signi c ant s tren gth eni ng of the Grou p nan ce an d IT co ntrol s teams. Th e Co mmi t tee rev iewe d and ag ree d th e prop os ed in terna l audi t stra tegy for t he pe ri od to ens ure th at it was pr op or t ion ate, focu sed and pr ovide d th e ne ces sar y assu ran ce ove r targ eted as pe cts of th e orga nisati on’s risk , con trol an d gove rna nc e arr ang em ents . T he inter nal au dit p rogr amm e also a llows for au dit s to be brou ght fo r ward if felt n ec ess ar y o r for ad diti ona l audi ts to be bu ilt i n for any oth er areas of assu ran ce that are id enti ed over the c our se of the na ncia l year. The prov isio n of inter nal aud it se r v ice s co ntin ued to d evelo p in the year, having be en es tabl ishe d followi ng the IP O. Inter nal audi t work was p rovid ed by a c om bin ation of ex terna l professi onal s er vic es and in - hou se res ourc e du rin g F Y 2 2. Internal controls review Th e Co mmi t tee su pp or ts the B oar d in mo nitor in g and rev iewi ng th e key ele me nts of the G rou p’s interna l con trol a nd ris k man age me nt fram ewor k arr ang em ents . Th e Grou p has spe ci c inte rna l cont rols and ris k manag em ent sys tems to gover n the na nci al repo r ti ng pro ces s. G roup p oli cie s inc lud e the f requ en cy an d co ntent of rep or t ing to the B oa rd, t he Gro up’s acc ou ntin g pol ici es, t he con soli datio n pro ces s to prepare th e cons olid ated na nci al inform atio n whic h is reviewed for ac cu rac y by the Group nan ce team and ex ter nall y audi ted wher e requi red . Sp eci c mat ters con side re d dur ing th e pe rio d in re latio n to the ef fec tive nes s of the Grou p’s intern al co ntro ls inc lud ed: • inter nal au dit re po r ts p rodu ce d in li ne wi th the a nnu al inter nal audi tpla n; • resp ons es to the in terna l audi t rep or ts, i n par ticu lar fu tur e roadm aps aro und I T plat form s and data se cu rit y gi ven co ntro l nd ings ove r the Grou p’s IT systems an d fram ewor k ; • revie w and re co mm en datio n for B oard a pprova l the G roup’s updat ed delegat ion of authority matrix; • revie w of the Gro up’s treas ur y p oli cie s and c ont rols; • the Gro up’s poli cies re latin g to the listing of spe ci c i tems on USmarketplaces; • the d evelo pm ent of th e Gro up nan ce ma nual ; and • con trols a roun d the o pe rati on of th e whist leb lowin g po licy. Th e inter nal au dit p rog ram me for F Y2 2 ha s inc lud ed in terna l co ntrol s as a focu s and th e pla n will c onti nue to do s o in F Y23 . Pro gres s towards com ple tion of acti ons id enti ed to improve inter nal co ntro l is regu lar ly mo ni tored by ma nag em ent an d the A udi t Co mm it tee , whi ch provid es as sur anc e to the B oard . In acqu iri ng Live Au cti on ee rs it is ack nowl ed ge d that work ne ed s to be co mpl eted to align the system s of nanc ial co ntrol wi th the rest of the Grou p. T he C om mit te e is sup po r tive of t he step s bei ng ta ken by mana gem en t to add ress this thr oug h the integr atio n of the nanc e dep ar t me nt into the wide r Nor th Am eri ca n anc e team and the roll out of the Gro up’s updated nan cial co ntro ls fram ewor k . Base d on t he as sess me nts un de r ta ken dur ing t he yea r and rec og nisin g the m aturi ng natu re of the b usin ess c on trol e nviro nm ent and c onti nue d for malis atio n of proc es ses , the B oa rd and A udi t Co mmi t tee are satis e d that the Gro up op er ates an adequ ate system of int ernal c ontrol. Finance team Th e Co mmi t tee su pp or ted a num be r of chan ge s to the Fi nan ce team dur ing th e year, which c on tinu ed to bui ld on t he st reng th eni ng of the team whic h took pla ce in F Y 2 2 . Key appoin tme nts in clu ded th e Head of Investor Relati ons , He ad of M& A , Head of T ax an d interi m treasu r y spe cia list . Th e C omm it tee we lc om e the p rofessio nalis m dem on stra ted by the Grou p nan ce team who are o pe n to em bra cin g bes t prac tic e aroun d na nci al gover nan ce and re po r tin g and devel op ing the nan cial co ntro ls fram ewor k for the Gro up as it evolve s post IP O an d with the ac quis itio n of Live Auc tio ne er s. Ris k ma nag em en t rev iew Th e Bo ard has d ele gate d to the Co mm it tee t he res po nsib ilit y for mon itor ing th e ef fec tive nes s of the sys tems of ri sk man age me nt . Dur ing th e per iod un de r review the C om mit te e reviewe d the Grou p’s risk re gis ter and t he whis tle - blow ing p oli cy and c on side red t he Grou p’s overall risk ap peti te, toler anc e and str ategy. It also rec om me nde d and p ar t icip ated in a B oar d pres entat ion o n the con trols a nd ri sk ap peti te relati ng to the s ale of ce r t ain au ctio n ite ms thro ugh th e Gro up’s mar ketpla ces . T he lo ca l mar ket co ndi tio ns and regu lator y re gi mes al on g with t he Gro up’s resp ons e and r isk mana gem en t were c onsi dere d for e ach of th e Gro up’s key market s. Th e Co mmi t tee , in sup po r ti ng th e Bo ard to asse ss th e ef fecti ven ess of risk m anag em ent a nd inter nal c on trol p roc ess es, r elie s on rep or t ing by ma nag em ent , co mpl ian ce re por ts an d the as sur anc e provid ed by t he ex ter nal au di tor . Th e pri nci pal ri sks an d unc er tain ties facin g the G rou p are add ress ed in t he S t rategi c Rep or t and in t he tabl e on pa ges 41 to 4 4. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 93 FINANCIAL ST A TEM ENTS Assessing the effectiveness o f the e xternal audit process an d th e ex te rna l au di tor Effectiveness Th e Co mmi t tee rev iewe d and a pprove d the e x tern al aud it pl an toensure i t was consis tent wit h the exp ec tatio ns of the audi t eng age me nt. In rev iewin g the aud it plan , the C om mit te e discu sse d the area s iden ti ed by the ex ter nal au ditor as mo st likely to give rise to a material nan cial rep or tin g erro r or thos e that are per cei ved to be of high er r isk an d requ iri ng add iti onal a udi t emp hasi s. T he C om mit te e also c onsi der ed th e audi t sc op e, ma teriali t y thr esh old an d the a udi t app roac h by terri tor y. It also reviewe d Del oit te’s appro ac h to ensurin g audi t qual it y, robus tne ss of revi ew on key ju dge me nts an d the app ropr iaten ess of i ts fee an d use of ex pe r ts gi ven th e natur e ofthebu sine ss . Th e Co mmi t tee m et pr ivatel y with t he ex te rnal a udi tor, withou t mana gem en t pres ent , to discu ss th eir wo rk an d relat ion ship wi th theG roup. S ep arate me eti ngs were also h eld be twe en th e ex tern al audi tor and the C hair of the Aud it Co mmi t tee thr oug hou t theye ar. Independence Th e Co mmi t tee is re spo nsi ble for re view ing th e ind ep en den ce of theG roup’s ex tern al audito r and satisf yi ng itse lf as to thei r conti nue d ind ep end en ce. T he audi tor has provid ed co nr mati on that the y remain ind ep end ent of th e Gro up an d its m anag em ent . T he C om mit te e con side re d this matter an d after re ec tin g on the scop e ofthe work car ri ed ou t by De loi t te, its tenure as ex tern al audito r and its relatio nsh ip with t he Gro up an d its tea m, c on cur red w ith th at co nc lusi on . Prov is io n of n on -a ud it s er vic es T o pr eserve obj ectivity and independence, t he extern al a uditor is asked not to provid e other se r vi ce s except th ose that are sp ec i c ally app roved an d pe rmi t ted un de r the G roup’s no n - au dit se r v ice s po licy. Non - audi t se r vi ces a re gen er ally n ot provi de d by the ex ternal a udi tor unle ss sp eci c circu ms tanc es me an that it is in the b est intere sts of the Gro up that th ese are prov ide d by Delo it te rathe r than an othe r supp lie r . T o ens ure th e co ntin uing i nde pe nd enc e of the a udi tor, during the ye ar the C o mmi t tee rev iewed a nd ap prove d a pol icy o n no n - audi t ser vic es. T h e key prin cip les of th is po licy a re: • Th e Audi t C omm it tee h as ado pted th e FR C ’s “ Wh itelis t” of per mi t ted ser vic es for UK in co rp orate d EU Pub lic Intere st ent itie s (“ E U PIE s” ) as set ou t in the Revi sed Ethi cal S t and ard 2019 (“ Eth ica lS tan dard ” ). T hese se r v ice s are allowed un de r UK statu tor y leg islati on and c omp ly wit h the Euro pea n Unio n dire cti ve on audi t and non-audit services. • Per mi t ted ser vic es in clu de th ose t hat are re qui red by law an d regu latio n, l oan c oven ant re por tin g, oth er as sur anc e se r vi ces clo sel y linked to th e audi t or A n nual Re po r t an d rep or ting accountant servic es. • For any n on - a udi t pe rmi t ted se r v ice s the foll owin g level s of authority apply: a) up to £50 , 0 0 0 requ ires th e app roval of th e CFO b) in exc ess of £5 0 ,0 0 0 a nd up to £1 5 0, 0 0 0 req uires t he ap proval ofthe CFO foll owing c ons ult ation wi th the Ch air of the AuditCommi t tee c) in exces s of £1 50 , 0 0 0 requ ires th e ap proval of th e Co mmi t tee . Audit and non-audit fees Th e Co mmi t tee rev iewe d, an d agre e d, th e audi t an d non -a udi t fees fo r the G roup fo r the ye ar en de d 30 S e ptemb er 20 2 2 foll owing d iscu ssio n with m anag em ent a nd th e ex ter nal au ditor, and af ter re cei pt of a deta ile d sch ed ule s et tin g ou t the nat ure of the wo rk b ein g un der taken , the lo c atio n of that wor k and t he rates as so ciated w ith th e wor k . Note 6 of the C ons olid ated Fi nan cial S tateme nts se ts ou t th e brea kdown of audi t and no n - aud it fees paya ble to Del oit te in F Y 2 2 and F Y 21. Dur ing th e year, De loi t te recei ved no n - aud it fees of £0 .5m (F Y21: £5.0 m). The n on - au di t fees in F Y 21 larg ely re lated to th e rep or t ing acc ou ntant wor k for the IP O and the Li ve Auc tion e ers ac quisi tio n. Del oi t te was selec ted to per for m this work du e to the ir deta ile d kn owle dge of th e bus ine ss and u nd ers tan ding of i ts in dus tr y, as well as de mon str ating t hat th ey had th e ne ce ssa r y exp er tise a nd ca pab ilit y to unde r ta ke the wor k . Th e no n - aud it fe es for F Y2 2 rel ated to a pri vate revi ew on the clo sin g balan ce sh ee t of Live Auc tio ne e rs. T his wor k was per form ed by a se pa rate team to the ex ter nal a udi t team for th e Gro up and De loi t te were sele cted bas ed on th eir kn owle dg e and busin ess und ers tan din g of the Gro up. T he n on - a udi t fees al so in clu de wor k per form ed for t he Gr oup’s inter im rev iew o pinio ns . Ex ternal audit tender Th e Grou p will ai m to com ply wi th th e rel evant ten de rin g and au dito r rotatio n requi rem ent s appli cab le und er U K regul atio ns, wh ich re quire the nex t exte rna l audit ten der to oc cur by F Y 24. De loi t te was rst app ointe d as statu tor y audi tor for th e previ ous T urn er T o pc o Gro up for the year to 30 S eptem be r 2014. Ex ter nal au ditor s are requi red to rotate the audi t par t ner res po nsib le for the Gro up aud it ever y ve year s and, as a resul t, th e cur rent le ad audi t par tne r , Kate Darlis on , who ha s be en th e lea d audi t par tne r sin ce 2 01 8 , will be re qui red to rotate off followi ng the F Y2 2 audi t. I t is our intenti on that a form al audi t tend er pro c ess wil l be in itiate d dur ing F Y2 3 to sele ct t he ex te rnal audi tor . Foll owing t his pro ce ss , a reso lu tion w ill be p ut to sha reh old er s at the Ja nua r y 20 24 AGM fo r the ap po intm ent of th e sel ec ted au ditor, to enabl e their rst au dit to com me nc e for the nan cia l year end ing 30 S e ptemb er 20 24 . CM A or de r 201 4 st ate me n t of co mp lia nc e Th e Com pany c on rm s that it has co mpl ied wi th the prov isio ns of the Co mp etit ion a nd Ma rkets Au th ori t y ’s Ord er du rin g F Y2 2 in res pe ct to audi t tend eri ng an d the p rovisi on of no n - au dit se r v ice s. Whistleb lowing policy As refer red to in t he C or po rate Gover nan ce S tatem ent , a whis tle blowi ng pol icy ha s be en ad opted w hic h inc lud es ac ce ss to a whist leb lowin g telep ho ne se r vi ce r un by an i nde pe nd ent o rgan isatio n , allowin g emp loye es to raise co nc er ns on a str ic tly con d enti al basis, wit hou t fear of rec ri minati on . Th e po licy i s par t of the em ploy ee ha ndb oo k and is high lighte d to all new em pl oyee s. T he Au dit C o mmi t tee re cei ves regu lar re po r ts fr om th e Co mp any S ec reta r y on t he us e of the se r vi ce , issu es that have been raise d and the ndi ngs of any invest igati ons and any actio ns arisin g. Du rin g F Y2 2 the Co mmi t tee rec eive d additi ona l assu ran ce o n the ap pli cati on of the w histl eb lowin g po licy. The Co mmi t tee revie wed the poli cy and subse qu entl y con rm ed that thep olic y and supp or ting pro ces ses rema ine d appro pri ate. Corporate Governance Audit Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 94 Breon Corcoran Nomination Commit tee Chair Members Number of scheduled meetings attended/eligible t o attend Breon Corcoran ( Chair ) 2 of 2 Sc ot t Fo rb es 2 of 2 Pauline Reader 1 1 of 1 Penny Ladkin - Brand 2 1 of 1 1. App oin ted to t he C om mi t te e on 4 F eb ru ar y 2 0 2 2 . 2. S tepp e d dow n fro m th e C om mi t tee o n 25 Ja nu ar y 20 2 2. CORPORA TE GOVERNANCE STRATEGIC REPORT I am d el ig hte d to p re se n t th e No mi na ti on C o mm it te e Re po r t fo r th e year e nd e d 30 Se pt em be r 20 22 . In its r st full yea r of oper atio n, the N omi natio n Co mmi t tee mad e goo d pro gre ss ac ross t he ful l ran ge of its re sp onsi bili ties . Th ere were s om e cha nge s to the c omp osi tio n of the N omi natio n Co mmi t tee du rin g the ye ar. The Co mm it tee i niti ally c om pri sed mysel f (Chair of the Com mit tee and No n - E xe cu tive Cha ir of the Bo ard) an d two ind ep en den t Non - E xec uti ve Dire ctor s, S cot t For be s and Pen ny Lad kin - Br and . Penny L adk in - Bra nd stepp ed down fro m th e Bo ard an d the C om mit te e at the C o mpa ny ’s AGMon 25 Janu ar y 202 2 and Pa ulin e Reade r, ind epe nd ent Non - E xec ut ive Dire ctor, was appointe d as a memb er of the Co mmi t tee o n 4 Feb ru ar y 2 02 2 . Th e bio gra phie s of eac h Co mmi t tee m em be r are de taile d on page s 8 4 to 87 . Nomi na t ion C ommit t ee R epor t Co mmi t tee’s key acti vit ies d ur in g th e pe rio d en de d 30Se p tem be r 20 22 Th e Co mmi t tee’s key ac tivi ties d ur ing ye ar und er re view : • Rec om me nde d ele cti on and re - el ec tio n of the Direc tors atthe 20 2 2 AGM . • The recruit ment o f thr ee addit ional independent Non - E xec ut ive Dire ctor s incl udi ng Audi t Co mmi t tee Cha ir . • A thoro ugh eva luati on of the ski lls of the Dire ctor s. • A revie w of the ef fec tive nes s of the C om mit te e as par t oftheB oard eval uati on pro ces s. • Th e ini tiatio n of suc ce ssio n pla nnin g for th e Bo ard an d seniormanagement. • A revie w of the B oard ’s diver sit y p oli cy. Key act ivi tie s pr op ose d fo r th e n an cia l yea r en di ng 30 September 2023 Key activ iti es prop os ed for the for thc omi ng na nci al year are: • Co ntinu ing to em be d su cc essi on pl anni ng for th e B oard an d senior management. • Mon itor ing B oa rd co mp osit ion for a lign me nt of rele vant ski lls, e xpe ri enc e an d dive rsi t y to Com pany s trateg y, followin g the c om ple tio n of a skil ls anal ysis . • Mon itor ing p rog ress towards a chi evin g revis ed ta rget s und er the F T S E Women Le ade rs Revi ew, the Parker Rev iew an d the FCA’ s Pol icy S tateme nt in re spe ct of di ver sit y an d in clus ion on co mp any bo ards a nd exec ut ive man age me nt. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 95 FINANCIAL ST A TEM ENTS Role o f th e Co mmi t te e Th e Co mmi t tee’s rol e is to review t he size, s tr uc ture an d co mpo sit ion of the B oard a nd C om mit te es to ensu re that p lans a re in pla ce for orde rl y, divers e and in clu sive su cc ess ion to th e Bo ard , Co mmi t tees and se nio r man age me nt po siti ons ; and to le ad the p roc ess fo r appointments by identifyin g and making recomme ndations on potenti al ca ndid ates to join th e Bo ard. Th e Co mmi t tee re po r ts at t he su bseq ue nt B oard m ee ting o n the busi nes s co ncl ude d at th e previ ous C o mmi t tee me et ing o n the disc harg e of its res po nsib iliti es an d infor ms the B oa rd of any rec om me ndati ons m ade by th e Co mm it tee . Th e Co mm it tee a cts inac co rdan ce wit h its term s of reference an d the mat ter s dele gate d to it by the B oar d. Key are a of foc us d u rin g th e pe rio d Th e Co mmi t tee h eld t wo sc he dul ed m eet ings d uri ng th e year. Anad di tion al ad - ho c me etin g was conve ned in D ec em be r 2021 inrela tion to the app oin tme nt of additi ona l inde pe nde nt Non- E xecutive Dir ectors. Th e Com mi t tee’s main focu s in the rs t two me eti ngs was on the sear ch for addi tio nal ind ep en den t Non - E xec uti ve Dire ctors , havin g con du cted a ski lls gap anal ysis an d having id enti ed that th e Boa rd would b ene t from add itio nal ex per tise in th e US mar ket. Fo llowin g the resi gnati on of Penny L adk in - Bra nd, th e Co mmi t tee also ini tiated the sea rch for add itio nal in de pen de nt No n - E xe cu tive Dire ctor s, o ne of who m would be co me C hair of the Aud it Co mmi t tee . I am please d to rep or t t hat du rin g the ye ar th e Co mmi t tee su cc ess full y se cure d the app oint me nt of Pauline Re ade r on 2 Dec em be r 20 21 , and Suz ann e Ba x ter an d T ams in T o dd on 4 F ebr ua r y 20 2 2 , all as in de pe nde nt Non - E xec ut ive Dire ctor s. S uzan ne was also app oin ted as Chair of the Audi t Co mmi t tee. T he B oard has be e n signi c antl y enh anc ed by the ir diverse back grounds, their considerable experience and track records. T o assis t the Bo ard in nd ing sui tab le ca ndid ates for these ro les , the Co mpa ny sele cte d the execu tive se arc h com pani es Ego n Zehnd er and Red grave Pa r tn ers to assis t with agre ei ng the sp ec i cat ion an d sho r tlis tin g of appr opr iate can did ates. T he C om mit te e also u tilis ed exist ing Dire c tors’ own net wo rks to reco mm en d cand idates for sho r tlis tin g. T he C om pany d oes n ot use o pe n adve r ti sing to se arch for suit abl e cand idates for Dire ctor p osi tion s, as it rem ains of the bel ief that t he op timal way of re cr ui ting for t hes e pos itio ns is to use targ eted re cr uit me nt base d on t he sk ills a nd exp er ie nce r equ ired . Allt hre e appo intm ent s followed for mal , rigo rou s and tran spare nt rec rui tm ent p roc ess es an d sui tabl e ca ndid ates were inv ited for inter v iew by the Cha ir, Chi ef Exe cu tive O f ce r and the othe r Non- E xecutive Dir ectors. Egon Ze hnd er and Re dgr ave Par t ner s do not have any other con ne cti ons wi th the Co mp any, or any of the Dire cto rs , other tha n they m ay be us ed as an e xecu tive s earc h co mp any for oth er co mpan ies of whic h they are Dire c tors . At its thi rd me eti ng , the C om mi t tee foc use d on su cc ess ion p lann ing , Bo ard co mp osi tio n and di ver sit y an d inc lusi on , fur the r de tails for whic h ca n be foun d be low. Succession planning Dur ing th e year, the C om mit te e initi ated a review of the suc ce ssio n plan s in place at B oard , E xec uti ve Dire ctor and se nio r manag em ent level . T he C omm it te e’s discus sio ns foc use d on th e key Bo ard rol es ofChair, CEO and CFO an d in par t icul ar em erg enc y suc ces sio n in theeve nt of unforese en ci rcum sta nc es. A key area with in the Co mmi t tee’s rem it is su cc ess ion at s eni or ma nag em ent l evel . As des cri be d in the Chie f Exe cu tive O f ce rs S tatem en t on page 10, sever al key appoi ntm ents wer e made dur ing th e na ncia l year, whic h will en sure th at the C o mpany is we ll po siti on ed to dri ve the b usin ess for ward an d de live r the n ex t st age of grow t h for A TG. Board composi tion Foll owing t he B oard a ppo intm ent s referre d to above , the B oa rd issatis e d that it has th e appro pr iate rang e of skills , expe ri enc e, ind ep end en ce an d kn owle dg e of the Gro up to en abl e it to ef fect ivel y disc harg e its dut ies and res po nsib iliti es . Dur ing the yea r, the Co mmi t tee c om missi on ed a sk ills a nd exp er ie nce m atri x anal ysis tohighlig ht any gaps an d to identif y th e key skills an d expe rie nc e valua ble to th e ef fecti ve over sight of th e C omp any an d the exe cu tio n of its st rateg y. The resul ts of this a naly sis will b e revi ewed by th e Co mmi t tee in F Y2 3. Board gender diversity Male (5) Female (3) Board independence Independent (4) Non-independent (3) Chair (1) Length of tenure 0-3 years (6) 3-6 years (1) 6-9 years (1) Corporate Governance Nomination Committee Repor t continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 96 CORPORA TE GOVERNANCE STRATEGIC REPORT Board inducti on and tra ining New Dir ec tors join ing th e Boar d unde r t ake a tailore d indu cti on prog ram me in clu din g me etin gs wi th key me mb ers of t he mana gem en t team. No n - E xe cu tive Di rec tors have full ac ces s to our E xec uti ve Dire ctors an d seni or man age me nt team out side sc he dul ed Bo ard me eti ngs a nd ca n at tend C om pany a nd em ploye e eve nts an d bri e ngs . Indi vidu al Bo ard me mbe rs have ac ces s to training an d can see k ad vic e fro m ind ep end ent p rofessi onal a dvis er s, at th e Gro up’s exp ense , whe re spe ci c ex pe r tise o r traini ng is requ ired to enab le the m to per fo rm th eir d uti es ef fec tive ly. Ele c tio n a nd r e- e le ct io n of Di re ct or s In acco rda nc e with the provisi ons of the Cod e, all Direc tors will retireatt he for th co min g AGM of the Co mpany and th e Board has rec om me nde d their el ec tio n or re- ele c tion . In reachi ng its de cisio n, theB oard ac ted on the advic e of the Nomin ation C omm it te e. Having asses sed numer ous crit eria such a s independence, time commitment s and oth er di rec tors hips , me eti ng at ten dan ce , ski lls, k now led ge an d exp eri en ce an d bo ard dive rsi t y, the Co mmi t tee an d the B oa rd are satis e d that all Direc tors con tinu e to be effe cti ve in and demo nstr ate co mmi tme nt to the ir resp ec tive role s and the Com mit te e is satise d that they devote suf ci ent time to their du ties , dem ons trate enth usias m and c om mi tme nt to thei r rol es, a nd ma ke a valuab le con tri bu tion to th e lea der shi p of the C om pany. Board ev aluation As de scr ibe d in mo re detail o n page 75, th e Boa rd und er took its rst ef fecti ven ess rev iew in F eb rua r y 2 02 2 , th e app roac h for whi ch was overs ee n by th e Co mm it te e. Breon Corcoran Chairman 1 Dec em be r 20 22 Div ersity and inclusi on Th e Bo ard is c omm it ted to mai ntai ning a B oa rd with a d iver se se t ofskill s, exp er ie nce s and bac kgrou nds . The C om mit te e reviewe d its diver si ty p oli cy in S e ptemb er 2 021 a nd ag ain in J uly 2 02 2 i n light of the up dated targ ets an nou nc ed by the F T S E Women Le ade rs Revi ew and th e FC A ’s Policy S tatem ent in re sp ec t of diver sit y a nd in clu sio n on co mp any bo ards a nd exec ut ive man age me nt. W hil st not appl ica ble to th e year u nde r revi ew, the Co mm it tee c on side red t he revise d min imu m targ et of 4 0 % wom en o n listed c om pany b oard s and the pr ovisio n that at leas t one of the po siti ons of Chai r , CEO, CF O or SI D is lled by a woman , and aim s to achieve this tar get by the en d of 20 25 . Th e Bo ard di versi t y po lic y has be e n expa nde d to cover w ide r dive rsi t y characteristics beyond gender and ethnicity, including disability , sexual orientati on, socio - e conomic background and cognitive diver si ty. Th e Bo ard’s po lic y is to enc our age d iver sit y wi thi n lon g and sho r tlis ts as par t of the over all sel ec tio n proc ess for N on - E xecu tive Dire ctor rol es whe n app oint me nts are made . Th e Bo ard is su ppo r t ive of the a mbi tio n shown i n rec en t revie ws on ethn ic dive rsi t y, inclu ding t he Pa rker Re view re c omm en dati on for all F T SE 25 0 boa rds to have at lea st one di rec tor of colo ur by 20 24. Th eBo ard , having co nsu lted wit h the No mina tion C om mit te e, bel ieves th at it h as ach ieve d this ta rget , wi th Jo hn - P aul S avant repre sen ting a Eur asian et hnic all y diver se bac kgroun d. T he Co rp or ate Gover nan ce Re po r t o n pag es 72 to 8 3 prov ide s fur the r infor matio n on th e Bo ard’s cu rre nt co mp osi tio n and i ts pla ns to con tinu ous ly imp rove sk ills a nd di vers it y. As at 3 0 S eptem be r 20 2 2 the B oa rd me t the re co mm end atio ns of the F T SE Wom en Lea der s Revie w relatin g to f em ale me mb ers hip of the Bo ard. T he Bo ard co nsis ted of ve males (62.5 %) and three femal es (37 .5 %), and in terms of wide r lead ers hip, th e Leade rs hip T ea m, as de ne d by the Co rp orate Gove rna nc e Cod e, co nsis ted of nine male s and th ree fe male s. Th e Grou p str ives to ac hie ve a gen de r balan ce a cro ss all le vels of th e orga nisati on (with p rop or tion al rep rese ntati on to the re gi ons in w hic h we work) t hrou gh re cr uit me nt and s uc ces sio n plan nin g. Th ere is f ur t her i nform atio n on th e Grou p’s diver sit y a nd in clus ion pol icie s in th e Sus tai nabil it y Re po r t on p age s 66 to 6 8 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 97 FINANCIAL ST A TEM ENTS Scott Forbes Remuneration Committee Chair Members Number of meetings Sc ot t Fo rb es (Chair) 3/3 Breon Corcoran 3/3 Penny Ladkin - Brand 1 1/ 1 Pauline Reader 2 – S uz an n e B a x te r 3 2/2 T amsin T odd 3 2/2 1. Ste pp ed d own f ro m the C o mm it te e on 2 5 Jan ua r y 2 02 2 . 2. M em be r of the C o mmi t te e fro m 2 Dec e mb er 2 02 1 to 4 Febr ua r y 20 2 2 . 3. A pp oi nte d to th e Co mm it te e o n 4 Fe br ua r y 20 2 2 . Key Com mi t tee a ct ivi tie s du ri ng t he yea r • Ong oin g review an d impl em ent atio n of the Direc tors’ remuneration policy . • Revie w of the p er for man ce m etr ic s use d for in ce ntive schemes. • Evaluati on of per form anc e of remun erat ion po lic y and inc enti ve pla ns rela tive to rec ru itm ent , reten tion a nd fair reward in t he co ntex t of th e grow th of A TG. • Revie w of work fo rce re mun er ation a nd re lated po lic ies . • An nual re view of th e C omm it tee ’s terms of refere nc e. • Rec eiv ing re po r ts a nd ad vic e fro m adv ise rs on a r ang e of mat ters i ncl udin g mar ket the me s. Corporate Governance Dear Shareholder I am p le ase d to p re se nt t h e Di re ct or s’ Re mu ne r at io n Re po r t fo r th e n an ci al yea r en d ed 3 0 Sep te m be r 202 2 . Th e rep o r t su mm ar ise s th e ac ti vi ti es of t he R em u ne ra ti on C om mi t te e du ri ng t h e yea r an dexp la in s th e de ci sio ns we have t ake n in im pl em en ti ng t he Di re ct or s’ re mu ne r at io n pol icy. The re po r t ha s be en p re pa re d inli ne wi t h the r el eva nt U K re po r ti ng r eq ui re me n ts . Remune ration philo sophy Th e Co mpa ny ’s overall re mun er atio n stra tegy is to prov ide p ay pac kage s that at t rac t, re tain an d moti vate high - cal ibre t alen t to hel pensu re its co ntinu ed grow th and suc ce ss as a listed com pany. Itaim s to encou rag e and supp or t a high - p er for man ce cu ltu re; rewardac hieve me nt of the Grou p’s corp ora te strategy an d deli ver y ofsust ainab le grow th; and a lign th e intere sts of th e E xec uti ve Dire ctor s, se nio r manag em ent an d empl oyee s to the long - term interes ts of sha reh old ers ; whils t ens uri ng tha t remu ne ratio n and inc enti ves ad here to th e pri nci ple s of go od c or por ate gover nan ce andsu pp or t good r isk mana ge men t prac tic e and sust aina ble Company per formanc e. Th e stru ctu re of the remun era tion ar ran ge me nts for E xecu tive Dire ctor s and seni or man age me nt was agree d pri or to the IPO in Feb ru ar y 2 021 a nd has to date re main ed b roadl y un cha nge d sin ce Admis sio n. P er for man ce - rel ated pay is bas ed o n stre tchin g targ ets and for ms an i mp or t ant pa r t of th e overal l remu ne ratio n pac kag e. Th ere is an a ppro pr iate bala nc e bet we en sh or t and l ong er- term per form anc e targ ets li nked to de liver y of the G roup’s bu sine ss pl an. Th e Co mpa ny del iver s this p oli cy for se nio r man age me nt, i ncl udin g E xec uti ve Direc tors , via a remu ner atio n fram ewor k whic h com bin es base s alar y, pensio n co ntri bu tio ns (or salar y sup ple me nt in li eu), ben e ts , an annu al bon us plan and sh are - base d awards. Th e full Dire ctor s’ remu ne ratio n poli cy was incl ude d in last year ’s An nual Re po r t a nd Ac co unts a nd was su bje ct to sha reho ld er ap proval at the AG M in Jan uar y 20 2 2. T he C o mmi t tee was d elig hted to rec eive 99.97% sup po r t for th e po licy a nd we are n ot pro pos ing any c han ges to the po licy t his yea r . Th e imp lem en tatio n of the p olic y for F Y2 2 was in li ne wi th the intenti ons se t out in last yea r ’s Direc tors’ Re mun era tion Re por t. O ur key dec isio ns in re spe ct of th e yea r are sum mar ise d be low. For F Y23 , we will co ntin ue to imp le men t the p oli cy in a br oadl y simi lar ma nne r and are n ot mak in g any mater ial ch ang es to the way we o per ate the inc enti ve sc hem es . Th e onl y ch ang e we have agre ed to th e impl em ent atio n of the p olic y is to inc rease t he ma xim um an nual bon us op po r tu nit y fo r the C FO fro m 100% to 12 5% of b asic sa lar y (1 25% b ei ng th e max imu m availab le un de r our p oli cy). This i s explained below . Loo ki ng ahe ad, du rin g 202 3 it will be thre e year s since th e main ele me nts of the r emu ne ratio n po licy we re agre e d as par t of the plan ning pr oc ess for the IP O. As a resul t, we intend to review the ef fecti ven ess of th e cur ren t arr ang em ents ove r the c om ing 12 months to ensure t hat we have a po lic y whic h is ful ly co nsis tent wi th A TG’s stra tegic o bje cti ves. We will c on sul t with m ajor s hare ho lde rs o n any majo r cha nge s we prop os e to make to the exis ting p oli cy fr amewo rk . If requi red , we will ask shareh old er s to f or mall y approve a new Dire ctor s’ remu ne ratio n poli cy at the AGM in ear ly 20 24. R emunera ti on C ommit t ee R epor t Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 98 CORPORA TE GOVERNANCE STRATEGIC REPORT Rem un er at ion f or F Y22 Th e annu al bo nus s ch em e for the ye ar un de r revie w op erate d with per form anc e con diti ons bas ed on reven ue and adju sted EB IT DA , twoof the Co mp any ’s key na nci al per forma nc e indic ators . An above -ta rget l evel of p er fo rma nc e was rep or ted agai nst b oth me tri cs , resul tin g in an over all bo nus p aym ent of 6 4 .5% of t he ma xim um availab le. T he b on us targ ets a nd the l evel of p er fo rma nc e ach ieve d again st the m are set out on pag e 1 07 . For the E xecu tive Dir ec tors , in line wi th th e rem une rati on p olic y, 7 5% of th e bo nus wi ll be pa id in c ash and th e rem ainin g 25% d eferr ed in to shares , whi ch mu st b e hel d for a mini mum of th ree ye ars . An award of share s unde r the Lon g T er m Inc enti ve Plan ( “ L T IP ” ) was made in D ec em be r 2021, with vestin g dep en de nt on the ac hieve me nt of adjusted dil uted ea rni ngs pe r share ( “ EP S ” ) targe ts af ter thre e year s. Adju sted dilu ted EP S is a key per for man ce in dic ator use d by A TG and re e cts the pro tabil it y of the busi nes s on a per sha re basis . Dur ing th e year, the C om mit te e agre ed to make a minor adjus tm ent to the sp ec i c EP S targ ets for this award to ensure the re is full alig nme nt bet we en the de n itio n of adjuste d dilute d EP S used for th e award with that us ed in t he C om pany ’s wide r co rp or ate repo r ti ng. T his i s expl aine d fu r th er o n page 108 . A ny share s whic h ves t und er thi s award will b e subj ec t to a two - ye ar po st- vesti ng ho ldi ng pe ri od . In addi tio n, dur ing th e year the Re mun era tion C om mit te e con side red and app roved an am en dme nt to the adjuste d dilute d EP S targe ts for the L T IP award gra nted at the tim e of the IPO in Fe bru ar y 2 021. This ame ndm en t was agre ed i n ord er to ens ure that t he ta rget s rema in app ropr iate followin g the acq uisi tio n of LiveA uc tion ee rs , whic h co mpl eted on 1 O c tobe r 20 21. The adjus tm ent in cre ase d the ta rge ts to take acc oun t of the hig he r ear ning s exp ec ted to resul t fro m the acq uisit ion wi th th e adju stm ent e nsu rin g that th e revis ed ta rget s were con side re d by the C om mit te e to be no m ore o r les s cha llen gin g than whe n they we re or igin ally s et . Full det ails are i ncl ude d on p age 108 . The Remuneration Commit tee is comfortable that the remuneration policy operated a s int ended during F Y2 2. In ten de d op e rat io n of th e re mu ne ra tio n p olic y for F Y23 Th e remu ne ratio n po lic y will op er ate in a broa dly si mila r mann er for F Y23. Th e Com mi t tee has revi ewed the bas ic sala rie s of the Exe cu tive Dire ctor s. Fo r Joh n - Pau l Savan t, th e CEO, the C om mit te e has agre ed an inc reas e of 3% wi th ef fec t fro m 1 Oc tobe r 20 2 2 . This i s in lin e with the aver age i ncr ease to othe r me mb er s of the se nio r man age me nt team and is l ower th an th e averag e inc reas e for the e mp loye e base asa whol e. For T o m Harg reaves , the CFO, th e Co mmi t tee has agre e d that a hig he r inc reas e of 5.75% is app rop riate. T his is c ons istent wi th the sa lar y inc rease t hat has b ee n agre e d for the h ighe st p er fo rm ers acro ss th e Co mpa ny and s hif ts T om’s remu ner atio n to a posi tio n that more c lose ly re e cts his sen ior it y an d cont rib uti ons rel ative to other s in the s eni or le ade rs hip or ganis atio nal st ru ctu re. T he in cre ase also re ec ts his incr ease d expe ri en ce as a listed co mpa ny CFO and th e inc reasi ng bre adt h and c om plex it y of his ro le foll owing t he ac quisi tio n of Live Auc tio ne er s. In agre ei ng to the salar y incre ase , the Co mmi t tee also note d that T o m’s pay is co nse r vati vely p osi tio ne d whe n co mpare d to CFO r emu ne ratio n at co mp anie s of a simila r size andc om plex it y to A TG. The UK Corporat e Gov ernance Code Th e Bo ard is stro ng ly sup p or tive of the UK Cor p or ate Gover na nc e Co de an d co nsid er s that th ere is f ull co mp lian ce wi th th e remu ne ratio n - re lated prov isio ns of the C o de. T he re mu ner atio n pol icy an d its i mpl em ent ation a re co nsis tent wit h the p rin cip les set o ut in P rovisi on 4 0 of th e C ode , as illu str ated be low. • Clarity: The re mun er ation p oli cy has b e en de sign ed to prov ide clar it y to all in tereste d par ties . Th e Rem une rati on C om mit te e has en deavo ure d to explai n the p oli cy and i ts im ple me ntati on in a clear and tran spare nt fashio n in this Directo rs’ Remu ne ratio n Rep or t . T he C om mit te e has e ngag ed i n two - way dialo gu e withm ajor sha reh old ers and wit h represe ntat ives of the work fo rce o n rem une rati on mat te rs an d has re cei ved general lypos itiv e f ee dback. • Simplicity: The remuneration policy is designed to be relati vely s imp le an d co nsiste nt wit h stan dard p rac tic e for UK- listed c omp anie s of a similar size to A TG. The rati ona le foreac h ele me nt of Direc tors’ pay an d expla natio ns of the Co mmi t tee’s de cisi ons i n resp ec t of op era ting th e po licy forF Y 2 2 ( and th e plans for F Y23) are set ou t in this rep or t. • Risk: Th e poli cy op erates wi thin cl ear ly de n ed limi ts and th e potenti al for reward s that wo uld b e co nsid ere d exces sive in the UK lis ted co ntex t is low. Neve r th el ess , the Co mm it tee is alive to the r isks i nhe rent i n op erat ing in ce nti ve sch em es an d has th erefore e nsu red th at the ta rge ts whic h have be e n set forthe an nual b onu s sche me an d the L T IP do not en co ura ge inap pro pri ate levels of risk- tak ing (i ncl udin g in resp ec t of ESG risks). The r emu ne ratio n po licy i ncl ude s a num be r of features whic h give th e C omm it tee a ddi tio nal co ntro l, s uc h as the abili t y to overr ide i nc enti ve ou tcom es if c ons ide red app ropr iate and t he op er atio n of rec over y a nd wi thh old ing provis io ns for in ce nti ves. • Predic tabilit y: Wh ile i t is not p ossi ble to pre cis ely p red ict t he level of overal l reward for the E xec uti ve Dire ctor s in any one year, the pol icy o pe rates wi th reas ona ble li mits w hic h mea n that ou tsize pay me nts are h ighl y unli kely. We provide an illus trati on of pote ntial o utco me s und er di f ferent s ce nar ios (see page 104). • Proportionality: The p er forma nc e co ndi tio ns ch ose n for the annu al bonu s sche me and the L TIP in each year are close ly linked to th e suc ce ssfu l del iver y of strate gy ove r the sh or t and lon g term . T he C om mit te e care full y co nsid ers t he op timu m metr ic s and t arge ts ahe ad of mak in g de cisi ons o n the o pe ratio n of the po lic y eac h year. A comb inati on of th e targ et- set ti ng pro ces s and th e C omm it tee ’s overr idin g disc retio n to adjus t outc om es en sure s that p oo r per form anc e will n ot be rewa rde d. • Al ig nm e nt to cu l tu re: T he s uc ces s of the b usin ess c ont inu es to be base d on a c om bin ation of i nnovat ion , co llab or atio n andp er for ma nc e which has dr ive n stron g level s of growth . Th e remun er atio n poli cy dire ctl y inc enti vise s the E xec uti ve Dire ctor s and othe r mem be rs of the senio r mana ge men t team to conti nue to foc us on t he ac tiv iti es whi ch are li kely to dri ve fur the r levels of grow th , for the be ne t of all stakeh ol der s. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 99 FINANCIAL ST A TEM ENTS Th ere is no cha nge to the pe nsio n and be ne ts e ntitl em ent s of the Direct ors f or F Y23. Wh en c onsi der ing t he o pe ratio n of the in ce nti ve sch em es for thec omi ng year, the Com mit te e has revie wed whe the r it would beap pro pri ate to intro duc e new pe r for man ce me tri cs , potenti ally inc ludi ng tho se linked to ES G measu res , rec ogn ising th e inc rease d focus o n su ch m etr ics by s om e investor s. T he C o mmi t tee de ci ded that th e exis ting m etr ic s rema in app rop riate for A TG at the cu rre nt time ; howeve r , a mor e co mpre he nsive re view wi ll be c on duc ted as par t of the wid er rev iew of th e remu ne ratio n po lic y over the n ex t 12 mon ths an d it is p ossi ble t hat ch ang es to the c ur rent ap pro ach m ay be ag ree d at that ti me . For F Y2 3, p ar ti cip atio n in the a nnu al bo nus s ch eme w ill rem ain at a level of 1 25% of basic sala r y for the CE O. The C om mit te e has agre ed to align th e max imu m bo nus o pp or t uni t y for the C FO to the s ame level , an d so his b onu s limi t will in cre ase fro m 100 % to 1 25 % of salar y. This i s bei ng do ne to en sure th at the C FO ha s an ann ual in ce ntive opp or tuni t y whic h ree cts th e inc rease d co mpl exi ty an d glo bal reac h of A TG as well as t he in cre ased s cal e and c on tinu ed su cc es s of the busi nes s sinc e the IP O. The ac quis itio n of Live Auc tio ne er s in 2021 was the p rin cip al dri ver of th e step c hang e in A TG’s inter natio nal pro le and c omp lexi t y, with the CFO now res po nsib le for mana ging a muc h broad er ra nge of na nci ng mat ter s than was ori ginal ly the ca se. An i ncre ase in t he b onu s limi t to 1 25 % of sala r y ta kes the C FO up to the ma xim um pe rmi t ted und er th e Dire ctors ’ remu ner atio n poli cy, andb et ter alig ns his inc enti ve opp or tuni t y with mar ket prac tic e at co mpan ies of a si milar s ize to A TG. Ap pro pri ately de ma ndin g pe r for man ce ta rget s app ly to the F Y2 3 bon us . Per fo rm anc e mea sure s for the b on us will ag ain b e base d on revenu e and adju sted EB IT DA targ ets , with 25 % of any bonus paya ble defer red in to shares fo r thre e yea rs. We will again gran t L TI P awards over share s equi vale nt in valu e to 1 5 0 % of basic sala r y. Our poli cy was set at the tim e of the IPO in Feb ru ar y 20 21 wit h our rs t awards gra nted at that time bas ed on ourAd miss ion pr ic e of £6.0 0. Al tho ug h the share pr ic e inc rease d pos t Admis sio n, re sul ting i n the F Y2 2 awards b ei ng gr anted ba sed o n a high er sh are pr ic e, th e Co mmi t tee c ons ide rs i t app ropr iate to retain the 1 5 0% award l evel n oting t he cu rre nt sh are pr ice r emai ns ab ove theAd miss ion pr ic e, whe n our cu rre nt gran t poli cy was set . For fu ture year s the Co mmi t tee inten ds to keep the L T IP gra nt level un de r review in ligh t of share p ric e move me nts an d deve lop me nts in t he over all size and c om plex it y of the C o mpa ny. Th e upc om ing award w ill ves t subje c t to the ac hieve me nt of adjus teddilu ted EP S tar gets to be ach ieve d over the per io d endi ng 30S e ptemb er 20 25 . At the time of writi ng , the Co mm it tee is con tinu ing to de lib erate on t he pre cis e targ ets to ap ply to this award . We intend to nalise ou r posi tio n shor tly an d we expe ct to publis h the targ ets in th e reg ulator y ann oun ce me nt whe n th e award is gra nted . Any s hares w hic h vest wi ll be su bje ct to a t wo - year p os t-ves tin g hol ding p er io d, oth er th an th ose re quir ed to be so ld to pay ta x. Engagement with k ey stakeholders I enga ge d with majo r share ho lde rs ahe ad of our r st AGM in Janu ar y 20 2 2 and was pl eas ed to rec ei ve pos itive fe ed bac k on o ur ap proa ch to execu tive re mun era tion . T his was fu r th er d emo ns trated by th e hig h level s of suppo r t for the re mun erat ion res olu tio ns at the AGM . In the abse nc e of any mater ial ch ang es to our a ppro ac h sinc e th e AGM , and our in tentio n to con tinu e op era ting th e rem une rati on p olic y in bro adl y the sa me m ann er for F Y2 3, t he C om mit te e has not i niti ated fur the r dire ct co ntac t with ma jor sha reh old er s. Howeve r , I will do so as and whe n app ropr iate to ensu re that we re tain s hare hol der p er sp ec tives and th e sup po r t of inves tors as a nd if o ur ap proa ch evo lves , and a s noted ab ove the re will b e co nsul tati on wi th sha reh old er s in the e vent our for thc om ing re view of th e rem une rati on p olic y pro pos es any signi can t chan ges . Th e Co mmi t tee n otes and su pp or ts the e mph asis pl ace d by A TG o n equ it y rewards ac ros s the orga nisati on . Equi ty is gr anted to ensure align me nt wit h share ho lde rs an d to provid e for ma rket- com pe titi ve remu ne ratio n in our key mar kets. In addi tio n, th e Co mpany o pe rates all - e mpl oye e share sc hem es su ch as a Shar e Ince ntive Pl an (“ S IP ” ) and , in the US , an Em ploy ee S hare Pu rcha se Plan ( “ ES PP ” ). In his capa ci t y as the desig ne d Non - E xec uti ve Dire ctor for wor k force eng age me nt, B re on C orc or an (B oa rd Chai r and a m em be r of the Remu ne ratio n C omm it tee) has c onti nue d to me et wit h em ploye e repre sen tative s to discu ss a ran ge of mat ters rel ating to th e busi nes s, inc ludi ng re mun erat ion a nd th e align me nt of exec uti ve pay wit h wide r Co mpa ny pay po licy. T opi cs c overe d at the m ost r ec ent s essi on inc lud ed th e app roac h to remu ne ratio n ac ross t he bu sine ss an d the ben e ts pac kag es on of fer. We remain co mm it ted to conti nuin g this dialo gu e and e nsu rin g that th e em ploye e voi ce is h eard o n mat ter s relating to r emuneration. Th e AG M At the C om pany ’s for t hc omi ng AGM o n 26 Jan uar y 20 23 , share ho lde rs will be as ked to approve this Dire ctor s’ Rem une rati on Rep or t by way of an a dvis or y resol uti on . I hop e the Co mmi t tee ca n cou nt on your su pp or t for th ese reso lu tio ns at the AGM . I will be prese nt at the me etin g to answer any ques tion s you may have o n our a ppro ac h to execu tive re mun er ation . Scott Forbes Chai r of the Re mun erat ion C o mmi t tee 1 Dec em be r 20 22 Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 0 CORPORA TE GOVERNANCE STRATEGIC REPORT Di rec tors’ remu ne rat ion pol ic y Th e Dire ctors ’ remu ner atio n poli cy sets ou t the fr ame work for th e remun er atio n of the Direc tors of Auc tion T e c hno log y Gro up plc . Paym ents toDirec tors an d payme nts for los s of of ce c an onl y be made if th ey are co nsisten t with the ter ms of the app roved rem une rati on po licy. Th e poli cy was desig ne d followin g a review und er taken by the Rem une rati on C omm it tee du rin g the pro ce ss of planni ng for the IP O. Th e poli cy was form ally a pprove d by sha reh old ers a t the AG M hel d in Jan uar y 20 2 2, w ith a vote in favou r of 99.97% , and n o cha nge s are cu rre ntly proposed. A summ ar y of the key features of the Dire ctor s’ rem une rati on po licy is in clu ded b elow for infor mati on pur po ses on ly. The full po lic y is inclu de d in the A nn ual Re po r t for t he yea r end ed 3 0 S ep temb er 20 21 an d is also avai labl e on th e Gro up web site at w w w.aucti onte chn ol og ygrou p.co m. Ifthe re is any discre pan cy be twe en th e summ ar y an d the full po lic y, the fu ll poli cy will preva il. Poli cy ta bl e for E xe cu ti ve Dir ec to rs Element Pu rp o se an d li nk to s tr a te gy Ope ratio n Opportunity Basic salary Prov ide s a basi c leve l of remuneration t o ensure the C om pa ny ca n rec ru it and reta in individua ls with the requ ired skill s and ex pe ri en ce to de li ver on th e Co mp any ’s s t r a t e g y. Th e salar ies for E xec ut ive Dire cto rs de pe nd on thei r expe ri en ce and t he sc op e of th eir ro le . Th e Re mun er atio n C om mit te e als o has du e re gard to p rac tic es at p e er c om pan ies of e qui val ent sizeand co mp lex it y and als o of the pay and co ndi tio ns of the workforce generally . Bas e sal ari es wil l t yp ica lly b e rev iewe d on a n ann ual b asis , wi th any ch ang e no rm all y tak in g ef fec t fro m 1 Oc tob er. Th e rec ei pt of bas ic sa lar y is not s ubje c t to the ac hi evem en t ofpe r for man ce co nd iti ons . Sa lar y inc rea ses wi ll de pe nd o n a number of factors, incl uding individua l and C o mpa ny pe r for ma nc e, pay inc rea ses fo r the wi de r wor k forc e andl evel s of in atio n . Indi vi dua ls who are recr uite d or promote d to the B oar d may have th ei r ini tial s ala r y set at a l ower l evel t han wo uld o the r wis e be th e ca se un til th ey b ec om e es tab lish ed in their Board role. Subsequent increases in th eir s ala r y may b e hig he r tha n the avera ge , sub jec t to the ir o ng oin g performance and deve lopment. Benets Prov ide s a market-competitive be ne ts pa cka ge to supplement basic sa lar y and to aid t he recruitment and reten tio n of E xec ut ive Direct ors. E xec ut ive Dire cto rs are enti tle d to re cei ve a stand ard be ne t s package, includin g priva te medical insurance, permanent health insurance and l ife a ssurance. Th e Com mi t tee has the disc ret ion to amen d indi vid ual be ne t s and the over all be ne t s pack age and may intr odu ce ne w be ne ts wi thin th e poli cy per io d. Th e rece ipt of ben e ts is not subje ct to the achi evem en t of performance condit ions. Be ne t s are not subje ct to a spe ci c maximum oppor tunity under this policy bu t in no rm al ci rcu ms tan ce s the va lue of be ne ts pro vid ed is not expe cte d to change materially y ear-o n- year . Th e Com mi t tee will co nsid er the be ne ts availa ble to th e wid er wo rk fo rc e whe n co nsid er in g any chang es to the bene ts pac kag e for Exe cu tive Di rec tor s. Pension Prov ide s a market-standard reti rem ent be ne t to supplement basic sa lar y and to aid t he recruitment and reten tio n of E xec ut ive Direct ors. E xec ut ive Dire cto rs can re ce ive a Comp any pe nsi on co ntr ibu tio n , or a c ash s ala r y su ppl em en t in lie u of a C om pany pension contribution. All E xe cu tive Dir ec tors (existi ng and new) rec eive pe nsi on co ntr ibu tio ns w hic h are al ign ed to th e rate paya bl e to the majo ri t y of th e wide r wor k for ce . Th e rec ei pt of pe nsi on c on tri bu tio ns (or ca sh in li eu) is not subject to the ach ievement of performance condit ions. Th e ma xim um l evel of C om pa ny pe nsi on co ntr ibu tio n or c as h sup pl em ent i s 6% of basi c sal ar y, whic h is al ign ed to th e rate cur re ntly p ayab le to th e majo ri t y of th e wider workforce. If the rate payabl e to the majo ri t y of the wide r wor k for ce in cr eas es over t he p oli cy pe rio d , the C o mmi t tee h as the d isc reti on to inc reas e the r ate payab le to th e E xec ut ive Dire cto rs above 6% so that itre mai ns align ed wit h the wide r wor k forc e rate. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 101 FINANCIAL ST A TEM ENTS Element Pu rp o se an d li nk to s tr a te gy Ope ratio n Opportunity Annual bonus sc he me an d Def er re d Sh ar e Bonus Plan (“DS BP ” ) Provides an annual inc en tive to rewa rd E xec ut ive Dire ctor s for the achievement of performance obj ectives linke d to the s ho r t- term str ategi c obj ec ti ves of th e business, with ongoing alignme nt with shareholders achieved thro ug h the d efer ral of a po r ti on of th e bo nus i nto shares. An nua l bo nus es ar e payab le su bje c t to the ac hi evem en t of pe r for man ce t arg ets s et by th e Rem un er atio n Co mm it te e. T he se targ ets w ill be d ete rmi ne d by th e Co mm it te e on an a nnu al ba sis and wi ll be l inke d to the sh or t-te rm s trate gic p ri or iti es for t he busi ne ss . Th e Co mm it te e has di sc reti on to ch oo se th e nu mb er of pe r for man ce m et ric s whi ch a ppl y to the b on us in a ny yea r and the re lati ve wei ghti ngs of t hos e me tri cs . T he pr im ar y fo cu s of the bo nus sch em e will be on rewardin g nan cial pe r for ma nc e (norm all y ac co unti ng for a m ajo ri t y of the b on us) alth ou gh th e Co mm it te e may ch oo se to use non - na nci al per fo rm an ce co ndi tio ns (nor ma lly fo r a min or it y of th e bo nus s ch em e). Th e Co mm it te e will re vie w pe r for man ce a gai nst t he ta rge ts af terth e end of the na nc ial year and bo nus paym en ts will be dete rmi ne d ac co rdi ngl y. The C om mi t tee ha s the d isc reti on to adju st th e bo nus o u tcom e wh ere i t be lie ves thi s is ap pro pr iate, inc lud ing (b ut not limi ted to) w her e the outco me is not ree cti ve of the u nde rl yi ng p er fo rm anc e of th e bus ine ss o r the e xp eri en ce of the C om pa ny ’s share ho ld er s, e mp loye es o r oth er stakeholders. Of t he total b on us , 75% wi ll be p ayab le in c ash a nd th e re main ing 25% will be defer red into share s unde r the DS BP . Defer re d shares mus t no rm ally b e he ld fo r a pe rio d of th ree y ear s. Am ou nts payab le und er the ann ual bon us sch em e and the DS BP are su bje ct to ma lus a nd cl awba ck p rovis ion s as su mm aris ed o n p a g e 10 3 . Wh ere a deferre d share award und er the DS B P is gra nted in the form of a n opt ion o r a co nd iti on al sh are award , di vid en d equ iva len ts may b e pai d in res pe ct of t he d efer red s hare s. Th e ma xim um an nu al bo nu s opp o r tu nit y is 1 25% of b asic s ala r y. For F Y2 3 , the C o mmi t tee h as agr ee d to op era te the b onu s sc he me wi th a li mit of1 25% of basic sala r y for both the CE O and t he C FO. 50 % of th e ma xi mum b on us o pp or tuni t y is paya ble fo r on - ta rge t pe r for man c e. 25% of th e ma xi mum b on us o pp or t uni t y is paya ble fo r thre sh old p er form an ce . Lo ng T e rm Incentive Plan ( “ LT I P ” ) Provides an annual award of sh ares to E xec ut ive Dire cto rs whic h wil l vest af te r thr ee year s sub je ct to th e achievement of performance obj ectives link ed to the long-term str ategi c obj ec ti ves of the b usi nes s, a lign ing t he intere sts of the Dire cto rs with t ho se of shareholders. Awards wi ll no rm all y be gr ante d as ei th er ni l - c ost o pti ons o r award s of conditional shar es. Awards will no rm ally be gra nted ann ual ly to Exec ut ive Dire c tors and wi ll no rm all y vest a t the e nd of a th re e - yea r pe ri od su bje c t to the re ci pie nt ’s co ntin ue d em pl oym en t at the d ate of vest ing a nd the sa tis faction of performance condit ions mea sured over three nancial years. Th e pe r for ma nc e co ndi tio ns wi ll be d eter mi ne d by the Rem une rat ion C o mm it tee o n an a nnu al ba sis at th e tim e of eac h gr ant an d will b e lin ked to th e lo ng - ter m str ategi c pr io ri ties for th e bus ine ss . Th e Co mm it te e has d isc reti on to ch oo se th e num be r of per for man ce me tri cs whi ch app ly to an L T IP award inany year an d the relati ve weight ing s of tho se met ric s . It is exp ec ted th at th e majo ri t y of th e pe r for man ce c o ndi tio ns wil l beba se d on the achie vem en t of na nc ial targ ets , alth ou gh the Co mm it te e may choo se to app ly rel evan t non - nan ci al pe r for man ce c on di tio ns to a min or it y of a n award . Th e Co mm it te e will re vie w pe r for man ce a gai nst t he ta rge ts af ter th e en d of the p er fo rm an ce p er iod a nd t he le vel of ves tin g will b e dete rm ine d ac co rdi ngl y. The C om mi t tee h as the disc ret ion to ad jus t the ve sti ng o utc om e whe re it b el ieve s this is app rop ri ate, in clu din g ( bu t not li mite d to) where th e ou tco me i s not re ec tive of the und er lyi ng pe r for man c e of the bus ine ss or the ex pe ri en ce of th e C om pany ’s share ho lde rs , em pl oye es or other st akeholders. Div id en d equi vale nts may be paid in resp ec t of any vested sha res . Pos t-v esti ng , E xec uti ve Dire ctor s will be requ ire d to hol d their veste d sha res for a f ur the r t wo year s (other t han s hare s whi ch are re qui red to b e sol d to pay ta x du e on ves tin g). Awards vest ing un der th e L TI P are subje ct to malus and clawb ac k prov isio ns as s um mar ise d on p age 103 . Th e ma xim um an nu al award is 2 0 0 % ofbasi c salar y ( or 250 % of basic sala r y ifthe Re mun er atio n Co mmi t tee determines that exceptional circumstances apply). Th e Co mm it te e’s cur re nt po lic y is to issu e awards for the E xec uti ve Dire ctor s base d up on 150 % of basi c sal ar y. Performance cond itions are st ructured suc h tha t, fo r thre sho ld l evel s of pe r for man ce , no m ore t han 25 % oftheawar d will vest . Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 2 CORPORA TE GOVERNANCE STRATEGIC REPORT Element Pu rp o se an d li nk to s tr a te gy Ope ratio n Opportunity All-employee sh ar e pla ns Provid es all e mp loye es with the opportunity t o par ticipate in tax- advantaged share plans and increases the le vel of alig nme nt with shareho lders. Th e Co mpa ny has th e aut hor it y to op er ate an all - e mp loye e Sh aresave ( “ SAYE” ) Sc he me and an all - emp loye e Sh are Inc enti ve Plan ( “S IP ” ). Awards und er the S A YE an d/or SIP may be of fere d annua lly to all eligibl e emp loye es, in clu din g E xecu tive Di rec tors . Th e SIP was imp lem en ted in the UK wi th effe ct fro m 1 Novem be r 20 21 . Intern atio nal sub - plan s to the SIP were also im ple me nted in G er many a nd th e US at t he sa me tim e. Th e E xecu tive Di rec tors are eli gibl e to par ticip ate in the SAYE Sc hem e and the SI P subje ct to the limi ts prescribed under the applicable legislation governing those plans. Shareholding guidelines Requ ires the E xe cu tive Dire ctor s to hold a mini mum l evel of share s both d uri ng an d af ter the p er iod of th eir employment. E xec uti ve Dire ctors are e nc our age d to build up over a ve -ye ar pe rio d ( as a minim um thro ugh th e retentio n of at leas t 5 0% of th e af ter-t ax nu mb er of ves ted sha re awards), and th en su bse que ntl y hol d, a m inim um le vel of shareholding. E xec uti ve Dire ctors are als o requi red to mainta in a mini mum l evel of sh areh old ing for a p er io d of two yea rs post- cessation of employment. The minimum shareholding w hich sho uld be bu ilt up by an E xec uti ve Dire ctor is eq uival ent to 20 0% of the ir basic salar y. E xec uti ve Dire ctors mu st also maintain a minimum shareholding equ ival ent to 20 0 % of basi c sala r y for a per io d of two ye ars p ost c ess atio n of emp loym en t. T his will b e cal culate d base d on t he lowe r of (i) the n et of ta x num be r of vested share s acqu ired un de r the L T IP or DS B P duri ng the ir emp loy me nt and (ii) th eir a ctua l share ho ldin g at th e time of th eir d ep ar tu re. Ma lus a nd c law ba ck Th e rul es of the C o mpa ny ’s ince ntive s ch em es in clud e st anda rd re cover y and wi thh ol ding p rovisi ons . Th e Remu ne ratio n C omm it te e has th e abili t y, prior to th e vesti ng of an award , to redu ce t he nu mbe r of sha res su bje ct to the award i n the following circu mstanc es: • disc over y of a m ateria l miss tateme nt res ulti ng in t he adj ustm en t in the a udi ted Co nso lidate d Fin anc ial S t ateme nts of th e Co mpa ny or of th e audi ted ac co unts of any G rou p mem be r ; • disc over y of a m ateria l failure of r isk ma nag em ent ; • the in sol venc y of the G roup; • acti on o r co ndu ct of a pa r tic ipa nt whic h , in the re aso nabl e op inio n of the C om mit tee, c ause s ser io us rep uta tion al dam age to th e Co mpa ny, any Gro up me mb er o r rele vant b usin ess u nit ; an d/or • acti on o r co ndu ct of a pa r tic ipa nt whic h , in the re aso nabl e op inio n of the C om mi t tee, a mou nts to frau d, g ross m isc ond uc t or a se ri ous b reac h of the C om pany ’s po lici es and p ro ce dure s. In addi tio n, the C om mit te e can also us e clawba ck prov isio ns suc h that, for a pe rio d of three yea rs followi ng the date of payme nt of a bonus orves ting of an award, if any of the above cir cum sta nce s arise (i ncl udin g if ther e has bee n an err or in cal cul ating th e level of per form anc e achi eved ), th e C omm it tee m ay req uire th e rele vant award h old er to pay an e qui vale nt c ash am oun t bac k to the C om pany or t rans fer so me or a ll of the sh ares th at were su bje ct to the awar d. Ser vice contrac ts Th e cur rent E xe cu tive Dire ctor s have both entere d into ser vic e agree me nts wit h the Co mpa ny dated 1 7 Febr uar y 20 21 . The ag ree me nts have no xed ter m and are term inab le by the Dire cto r or by the Co mpany o n not less tha n six mon ths’ pr ior wr it ten not ice . The se r v ice c ontr ac ts are availab le for insp ec tio n at the Co mpany ’s registere d of c e. Poli cy on p aym en t for l os s of of ce Th e termin atio n arra nge me nts agre e d for an Exe cu tive Dire cto r who is leavin g the bus ine ss will dep en d upo n the provi sion s of the Direc tor ’s ser vic e co ntra ct , the r ule s of the re leva nt inc en tive sc he mes a nd th e nature of t he in divi dua l’s dep ar tu re. A ll ter minat ion p ayme nts ar e subj ec t toapproval by the Re mun era tion C om mit te e. In the even t of t er minat ion of emp loy me nt for reaso ns of gross misc on duc t, th e Dire ctor will have no enti tle me nt to any fur th er pay men t other than for s ums a cc ru ed up to th e date of termi natio n. In the even t of t er minat ion of emp loy me nt for other rea sons , paym en ts relatin g to basic salar y, pe nsio n and othe r be ne ts will co ntin ue as nor mal u ntil th e date of ces sati on of em ploy me nt . Al tern ative ly, the Co mmi t tee m ay dec ide to ma ke a payme nt in li eu of not ice . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 3 FINANCIAL ST A TEM ENTS Remuneration for other employees Th e Dire ctors ’ remu ner atio n poli cy re ec ts what the C om mit te e con side rs to be an appro pr iate remun er atio n fram ewor k for the E xec uti ve Dire ctor s in light of thei r roles an d resp onsi bili ties , what is co nsid ere d nec ess ar y to retain th eir se r vi ce s and stan dar d prac tic e for CEO and CF O remu ne ratio n in listed co mp anie s of a simi lar size and co mpl exi t y to A TG. In devisin g the po licy th e Co mmi t tee co nsid ere d the rem une rati on arr ang em ents fo r othe r emp loye es wi thin t he C om pany. Many of the po licy pr inc ipl es whic h app ly to the Exe cu tive Di rec tors also ap ply to other s thro ugh ou t the orga nisat ion , in par ticul ar the foc us on inc enti visi ng ou tp er fo rma nc e thro ugh a c ash b on us sc hem e an d dri vin g align me nt wit h shar eho lde rs t hrou gh pa r tic ipati on in e qu it y sc he mes . Th e Co mpa ny has als o esta blis he d all - e mpl oye e share i nc enti ve sch em es in w hic h all eli gibl e em ploye es m ay par ti cip ate. Consider ation of shareholder views Th e gen er al vie ws of insti tut ion al sha reh old ers a nd oth er key ma rket pa r ti cipa nts were t aken into ac co unt as p ar t of th e Rem un erati on Co mmi t tee’s pre - I P O review of the app rop riate rem une rati on po licy to appl y to the Com pany po st- Admis sio n. T he Chai r of the Remun er atio n Co mmi t tee als o wrote to major s hare hol de rs ou tlin ing th e key feature s of the p olic y and s ee ki ng th eir fee db ack a hea d of the p olic y be ing prese nted for fo rm al sha reho ld er ap proval at t he 20 2 2 AGM . No ne of th e sha reho ld ers w hic h resp on ded to th is eng age me nt ap proa ch r aise d any mater ial iss ues of c on ce rn wi th the p oli cy. Ill us tr at ion s of t he a pp lic ati on of t he r em u ne rat io n pol icy (“ Sc e na rio c ha r t s”) Th e char ts bel ow give an indi cati on of the level of total annu al remu ne ratio n that woul d be rec eive d by each E xe cu tive Dire ctor in ac co rda nce with th e remun er atio n poli cy (as it will ap ply in F Y23) in resp ec t of minimu m pay (xed pay), the pay base d on targe t per form anc e and maximum per formance. 2,500k 2,000k 1,500k 1,000k 500k 0 Minimum T arget Chief Executive Officer Maximum Minimum T arget Chief Financial Officer Maximum 100% 44% 28% 100% £488k £1,108k £2,066k £1,728k £377k £864k £1,616k £1,351k 44% 28% 25% 31% 33% 26% 31% 33% 39% 39% Fixed Pay Annual Bonus L TIP L TIP with 50% Share price growth Notes to the c har ts: • Mini mum: F ixed pay, ree ctin g basic sal ar y le vels wit h effe ct fro m 1 Octob er 20 2 2 , ben e ts of £1 0, 0 0 0 for the CEO an d £2 , 0 0 0 for the CF O and a 6% pen sio n co ntri bu tion . • T arge t : Fixed pay plu s a 50 % pay- ou t und er the bo nus an d L T IP . • Ma ximu m: Fi xed pay plus full pay - ou t unde r the bo nus an d L TI P . The max imu m sce nar io inc lud es an addi tio nal el eme nt to repres ent 5 0 % share pr ic e grow th on th e L TI P award. Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 4 CORPORA TE GOVERNANCE STRATEGIC REPORT Poli cy ta bl e for t he B oa rd C ha ir an d N on - E xec ut ive Di rec to r s Element Pu rp o se an d li nk to s tr a te gy Ope ratio n Opportunity Fees Prov ide s a leve l of remuneration at an appropriat e lev el to attract and retai n Non- E xecutiv e D irect ors of an ap pro pr iate cal ibr e. Th e Chair ’s and the other No n - E xe cu tive Di rec tor s’ fees are set at a leve l to re ec t the amo unt of time and leve l of involvem en t req uire d in o rde r to car r y o ut t he ir du tie s as me mb er s of th e Bo ard an d it s Co mm it te es , and to at tr ac t and r etai n No n - E xe cu tive Di rec tor s of a high cali bre wit h releva nt commercial and o ther e xperience. Fe e leve ls are s et by refe ren ce to no n - exec uti ve dir ec tor fee s at co mpa nie s of sim ilar s ize and c om pl exi t y and g en er al in cre ase s for sal ar ied e mp loye es w ith in th e Co mp any. Th e fee p aid to the C hai r is de ter min ed by t he Re mun er atio n Co mm it te e, whil e the fees for other No n - E xecu ti ve Dire ctor s are dete rmi ne d by th e Bo ard as a w ho le. A ddi tio nal fe es a re paya ble for acti ng as Sen io r Inde pe nd ent Dir ec tor and as Chair of the Bo ard ’s Audi t an d Rem une rat io n Co mm it te es. O n an e xce ptio nal basis t he fe es pay abl e may tem po rar il y be i ncr eas ed to rec og nis e any ad dit ion al c om mit me nts un de r t aken by a No n - E xe cu tive Di rec tor in resp ec t of his or her B oard rol e. Fe es are p aid in c as h. No n - E xe cu tive Di rec tor s are also entit le d to reim bu rse me nt of reasonable business expenses ( an d any r elated tax) . Th e ini tial fe e le vels we re ag ree d pr io r to the IP O and are revie wed (and potenti ally increase d) pe riodi cally. Th e ma xim um fe es pay abl e are su bje ct to an agg reg ate ann ual li mi t of £1m as set o ut i n the A r ticl es of A ss oc iatio n . Let t er s of a pp oin tm en t for N o n- E xe cu tive D ire c tor s Th e Boa rd Chair an d the No n - E xe cu tive Dire cto rs have all signe d let ter s of appoi ntm ent . Th e let ters of app oint me nt are availab le for insp ec tio n at the Co mpa ny ’s registere d of c e. Fur the r detail s are incl ude d bel ow. Director Da te o f ap p oi nt me n t to t he B oa r d Date o f le t te r of a pp o in tm e nt Notice period (months ) Breon Corcoran 25 Janu ar y 2 02 1 1 7 Fe bru ar y 20 21 1 S uz an n e B a x te r 4 Feb ru ar y 2 02 2 4 Feb ru ar y 2 02 2 1 Sc ot t Fo rb es 26 Fe br uar y 20 21 1 7 Fe br uar y 20 21 1 Pauline Reader 2 Dec em be r 20 21 2 Dec em be r 20 21 1 Morgan S eigler 1 8 Janu ar y 2 0 21 17 Febru ar y 2 021 1 T amsin T odd 4 Febr uar y 20 22 4 Fe bru ar y 2 0 22 1 Th e Boa rd Chair an d the No n - E xe cu tive Dire cto rs have all bee n app ointe d for an initial ter m of three yea rs , subje ct to termin atio n by eithe r the Dire ctor or th e Co mpa ny on not less th an one mo nth’s prio r writ ten n otice . All Di rec tors will st and for re - ele cti on at eac h AGM of the Co mpany. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 5 FINANCIAL ST A TEM ENTS A n nua l Rep or t on Re mu nerat ion The Re m un er ati on C om mi t tee (con sid er at ion by t he D ir ec to rs of m at te r s re lat in g to Di re ct or s’ rem un er at io n ) Th e Remu ne ratio n C omm it te e has de le gated res po nsib ilit y fo r deter min ing th e po licy fo r exec uti ve remu ne ratio n and s et tin g rem une rati on forthe Ch air, the Exe cut ive Dire ctor s and sen ior ma nag em ent . It revie ws work for ce rem une rati on and rel ated pol ici es and the ali gnm ent of inc enti ves and rewar ds with cu ltu re, tak ing th em into acc ou nt whe n set tin g the pol icy for E xec ut ive Dire ctor s’ remu ne ratio n. T he Rem un erati on Co mmi t tee is also resp on sibl e for prepa rin g the Dire cto rs’ Rem une rati on Rep or t for approval by sha reh old ers at th e AGM. Th e resp ons ibili tie s of the C om mit te e cover ed in i ts ter ms of referen ce i ncl ude d eter mini ng an d mo nitor ing t he st rateg y and p oli cy on remu ne ratio n, te rmi natio n, p er form anc e - re lated pay, pen sio n arr ang em ents , re por tin g and dis cl osure , sha re inc en tive pl ans an d rem une ratio n con sul tants . T he ter ms of refere nce a lso se t ou t the re po r tin g resp on sibil itie s and t he au tho ri t y of the Re mun er ation C o mmi t tee to car r y o ut i ts resp onsi bili ties . T he ter ms of refere nce a re availab le o n the G roup’s webs ite at w w w.aucti ontec hn olo gyg rou p.co m. Committee members Th e Remu ne ratio n C omm it te e is chai red by S c ot t For be s and i ts othe r me mb er s are Bre o n Co rco ran , S uzan ne B ax ter and T a msin T odd . Suz ann e and T ams in were app ointe d to the Com mit te e following th eir ap poi ntm ent to the Bo ard on 4 Feb rua r y 20 2 2 . Penny L adk in - Bra nd was a mem be r of the C om mi t tee up to the d ate of her re tirem en t from t he B oard o n 25 Jan uar y 20 2 2. P aulin e Read er s er ve d as a me mb er of th e Co mmi t tee fro m 2 Dec em be r 2021 to 4 Febr uar y 20 22 . Non e of the Co mmi t tee me mb ers has any p ers ona l nan cial inte rest (other tha n as a shareho ld er) in the de cisi ons mad e by the Co mmi t tee. Th e Remu ne ratio n C omm it te e met th re e time s dur ing t he yea r end ed 3 0 S epte mbe r 20 2 2 . All m em be rs of th e Co mmi t tee at ten de d all me etin gs he ld whi le th ey were a m emb er of th e C omm it te e. Committee support Th e Com mi t tee is supp or ted by the CEO, CF O and the C omp any S ec retar y whos e atte ndan ce at Co mm it tee m ee tings is by invi tatio n from th e Chai r . Duri ng the yea r unde r revie w, no Director was pre sen t for any discus sion s that related di rec tly to their own re mun erat ion . Th e Com mi t tee is also sup por ted by Korn Fer r y, which has ad vise d the C om mit te e on remu ner atio n mat ters sin ce th e IPO. Kor n Fer r y was app ointe d by the C om mit te e followi ng a for mal c om peti tive ten de r pro ce ss. T he C o mmi t tee exerc ises a ppr opr iate jud gem en t whe n con side ri ng the wor k of its ex tern al advis er s and, af ter rev iewin g the natur e and quali t y of the advi ce prov ide d duri ng the yea r , is satis ed th at the adv ic e it rec eive d dur ing the ye ar und er revi ew was obje cti ve and ind ep end ent . Korn Fe rr y is a memb er of the Remu ne ratio n Co nsul tant s Grou p and is a s ignato r y to its C od e of Co ndu ct . Fee s payabl e to K or n Fer r y for advi ce prov ide d dur ing th e year were £5 6, 105 (excludin g V A T ). No oth er se r vi ces were p rovide d by Korn Fer r y tothe Co mpa ny durin g the year an d Korn Fe rr y have no oth er co nne c tion wi th the C omp any or ind ivid ual Di rec tors . Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 6 CORPORA TE GOVERNANCE STRATEGIC REPORT Si ngl e tot al gu re of r e mu ne ra tio n ( au di ted ) Th e followin g table se ts out th e total remun er ation for E xe cu tive and N on - E xecu tive Di rec tors for the yea r end ed 3 0 Se ptemb er 20 2 2 . The dat a in the t abl e for the p rio r yea r cover s the p er io d from A dmis sio n on 26 Fe br uar y 20 21 to 30 S ep temb er 20 21. Al l g ur es s ho wn in £000 Ye a r Salary/fees Be nets Pe nsi on T o t al x ed remuner ation Annual bonus LT I P T otal variable remuner ation T otal remuner ation Jo hn - Pa ul S av ant 2022 438 10 26 4 74 35 3 – 35 3 827 20 21 24 8 7 15 270 3 10 – 3 10 580 To m H a r g r e a v e s 2022 335 2 20 357 2 16 – 2 16 573 20 21 19 0 – 11 201 19 0 – 19 0 391 Breon Corcoran 2022 75 – – 75 – – – 75 20 21 44 – – 44 – – – 44 Morgan S eigler 2022 – – – – – – – – 20 21 – – – – – – – – Pen ny Ladkin - B rand 1 2022 22 – – 22 – – – 22 20 21 41 – – 41 – – – 41 Sc ot t Fo rb es 202 2 75 – – 75 – – – 75 20 21 44 – – 44 – – – 44 Pauline Reader 2 2022 50 – – 50 – – – 50 20 21 – – – – – – – – S uz an n e B a x te r 3 2022 45 – – 45 – – – 45 20 21 – – – – – – – – T amsin T odd 3 2022 39 – – 39 – – – 39 20 21 – – – – – – – – 1. Re tir ed f ro m the B o ard o n 25 Ja nu ar y 2 0 2 2. 2. A pp oin ted to th e Bo ard o n 2 Dec e mb er 20 2 1. 3. A pp oi nte d to the B o ard o n 4 Fe br ua r y 2 02 2 . Add iti on al in for ma tio n re ga rd in g th e sin gl e tot al gu re t ab le (audi ted ) Salar y and fees Base s alar ies on Ad missi on for Jo hn - P aul S avant (CEO) and T om Har greaves (CFO) were £425, 0 0 0 and £3 25 ,0 0 0 res pe cti vel y . The se sala rie s appl ied for th e per iod fro m Admi ssio n to the end of the 20 21 nan cial yea r . As disc lose d in last yea r ’s Direc tors ’ Remun er atio n Repo r t , the salar ies we re in crea sed by 3 % wit h ef fect f rom 1 O cto ber 2 0 21 , to £4 37 ,750 for J oh n - Pa ul S avant an d £ 33 4 ,75 0 for T o m Harg reaves . Th e fees for the Bo ard Cha ir and the N on - E xecu ti ve Direc tors were se t on Admis sio n. T he ann ual fee for Bre on C orc or an as Boa rd Chair is £75 ,0 0 0 . For othe r NE Ds, th e basic fee is £6 0, 0 0 0, wi th addi tio nal fees of £10,0 0 0 pai d to eac h of the Chair s of the Audi t and Remu ne ratio n Co mmi t tees an d an addi tion al fee of £5, 0 0 0 paid to the Se nio r Inde pe nde nt Dire c tor . The se fees were un cha nge d for the 20 2 2 na ncia l year. Mor gan S eig ler do es not re ce ive any fees in resp e ct of his role as a Non - E xecu tive Di rec tor. Be ne ts an d pen si on s Be ne ts for Jo hn - Paul S avant and T o m Harg reaves rel ate t o pri vate healt h insur anc e. Both E xe cu tive Dire cto rs rec ei ved pe nsio n con tri but ion s at a level of 6 % of basic salar y duri ng the n anc ial year un de r review, which is in lin e with th e pens ion c ontr ibu tio ns availa ble to the majo rit y of the U K work for ce. Annual bonus f or FY22 Th e annua l bon us for F Y 22 was str u cture d in line wi th the Dire c tors’ rem un erati on po lic y and with th e appro ach ta ken duri ng F Y21. Per fo rm anc e was again base d on adju sted EB IT DA and reve nue ta rge ts, th ese me tri cs be ing t wo of A TG’s key nanci al per forma nc e indi cator s. T arge ts were set on a co nst ant cu rre ncy bas is to reec t unde rl yin g per form anc e so that exec uti ves were not reward ed or pe nali sed du e to cur ren cy move me nts du rin g the ye ar. The targ ets se t and t he pe r for man ce a chi eved a re shown b el ow: Measure Weighting Threshold £m T arget £m Stretch £m Actu al £m 1 Achieve men t % of maximum opportunity 25% o f ma xi m um 50 % of m ax im u m 100% o f ma x im um Adjusted EBIT DA 50% 4 4 .0 4 8 .9 5 6.2 50.2 59% Reven ue 50% 10 3 . 7 1 0 9 .1 11 7. 3 112 . 4 70 % 1. Ac tu als re e ct t arg et ac hi eve me nt o n co nst an t cur re nc y bas is. T he re is a st rai ght - lin e pay - o u t bet we e n the ta rg ets ab ove . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 7 FINANCIAL ST A TEM ENTS Base d on t he p er for ma nce a chi eved , th e total bo nus paya ble is 6 4.5 % of the ma xi mum o pp or tunit y. Th e max imu m op por tuni t y was 1 25% ofbasic sal ar y for Jo hn - P aul S avant and 100 % for T om Hargre aves. B onu ses will be paya ble to the E xecu tive Di rec tors as set ou t bel ow. Th e Co mmi t tee b elie ves that t he for mul aic ou tco me of th e bo nus , base d on t he p er for man ce a chi eved , is ap pro pri ate and so i t has not e xercis ed itsdis cre tion to adjust th e bon us outc om e. Overall annual incentiv e outcome % of ma x im u m % of salary Pa ymen t ( £’000 ) Jo hn - Pa ul S av ant 6 4.5 % 8 0 . 6% 353 To m H a r g r e a v e s 6 4.5 % 6 4.5 % 2 16 Of th e total bonus , 75% will be pai d in cash (£ 26 4 ,702 for the CE O and £16 1, 935 for the C FO) and the rem ainin g 25% (£8 8 , 23 4 for the C EO and £5 3,978 for the CF O) will be deferre d into an award over shares un der th e DS BP to be hel d for thre e years . Malu s and clawb ack prov isio ns app ly to the bon us, in lin e with th e Dire ctors ’ remu ner atio n poli cy. L TIP awa rd s gr an te d du ri ng F Y 22 (audi ted ) L T IP awards were gra nted to the CEO and C FO on 10 De ce mb er 20 21 in the for m of nil- cos t optio ns , as set out in th e tabl e below. E xec ut ive Ba si s of t he aw ar d (% o f salary) Threshold vesting (% o f salary) Number of shares granted 1 Face valu e of t he aw ar d ( £’000 ) G r a nt d at e Vest date Jo hn - Pa ul S av ant 15 0 % 25 % 4 5 , 4 10 65 6.6 10 Dec 21 10 Dec 24 To m H a r g r e a v e s 15 0 % 25% 3 4 ,7 25 5 0 2 .1 10 Dec 21 10 De c 24 1. Th e nu mb er of sh are s award e d was cal cu late d on th e bas is of a sha re pr ic e of £14.4 6 , be in g the ave ra ge sh are p ric e ove r the ve de ali ng day s pr io r to gran t. Th ese awards will ves t subje ct to cont inui ng em ploy me nt and the ac hie veme nt of chall en ging ad justed dil uted E P S targe ts over the pe rio d to 30 Se ptemb er 20 24: Performance le vel Percentage of award vesting Adj u st ed d il u te d E PS to be a ch ie ved i n F Y 24 Below “threshold” 0% Bel ow 2 9.3 p “ Threshold” 25% 2 9. 3 p “ S tr e tc h” 10 0 % 35 .6p Th er e is st rai gh t- li ne ve sti ng i n be t wee n th e ab ove p oi nts . As disc los ed in las t year ’s Dire ctor s’ Remu ne ratio n Repo r t , for this award the C omm it tee ag ree d to use a target ran ge bas ed on a pe nc e per share nu mb er at the en d of the per for ma nc e per iod in F Y24 rath er than a pe rce ntag e grow th ap proa ch (which ha d bee n use d for the L T IP award made at the tim e of the IP O). Th is was done to avoid rebasi ng F Y 21 adjus ted dilu ted EP S , whic h was impa cted by one - of f n anc ing co sts arisi ng as a resul t of the IPO. Th e Co mmi t tee dete rmi ne d that the use of F Y 24 adjuste d dilute d EP S is more tran spa rent an d also takes into acc ou nt the exp ec ted be ne ts of the Li ve Auc tio ne ers ac quis itio n. Dur ing F Y2 2 , and in ac co rdan ce wit h the rul es of the L T IP , the Co mmi t tee agre e d to a mino r ame nd men t to the spec i c adjus ted dilu ted EP S targ ets for this award to align with the d en iti on of adjuste d dilute d EP S now used by A TG for wide r co rp orate rep or ting pu rp ose s. As ag ree d by the Bo ard , adjus ted dilu ted EP S is now calc ulated af ter “ad ding ba ck ” th e impa ct of the amo r tis atio n of acquire d inta ngib le sof t ware in lin e with the me asure of pe r form anc e util ised in th e busin ess an d ree c ted in the Grou p’s disclo sed A PM s on page 139. The targ ets for the L T IP were the refore inc reas ed to ree ct this ch ang e. Th e previ ous ta rget s ( as discl ose d in last year ’s Directo rs’ Rem une rati on Rep or t) involved an F Y24 adjus ted dilu ted EP S ran ge of 29. 1 p - 35 .3 p. Af ter adjus tme nt , the ran ge is now 29.3 p - 35 .6p as se t out in the ta ble ab ove. Th e Remu ner atio n Co mmi t tee ha s agre ed th at the a me nde d targ ets a re no mo re or l ess c hall en ging t han th e or igin al targ ets . Th e Dire ctors wil l be requi red to hold any ves ted share s ( exclu ding th ose so ld to pay tax) for a perio d of two years foll owing th e date of vesti ng . L TIP awa rd s gr an te d du ri ng F Y 21 ( a ud ite d) As prev iou sly dis clo sed , L T IP awards were gr anted to the CEO an d CFO on Adm issi on in Feb ru ar y 20 21, as set ou t be low. E xec ut ive Ba si s of t he award (% o f salary) Threshold vesting (% o f salary) Nu m be r of shares granted 1 Fac e va lu e of the awar d ( £’000 ) G ra nt d a te V est date Jo hn - Pa ul S av ant 15 0 % 25 % 10 6 , 2 5 0 6 3 7. 5 26 Feb 21 26 Feb 24 To m H a r g r e a v e s 15 0 % 25 % 81, 2 5 0 4 8 7. 5 26 Fe b 21 26 F eb 24 1. T he n um be r of sh are s awar de d was c al cu late d on t he b asi s of th e Adm iss io n pr ic e of £6 .0 0 . Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 8 CORPORA TE GOVERNANCE STRATEGIC REPORT Th ese awards ves t subje ct to the ach ievem en t of challe ngin g adjus ted dilu ted EP S targ ets over the p eri od to 30 S eptem be r 202 3. A s indic ated in last yea r ’s repor t, du rin g F Y 2 2 the Co mmi t tee revi ewed wh ethe r the targ ets or igi nall y set for this award shou ld be adju sted to ree ct th e impa ct of the acq uisi tio n of LiveA uc tion e ers , on e year into the thre e - yea r per form anc e per io d. As ex plain ed in th e Ann ual S ta teme nt from th e Chai r of the Remun era tion C om mit te e on page 9 8 and in acc ord anc e with th e rul es of the L TI P , the Co mmi t tee agre ed to ame nd the adj usted dilu ted EP S targ ets . The C om mit te e was keen to ensure that th e earn ings - en han cing nat ure of the acqu isit ion was re ec ted in an inc rease to the or igin al targe ts. T he C omm it tee c onsi de red the di f feren ce in the ea rni ngs targ ets tha t would have aris en had Li ve Auc tion e ers b ee n owned for the d urati on of th e thre e - ye ar pe r for man ce p er iod a nd ad ded t hes e addi tio nal ea rni ngs i n to the or igin al targ ets se t. T his h as resu lted in a n inc rease to th e targ et ra nge fo r the award , as se t ou t bel ow. Leve l of v es ti ng Adj u st ed d il u te d E PS g ro w th p e r an n um (% CAG R) Performance le vel Original targets Amended targets Below “threshold” 0% B e l o w 12 % B e l o w 14 % “ Threshold” 25% 12 % 14 % “ S tr e tc h” 10 0 % 17 % 19 % Th er e is st rai gh t- li ne ve sti ng i n be t wee n th e ab ove p oi nts . Th e ame nd ed ta rget s are co nsid ere d by the C o mmi t tee to be n o more o r le ss ch alle ngi ng tha n whe n the y were or igi nally s et . Paym en ts to p as t Di re c tor s/ Paym en ts fo r lo ss of o f c e (audi ted ) Th ere were no pay me nts to past Dire ctor s or paym ents for lo ss of of ce ma de dur ing th e year. Statement of Directors’ shareholding and share interests ( audited) Th e table b elow in clu des fu ll deta ils of shares he ld by each Di rec tor as at 30 Se ptemb er 20 2 2 , inc ludi ng det ails of share awards whi ch are subject to the achieveme nt of per formance c onditio ns. Dur ing e mpl oym ent , E xec uti ve Dire ctors are re quir ed to build and ma intai n a shareh old ing eq uiva len t to 200 % of their bas e salar y . E xecu tive Dire ctor s are expe cte d to build up thei r share hol din g over a ve - year p er iod (as a minimum thr oug h the retenti on of at least 5 0 % of the after- tax num be r of vested share awards). This requ irem ent was me t as of 30 Septe mb er 20 2 2. Po st- c es satio n of empl oym ent , E xec uti ve Dire ctors must re tain sha res to the value of 20 0 % of base salar y for a perio d of two years in ac co rda nce wi th the Dir ec tors’ re mun erat ion po lic y. Th ere are no form er E xe cu tive Dire ctor s to whom this req uire me nt cur rent ly app lies . Director Benecially owned shares on 30 Septemb er 2022 Unvested share awards s ubje ct to performance conditions 1 Unvested share awards no t su bj ec t t o performance conditions 2 Options exercis ed in year Ve s t e d un exer ci se d share options Shareholding requirement (% of b as e salary) Requirement met? Jo hn - Pa ul S av ant 3,5 2, 5 73, 6 31 15 1 , 6 6 0 5,358 – – 200% Ye s To m H a r g r e a v e s 5 1 ,284,060 115 , 9 7 5 3,278 – – 200% Ye s Breon Corcoran 729, 497 – – – – – – Morgan S eigler 4 – – – – – – – Sc ot t Fo rb es 16 0 , 5 4 8 – – – – – – Pauline Reader – – – – – – – S uz an n e B a x te r – – – – – – – T amsin T odd – – – – – – – 1. Awar ds gr ante d as nil - co st op tio ns u nd er th e L TI P . 2. Awar ds gr ante d as nil - co st op tio ns u nd er th e Defe rr ed S ha re Bo nu s Pla n. 3. S har es als o he ld in th e nam e of spo us e (Sa ma nth a Sav ant) an d th e Sava nt Di sc ret io na r y T r u st (who se tr us tee s are J oh n - Pa ul S ava nt an d Sa man th a Sav ant). 4. M org an S e igl er i s not d ire c tly i nte res ted i n any s ha res b ut a ct s as a re pr ese nt ati ve of TA Asso ci ates o n th e B oar d. 5. T he tot al g ure fo r the nu mb e r of ben e c ial ly own ed s har es in cl ud es th e pre -A dmi ssi on e qu it y awa rds su mm ar ise d be lo w. As disc los ed in the IP O pro spe c tus and in las t year ’s Dire ctor s’ Remu ne ratio n Repo r t , pre -Ad missi on eq uit y awards wer e granted to Joh n - P aul Sava nt and T om Ha rgreave s on Ad missi on . Jo hn - P aul S avant h old s an eq uit y awar d over 8 3 ,4 09 s hare s and T o m Ha rgreaves h ol ds an e quit y award over 97 , 26 1 sha res. T he se awards we re or igin ally g rante d to them ove r 1 , 391 a nd 1,622 AT G B ordi nar y share s resp ec tive ly. Th e share s over wh ich t he pre -A dmis sion e qu it y awards we re gra nted will b e for fei ted if th e ho lde r leaves t he Gr oup for a ny reaso n pr ior to th e third an nive rsar y of Admissi on (other than in c ases of deat h or a chang e of contro l). In no rm al circu ms tanc es th e shares mu st also be h eld for afur the r year, until th e four t h annive rs ar y of Admis sio n, befo re they ca n be sold o r other wise tran sferre d. T he for fei ture an d hold ing pe ri ods ceas e to appl y in th e event of a c han ge of co ntro l. Th ere has be en n o chan ge in the Di rec tors’ inte rests in th e ordin ar y sh are cap ital of the C omp any bet we en 3 0 Se ptemb er 20 2 2 and th e date ofthis rep or t . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 10 9 FINANCIAL ST A TEM ENTS T ota l S ha re hol de r Re tu rn ( T SR) pe r fo rm an ce g ra ph a nd t ab le of C E O pay A TG share s were admi t ted to the Lond on S toc k E xcha nge ’s Main Mar ket on 26 Febr uar y 202 1 . The ch ar t b elow sh ows the TS R pe r form anc e of£100 invested in A TG from 26 Febr uar y 20 21 ( usin g the offe r pric e of 60 0 p per sh are) t o 30 S eptem be r 202 2 ag ains t the F T SE 25 0 ind ex. Th eF T SE 25 0 ind ex is cons ide red an ap prop riate co mpa ris on as A TG is posi tio ne d within th is index . 300 250 200 150 100 50 0 26/02 2021 26/05 2021 26/08 2021 26/11 2021 26/02 2022 26/05 2022 26/08 2022 30/09 2022 Auction Technology Group FTSE 250 Value (£) 2 0 21 2022 CEO sing le gu re total remu ne ratio n (£0 0 0s) 580 8 27 An nual b on us (as % of maxim um o ppo r tu nit y) 10 0 % 6 4.5 % Lon g -ter m inc enti ve vesting (as % of m ax imu m oppo r tu nit y) N /A N /A An nu al p er ce nt ag e ch an ge i n re mu ne ra tio n of D ire c tor s a nd e mp loyee s Th e table b elow c omp ares th e perc en tage c hang e in pay of the Direc tors for F Y2 2 with th e average p erc ent age ch ang e for empl oyee s for the sam e per iod . As req uire d by the repo r ti ng reg ulati ons , the tab le shows th e perc en tage c hang e in sala r y/fees , taxa ble be ne t s and bo nus fro m year to year . The Di rec tors’ re mun er ation for F Y2 2 is base d on the disc los ures in th e singl e total gure tab le on pag e 1 07 . For F Y 21, we have annu alise d the sin gle total gu re tabl e discl osu res to ensure a mea ning ful co mp aris on . Director Salary/fees % ch an g e T a x ab le be n e t s % ch an g e Annual bonus % ch an g e Jo hn - Pa ul S av ant 3% (2 %) ( 3 4 %) To m H a r g r e a v e s 1 3% 10 0 % (3 4 %) Breon Corcoran 0% - - Morgan S eigler - - - Penny Ladkin - Brand 2 - - - Sc ot t Fo rb es 0% - - Pauline Reader 3 - - - S uz an n e B a x te r 3 - - - T amsin T odd 3 - - - Em plo yee s Average p er e mpl oye e 4 45% 5 6% 27% 1. Year- on -y ear c ha ng e for ta xab le b en e ts re e c ts abs en c e of taxa bl e be ne t s in pr io r na nc ia l year. 2. Year- o n - yea r ch an ge n ot sh own a s Pe nny r eti re d fro m th e Bo ar d dur in g th e yea r un de r rev ie w. 3. Th es e Dir ec tor s wer e app oi nted d ur in g the ye ar un de r rev iew an d th ere fore n o co mpa ri so n wit h pri or ye ar re mu ne rat io n ca n be mad e. 4. F ig ure s rel ate to Gro up as a who le a nd re e ct th e ac qu isi tio n of Li ve Au cti on e er s on 1 Oc tob er 2 02 1. No gu res ar e sho wn for th e par en t com pa ny as th e onl y em pl oye es ofthe p are nt c om pan y are th e Dire c tor s and th e Co m pany S e cr eta r y. Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 0 CORPORA TE GOVERNANCE STRATEGIC REPORT CE O pay r ati o an d wid er e mp loyee r e mu ne ra tio n As A TG has fewer tha n 250 U K empl oyee s, it is not re quire d by law to inc lud e detai ls of total pay for the CE O relative to that of UK emp loye es at the m edi an, l ower qu ar t ile an d upp er q uar tile . Neve r th ele ss , the Re mu ner atio n Co mmi t tee rev iews wi der wo rk for ce re mun er ation w he n set ti ng the rem une rati on po licy for th e E xecu tive Di rec tors . Th e Com mi t tee rema ins satis e d that the re mun er ation for th e Dire ctor s is appro pri ate in the contex t of pay prac tic es mo re widel y at the Co mpa ny notin g, fo r examp le, t he foc us on p er form anc e - re lated p ay throu gh ou t the o rgani satio n, b road l evels of e qui t y owne rsh ip ac ross t he busi nes s and the alig nme nt of E xecu tive Di rec tor pe nsio n cont rib uti ons wi th the rate appl ica ble to the majo ri t y of the wider wor k forc e. In the UK , U S and Ge rma ny, the C omp any has est ablis he d all - e mpl oyee sh are inc ent ive sch em es in whic h all eligi ble e mpl oyee s may par ti cipate. As is the no rm , leve ls of ince ntive op po r tu nit y wit hin the wid er or ganis atio n are lower than th e levels in pl ace for th e E xecu tive Di rec tors . In addi tio n, ce r t ain ele me nts of the Dire ctor s’ rem une rati on po licy do n ot appl y to others in the org anis atio n. Fo r exampl e, ann ual bo nus es for othe r emp loye es are p aid wh oll y in cas h, w ith n o requ irem en t for an el em ent to b e defer red in to shares . T her e is also a mi no rit y we ighti ng o n per so nal no n - na nci al targ ets in the bo nus sc he me for em ploye es be low B oard leve l. L T IP awards are gra nted to cer t ain othe r emp loye es nor mal ly with a dif fere nt str uc ture tha n is in place for E xe cu tive Dire cto rs. T his is pred om inan tly in the for m of restri cted sh are awards (i.e . nil - c ost op tion s or restr ic ted stock un its tha t are not subje ct to nan cial p er for ma nc e con di tion s), some of which have a dif feren t vestin g pro le than Di rec tors’ L TIP s. T his rec og nises th e nee d for the Co mp any to be able to offer inc enti ves to empl oyee s which are re levan t for the spe ci c c om mer cial ci rcum sta nc es, for exam pl e to be ab le to comp ete suc ces sful ly for tale nt in ma rkets s uc h as the U S tec hno lo gy se cto r . Rel ati ve imp or ta nc e of sp en d o n pay Th e tabl e be low sh ows the C om pany ’s exp en ditu re on e mpl oye e pay co mpa red to dis trib uti ons to sh areh ol der s for F Y2 2 . Th e infor matio n provid ed fo r F Y 21 has b ee n ann ualis ed to ens ure an a ppro pr iate year- o n - year c om par iso n can b e mad e. F Y22 £m F Y21 £m % ch a ng e Dist rib uti ons to shareho lde rs – – – Ove rall spe nd on pay for em ploye es , incl udin g Exe cu tive Dire ctor s 2 7. 7 19 . 3 4 3% Statement of shareholder v oting Th e tabl e be low sh ows the re sult s of the votin g on re mun er ation r esol uti ons at t he AGM h el d on 25 Jan uar y 20 2 2. V otes for % Votes a gainst % V otes withheld Dire ctor s’ Remun er atio n Repor t 108,86 1 , 907 9 9.6 8 353,0 85 0.32 0 Directors’ remuneration policy 1 0 9 ,17 7,15 6 9 9.9 7 3 7, 8 3 6 0 .03 0 S ta tem en t of im pl em en ta tio n of r em un er at ion p ol icy d ur in g F Y2 3 Bas e sa la r y Th e Remun er atio n Com mi t tee has agre ed th at the CEO will re ce ive a salar y incre ase of 3% with ef fe ct fro m 1 Octob er 20 2 2. Fo r the CF O, theC om mit te e has deter min ed tha t a higher in cre ase of 5.75% is approp riate. T he rati ona le for thes e incr ease s is explain ed in th e Ann ual S tatem ent f rom th e Ch air of the Re mu ner atio n Co mm it tee o n pag es 98 to 100. Executive Director Salary with effect fr om 1 O c t 20 21 Salary with effect fr om 1 O c t 20 22 % increase Jo hn - Pa ul S av ant £4 37 ,75 0 £4 5 0, 8 8 3 3 To m H a r g r e a v e s £ 3 3 4 ,75 0 £ 3 5 3 ,9 9 8 5.7 5 Pen si on an d be ne t s E xec uti ve Dire ctors will c onti nue to rec eive a pe nsio n con trib ut ion of 6% o f salar y, whic h rema ins align ed to the rate cur rentl y payabl e to the majo ri ty of the U K work for ce. O th er be ne t s inclu de pr ivate me dic al insu ran ce, p er man ent he alt h insur anc e and life assu ran ce. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 111 FINANCIAL ST A TEM ENTS Annual bonus Th e maxi mum an nual b onu s opp or tuni t y will be in line wit h the Dire ctor s’ rem une rati on po licy, i.e. 1 25 % of salar y for both the CE O and the CF O. As noted in th e Ann ual S ta teme nt from th e Chair of the Rem une rati on C omm it tee , this re ec ts an inc rease in th e CFO ’s oppo r tu nit y fro m the 1 0 0% of s alar y level w hic h app lied fo r both F Y21 a nd F Y2 2 . Th is has b ee n agre ed to e nsure t hat th e CFO ’s bon us op po r tu nit y m ore a ccu ratel y takes into acc oun t the sco pe of the rol e given th e inc rease d size and com pl exit y of the Gro up sin ce the IP O. Th e pe r form anc e me asur es for th e F Y 23 b onu s will re main a ppro pr iately c hall en ging a nd will a gain b e payab le su bje ct to the a chi evem ent of targ ets linke d to revenue (50 % weight ing) and adju sted EB IT DA (50 % weigh ting), me asure d on a con sta nt cur ren cy basis . Full detai ls of the F Y 23 bo nus ta rgets wil l be discl ose d in nex t yea r ’s Direc tors’ Re mun era tion Re po r t . Of th e total bonus , 75% will be paya ble in ca sh and the re main ing 25% will b e deferr ed into an award over share s unde r the DS B P to be held for thre e years . Malu s and c lawbac k prov isio ns ap ply i n line wi th th e rem une rati on po lic y, as summar ise d on p age 103. Lo ng T er m In ce n tive Pl a n L T IP awards of 1 5 0% of sala r y will be ma de to the E xecu tive Di rec tors , with pe r for man ce m easu red over the th ree - year pe ri od to 30 Se ptemb er 20 25. T he Rem une rati on Co mm it tee has ag ree d that adjus ted dilu ted EP S sh ould c onti nue to be use d as the per form anc e con dit ion for the L T IP awards. At the time of wri ting , the C om mit te e is conti nuin g to delibe rate on the pre cis e targe ts to apply to this award. We intend to nalis e our pos itio n sho r tl y and we ex pe ct to pu blish t he ta rgets i n the re gul ator y a nno unc em ent w he n the award is g ran ted. Th e Dire ctors wil l be requi red to hold any ves ted share s ( exclu ding th ose so ld to pay tax) for a perio d of two years foll owing th e date of vesti ng . Malu s and c lawbac k prov isio ns ap ply i n line wi th th e rem une rati on po lic y, as summar ise d on p age 103. Non-E xecutive Director remuneration Non - E xec ut ive Dire ctor fee s have bee n reviewe d by the Boa rd and will rem ain un cha nge d for F Y 23 . Non-Executiv e D irector Fee Chai r of the B oard £75,000 Non - E xec ut ive Direc tor base fee £60 ,000 Senior Independent Di rector £5 ,000 Audi t Co mm it tee C hair ’s fee £1 0, 000 Remu ne ratio n C omm it tee C hai r ’s fee £1 0, 000 As par t of the review of the overa ll Dire ctor s’ remu ne ratio n poli cy whi ch will take plac e over the c omin g year, the Board will rev iew the fee s payabl e to the Non - E xecu tive Di rec tors an d the Remu ne ratio n Co mmi t tee will revi ew the fee paya ble to the Bo ard Chai r . This will take into acc ou nt the grow th of the C om pany sin ce the IP O, the l evel of fees payab le at com pani es of a similar size and co mp lexi t y and the fee s con side re d nec ess ar y to att rac t and retai n NED s of a high calib re with rel evant co mm erc ial and oth er exp er ien ce . This re po r t was app roved by the Bo ard of Dire ctors an d sign ed on its b eha lf by: Scott Forbes Chai r of the Re mun erat ion C o mmi t tee 1 Dec em be r 20 22 Corporate Governance Remuneration Committee Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 2 CORPORA TE GOVERNANCE STRATEGIC REPORT Th e Dire ctors p rese nt thei r repo r t , toget her wi th the aud ited C ons olid ated Fin anc ial S tatem en ts and audi tor ’s repo r t for th e year end ed 3 0 September 2022. Auc tion T e c hno lo gy Gro up plc is a publ ic limi ted co mpany in co rp or ated in the Uni ted Ki ngd om an d regis tered in En glan d & Wales with regis tered n umb er 131 41 12 4. T he C om pany ac ts as a h oldi ng c omp any for th e Gro up of sub sidia rie s. A lis t of its su bsid iar y com pan ies is se t out i n note 25 on pa ge 170. This Dire cto rs’ Repo r t sho uld be read in conju ncti on with the othe r secti ons of this Annua l Repor t as det aile d below to full thes e require me nts whic h are incor po rated into the Direc tors’ Rep or t by re feren ce. In acc ord anc e with sect ion 41 4 C (1 1 ) of t he Com pan ies Act 20 0 6 and the Comp anie s (Mis cel lane ou s Rep or ting) Re gulati ons 2 018 the Boa rd has in clu de d ce r ta in disc los ures i n othe r se ctio ns of A nnu al Rep or t set o ut b elow : To p i c Section of report Pages S trate gy an d fu ture d evelo pm ent s Chief E xec ut ive Of ce r ’s St ateme nt S trategi c Repo r t 10 -13 0 2 -7 1 Dive rsi t y and inclu sion Nomina tion Committ ee Report Sustainabilit y Repor t 95 - 97 52- 71 Risk management S trategi c Repo r t 0 2 -7 1 Goin g co nc er n and v iabi lit y s tateme nt S trategi c Repo r t 0 2 -7 1 Emp loye e mat ters , disabl ed emp loye es and emp loye e engag em ent Sustainability Repo r t S takeh ol der En gag em ent and s. 172 S tatem en t 52- 71 4 6 - 51 Clim ate - rel ated nan cial disc los ures , gree nho use gas and car bo n emiss ions , ene rgy co nsu mptio n and ene rgy ef cie ncy ac tion S trategi c Repo r t Sustainabilit y Repor t 0 2 -7 1 52- 71 Busi nes s relat ions hips w ith su pp lier s, c usto mer s and ot he r stake hol de r engagement S takeh ol der En gag em ent and s. 172 S tatem en t 4 6 - 51 Corporate gov ernance Corporate Gov ernance Report 72- 81 Internal controls Audit Committee Report 88-94 Financ ial instrume nts Financial S tatements 12 8 -16 5 S tatem ent of Direc tors’ Resp on sibil itie s S tatem ent of Direc tors’ Resp on sibil itie s 11 7 Di re c to r s’ inte re s ts Dire ctor s’ Remun er atio n Repor t 9 8 - 112 Emp loye e share plans Dire ctor s’ Remun er atio n Repor t 9 8 - 112 Lis ti n g Rule 9.8.4R di sc lo su re s Th e followin g sets ou t where dis clo sure s requi red in co mp lian ce wit h Listi ng Rule 9.8 .4 R are loc ated . To p i c Section of report Page number Det ails of long - term inc ent ive sche me s Dire cto rs’ Remu ne ratio n Repo r t 9 8 - 112 Non p re - em ptive iss ues of e qui t y for c ash (in clu din g majo r sub sidia rie s) C hief Fin anc ial Of c er ’s Review 32-36 Energy and carbon reporting Th e Grou p’s ene rgy an d ca rb on dis clo sure s are de taile d in th e S usta inab ilit y Re po r t o n pag es 52 to 65 . En ga ge m en t wi th e m pl oyee s, s up pl ie rs , c us to me rs a n d ot he r s Th e Group ’s engage me nt wit h its stakeh ol der s is detail ed in th e S takeh old er En gag em ent se cti on of the S tr ategic Re por t on pag es 4 6 to 51 . Research and dev elopment Th e Grou p is en gag ed in v ari ous res earc h an d devel op me nt ac tivi tie s rega rdin g inn ovatio n and e nha nci ng its te ch nol og y app lic atio ns. T he se are set o ut i n the S trategi c Rep or t on pa ges 0 2 to 71. Di re c t o r s ’ Re p o r t Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 3 FINANCIAL ST A TEM ENTS Compliance w ith the UK Corporate Go vernance Code 20 1 8 Th e Discl osu re Guida nc e and T ran spa renc y Rules ( “ DGT R ” ) req uire cer tain i nform atio n to be inc lud ed i n a co rp orate gove rn anc e statem ent in th e Dire ctor s’ Repo r t . Th e Co rp orate Gove rna nc e Repo r t is inc or po rated by refer enc e an d inc lud es de tails of ou r co mp lian ce with t he C ode . Ou r state men t inc lud es a de sc ripti on of th e main features of o ur inte rnal c on trol a nd ris k man age me nt sys tems in relati on to the nan cia l repo r ti ng pro ces s and form s par t of this Direct ors’ Report. Dividend Th e Dire ctors d o not prop ose th e payme nt of a divid end (F Y21: nil ). Branches In acc ord anc e with th e Com pan ies Ac t 20 06 , the B oard c on rm s that the re were no b ran ch es of the C o mpa ny or it s subsi diar ies d uri ng th e na nci al year. Board of Directors Th e Boa rd of Direc tors as at 30 S eptem be r 202 2 is det aile d bel ow; fur the r detai ls abou t eac h Dire ctor are gi ven on pag es 8 4 to 87 of thisre por t. Name Position D ate of appointment Breon Corcoran Chair man 25 Janu ar y 2 021 Jo hn - Pa ul S av ant Chief E xecu tive Of c er 25 Jan uar y 20 21 To m H a r g r e a v e s Chi ef Finan cia l Of ce r 25 Januar y 2 0 21 Sc ot t Fo rb es Senior Independent Non- E xecutive Di rector 26 Feb ru ar y 2 021 S uz an n e B a x te r Indepen dent Non- E xecutive Di rector 4 Feb ru ar y 2 02 2 Pauline Reader I ndependent Non- E xecutive Di rector 2 Dec emb er 20 21 Morgan S eigler Non- E xecutive Di rector 1 8 Ja nua r y 20 21 T amsin T odd Independen t Non- E xecutive Di rector 4 Feb ru ar y 2 02 2 Pen ny Lad kin - Br and also se r ve d as a Directo r of the Com pany fro m 26 Feb ru ar y 2 021 u ntil sh e resi gne d on 25 Ja nua r y 20 2 2 . Th ere have b ee n no c han ges in t he c omp osi tio n of the B oar d bet we en 30 S e ptemb er 20 2 2 an d the d ate of this rep or t. All Di rec tors , othe r than Suz ann e Ba x ter and T am sin T o dd , who will bese ek in g ele ctio n at the r st AGM followi ng the ir app oint me nt, willreti re, and b ein g eligib le , offer th ems elve s for re - e le ctio n at the for th co min g AGM . Dire ctor s’ interes ts in the sha re cap ital an d equi t y of the Co mpany as at 30 S eptem be r 202 2 are co ntai ne d in the Dire ctor s’ Remu ne ratio n Rep or t o n pag e 109. Pur suan t to the rel atio nshi p agre em ent wi th T A As soc iates , thro ugh itssu b - fun ds T A XIII - A , L .P ., T A XIII - B, L .P ., T A Investor s XIII, L .P ., T AInve stors I V EU AI V , L .P . and T A Su bo rdina ted Debt Fund I V , L .P (“ T AA ss oc iates” ) that the C omp any entere d into on 1 7 Febr ua r y 20 21, the Co mpa ny agree s to app oint on e Non - E xec uti ve Direc tor nomi nated by T A A sso ci ates to the Bo ard for s o lon g as T A Ass oc iates owns in aggre gate mo re tha n 10% of the issu ed o rdin ar y s hare c api tal in t he Co mpa ny. Morgan S ei gle r is the TA Asso ciates no min ated Non- E xecutive Dir ector . All oth er Dire cto rs are app ointe d in their p ers ona l capa cit y. Directors ’ insurance and indemni ty provis ions Th e Com pany mai ntai ns Dire ctor s’ and O f cer s’ insu ran ce in res pe ct of any liabili ties ar ising fr om the pe r for man ce of the ir dut ies . In addi tio n, du rin g the na nci al year en ded 3 0 Se ptemb er 20 2 2 and to the date of this repo r t , the Dire cto rs have had the be ne t of quali f yi ng third - par t y i nde mn itie s und er wh ich t he C om pany has a gre ed to ind emn if y the Di rec tors , to the exte nt per mi t ted by law and by the Co mpa ny ’s Ar t icl es of As so ciati on , agai nst any l iabil itie s the y may inc ur in th e exec uti on of th eir d utie s as dire cto rs of the C o mpa ny or ofits subs idia rie s. Di re ct or s’ int er es t s in con tr ac t s and co n ic t s of inte re s t No me mb er of th e Bo ard ha d a materi al intere st in a ny co ntra ct of signi can ce wi th the Co mp any, or any of its sub sidia rie s, at any time dur ing the p er iod . Dire ctor s are requi red to notif y the C om pany of any con ic t or potent ial co ni ct of interest . Ca pi ta l s tr uc t ur e an d sh ar e ho ld er vo ti ng r ig ht s Th e share s in iss ue as at 3 0 Nove mb er 2 02 2 , b eing t he lates t pra ctic ab le date pr ior to th e pub lic atio n of this rep or t, c on sisted of1 2 0, 59 9, 32 9 ordi nar y shares of 0.01 pe nce ea ch . Th e cha nge s in the C o mpa ny ’s issue d sha re cap ita l dur ing the nan cial yea r are detail ed in note 20 to the Con soli dated Fin anc ialS t ateme nts. Rig h ts a nd o b lig at io ns o f or di na r y s ha re s Hol de rs of ord inar y shar es are e ntitl ed to at ten d and sp ea k at gen er al me etin gs of the C o mpany a nd to app oin t one o r mo re proxi es or, if the hol der of s hares i s a co rp orat ion , on e or m ore c or po rate rep rese ntati ves. On a sh ow of han ds, e ach h ol der of o rdin ar y s hares w ho is p rese nt in per so n or by prox y/corp ora te repres ent ative sh all have on e vote. Th ere are n o res tric tio ns on voti ng r ights o r the t rans fer of share s in theC om pany and the Com pany is not aware of agre em ents bet we en hol der s of se cur iti es that r esul t in su ch res tr icti ons . Corporate Governance Directors’ Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 4 CORPORA TE GOVERNANCE STRATEGIC REPORT Powe rs of t h e Co mp a ny to p ur ch as e own s ha re s At the AGM h el d in Jan uar y 20 2 2, s hare hol de rs pas se d a spe ci al reso luti on in a cc ord anc e wit h the A ct to aut hor ise th e Co mp any to make mar ket pu rchas es of it s own ordi nar y share s up to a ma ximu m of 1 1, 9 9 9,99 9 ordi nar y share s, re pre sen ting 10% of the C o mpany ’s issu ed ord inar y share ca pit al as at 1 4 D ec em ber 2 021. No shares have be en p urch ase d und er th is aut ho rit y. The a uth or it y will e xpir e atthe co nc lusi on of the Co mpa ny ’s AGM in Januar y 20 23 , when th e Co mpa ny intend s to see k a ren ewal. Sh ar es he ld by Emp lo yee Be ne t T ru st Th e Empl oye e Ben e t T ru st ( “E BT ” ) is a discretio nar y emp loye e ben e t tr ust co nst itu ted by a trust de e d entere d into on 1 2 Feb ru ar y 20 20 be twe en Au ctio n T op co L imi ted and Zed ra T ru st Co mp any (Guer nsey) Lim ited , ind ep end ent of fsh ore profes sion al tru stee s (the “ T r us tee” ). T he Co mpa ny suc ce ed ed Au ctio n T op co L imi ted as the set tl or of the EBT un de r a dee d of succ essi on enter ed into on 25 Feb ru ar y 20 21. Th e EBT is op era ted as an empl oyee sh are sch em e withi n the m ean ing of S e ctio n 1 166 of the C om pani es Ac t 20 0 6 , with the pu rp ose of e nc our agin g and fa cili tatin g the h old ing of sh ares by bon a de e mpl oyee s of the Com pany (which for th ese pu rp oses inc lud es the E xec ut ive Dire ctor s) and its subsidi ari es , forme r emp loye es and c er t ain of thei r relative s or for thei r ben e t. Sh ares he ld by the Co mpa ny ’s EBT rank pa ri pass u with the oth er share s in iss ue an d have no sp e cial r ights . Voting ri ghts a nd ri ghts of acc ept anc e of any of fer rel ating to th e share s he ld in th e T r ust re sts with t he T r uste es , who m ay take acc ou nt of any rec o mme nd ation from t he C om pany. Relationship Agreement Th e Relati ons hip Ag ree me nt , whic h was en tered in to on 1 7 Feb ru ar y 20 21 , com pli es with th e requi rem ents of the Li stin g Rules an d rema ins ef fec tive wh ilst TA Assoc iates ho lds at l east 10% of th e voting r ights of t he C omp any. As at 30 S e ptemb er 2 02 2 T A he ld 1 7 . 7 7% of th e issu ed s hare c api tal of th e Co mpa ny. Th e Boa rd is satis ed tha t the Co mpa ny has com plie d with th e independence pro visions included in the Re lationsh ip Agr eement dur ing th e pe rio d en de d 30 S e ptemb er 2 02 2 : • T ran sac tio ns and a rra nge me nts b et wee n the C o mpany a nd T AA sso ci ates are and will be, at ar m’s len gth and on nor mal commercia l t erms. • Nei the r T A Ass oc iates no r any of its as so ciates will t ake any ac tion that wou ld have th e ef fect of p revent ing th e Co mp any fro m co mpl yin g with its obli gatio ns unde r the LR, the DGT R , the require men ts of the Lon don S toc k Exc hang e, the Fina nci al Ser vic es and Market s Act, Mar ket Ab use Re gu latio n or th e A r tic les of A ss oci atio n. • Nei the r T A Ass oc iates no r any of its as so ciates will p rop ose , or pro cure t he pro po sal of, a share ho lde r reso lu tion t hat is inte nde d or app ear s t o be intende d t o circumve nt the prope r appli cati on of the LR . As far a s the C om pany is aware , su ch prov isio ns have b ee n co mpli ed with d uri ng th e pe rio d en ded 3 0 S e ptemb er 20 2 2 by T A Ass oc iates. Substantial shareholdings Th e table b elow se ts out th ose sh areh old er s that have noti ed th e Co mpa ny of thei r dire ct o r indi rec t intere st in 3 % or m ore of th e issu edsh are ca pita l of the Com pany in ac co rdan ce wit h Rule 5 of theD GTR as at 30 Nove mb er 20 2 2 bei ng the ne ares t prac tic abl e dateto public atio n: Shareholder Holding % V oting rights T A As soc iates Manag em ent , L. P . Indirect 1 7. 7 7 1 Blac k Roc k , Inc. Indirect 10 . 2 9 2 Th e Capit al Group Co mp anie s, Inc . Indirect 7. 9 4 1 Jup iter Ass et Mana gem en t Limite d Indirect 7. 8 6 1 abrdn plc Indirect 5 .13 1 Ameriprise/ T hreadneedle Indirect 4 .82 1 ECI Par tne rs LL P Indirect 3 .9 9 2 Invesc o Ltd Indirect 3 .9 9 1 Th e V ang uard Gro up Inc. Indirect 3 .1 9 1 1. No ti c ati on b ase d on tota l votin g ri ght s at the ti me of 120, 59 9, 3 29. 2. I nfor ma tio n pro vid ed to th e Co mp any p ur sua nt to Rul e 5 of the DGT R pu bl ish ed on a Reg ul ator y Infor ma tio n S er v ic e an d on th e Co mp any ’s web si te. Change in control Th e Com pany is req uire d to disclos e any signi c ant agr ee me nts whic h take ef fec t, al ter or ter mi nate upo n a ch ang e of con trol of th e Co mpa ny. In com mo n with many oth er co mp anie s, the G roup’s bank facili t y is termin abl e upo n chan ge of cont rol of the Co mp any. In addi tio n, th e Rel ation ship A gre em ent wi th T A would a lso ce ase to be ef fect ive on a c han ge of co ntro l. In the even t of a cha nge of co ntrol of the C om pany, unvested L T IP awards will ve st an d be co me exer cisa ble for a p er io d of six mo nths followin g the c han ge of c ontro l to the ex te nt dete rmi ne d by the Remu ne ratio n C omm it tee i n its a bsol ute disc reti on . Wh en m aki ng itsd eci sion , the Re mun era tion C om mit te e will con side r the pe rio d oftime th e award has bee n hel d by the par ti cipa nt and th e ex tent towhich th e per fo rm anc e con dit ions have be e n achie ved . Whe re app ropr iate, an d wit h the ag ree me nt of the a cqu iri ng c omp any, theC om mit te e may spe cif y th at unvested awards wil l not bec om e exercis abl e as a resu lt of th e cha nge of c ont rol an d instea d they w ill be exch ang ed (i n who le o r in par t) for awards over s hares i n the acq uiri ng co mpa ny. Dif fere nt de cisi ons ca n be taken in resp e ct ofdif feren t grant s of awards held by the par ticip ant . Hol de rs of the p re - Adm issi on e qui t y awards will for feit th eir s hares forno pay men t if they leave the G roup for any reas on pr ior to the third anni vers ar y of A dmis sion (othe r than i n the c ase of th eir d eath o r the sale of th e co mp any or b usin ess th at the y work fo r ou t of the G roup). In nor mal ci rcum sta nc es, th e share s must als o be held for a fur the r year un til th e four t h anni ver sar y of Admis sio n, b efore the y ca n be so ld or othe r wise tr ansfer red . If the re is a corp or ate event resul ting in th e cha nge of c ont rol of the C o mpa ny, the for feitu re and h old ing p er iod s will cease to apply. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 5 FINANCIAL ST A TEM ENTS Th ere are no agre e men ts bet we en the C om pany and i ts Dire ctor s orem pl oyees th at provid e for com pe nsati on for los s of of ce or emp loy me nt be ca use of a take over bi d othe r than fo r paym ent fo r loss of of ce as det aile d on page 103. Ar ticles of Association Th e rule s gover nin g the app oint men t and rem oval of Direc tors are con tain ed in t he C om pany ’s A r tic les of A ss oci atio n. C hang es to the Ar ticl es of A sso ciati on m ust b e app roved by a s pe cial re sol uti on of the sha reh old ers . Th e power s of Direc tors are des cr ibe d in the Mat ter s Rese r ved fo r the B oar d do cum ent a nd th e Ar tic les of Ass oc iatio n, b oth of whi ch c an be fo und o n our we bsi te. Political donation s It is not the policy of the Com pany, or its subsidia rie s, to make pol iti cal don atio ns as co ntem plated by th e C omp anie s Ac t and n o don atio ns were mad e by the C o mpa ny to any poli tic al par t y dur ing t he yea r . However, the ap plic atio n of the re leva nt provi sion s of the C om pani es Act is ve r y wi de in na ture an d nor ma l busi nes s acti vi ties of th e Co mpa ny, which mig ht not b e co nsid ere d po liti cal d onat ion s or exp end itur e in the u sual s ens e, may p oss ibly b e c ons tru ed as p oli tic al exp end itur e and fall wi thi n the re str icti ons of th e Ac t. T his c oul d inc lud e spo nso rsh ips , sub scr iptio ns , paym en t of expe nse s and s upp or t for bo dies re pre sent ing th e co mm uni t y . Th e Bo ard th erefo re intend s to rene w share ho lde r au tho ri t y at the C om pany ’s AGM to en sure th at the Co mpa ny do es not in adve r ten tly bre ac h thes e prov isio ns. Post balance sheet e vents Th e Group p re - p aid $ 4 3 .7 m of their S enio r T er m Loan Fac ilit y at the star t of Oc tobe r 20 2 2 usin g the G rou p’s available c ash . Disclosure of inf ormation to the auditor Eac h of the per so ns who is a Direc tor at the date of approval of this An nual Re po r t co n rms th at: • so far as the Dire ctor is aware, th ere is no rele vant aud it infor mati on of whic h the C om pany ’s aud itor is u naware; a nd • the Dire c tor has taken all the step s that he/she ou ght to have taken as a Direc tor in orde r to make himself/h er self aware of any releva nt audi t infor matio n an d to estab lish th at the C om pany ’s auditor is aware of that infor mati on . This c on rm atio n is given and sh oul d be inter prete d in acc orda nc e with t he prov isio ns of S ec tio n 41 8 of the C o mpa nies A ct 20 0 6 . Auditor Del oi t te LLP has in dic ated its will ingn ess to con tinu e in of c e and theB oard re co mm en ds the reap po intm ent of De loi t te at the for th co min g AGM . Annual Gener al Meeting Th e Com pany ’s AGM will be he ld at the of ce of T raver s Smi th LL P , 1 0Sn ow Hill , Lond on EC1A 2 AL o n 26 Januar y 20 23 . The Not ice of AGM ac co mpa nies t his rep or t as a se para te doc ume nt . This re po r t was app roved by the Bo ard of Dire ctors o n 1 Dec em be r 20 2 2 and si gne d on i ts be half by : Jayne Meacham Company Se cretar y 1 Dec em be r 20 22 Corporate Governance Directors’ Report continued Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 6 CORPORA TE GOVERNANCE STRATEGIC REPORT Stateme nt of Directors’ responsibilities in respect of the Annual Rep o r t an d F in an ci al S t at em en t s Th e Dire ctors are res po nsib le for prep ari ng the A nnu al Rep or t and the Fin anc ial S t ateme nts of the G rou p and C om pany i n acc ord anc e wi th applicable law and r egulations. Co mpa ny law require s the Dire ctor s to prepare nanc ial sta teme nts for each nan cial yea r . Unde r that law the Dir ec tors are req uire d to prep are th e Grou p Fi nan cial S tateme nts in a cc ord anc e wit h Uni ted Kin gd om ado pted Inter nati onal Ac co unti ng S ta ndar ds and wit h the requ irem ent s of the Com pani es Act 2 0 06 . Th e Dire ctors have ch ose n to prepa re the p arent C o mpa ny Fin anc ial S t ateme nts in a cc orda nc e with U nited K ing do m Gen eral ly Acc ep ted Acc oun ting Pr act ice ( Uni ted Kin gd om Ac cou ntin g S tan dards an d appl ica ble law), incl udi ng FR S 1 01 “Re du ce d Disc losu re Frame work ” and the Co mp anie s Act 20 0 6. Und er co mp any law the Dire ctor s must n ot approve th e nan cial statem ent s unles s they are sati s ed that th ey give a tru e and fair vie w of the state of affairs of the C om pany and of the pro t o r loss of the Co mpa ny for that p er iod . In prep ari ng the pare nt Co mp any Fin anc ial S tatem en ts, th e Dire ctors are requ ired to: • sel ec t sui tabl e ac cou ntin g po lici es an d the n app ly th em c onsi stentl y ; • make jud gem en ts and a cc oun ting e stim ates that ar e reaso nab le and prudent; • state whet he r appli cab le UK Ac co unti ng S ta nda rds have bee n followed , su bje ct to any mater ial d epa r tu res disc los ed an d expl aine d in th e n anc ial st ateme nts; an d • prep are th e Fin anc ial S t ateme nts o n the g oing c on ce rn b asis unle ssi t is inapp ropr iate to presum e that the Gro up will co ntin ue inbusiness. In prep ari ng the Gro up Fi nan cial S t ateme nts , Intern ation al Acc ou ntin g S tan dard 1 req uires th at Dire ctor s: • prop er ly se le ct a nd ap ply a cc ount ing p oli cies ; • present in formation, including accounting policies, in a manner thatprov ide s releva nt, re liab le, c omp ara ble an d unde rs tand abl e informatio n; • provid e addi tio nal disc los ures wh en co mpl ianc e with th e spe ci c requ irem ent s of the nan cial rep or tin g fram ewor k are insuf c ient to ena ble us er s to unde rs tand t he im pac t of par ticu lar tr ansa cti ons , othe r events and c ond iti ons on th e enti t y ’s nanc ial pos iti on and na nci al pe r for man ce; a nd • make an ass ess me nt of the C om pany ’s abi lit y to co ntin ue as a going concern. Th e Dire ctors are res po nsib le for keep ing ad equ ate acco unti ng rec ords th at are suf ci ent to show and exp lain th e Com pany ’s transactions and d isclose with r easonable accuracy at an y time the na nci al posi tio n of the Com pany and e nabl e the m to ensure that the Fin anc ial S t ateme nts co mp ly wi th the C o mpa nies A ct 20 0 6 . Th ey are also res po nsib le for s afeguar ding t he ass ets of th e Co mpa ny and hen ce for t ak ing re ason abl e steps fo r the pr eventi on an d de tecti on offrau d and othe r irre gula ri ties . Th e Dire ctors are res po nsib le for the mai ntenan ce an d integr it y of thec or po rate and na nci al inform atio n incl ude d on the C om pany ’s websi te. Legis latio n in the Uni ted Ki ngd om gove rn ing the pr epa ratio n and diss emi natio n of nan cial st ateme nts may dif fer fro m legi slatio n in othe r jur isdic tio ns. Res po ns ib il it y s t ate m en t of t he D ir ec t or s in r es pe c t of t he a nn u al nancial report We con rm tha t to the b est of our k nowle dg e: • the F ina ncia l S tatem ent s, p repa red in a cc ord anc e wit h the re leva nt na nci al repo r ti ng fra mewo rk , give a tru e and fair vi ew of the asse ts, lia bili ties , na nci al posi tio n and pro t or lo ss of the Co mpa ny and th e und er tak ing s inc lud ed in t he c ons olid ation takenas a who le; • the S t rategi c Rep or t inc lud es a fair re view of th e deve lo pme nt an d per form anc e of the b usin ess a nd th e posi tio n of the C om pany a nd the un de r ta kin gs in clu de d in the c on soli datio n take n as a who le, toget her w ith a d esc ript ion of th e pr inc ipal r isks an d un ce r tai ntie s that th ey fac e; an d • the A nn ual Re po r t an d Fin anc ial S t ateme nts , taken as a w hol e, are fair, balanc ed an d und er sta nda ble an d prov ide th e infor matio n ne ces sar y for sha reho ld ers to as sess t he Gro up’s pos itio n an d per form anc e, b usin ess m od el an d str ategy. This res po nsib ilit y st ateme nt was approve d by the Bo ard of Direc tors on 1 De ce mbe r 20 2 2 and is signe d on its b ehal f by: Jo hn - Pa ul S avan t T om H ar gr eave s Chief E xe cu tive O f ce r Chief Fin anc ial Of c er 1 Dec em be r 20 22 1 De c emb er 20 2 2 Direct o rs’ R esp onsibil ities Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 117 FINANCIAL ST A TEM ENTS Financial Statements In t hi s se ct io n: Independent Auditor’ s Report 119 Consolidated Statement of Pr ot or Loss and Other Comprehensive Income or Loss 128 Consolidated Statement of FinancialPosition 129 Consolidated Statement of Changes in Equity 130 Consolidated Statement of Cash Flows 131 Notes to the Consolidated Financial Statements 132 Company Statement of Financial Position 171 Company Statement of Changes in Equity 172 Notes to the Company Financial Statements 173 Glossary 176 Shareholder Information IBC F inan cial S t a te m e n t s Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 8 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 8 FINANCIAL ST A TEM ENTS STRATEGIC REPORT Rep or t o n t he au di t of t he F ina nc ia l S ta tem en ts 1 . Opi nio n In our op inio n: • the F ina ncia l S tatem ent s of Auc tion T ec hno lo gy Gr oup p lc (the ‘pare nt C omp any ’ ) a nd i ts subs idia rie s (the ‘Gr oup’ ) give a tr ue a nd fair vi ew of the s tate of the Gro up’s and of th e pare nt C om pany ’s affai rs as at 3 0 S eptem be r 20 2 2 and of t he Gro up’s los s for the ye ar then ended; • the G roup F ina nci al S tate men ts have be en p rop er ly p repa red in acc ord anc e with U nited K ing do m adopte d Intern atio nal Acc ou ntin g S tandards; • the pa rent C o mpany F in anc ial S ta teme nts have be e n prop er ly prep are d in acco rda nc e with Uni ted Ki ngd om Ge ne rall y Acc epted Accounting Practic e, including Financial Repor ting Stand ard 1 01 “R edu ce d Disc los ure Frame work ” and • the F ina ncia l S tatem ent s have be en p repa red i n acc ord anc e wit h the re quir eme nts of th e Co mp anie s Act 2 0 06 . We have audi ted the F ina nci al S tate men ts whic h co mp rise : • the Co nso lida ted S tatem ent of Pro t or Los s and O the r Co mpre he nsi ve Inco me or Lo ss; • the C ons olid ated an d pare nt C omp any S ta teme nts of Fi nan cial Position; • the Co nso lida ted and Pare nt S tatem en ts of Chang es in Equi t y ; • the C ons olid ated S t ateme nt of Cas h Flows ; • the re lated notes 1 to 25 to the C ons olid ated F inan cial S tatem ents ; and • the re lated notes 1 to 10 the Co mpa ny Fin anc ial S t ateme nts . Th e nan cial re po r tin g fram ewor k that has be en ap plie d in the prep arati on of th e Gro up C onso lid ated Fi nan cial S tateme nts is appl ica ble law, and Uni ted Kin gd om ado pted Inter natio nal Ac co unti ng S tan dard s. Th e na nci al repo r ti ng fra mewo rk that has b ee n appli ed in the pr epa ratio n of the p arent C o mpa ny Fin anc ial S t ateme nts is appl ica ble law and U nited K ing do m Acc oun ting S t and ards , incl udi ng FR S 1 01 “Re duc ed D iscl osur e Framewo rk ” (U ni ted Kin gd om Ge ner ally Accepted Accounting Practice ). 2 . Bas is fo r opi ni on We condu cted ou r audi t in acco rdan ce wit h Intern ation al S tan dard s on Audi tin g (UK ) (IS A s (UK )) and appl ica ble law. Our respo nsi bili ties und er thos e sta nda rds are fu r t her d esc ri be d in the a udi tor ’s resp onsi bili ties for the audi t of the nanc ial statem ent s sect ion of our rep or t. We are ind ep end ent of th e Gro up an d the p aren t Co mpa ny in acc ord anc e wit h the e thic al re quire me nts th at are rel evant to o ur audi t of the nan cial st ateme nts in the U K , inc ludi ng the F inan cial Rep or t ing C oun cil ’s ( the “ F RC ’s” ) Ethic al S tan dar d as applie d to listedp ubli c interes t enti ties , and we have ful lle d our othe r ethi cal resp onsi bili ties i n ac cor dan ce wi th the se re quire me nts . Th e no n - aud it ser vic es prov ide d to the G roup a nd par ent C om pany for t he yea r are discl ose d in n ote 6 to the Co nsol idated F ina nci al S tate men ts. We con r m that we have not provid ed any no n - audi t ser vic es pro hibi ted by the FRC ’s Ethic al S tan dard to the Gro up or the pa rent C om pany. We believe th at the audi t evid en ce we have obtain ed is suf ci ent an d app ropr iate to provid e a basis fo r our o pini on . 3. Su mm ar y of ou r au dit a pp ro ac h Key audit mat ter s Th e key audit mat ter s that we ident i ed in the cur rent ye ar were: • Acq uisit ion of Live Au cti on ee rs L LC (“ L A ” ) - clas si ca tion of co nsid erat ion • Acq uisit ion of L A - valu atio n of intangi bles • Risk of im pair me nt to go odw ill • Functional currency Wi thin thi s repo r t , key audit mat ter s are ide nti e d asfollows: Newl y ide nti e d Inc rease d level of ris k Si mila r level of r isk De cre ased l evel of risk Mate riali t y The mater iali t y that we us ed for t he C ons olid ated Fin anc ial S t ateme nts was £1,3 20 ,0 0 0 w hic h was deter min ed o n the b asis of a bl end of 4% of adju sted ear ning s before i nteres t ta x, d ep rec iatio n, a nd amo r tis atio n ( adjus ted EBI T DA – refer t o note 3 ) an d 5% of pro t before tax . We also consi dere d revenu e as a sup po r tin g be nc hma rk . Scoping Fo ur c om po nen ts were su bje ct to full s co pe au dit s and t wo com pon en ts were subje ct to spe ci e d audi t pro ce dure s. T hes e co mp one nts p rovid ed c overag e whic h totals 92% of the Gro up’s adjus ted EBI T DA , 91 % of re venu e and 8 0 % of net as set . A ll wor k performed on component s wa s performed by theG roup au dit team . Signicant ch an ge s in ou r approach In the cur ren t year, the Gr oup ac quire d L A on 1Oc tobe r 2021 wi th sign i ca nt intan gib le asse t rec og niti on an d co mpl ex co nsid er ation . A s suc h wehave ident i ed t wo key audit mat ter s in respe ct of this acqui siti on – class i cat ion of con side rati on and val uatio n of inta ngi bles . Su bse que nt to the acquis iti on of L A , th ere was a cha nge i n fun ctio nal c ur ren cy and t he ap plic atio n ofthe net inves tm ent he dg e in the per io d has resul ted in a n ew key audi t mat ter, bec aus e of the signi can ce an d com ple xit y of the jud gem en ts bei ng ma de whi ch im pac ted on t he C ons olid ated S tatem ent of Pro t or Los s. In the pri or year, IF RS 2: Share base d paymen t valuat ion on IPO and reven ue reco gni tio n ac cur acy and co mpl etene ss were key au dit m at ters h owever th ese are no l ong er c ons ide red as key au dit m at ters as t he level of au dit e ffo r t invo lve d in app rop riatel y add ressi ng thes e risks is n ot the most signi can t in o ur audit . Independent Audit or ’ s Repor t t o t he Me mbers o fAuct ionT ec hnol ogy Gr oup pl c Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 11 9 CORPORA TE GOVERNANCE Financial Statements Independent Auditor’ s Report continued 4. Co nc lu sio ns r el ati ng t o goi ng c on ce rn In audi ting th e Fina nci al S tatem ents , we have con clu ded th at the Dire ctor s’ use of the goi ng co nc er n basis of acc ount ing in the pr epa ratio n of the n anc ial statem en ts is appro pri ate. Our eva luati on of the Dire ctor s’ asse ssm ent of the Gro up’s and pare nt Co mpa ny ’s abilit y to conti nue to ado pt the goin g co nce rn ba sis of accounting includ ed: • Ass ess ing as p ar t of o ur ris k asse ssm ent t he nat ure of the G rou p and i ts bus ine ss mo de l and re lated ri sks in clu din g whe re rele vant , the ef fe ct of the current macroeconomic unce r tainty ; • Obta inin g an unde rs tand ing of the rel evant c ontro ls imp lem en ted by the Dire ctor s duri ng the go ing co nc er n asses sm ent ; • Chall en ging th e unde rly ing dat a and key assumpti ons use d to make the asses sm ent as well as evaluatin g the Dire ctors ’ plans for futu re actio ns; • Und er sta ndin g nan cin g facili tie s inclu din g asses sin g forec ast co mp lian ce wit h interest c over rati o covena nts; • Und er sta ndin g how th e goi ng co nc er n mo de l mir ror s the bu sin ess m od el an d the fore c asts us ed to ass ess im pai rm ents tes ting ; • Ass ess ing the ma turi t y pro le of the Co mpa ny debt an d the liqui dit y for the g oing c onc er n pe rio d; • Per fo rmi ng se nsi tivi t y ana lysis b ase d on th e co ntra dic tor y ev ide nc e, in clu din g co nsid erati on of ma rket , latest t hird - p ar t y e c ono mic fo rec ast s; and • Ass ess ing the ap pro pri atene ss of the goin g con ce rn dis clo sures ma de in the n anc ial state men ts. Base d on the wor k we have per for me d, we have not ide nti e d any material un ce r t ainti es relati ng to events or co ndi tio ns that , indi vidu ally o r col le ctive ly, may cast signi can t dou bt on the Gro up’s and paren t Com pany ’s abilit y to contin ue as a goin g con ce rn for a per iod of at leas t twe lve mon ths fro m when th e nan cial s tateme nts are au tho rise d for issu e. In relati on to the repo r ti ng on how the G roup has ap plie d the U K Cor po rate Gover nan ce C od e, we have nothin g materia l to add or dr aw atten tio n to in relation to the Dire ctor s’ state men t in the na nci al statem ents ab ou t whe the r the Dire ctor s con side red i t appro pr iate to ado pt the go ing concern ba sis of account ing. Our res po nsib iliti es and th e respo nsi bili ties of the Dire cto rs with res pe ct to goin g con ce rn are de scr ib ed in the rel evan t sec tion s of this repor t. 5. Key aud it m at te rs Key audit mat te rs are tho se mat ters th at, in ou r professio nal jud ge me nt, were of mos t signi can ce in ou r audi t of the nan cial st ateme nts of the cu rre nt per io d and inc lud e the mos t signi can t asses sed ri sks of material mis state me nt (whethe r or not due to frau d) that we ide nti e d. Th ese ma t ters in clu de d thos e whi ch had t he gre atest ef fec t on t he over all aud it s trateg y, the allo cati on of res our ces i n the au dit ; an d dire cti ng the ef for ts of the e nga ge men t team . Th ese ma t ters were a ddre sse d in th e co ntex t of our au di t of the F inan cia l S tatem ents a s a who le, a nd in for mi ng ou r opi nio n the reo n, a nd we do not p rovid e a sep arate op inio n on t hes e mat ters . 5. 1. Ac q ui si tio n of LA - cla ss i c ati on of co ns id er at io n Key au di t ma t te r description Th e Group ac qui red L A on 1 Octob er 20 21. Under th e terms of the sal es and pu rcha se agre em ents ( “ S PA ” ), th e Grou p paid a total c ons ide ratio n of £4 0 4 .0m i ncl udin g ca sh of £ 35 8 .8 m, Ro llove r Opti ons a nd Res tri cted S tock U nit s (“ R SU s” ) with a fai r valu e of £2 7 .3m an d co ntin ge nt co nsid er ation of u p to a maxi mum of £ 18.6m. Th ere is an inhe ren t judg eme nt invol ved in de termi ning th e clas si cat ion of the Roll over Op tion s and RS Us as eit her con side rati on or re mun erat ion for po st- c om bin atio n ser v ice s in acc ord anc e with th e requi rem ents of IF RS 2 and IF RS 3. If the awards that are be ing re pla ce d expire d as a conse qu en ce of a busine ss co mbi natio n and if the Gro up rep lac ed thos e opti ons w hen i t was not o blig ed to do s o, th e repl ac eme nt o ptio ns sho uld b e re co gnise d as a re mun era tion c os t rath er than c onsi der atio n. If the award s do not expire an d the acq uire e repl ace s thes e awards, th e chan ge in owne rsh ip is treated as a modi cati on to the share - bas ed paym en t and is cons ide red as co nsid er ation . Th ere is signi can t judg em ent exerc ise d in the clas si cat ion of Rollove r Opti ons an d RS Us as cons ide ratio n and the refore we co nsid ere d this o ur key aud it mat ter . Fur th er d etail s are in clu ded i n notes 2 , 1 1 an d 1 2 to the C onso lid ated Fi nan cial S tateme nts in re latio n to busi nes s co mbi natio n. Refer also to pag e 9 0 of the Re po r t of th e Audi t C omm it tee . How t he sc op e of ou r aud i t res po n de d to the key au d it mat ter We obtain ed a n und er stan din g of the re levan t co ntrol s over ma nage me nt ’s detai led r eview of t he bu sine ss c omb inati on , which is performed periodical ly . We challe ng ed the cl assi c atio n of the Rollove r Opti ons and R SU s as consi de ratio n. Our procedures included: • asse ssin g the requ ire men ts of IFRS 3 and IF RS 2 in deter min ing if the e qui t y instr um ent s repres ent c onsi der atio n or remuneration; • asse ssin g wheth er th e requi rem ent of IFR S 3 relatin g to contin ued e mpl oym ent was me t, i.e . asses sing wh eth er the rec ipie nt is re quire d to rema in in e mpl oym ent i n ord er to quali f y for th e awards i t is clas si e d as rem une rati on; an d • asse ssin g the a ppro pr iatene ss of the j udg em ent di scl osur es in th e Co nso lidate d Fin anc ial S t ateme nts. Key ob se r va tio ns We co ncl ude d that the cl assi c atio n of cons ide ratio n is appro pr iate and that the c onc lusi ons rea ch ed were su ppo r ted by the evi dence obtai ned. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 0 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 5.2 . Ac qu is it io n of LA - valu at io n of inta n gi ble s Key au di t ma t te r description Th e Group ac qui red L A on 1 Octob er 20 21. IFRS 3 “B usin ess C om binat ion s” requi res man age me nt to apply ac quisi tio n acc ou nting , wh ich i ncl ude s the re co gni tio n of asse ts ac quire d and l iabil itie s assu me d in th e acq uisi tion a t thei r fair val ue toget her w ith any n on - co ntro lling i nteres ts (of which th ere we re non e). Mana ge me nt en gage d ex ter nal va luati ons s pe cial ists to un der take an exer cise to de term ine th e req uire d pur chas e pri ce acc ou nting ( “ PPA ” ) inc ludi ng the valu atio n of separ ately ide nti ab le int angi ble ass ets ac quire d £16 7 .8m . Th ere is b oth co mp lexi t y and ju dg em ent in t his pro ce ss an d as su ch th e key audi t mat ter is fo cus sed o n the 2 0 23 to 20 27 reven ue g row th ass umpt ion s and dis co unt r ates that fee d into th e valuat ion of in tan gibl e asse ts. Fur th er d etail s are in clu ded i n notes 2 , 1 1 an d 1 2 to the C onso lid ated Fi nan cial S tateme nts in re latio n to busi nes s co mbi natio ns. Refer also to pag e 9 0 of the Au dit C o mmi t tee Re po r t . How t he sc op e of ou r aud i t res po n de d to the key au d it mat ter We obtain ed a n und er stan din g of the re levan t co ntrol s over ma nage me nt ’s detai led r eview of t he bu sine ss c omb inati on , which is performed periodical ly . Our wo rk i ncl ude d, b ut wa s not lim ited to: • asse ssin g wheth er th e acc oun ting for the ac quis itio n is in line wit h the requ irem en ts of IFRS 3 Bus ines s com bin atio ns; • asse ssin g manag em ent ’s und erl yin g anal ysis and su pp or t ing n anc ial mo del s; • asses sing t he compet ence, capabil ity and obj ectivity of management’s expert; • eng agin g our v aluati on s pe ciali sts to asse ss th e valua tion m eth ods u se d on th e valuat ion of in tang ibl e asse ts, t he disc oun t rates appli ed , and the use ful life at trib ute d to the separa tely ide nti ab le inta ngi ble ass ets; • asse ssin g manag em ent ’s sensi tivi t y analy sis to identif y the key assum ptio ns that have a sign i ca nt effe ct on the mo del ; • asse ssin g key assu mptio ns in clu din g reven ue fore ca sts an d lon g - term g row th rates , by co mpa rin g fore cas ted reve nue to market g row th an d lon g -te rm grow th rates to in atio n; and • asse ssin g the app rop riaten ess of disc losu res in the n anc ial sta teme nts spe ci call y the sen siti vi t y to reasonab ly possible changes to k ey assumptions. Key ob se r va tio ns We concl ude d that t he as sum ption s app lie d in the v aluati on of int ang ible s ari sing o n acq uisi tio n were wi thin an acc ept abl e ran ge, t he over all po siti on ad opte d was reaso nab le an d the di scl osure s in res pe ct of se nsi tivi t y to reaso nab ly pos sibl e cha nge s to key assum ptio ns are ap pro pr iate. 5.3 . Ri sk of im pai rm e nt to goo dw ill Key au di t ma t te r description Up on acq uisi tio n of L A , the Gro up re co gnise d go odwi ll of £281.3m . This go o dwill has be e n alloc ated to the Grou p’s followin g cash g ene rati ng uni ts (CGUs): Ar ts & A ntiqu es ( “ A& A”) (£2 26 .7 m) and Indust rial an d Co mme rci al (“ I& C ” ) (£56 .6m). As at 3 0 S eptem be r 20 2 2, t he total gro up c arr yin g valu e of go odwi ll is £5 05 .2m w hic h is allo c ated ac ross th e A& A , I&C and Au cti on S er vic es CG Us. Th ere is b oth co mp lexi t y and i nhe ren t risk d ue to the q uantu m of go odw ill be ing as ses sed fo r imp air men t. T he va luati on of goo dwill invol ves hei ghten ed jud ge men t and esti matio n unc er tain t y with reg ards to forec astin g the bu yer sp ec i c syn ergi es and fu ture c ash ows , the se nsit ivi t y of the impai rm ent mo de l to movemen ts in the disc ou nt rate, and the current macro- e conomic volatility . Th e Grou p co nc lud ed th at no im pair me nt was re quir ed for th e year e nd ed 3 0 S eptem be r 20 2 2 . Fur th er d etail s are in clu ded i n notes 2 , 1 1 a nd 1 2 to the C onso lid ated Fi nan cial S tateme nts in re latio n to busi nes s co mbi natio n. Refer also to pag e 91 of the A udi t Co mmi t tee Re po r t . How t he sc op e of ou r aud i t res po n de d to the key au d it mat ter We obtain ed a n und er stan din g of the re levan t co ntrol s over ma nage me nt ’s con trols re latin g to the rev iew of the fo rec ast , goo dwil l imp air men t mo del a nd th e revie w of disc ount r ates app lie d, wh ich i s per form ed a nnua lly. Our a udi t pro ce dure s inc lud ed , bu t are not l imi ted to the foll owing: • chal len gin g the G roup’s fore cas t and e stim ates by : – rea ding m arket a naly st re po r ts to gain a n und er sta ndin g of the m arket ex pe ct atio n of the Gro up’s fu ture p er for ma nce ; – invest igati ng the ca sh ow fore cas t spe ci c all y relatin g to the revenue grow th predi cted an d how this was adjus ted for r is k ; – co nsid er ing co ntr adic tor y evi den ce an d ex tern al data po ints , spe ci c all y loo kin g at how com pet itor s per fo rm ed dur ing p revio us p eri ods of e co no mic u nc er taint y an d use d this d ata to dri ve sen siti vi ties ar oun d grow th . • asse ssin g the allo cat ion of goo dwil l to CGUs again st the re quire me nts of IA S 36; • eng agin g our v aluati on s pe ciali sts to ind ep end en tly c alc ulate a Weighte d averag e co st of ca pit al (“ WACC ” ) a nd evalu ate the inp uts u se d the rein as at t he yea r end d ate; and • asse ssin g the di scl osure s inc lud ed i n the C on soli dated F inan cia l S tatem ent s, in clu din g the i ncl usio n of the im pai rm ent of goo dwill as a key sourc e of estimati on un ce r tai nt y and of the sen siti vit y an alys is discl osur es requ ired by both I A S 1 and I AS 3 6. Key ob se r va tio ns We concu r that t here i s no im pair me nt to go odwi ll and c on clu de d that th e disc los ure in th e Co nso lida ted Fi nan cial S tatem ents i n relat ion to th e imp air men t asse ssm ent of g oo dwill is a ppr opr iate. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 1 CORPORA TE GOVERNANCE Financial Statements Independent Auditor’ s Report continued 5.4 Fun ct ion al c ur re nc y Key au di t ma t te r description Dur ing th e year, and su bse que nt to the acqu isiti on of L A , manag em ent un der took an exer cise in res pe ct of treasu r y mana gem en t and foreig n exchan ge. B ase d on the req uire me nts and gui dan ce of IA S 21 “ Th e Effe cts of Chan ge s in Fore ign E xch ang e Rates”, mana ge men t deter min ed that th e func tio nal man age me nt deter min ed th e func tio nal cu rre ncy of cer tain e nti ties s hou ld have be e n pou nds S terlin g, r athe r tha n US d olla r . Th e enti tie s imp acted i ncl ude d A TG Medi a US Inc and P roxibid Bi dc o Inc that were par t of the Grou p for the year en ded 3 0 Se ptemb er 2 021. It was deter min ed th ere was no signi can t chan ge to the nature of busi nes s in the year for the se enti ties an d ther efore the fu nc tio nal cu rre ncy of t hese e nti ties s hou ld als o have be en p oun ds S ter lin g in the p ri or yea r . This e rro r res ulted i n a pri or year res tatem ent in cre asing fore ign cu rre ncy tr ansl ation re ser ves and n anc e inc om e by £2 .3 m and had no imp act on net assets. Due to the sign i ca nc e and co mpl exi ty of the jud ge me nts be ing mad e to the func tion al cur ren cy cha ng es in cer tain subsi diar ies wi thin th e Group s tru ctu re whic h had an impa ct on th e Con soli dated S tate men t of Prot o r Loss , we have deter min ed t his to be a key aud it mat te r . Fur th er d etail s are in clu ded i n notes 1 an d 2 to the C ons olid ated Fi nan cial S tateme nts in re lati on to the f unc tio nal cur ren cy res tatem ent a nd jud ge me nt. Refer also to pag e 91 of the A udi t Co mmi t tee Re po r t . How t he sc op e of ou r aud i t res po n de d to the key au d it mat ter We obtain ed a n und er stan din g of the re levan t co ntrol s over ma nage me nt ’s key judge me nts re latin g to the ch ang e in fun ctio nal c ur ren cy in th e year w hic h are pe r for me d pe rio dic all y. Our a udi t pro ce dure s inc lud ed th e follow ing: • asse ssin g the a ppro pr iatene ss of the j udg em ent i n sel ec ting t he fu nct ion al cur re ncy ag ains t the re qu irem ent s of IA S 21 inc lud ing th e addit ion al indi cator s for foreign op er atio ns and inter me diate ho ldin g enti ties; • asse ssin g the app rop riaten ess of acc ou ntin g for this as a prior pe ri od res tateme nt in line wi th the req uire me nts of IA S 8 (ref er to note 1 ); and re c alcu latin g the p rio r pe rio d Res tatem ent id en ti ed ; • co mpl etin g a stan d bac k ass ess me nt on th e trea sur y a nd fore ign exc han ge jud ge me nts mad e in th e year to und ers tan d the i mpa ct of th ese ju dge me nts on t he bu sin ess an d n anc ial resu lts ; and • asse ssin g the di scl osure p rovid ed i n the C on soli dated F inan cia l S tatem ent s in rel ation to fu nc tion al cu rre ncy a nd pr io r year res tateme nts aga inst th e requi rem ent s of IAS 1, IA S 21 and I AS 8 . Key ob se r va tio ns We concu r that t he ac co unti ng trea tme nt and j udg em ents o n th e fun ctio nal c ur ren cy ch ang e, th e imp act s of the pr io r per io d Rest ateme nt an d the re lated dis clo sure s are ap prop riate. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 2 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 6. Ou r ap pl ic ati on of m ate ri ali t y 6. 1 Ma te ria li t y We den e materia lit y as the mag nit ude of miss tatem ent in the nan cial st ateme nts that makes i t proba ble th at the ec on omi c dec isio ns of a reaso nab ly kn owle dge abl e per so n would be ch ang ed or in ue nc ed . We use material it y both in pl anni ng the sc op e of our audi t work and in evalu ating t he res ults of o ur wor k . Base d on ou r professio nal jud ge me nt, we deter min ed mate riali t y for the n anc ial statem ent s as a whole as follows: Group Financial S tatements Parent Company Financial Statements Mate riali t y £ 1 ,320 ,000 ( 202 1 : £1 ,2 7 0,000 ) £ 1 ,18 8 , 0 0 0 ( 2 0 2 1 : £ 1,1 8 1,1 0 0 ) Bas is fo r determining materiality Usin g professi ona l judg em ent , we de termi ne d mater iali ty to be £1,3 20 ,0 0 0 b ase d on a bl en de d asse ssm ent of 4% of adjus ted EBI T DA and 5% of Pro t befo re tax ( “ PBT ” ). We also co nsid ere d reven ue as a s upp or ting b en chm ar k . In the pr ior yea r , we determ ine d materia lit y bas ed on 4% of adjus ted EBI T DA . Co nsis tent wit h the p rio r year, we determ ine d mater iali t y base d on n et ass ets , whic h was th en c app ed at 9 0 % of Grou p mater iali t y in ord er to add ress t he ris k of aggre gati on wh en c om bin ed wi th oth er co mp on ents . Rat io na le fo r the benchmark applied Audi tors of lis ted en titi es t yp ica lly ba se the ir mater iali t y on a PBT m etr ic as thi s is co nsid ere d mos t rel evant to th e invest ors and analysts. Histor ic ally, the adjus ted EBI T DA metr ic was app lied as this was co nsid ere d the m ost re leva nt to the le nd er s and th e valuat ion of the bus ine ss on IP O and in the im me diate peri od following . In orde r to move to a material it y g ure mor e aligne d to othe r enti ties i n the m arket , we co nsid ere d PB T a rele vant ben ch mar k in th e cur ren t year. Th e Co mpa ny act s pri nci pall y as a hol din g Co mpa ny and the refore ne t asse ts is a key me asure for t his bu sine ss . 6. 2 Per fo rm an ce ma te ria li t y We set pe r for man ce m aterial it y at a le vel lowe r than m ateri alit y to red uc e the p roba bili t y that , in ag gre gate, un co rre cte d and un de tected miss tateme nts exce e d the materi alit y for th e nan cial st ateme nts as a whol e. Group Financial S tatements Parent Company Financial Statements Performance materiality 70% (20 21 : 70%) of Grou p mater iali ty 70% (20 21: 70%) o f pare nt C omp any mater iali t y Bas is an d ra ti on al e for de te r mi ni ng performance materiality In deter mini ng pe r for man ce mater iali t y, we prim aril y co nsid ere d our risk as ses sme nt of the Grou p’s overall con trol envir onm ent , th e histor y of aggr egate d pri or p eri od ad just me nts an d our as ses sme nt of th e co mpe tenc e of key management and accounting personnel. 6.3 Er ro r re po r ti ng t hr es ho ld We agree d wi th the A udi t Co mmi t tee th at we woul d rep or t to th e Co mm it tee al l audi t dif fere nc es in exc ess of £ 0.0 6 6m (20 21: £0.06 m), as well as dif fere nc es be low th at thre sho ld that , in o ur vi ew, warran ted rep or ting o n qua litat ive gro und s. We also re po r t to th e Audi t Co mm it tee o n discl osu re mat ters tha t we identi e d whe n asses sing th e overall pr ese ntatio n of the nan cia l statem ents . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 3 CORPORA TE GOVERNANCE Financial Statements Independent Auditor’ s Report continued 7 An ove r vie w of th e sc op e of ou r au di t 7 . 1 Ide nt i c at io n and sco pi n g of comp o ne nt s Our G rou p audi t was sc op ed by o btain ing an u nd ers tan din g of the Gro up an d its e nviro nm ent , in clu ding G rou p - wid e co ntrol s, an d ass essi ng th e risks of m ateria l miss tateme nt at th e Gro up le vel. We per for me d scop ing of the Group co mpo ne nts usin g relevan t benc hm arks su ch as adjusted EB IT DA , reve nue , net assets an d prot befo re tax to determin e which en titi es we consid er to be sign i ca nt com po nen ts. We consid ere d all comp on ents that co ntr ibu te in excess of 1 5 % of the ben ch mar ks to be sign i ca nt and requi re full audit pro ce du res (“ fu ll audit sc op e” ). Four ou t of twe nt y - seve n com pon en ts have been ide nti e d as signi can t and full audit pro ce du res were per for m ed . Spe ci e d audit pro ce du res have been pe r for me d on two out of the twent y - se ven co mpo ne nts . The chan ge in the numb er of com pon en ts subje ct to full audit sco pe and spe ci ed audi t proc ed ures resul ted from the ac quisi tio n of L A whi ch con trib ute d signi c antl y to the grou p in the curren t year . Cove rag e from full sc op e co mpo ne nts and sp e ci e d audit p roc edu res totals 92 % (2021: 95%) of the Group’s adjus ted EBI T DA , 91 % (2021 : 88 %) of revenu e and 8 0 % (20 21 : 7 2%) of net ass et . All p roc e dures we re co mp leted by t he Gro up e nga gem en t team, we d id not e nga ge th e use of component a udit ors. At the Grou p level we also tested th e cons olid atio n proc ess an d car rie d ou t analy tic al pro ce dure s to conr m our c onc lusi on that th ere were no signi can t risks of materi al misst ateme nt of the aggre gated nan cial infor mati on of the rem ainin g com po ne nts not sub jec t to audit . Net asset Revenue Adjusted EBITDA 79% 12% 92% 9% 76% 4% 20% 8% Full audit scope Specified audit procedures Review at group level 7 .2 Ou r con si de r ati on of th e con tr ol e nvi ro nm en t We involved I T spe ciali sts to test the gen era l IT con trols over th e key IT systems . We obtain ed an und er sta ndin g of contro ls over reven ue , the na nci al clos e and rep or ting and ma nag em ent ’s review of judg em ents an d esti mates. A s desc rib ed in th e Audi t Co mmi t tee Rep or t on page 8 8 to 94 there are I T con trol n din gs that still n ee d to be remed iated and th ere is wor k ongo ing to align the sys tems of na nci al cont rol of L A wit h the res t of the Group. A s suc h, we have not taken a cont rol reli anc e appro ac h as the con trol env iron me nt has de ci en cies wh ich ma nage me nt still n ee d to addre ss. 7 .3 Ou r con si de ra ti on of cli ma te - re la te d risk Th e Group is rep or ting for the r st time on cli mate - re lated issu es in line wit h the T ask Forc e on Clim ate - rel ated Fina nci al Discl osu res (“ TCF D” ) fram ewor k . Ma nag eme nt ha s con side re d tran siti onal , phys ic al, an d inves tor- relate d risks a nd o ppo r tu nit ies , ac ross th e Gro up’s value c hai n whe n factor ing i n clim ate chan ge as p ar t of th eir r isk as ses sme nt pro c ess wh en c ons ide rin g the p rin cip al ris ks and u nc er tainti es fac ing th e Gro up. This i s set o ut in t he S t rategi c Rep or t on pag e 4 0. T he e nviro nm ent al imp act a nd c arb on fo otpr int is c ons ide red to be l ow sin ce th e Gro up is a provid er of di git al mar ketpl ace te chn ol og y . Bas ed o n the n ature of th e Grou p’s ope rati ons , it h as be en as ses sed t hat cli mate ch ang e pres ents opp or tuni ties fo r the G roup . As ex plai ne d in note 1 in pr epa rin g the C on soli dated F inan cia l S tatem ent s mana ge men t has c onsi dere d th e imp act of clima te chan ge, p ar t icul arl y in th e co ntex t of the di scl osur es inc lud ed i n the S trategi c Rep or t this yea r . Th ese c ons ide ratio ns di d not have a materi al impa ct on the n anc ial repo r t ing jud gem en ts and esti mates, c onsis tent with th e asses sme nt that clim ate chang e is an emerg ing ris k not expe c ted to have a signi c ant imp act on the Gro up’s goin g con cer n asse ssm ent to 30 Se ptemb er 20 23 no r the viab ilit y of the Grou p over the nex t thre e year s. Th is is consis tent with ou r evaluati on of the climate related ri sks facin g the Grou p. In addit ion , we have: • per form ed o ur own qu ali tative r isk ass ess me nt of the p otentia l imp act of cl imate ch ang e on th e Gro up’s acc oun t bala nc es and c lass es of tran sac tion a nd di d not id entif y any reas ona bly p oss ible r isks of m ateria l miss tateme nt ; • involve d our Env iron me ntal S oc ial and G overn anc e (“ E SG ” ) sp e cialis t in asse ssin g the TCF D on page s 5 4 to 55 against th e rec omm en dati ons of the TCFD fr ame work . Our p roc e dures c on sisted s ole ly of c onsi de rin g whe the r they a re mater iall y inc ons istent wi th th e Co nso lidate d Fin anc ial S t ateme nts , or o ur kn owle dge o btain ed i n the c our se of th e audi t. We have n ot be en e nga ged to p rovide a ssu ran ce over t he ac cu rac y of thes e disc losu res . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 4 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 8 Ot he r i nfor ma tio n Th e other infor mati on co mp rise s the infor matio n inc lud ed in the A nnu al Rep or t other tha n the Fin anc ial S tate men ts and our In de pe nde nt Audi tor ’s Repo r t th ere on . The D irec tors are res po nsib le for the othe r inform atio n con tain ed wit hin the an nual re po r t . Our o pini on on the nan cial st ateme nts do es not cove r the othe r inform atio n and, exc ept to the ex tent othe r wise ex plic itl y stated in ou r repo r t , we do not ex pres s any for m of assu ran ce c on clus ion th ere o n. Our r esp onsi bili t y is to read th e othe r infor matio n and , in d oin g so, c onsi de r whe the r the oth er info rma tion is m ateri ally i nco nsis tent wi th the na nci al statem ents o r our kn owle dge o btain ed in the c our se of the audi t, or oth er w ise app ear s to be materiall y misst ated. If we identi f y suc h materia l inco nsis tenc ies or ap pare nt materi al miss tateme nts , we are require d to determ ine wh ethe r this give s rise to a materi al misst ateme nt in the n anc ial state men ts the mse lves . If, based on the wor k we have per for me d, we co ncl ude th at there is a materi al miss tateme nt of this ot her i nform atio n, we are r equ ired to re por t that fa ct . We have nothin g to repo r t i n this re gard . 9 Responsibilities of Directors As exp lain ed mo re full y in the Dire ctor s’ resp ons ibili tie s stateme nt , the Dire ctor s are resp ons ible for th e prepa rati on of the Fin anc ial S tatem en ts and for be ing satis ed that th ey give a tru e and fair view, and for suc h inter nal co ntrol as th e Dire ctors d eter mine is ne ce ssa r y to enabl e the prep arati on of F inan cia l S tatem ents t hat are f ree f rom m aterial m iss tateme nt , whe the r due to fr aud o r er ror. In prep ari ng the n anc ial state men ts, th e Dire ctor s are respo nsib le for asse ssin g the Gro up’s and the pare nt Co mp any ’s abilit y to cont inu e as a goin g con ce rn , disc losi ng as app lica ble , mat ters re lated to going c onc er n and usi ng the go ing co nc er n basis of acc oun ting un les s the Dire ctor s eit her i ntend to liq uidate th e Gro up or t he par ent C om pany o r to ceas e op erati ons , o r have no real isti c alter nati ve but to do s o. 1 0 Aud ito r ’s respo ns ib ili ties f or t he a ud it of t he na nc ial s t ate me nt s Our o bje cti ves are to obtain reaso nab le assu ran ce ab ou t whet her th e nan cia l stateme nts as a whol e are free fr om mater ial miss tatem ent , whet he r due to fr aud o r err or, and to issue an a udi tor ’s rep or t t hat in clu des o ur o pini on . Reaso nab le ass ura nc e is a high l evel of as sura nc e bu t is not a guar antee tha t an audit c ond uc ted in acc ord anc e with IS A s (U K ) will always detec t a material mis state me nt when i t exists . Miss tatem ents can ar ise fro m fraud o r erro r and are co nsid ere d materi al if, individ uall y or in the agg reg ate, they c ould re ason abl y be exp ec ted to inue nc e the ec on omi c dec isio ns of users ta ken on the basi s of these na nci al statem ents . A fur t her de sc ripti on of our resp on sibil itie s for the audi t of the nan cial s tateme nts is lo cated on th e FRC ’s websi te at: ww w.frc.o rg.uk /auditor sres po nsib iliti es. T his d esc ri ption fo rms p ar t of o ur au ditor ’s repor t. 1 1 Ex ten t to wh ic h th e au dit wa s co ns ide re d c ap abl e of d ete c tin g ir re gu lar it ies , inc lu di ng f ra ud Irre gul ari ties , inc lud ing fr aud , are insta nc es of non - co mpli anc e with laws and reg ulati ons . We design pro c edu res in line wi th our res po nsib iliti es , out line d ab ove, to dete ct mate rial m isst ateme nts in re spe c t of irre gula ri ties , in clu ding f rau d. T he ex tent to whic h our p roc ed ures a re cap abl e of detec tin g irre gu lari tie s, i ncl udin g fra ud is de tail ed b elow. 1 1. 1 Id e nt if y in g and as ses si n g pote nt ia l ris ks rel ate d to irr eg ul ar it ies In ide ntif y ing an d asses sing ri sks of material mis state me nt in respe c t of irregu lar itie s, in clu din g fraud an d non - co mpl ianc e with laws and regu latio ns , we co nsid ere d the foll owing : • the nat ure of the i ndu str y and se cto r , co ntrol e nviro nm ent a nd bu sine ss p er for ma nce i ncl udi ng th e desi gn of the G rou p’s remun era tion pol icie s, key dri vers for Di rec tors’ re mun er ation , bo nus leve ls and pe r for man ce tar gets ; • resul ts of our enq uir ies of manag em ent , inter nal aud it , the le gal fun cti on inc lud ing th e Group’s Ge ner al Co unse l, Di rec tors an d the audi t co mmi t tee abo ut th eir own ide nti c atio n and ass ess men t of the risks of irre gula ri ties; • any mat ters we ide nti e d having o btain ed an d reviewe d the Grou p’s docu me ntati on of their p olic ies an d proc ed ures rel atin g to: – ide ntif y ing , eva luati ng an d co mpl yin g with l aws and re gula tion s and wh eth er th ey were awa re of any inst anc es of no n - com plia nc e – dete ctin g and re sp ond ing to the r isks of f raud a nd wh eth er th ey have k nowle dg e of any ac tual , sus pe cted , or al leg ed f rau d – the i ntern al co ntro ls est ablis he d to mitig ate risks of fr aud o r no n - c om plia nce w ith l aws and reg ulati ons ; and • the mat ter s discu sse d amo ng the au dit en gag em ent team an d releva nt intern al spe ci alists , inc lud ing ta x, val uatio ns and I T spe cial ists rega rdin g how and whe re frau d might o ccu r in the na nci al statem ent s and any potenti al indi cator s of fraud . As a resul t of these pro ce du res , we consid ere d the op po r tun iti es and inc en tives th at may exist wit hin the org anis atio n for fraud an d iden ti ed the gre atest potenti al for frau d in the followin g areas: reve nue re co gni tio n, valu atio n of intangi ble ass ets of L A , impai rm ent of goo dwil l and fun ctio nal cu rre nc y . In com mo n with all aud its un der IS A s (U K ), we are also requ ired to per form sp ec i c pro ce dure s to respon d to the risk of mana ge me nt over ri de. We also obt aine d an un de rst and ing of th e le gal an d regu lator y fram ewor ks that t he G roup o pe rates in , foc usin g on pr ovisio ns of th ose laws an d regu latio ns that had a dire ct ef fec t on the de term inati on of material am ou nts and dis clo sures in th e nan cial s tateme nts . The key laws and regu latio ns we cons ide red in this c ontex t in clu ded th e UK Co mp anie s Act and L istin g Rules , UK C or po rate Gover nan ce C ode , tax le gis latio n in the Gro up’s vario us juri sdic tio n, En erg y and Ca rb on reg ulati ons , as well as pens ion s legis latio n and ta x legis latio n. In addi tio n, we con side red pr ovisio ns of other laws and re gulat ion s that do not have a direc t effe ct on th e Fina nci al S tatem ents bu t co mpli anc e with whi ch may be fu nda me ntal to the Grou p’s abilit y to oper ate or to a void a materi al pen alt y. These in clu de d the Ge ner al Data Prote ctio n Regu latio ns , the Cali forni a Co nsum er Pr ivac y Act , UK Br ib er y Ac t, e mpl oym ent law, healt h and safet y, USA F irear ms le gisl ation , L aws around sale of N azi m em ora bilia i n Ger ma ny, Restric tio ns of ivo r y ite ms and C o mpe titi on law i n the G roup’s var iou s juri sdic tio n. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 5 CORPORA TE GOVERNANCE Financial Statements Independent Auditor’ s Report continued 1 1.2 Audi t res po ns e to risks id en ti e d As a resul t of per for min g the ab ove, we ident i ed th e valuati on of intan gibl e on the ac quisi tio n of L A , imp air me nt of good will and fu nc tion al cur ren cy as key au dit m at ters re lated to the p otentia l risk of fr aud . T he key aud it mat te rs se cti on of ou r rep or t expl ains th e mat ter s in mo re deta il and des cr ibe s the spe ci c proc ed ures we pe r form ed in res po nse to those key audi t mat ters . In addi tio n to the ab ove, pro ce du res to respo nd to risks ide nti e d incl ude d the follow ing: • revie wing th e Fi nan cial S tateme nts di scl osure s and tes ting to su pp or t ing d oc ume ntati on to ass ess c om plian ce wi th p rovisio ns of rel evan t laws and re gul ation s des cr ibe d as havi ng a dir ec t ef fect o n the F in anc ial S t ateme nts; • enq uir ing of ma nage me nt , the au dit c o mmi t tee, i n - ho use a nd ex ter nal l ega l co unse l co nc er ning a ctu al and p otentia l liti gatio n and c laim s; • per form ing an aly tic al pro ce dure s to iden tif y any u nusu al or u nex pe cted re lati onsh ips th at may ind ic ate risks of mate rial m isst ateme nt du e to fraud; • readi ng min utes of m eet ings of th ose c har ged w ith g over nan ce; • in add ressi ng th e ris k of frau d in reven ue re co gni tio n, tes ting 100 % of tra nsac tio ns by usi ng an aly tics to re co nci le co mm issio n reve nue th at pass es thro ug h all sys tems fro m po int of en tr y to rec og nit ion wi thi n the g ene ral l ed ger ; and testi ng any re venu e that d oes n ot pas s thro ugh all system s to supp or ting d oc um enta tion a nd un de rst andi ng th e nature a nd c ause of ea ch tr ans acti on; a nd • in add ressi ng th e ris k of frau d thro ugh m anag em ent ove rr ide of c ontr ols , testin g the a ppro pr iatene ss of jou rn al ent rie s and oth er adjus tme nts; as ses sin g whet her t he ju dge me nts ma de in m aki ng ac co unti ng es timates a re indi cat ive of a potent ial bia s; and e valuati ng th e busi nes s ratio nale of any signi can t trans acti ons th at are unusu al or ou tsid e the nor mal c our se of busin ess . We also com muni cate d releva nt iden ti e d laws and regul ation s and potent ial frau d risks to all eng age me nt team mem be rs inc lud ing inter nal spe cia lists a nd re main ed al er t to any indic atio ns of fr aud o r no n - c om plian ce wi th laws an d reg ulati ons th rou gho ut t he aud it . Rep or t o n oth er le gal a nd re gulator y req uire me nts 1 2 O pi ni ons o n ot he r ma t te rs p res cr ib ed by t he C om pa nie s Act 2 0 06 In our op inio n the par t of the Direc tors ’ Remun er atio n Repo r t to be audi ted has be en pro pe rly p repa red in ac co rdan ce wit h the Co mpa nies Ac t 200 6. In our op inio n, bas ed on th e work un de r take n in the cou rse of the aud it : • the infor mati on give n in the S trate gic Rep or t and the Di rec tors’ Re po r t for the n anc ial year for whi ch the nan cial st ateme nts are prep are d is consistent with the Finan cial S tatements; and • the str ategi c repo r t and th e Dire ctor s’ repo r t have be en p repa red in ac co rdan ce wit h appli ca ble le gal req uire me nts . In the lig ht of the kn owle dge an d und er sta ndin g of the Grou p and th e paren t Co mpa ny and the ir envi ron me nt obta ine d in the co ur se of the audi t , we have not identi ed any mater ial miss tateme nts in the S trategi c Repo r t or th e Dire ctor s’ Rep or t . 1 3 Corporate Gov ernance Stateme nt Th e Listi ng Rule s requi re us to review the Dire ctor s’ state men t in relatio n to going co nc er n, lo ng er-te rm via bili t y and that par t of the Cor po rate Gover nan ce S t ateme nt relati ng to the Grou p’s compl ianc e with th e provisi ons of the U K Cor po rate Gover nan ce C od e spe ci e d for our revi ew. Base d on t he wor k un de r take n as par t of our au dit , we have co nc lud ed th at eac h of the fol lowin g ele me nts of th e Co rp or ate Gover nanc e S tatem ent is mater iall y cons istent wi th the n anc ial state men ts and our k nowl ed ge obta ine d duri ng the au dit : • the Dire c tors’ st ateme nt with re gards to the app rop riaten ess of ado ptin g the goin g con ce rn ba sis of acco unti ng and any mater ial unc er taint ies ide nti e d set ou t on pag e 36; • the Dire c tors’ exp lana tion as to its asses sm ent of the Gro up’s prosp ec ts, th e per io d this asses sm ent cove rs an d why the per io d is appro pri ate set ou t o n page 4 5 ; • the Dire c tors’ st ateme nt on fair, bala nc ed and un de rst and abl e set ou t on page 1 17; • the bo ard ’s con rmat ion tha t it has car rie d ou t a robus t asses sme nt of the em ergi ng and pr inc ipal ri sks set ou t on pag e 4 0; • the se ct ion of th e ann ual re po r t th at des cr ibe s the rev iew of ef fec tive nes s of risk m anag em en t and in terna l co ntrol s ystem s set o ut o n page3 8 ; and • the se ct ion d esc rib ing t he wor k of the au di t co mmi t tee se t ou t on pag e 8 8 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 6 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 4 M at te r s on w hic h we ar e re qu ire d to r ep or t by exc ep tio n 1 4. 1 Ade qu ac y of expl an at io ns re ce ive d and ac co u nti n g rec or ds Und er th e C omp anie s Act 2 0 0 6 we are req uire d to repo r t to you i f, in our o pini on: • we have not re cei ved al l the infor mat ion a nd exp lana tion s we requ ire for ou r aud it ; or • ade quate ac co unti ng re co rds have not b e en kept by th e pare nt C om pany, or retur ns ad eq uate for our a udi t have not b ee n rec ei ved fr om bran ch es not v isi ted by us; o r • the pa rent C o mpany F in anc ial S ta teme nts are n ot in agre e men t with t he ac co unti ng re co rds an d retur ns . We have nothin g to repo r t i n resp ec t of the se mat ter s. 1 4. 2 Dire c to rs’ re mu ne r at io n Und er th e Com pan ies Ac t 20 06 we are also req uire d to repor t if in our opin ion c er tain disc los ures of Dire ctor s’ remu ne ratio n have not be en made o r the par t of the Direc tors’ re mun erat ion re po r t to be audite d is not in agree me nt with th e acc oun ting re co rds and retu rns . We have nothin g to repo r t i n resp ec t of the se mat ter s. 1 5 O t he r ma t ter s wh ic h we are r eq ui re d to ad dr es s 1 5. 1 Aud it or ten u re Foll owing th e reco mm en datio n of the Audi t Co mmi t tee, we were app oin ted by the Boa rd of Direc tors in 2014 t o audi t the na nci al statem ents for the year en din g 30 S eptem be r 2014 and sub seq ue nt nan cia l per iod s. Th e per io d of total uninterr upted en gag em ent in clu din g previo us rene wals and reap po intm ents of the rm is nine yea rs , cover ing th e years en din g 30 S eptem be r 2014 to 30 Se ptemb er 20 2 2 . 1 5.2 C on sis te n cy of the au di t rep o r t wit h the ad di tio n al re po r t to the Aud it Co m mit tee Our au dit o pini on is con sisten t with the ad diti onal re po r t to the Audi t Co mmi t tee we are requi red to provid e in acco rda nc e with IS A s (UK ). 1 6 U se of o ur r ep or t This r epo r t is m ade s ole ly to the C o mpa ny ’s memb er s, a s a bo dy, in acc ord anc e wit h Cha pter 3 of Par t 1 6 of the C omp ani es Ac t 20 0 6. O ur audi t wor k has b ee n und er taken so t hat we mig ht state to the C o mpany ’s memb er s tho se mat ter s we are req uire d to state to the m in an audi tor ’s rep or t and for n o othe r pur po se. T o the fu lles t ex tent p er mi t ted by law, we do not ac ce pt or as sum e resp ons ibili t y to anyon e othe r than the C om pany an d the C o mpany ’s memb er s as a bo dy, for our au dit wo rk , fo r this re po r t , or for th e op inio ns we have for me d. As req uire d by the Fina nci al Co ndu ct Au tho ri t y (FCA) D iscl osur e Guida nc e and T ran spare nc y Rule (DTR) 4. 1. 1 4 R , the se na nci al statem ents form par t of the Europ ean S ing le Ele ct roni c For mat (ES E F ) pre pare d Ann ual F inan cial Re po r t le d on the N ation al S tora ge Me ch anism of the UK FC A in acc orda nc e with the E SE F Reg ulator y T ec hnic al S ta nda rd (‘ E SE F RTS ’ ). This aud itor ’s repor t p rovid es no assu ran ce over whe the r the annu al na nci al repo r t has b ee n prep ared usi ng the si ngle e le ctro nic for mat sp eci ed in the E SE F RTS . Kat e Da rl iso n , FCA (Se ni or s t at ut or y au di tor) For an d on beh alf of Delo it te LL P S tatutor y Auditor Lon don , Uni ted Ki ngd om 1 Dec em be r 20 22 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 12 7 CORPORA TE GOVERNANCE Financial Statements Cons ol ida t ed S tat ement o f Pr ot or Los s and O therCompr ehens iv e Income or L oss for the year ended 30 September 2022 Note Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Rev enue 4,5 119,846 70,080 Cos t of sal es (40,101) (24,544) Gross prot 79,745 45,536 Administrative expense s (63,646) (66,506) Other operat ing i ncome 718 346 Operating prot/( loss ) 6 16,817 (20,624) Finance inco me 8 2,127 12,660 Finance costs 8 (9,665) (17,078) Ne t n an ce c os t s 8 (7,538) (4,418) Pro t /(los s) befo re t ax 9,279 (25,042) Inc om e tax 9 (15,406) (2,322) Los s fo r t he ye ar a t tr ib ut a bl e to t he e qu it y h ol de r s of t he C om pa ny (6,127) (27,364) Ot h er c om p re he ns ive i nc o me /(los s) for th e yea r a t tr ib ut a bl e to th e e qu it y h ol de r s of t he C om pa ny Items th at may subse qu ently b e transfe rre d to pro t and loss : Fore ign exc hang e dif fere nc es o n tran slati on of forei gn op er atio ns 86,126 (2,773) Fair valu e los s ari sing o n he dgi ng ins tr ume nts du rin g the ye ar 22 (16,173) – T ax re latin g to thes e items 3,074 – Other comprehensive income/ (loss) for the y ear , net of income tax 73,027 (2,773) T ot a l co mp re h en si ve in co me /(lo ss) for t he ye ar a t tr ib u ta bl e to t he e qu it y hol de r s of t he C o mp any 66,900 (30,137) Los s p er s ha re p p Basic 10 (5.1) (31.0) Di lu te d 10 (5.1) (31.0) Th e above re sul ts are de ri ved fro m co ntin uin g op erat ions . Th e notes on p age s 1 32 to 1 70 are an in tegra l par t of these C o nsol idated F ina nci al S tate men ts. Th e Con soli dated S tate men t of Prot o r Loss and O th er Co mp reh ensi ve Inc om e or Loss for the yea r end ed 3 0 Se ptemb er 20 21 has be en resta ted as de taile d in n ote 1 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 22 128 FINANCIAL ST A TEM ENTS STRATEGIC REPORT Co nsolida ted S tatem e nt of Fi nanc ial Posi tion as at 30 September 2022 Note 30 S eptember 2022 £000 Restated 30 S e pte m be r 2021 £000 ASSE TS Non-current assets Goo dwill 12 488,978 141,160 Other intangible assets 12 246,475 68,077 Property, p lant and equi pment 13 526 379 Righ t of use ass ets 17 1,714 1,401 Defer red ta x asse t 19 – 366 T rad e and ot her re c eiva ble s 14 90 85 T otal non-curren t assets 737,783 211,468 Current assets T rad e and ot her re c eiva ble s 14 15,790 9,699 T ax asset 1,565 437 Cash a nd c ash e quiv alen ts 15 51,817 397,451 T otal current assets 69,172 407,587 T otal assets 806,955 619,055 LIABI LITIES Non- curr ent liabilities Loan s and bo rrowin gs 18 (149,862) (148,686) T ax liabili ties (1,074) (1,392) Lease liabilitie s 17 (1,094) (775) Defer red ta x liabi liti es 19 (64,618) (9,260) T otal non-curren t liabilities (216,648) (160,113) Curre nt liabilities T rad e and ot her p ayabl es 16 (18,780) (17,310) Loan s and bo rrowin gs 18 (30,983) (353) T ax liabili ties (475) (1,168) Lease liabilitie s 17 (746) (657) T otal current liabilities (50,984) (19,488) T otal liabilities (267,632) (179,601) Net as sets 539,323 439,454 EQUIT Y Share capital 20 12 12 Sha re prem ium 20 235,903 235,903 Other reser ve 20 238,385 238,385 Capital redemption reserve 20 5 5 Share option reserve 20 34,690 1,649 Foreign currency transl ation reserve 20 66,740 (3,213) Retained losses (36,412) (33,287) T otal equity 539,323 439,454 Th e Co nso lidated S tatem ent of F inan cia l Posi tio n at 30 S e ptemb er 2 021 h as be en re state d as det aile d in note 1. Th e notes on p age s 1 32 to 1 70 are an in tegra l par t of these C o nsol idated F ina nci al S tate men ts. T he C on soli dated F ina nci al S tatem en ts were app roved by the Bo ard of Dire ctors o n 1 Dec em ber 2 02 2 and si gne d on its be half by : Jo hn - Pa ul S avan t T o m Ha rg r eaves Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 22 129 CORPORA TE GOVERNANCE Company regi stration number 1 3141124 Financial Statements Cons ol ida t ed S tat ement of Ch anges in E quit y for the year ended 30 September 2022 Sha re capital £000 Sha re premium £000 Oth er res er ve £000 Capital redemption res er ve £000 Sha re option res er ve £000 Foreign currency translation res er ve £000 Retained losses £000 T otal equity £000 1 Oc to be r 20 20 11 – 1,125 – 276 (440) (16,388) (15,416) Loss for th e year – – – – – – (27,364) (27,364) Other comprehensive lo ss – – – – – (2,773) – (2,773) T otal comprehensive loss f or the year (rest a te d see n ot e 1 ) – – – – – (2,773) (27,364) (30,137) T ransactions with owners Issu e of ordinar y share s as consi de ratio n for a busi nes s co mbin atio n, n et of tra nsa ctio n cos ts and t ax 6 235,903 237,260 – – – – 473,169 Sh are bu yb ack of o rdina r y sh ares , ne t of tax (5) – – 5 – – – – Movement in equity -set tled share - based pay me nts – – – – 1,373 – 10,401 11,774 Inc om e tax rela ting to items taken di rec tly to equit y – – – – – – 64 64 30 S ep te mb e r 20 21 ( re st a te d see n ot e 1 ) 12 235,903 238,385 5 1,649 (3,213) (33,287) 439,454 Loss for th e year – – – – – – (6,127) (6,127) Other compr ehensiv e income – – – – – 69,953 3,074 73,027 T otal comprehensive income/ (loss ) for t h e yea r – – – – – 69,953 (3,053) 66,900 T ransactions with owners Issu e of option s as consi der atio n for a business combination , net of transaction cos ts and t ax – – – – 28,346 – – 28,346 Movement in equity -set tled share - based pay me nts – – – – 4,695 – 78 4,773 Inc om e tax rela ting to items taken di rec tly to equit y – – – – – – (150) (150) 30 September 2022 12 235,903 238,385 5 34,690 66,740 (36,412) 539,323 Th e Con soli dated S tate men t of Chang es in Equi t y at 30 Se ptemb er 20 21 has be en re stated as de taile d in note 1 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 22 130 FINANCIAL ST A TEM ENTS STRATEGIC REPORT Cons ol ida t ed S tat ement of C as h Flo ws for the year ended 30 September 2022 Note Y ear ended 30 S eptember 2022 £000 Restated Ye a r e n d e d 30 S e pte m be r 2021 £000 Ca sh o ws fro m op er at in g ac ti vi ti es Pro t /(l oss) before tax 9,279 (25,042) Adjustments for: Am or tisati on of ac quire d int angi ble a sset s 12 26,591 13,219 Am or tisati on of inter nal ly ge ne rated sof tware 12 4,118 4,576 De pre ciati on of prop er ty, plant an d equi pme nt 13 280 228 De pre ciati on of right of use ass ets 17 920 743 Share - based payment expense 21 5,226 11,892 Finance inco me 8 (2,127) (12,660) Finance costs 8 9,665 17,078 Op er a ti ng ca sh ows be fo re move me n ts in wo rk i ng ca pi t al 53,952 10,034 De cre ase/(in cre ase) in trade and oth er rec ei vabl es 304 (439) (De cr ease)/in cre ase in trad e and othe r payab les (4,847) 6,271 Ca sh g en e ra te d by op er a tio ns 49,409 15,866 Inc om e taxes paid (9,981) (6,090) Ne t ca sh f ro m o pe ra ti ng a c ti vi tie s 39,428 9,776 Ca sh o ws fro m inve st in g ac ti vi tie s Acq uisit ion of su bsid iari es , net of c ash a cqui red 11 (358,763) (24,948) Paym ent fo r inter nall y ge ner ated sof t ware 12 (4,209) (1,956) Paym ent fo r pro per t y, plant an d equ ipm ent 13 (270) (149) Payment of con tingent considera tion (20,946) – Paym ent of d eferre d c onsi der atio n 11 – (234) Ne t ca sh u se d i n inve st in g ac ti vi ti es (384,188) (27,287) Ca sh o ws fro m n an ci ng a ct iv it ie s Payment of con tingent considera tion (1,222) (492) Repay me nt of loa ns an d bor rowin gs (359) (108,956) Repa yment o f pr ef erence sh ares – (117,716) Pro ce eds f rom l oans a nd b or rowing s – 176,639 Pro ce eds f rom t he iss ue of prefer enc e sh ares – 714 Interes t ele me nt of lease pay men ts 17 (137) (74) Cap ital e le me nt of leas e paym ent s 17 (959) (742) Issu e of new share ca pita l, ne t of share issue c osts – 473,158 Interes t paid (7,283) (26,428) Ne t ca sh (use d in)/ ge ne r ate d by n an ci ng a ct iv it ies (9,960) 396,103 Cash a nd c ash e quiv alen ts at be gin nin g of the yea r 397,451 14,193 Net (dec reas e)/inc reas e in ca sh and c ash e qui vale nts (354,720) 378,592 Effe ct of foreign exc han ge rate chan ges 9,086 4,666 Ca sh a nd c as h e qu iva le n ts a t th e e nd o f th e yea r 15 51,817 397,451 Th e Co nso lidated S tatem ent of C ash Fl ows at 30 S e ptemb er 2 02 1 has be e n resta ted as de taile d in n ote 1 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 22 131 CORPORA TE GOVERNANCE Financial Statements Not es t o the Cons ol ida t ed Fin anci al S tat ements 1 . Acco un ti ng p oli cie s General information Auc tion T ec hno lo gy G roup p lc (the “ Co mp any ” ) is a c om pany inc or po rated in the U nited K ing do m unde r the C omp anie s Act . Th e Co mpa ny is a pub lic c om pany lim ited by s hares a nd is re giste red in Eng land an d Wales. T he reg istere d of c e of the Co mpany is Th eHar le quin Bu ildi ng , 65 So ut hwark S tre et , Lon do n, S E1 0H R , Uni ted Kin gd om . Th e pri nci pal ac tiv itie s of the C om pany a nd its s ubsi diar ies (th e “Gro up” ) a nd th e nature of th e Gro up’s ope rati ons a re set o ut i n note25 and in the S tr ategic Re por t on pag es 2 to 71 . Presentation currency Th e Co nso lidated F in anc ial S t ateme nts are p rese nted in p oun ds sterl ing wh ich is t he cu rre nc y of the pr ima r y e co no mic e nviro nme nt inwhi ch the Gro up op er ates round ed to the nea rest th ous and . Fore igno pe ratio ns are inc lud ed in ac co rdan ce wi th poli cie s set ou t onpag e 1 3 4. Basis of preparation Th e Co nso lidated F in anc ial S t ateme nts co nso lidate th ose of th e Co mpa ny and i ts sub sidia rie s (togeth er refe rre d to as the “G roup” ). Th e pare nt Co mp any ac co unts p rese nt infor mati on ab ou t the e nti t y and n ot abo ut i ts Gro up. On 31 De ce mb er 20 20 , IFR S as adopte d by the Europ ean Un ion atthat date was broug ht into UK law and be c ame U K-ad opted Inter natio nal Ac co untin g S tan dard s, wit h futu re chan ge s bein g subje c t to endor sem en t by the UK End or sem ent B oard . Th e Grou p tran siti one d to UK-ad opted Inter nati ona l Acc ount ing S ta nda rds in itsC om pany Fi nan cial S t ateme nts on 1 Oc tobe r 2021. This cha nge con sti tutes a c han ge in a cc oun ting f ram ewor k . Howeve r , the re is noim pac t on rec ogn iti on , measu rem ent o r discl osure in th e per io d rep or te d as a resu lt of the c han ge in f ram ewor k . Th e Co nso lidated F in anc ial S t ateme nts have be e n prep are d and app rove d by the Dir ec tor s in acc o rda nc e with UK-a do pted Inter nat io nal Acc ou nting S tan dards a nd wi th the r equ irem ent s of the C om pani es Act 2 0 06 . T he C om pany has e le cted to pre par e its pa rent C o mpany Financial S tatements in accordance with Financial Repor ting Standard 1 01 Redu ce d Discl osu re Framewo rk (“ F RS 101 ” ) and the Co mpa nies Act 2 0 06 ; the se are pr ese nted on p age s 1 71 to 1 75 . Th e Fin anc ial S t ateme nts have b ee n pre pare d und er th e his toric al cos t conve ntio n, exc ept for ce r tai n nan cia l instr um ents wh ich have be en m easu red at fai r valu e. A ll acc ou ntin g pol ici es set o ut b el ow have be en ap pli ed c onsis tentl y to all pe rio ds pre sen ted in th ese Consolidated Financ ial Statements . New a n d am en d ed a cc ou n tin g s ta n da rd s ef f ec ti ve du ri n g th e yea r Th e followin g am end ed s tan dard s and in terp retati ons we re ef fec tive dur ing th e year : • Am en dme nts to IFR S 1 6: C ovid -1 9 - Rel ated Rent C on ces sio ns beyo nd 3 0 Ju ne 20 21. • Am en dme nts to IFR S 9, IAS 39, IF RS 7 , IFR S 4 and IFR S 1 6: Interest Rate Ben ch mar k Refor m Phas e 2 . Th e ado ptio n of the st and ards an d inter pre tatio ns lis ted ab ove has not led to any c han ges to th e Grou p’s acc ount ing p oli cies o r had a ny othe r materi al impa ct on the nanc ial po siti on or pe r for man ce of the Grou p. New s t an d ar ds , in te rp re t at io ns a nd a me n dm en t s is su ed b u t no t yet ef fe c t ive The follo wing new accounting standards, amendments and inter pret ation s to acc oun ting s tan dards h ave be en is sue d bu t the se are not m anda tor y for 3 0 S epte mbe r 20 2 2 and t hey h ave not be en ado pted ear ly by th e Gro up: • An nual Im prove men ts to IFRS S ta nda rds 2018-2 0 20 • Am en dme nts to IA S 1 6 : Prop er ty, Plant and Equ ipm ent : pro ce e ds before i ntend ed us e • Am en dme nts to IFR S 3: Busin ess C om bin ation s: referen ce to conceptual framework • IFR S 1 7: Insuran ce C ont rac ts • Am en dme nts to IA S 1 : Cla ssi c atio n of liabili ties as cur ren t and non- current • IA S 37: One rou s Con trac ts: co sts of ful llin g a contr ac t • Am en dme nts to IA S 1 and IFR S Prac tic e S tatem ent 2 : disc losu re of accounting policies • Am en dme nts to IA S 1 2 : Defe rre d T ax rel ated to assets and lia bili ties arisi ng fro m a sin gle t rans acti on • Am en dme nts to IA S 8: De ni tio n of acco untin g esti mates Th e Dire ctors an tici pate that the ado ptio n of plann ed sta nda rds and inter pret ation s in fu ture p er iod s will not h ave a materi al imp act o n th e Co nso lidated F in anc ial S ta teme nts of the G rou p. Going concern Th e Dire ctors are re quir ed to assess go ing c onc er n at each re po r tin g per io d. T he Dire ctor s have unde r ta ken the goi ng co nc er n asses sme nt for the G rou p for a mini mum of 12 months f rom th e date of sign ing thes e nan cia l stateme nts . The Di rec tors have ass esse d the Gro up’s pros pe cts , bot h as a goi ng co nc er n and i ts lo ng er-te rm vi abili t y as se t out o n page 4 5 . Af ter con side ri ng the cu rre nt na nci al proje cti ons , the bank fa cili ties ava ilabl e and t he n appl yi ng seve re bu t plau sibl e sens iti viti es , the Dire ctor s of the Co mpany are sat is ed th at the Grou p has suf ci ent res ourc es for its o per atio nal ne ed s and will rem ain in co mpli anc e with th e nan cial c ovenan ts in its ban k facili ties for at leas t the n ex t 12 months fro m th e date of appr oving t hes e Co nso lidated F in anc ial S ta teme nts. T he p roc es s and key ju dge me nts in co min g to this co nc lusio n are s et ou t be low : Liquidity Th e Grou p ente red in to the S eni or Fac ilit ies Ag ree me nt on 17 June 20 21 whic h in clu ded t he S en ior T erm F acili t y for $ 20 4 .0 m for the acq uisit ion of Live Au cti on ee rs . The S en ior T e rm Fac ilit y was drawn down in f ull on 3 0 S e ptemb er 20 21 p rio r to com ple tio n of the acq uisit ion of Live Au cti on ee rs on 1 Oc tobe r 20 21 . The lo an will be due for re pay me nt on 17 June 20 26 . At 30 S e ptemb er 2 0 22 t he lo an was subje ct to interes t at a margin of 3% over US LI BO R . In addit ion the G roup h as a mul ti - c ur renc y revol vin g cre dit wo rk ing c ap ital fa cili t y (the “ RC F” ) for $ 49.0m . A ny sum s ou tsta ndi ng un der t he RC F will b e due for re pay me nt on 17 June 20 25 , su bje ct to the o ptio nali t y of a 1 2 - mo nth ex tensio n. T he fa cili t y has n ot be en dr awn down a s at 30 Se ptemb er 2 0 22 . A s at 3 0 Se ptem ber 2 0 22 t he Gr oup h as adjus ted net d ebt of £129.0m an d is in a ne t cur re nt asse t po siti on . Cov enants Th e Grou p is sub jec t to coven ant tes ts on th e S eni or T e rm Fa cili t y, with t he mo st se nsi tive c ovenan t be ing th e net l ever age r atio c ovena nt (net debt : trailin g 1 2 - mo nth adju sted EB IT DA). Th e net leve rag e ratio coven ant is a m axi mum of 4 .0 x, w hich r edu ce s to 3.5x in Q 2 F Y 23 and3 .0x in Q 4 F Y 23 . Und er the bas e case fore cas ts and eac h of the downs ide scenarios, including the combined do wnside scenario, Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 2 FINANCIAL ST A TEM ENTS STRATEGIC REPORT theG roup is fore cas t to be in co mpl ianc e with th e covena nts and have cash h ead roo m, w ith ou t app lyi ng mi tigat ing a ctio ns whi ch c oul d be impl em ente d suc h as red uc ing c api tal ex pen di ture sp en d. At 3 0 Se ptemb er 2 0 22 , th e ne t lever age r atio was 2 .2 x com pare d to the li mit of 4.0 x and th erefo re the G rou p was co mfor ta bly w ithi n the c ovena nt. Scenario planning Th e Dire ctors have un der taken th e goin g con ce rn ass ess me nt for the Grou p, tak ing i nto con side rati on th e Gro up’s busi nes s mod el , str ategy, and pr in cipa l and e me rgin g risk s. A s par t of the go ing c on ce rn rev iew the Dire c tors have reviewe d the Gro up’s forec asts an d proje cti ons , asse sse d the h eadr oo m on th e Gro up’s facili ties a nd th e ban kin g coven ants . Th is has b ee n co nsid ere d und er a b ase ca se an d sever al plaus ibl e bu t severe d ownsi de sc en ari os, t aki ng in to cons ide ratio n the Group’ s principal risks and uncertainties. These sce narios include signi can t redu ctio n in co mmis sio n revenu e due to TH V redu cti on , signi can t redu ctio n in co mmis sio n revenu e due to onlin e share de clin e and d elay in t he rol l ou t of paym ents te chn ol og y acro ss th e Grou p. No ne of th ese s ce nari os in div idua lly o r col le cti vely th reaten the Gro up’s abilit y to con tinu e as a going co nc er n. Even in th e co mbin ed d ownsi de sc ena rio m od ell ed (th e co mbin atio n of all downsi de sc en ari os oc cu rr ing at o nc e) the Grou p woul d be ab le to ope rate wi thin th e leve l of its c urre nt avail able d ebt fa cili ties a nd coven ants . Acc ord ingl y, the Direc tors co ntin ue to adopt the g oing con ce rn b asis in p rep arin g the C o nsol idated F ina nci al S tate men ts for the year en de d 30 Se ptemb er 20 22 . Climate change In prepar in g the Conso lidate d Finan cial S tatem en ts manage me nt has con side re d the im pac t of clim ate chan ge , par ticu lar ly in th e co ntex t ofthe discl osur es inclu de d in the S tr ategic Rep or t this year . Th ese con side rati ons did not have a material imp act on the nan cial rep or ting judg em ents a nd es tim ates, c onsi stent wi th th e asse ssm ent t hat cli mate cha nge is an emergi ng risk and not expe cted to have a signi can t impa ct o n the G rou p’s going c on ce rn as ses sme nt to 30 S e ptemb er 20 23 n or th e viab ilit y of th e Gro up over t he ne x t thre e yea rs . Restat ements Foll owing th e acqu isiti on of Live Au cti one er s , a review was per fo rm ed to ensure t hat th e fun cti onal c ur ren cy of eac h sub sidia r y wi thin t he Grou p had b ee n co rre ct ly de term ine d give n the re vise d str uc ture a nd ope rati ons of th e Gro up. As a res ult of th e revi ew, the fun cti on al cur ren cy for al l enti ties wa s de em ed to be th e cu rre ncy of th e pr imar y ec on omi c envi ron me nt in which the en tities operat e with no changes proposed, ex cept f or A T G Me dia US In c., Proxi bid Bid co In c., Pl atinu m Paren t Inc. , Platinu m Inter me diate Inc ., Platin um Purc has er Inc . and Li ve Auc tio ne ers In c. Th e fun cti onal c ur ren cy of the se en titi es was de em ed to b e pou nd sterl ing rath er tha n US do llar s. Th e Live Au cti on ee r enti ties (Pl atinu m Pare nt Inc ., Platin um Inter me diate Inc ., Platin um Pu rcha ser In c. and Live Au cti on ee rs Inc .) have be en tra nslate d into the new fun cti onal cur ren cy, using th e excha ng e rate at 1 Oc tobe r 20 21, the date they be cam e par t of the Group. A s A TG Med ia US In c. and Pr oxibid Bi dc o Inc . were par t of the Gro up pre vio usly a pr ior p eri od adju stm ent is requ ired to b e disc lose d. A resta teme nt has b ee n rec og nise d for th e year e ndi ng 3 0 Se ptem be r 20 21 adjus ting fore ign cu rre ncy tr ansla tion res er ve s and na nc e inc om e by £ 2. 3m . T hes e cha nge s have no im pac t on th e adju sted meas ures u sed as p ar t of the Gro up’s alter nati ve per form anc e meas ures . T reati ng the fu nct ion al cur ren cy of A TG Medi a US Inc . andPr oxibid Bi dc o Inc. as U S dolla r rathe r than po und s terlin g had noim pac t on the op eni ng bala nc e she et as at 1 Octobe r 20 20 , and assuc h no op enin g balan ce sh ee t has be en pres ente d. Be low is a su mma r y of the r estate me nt, o utl inin g the p rim ar y statem ent s and na nci al statem ent lin e items im pac ted: Rep or ted 30 September 2021 £000 Change £000 Restated 30 September 2021 £000 Co ns ol id ate d S ta te me nt o f Pro t o r Los s an d Other Compre hensive Income or Loss Finance inco me 10 , 3 9 4 2, 26 6 12 , 6 6 0 Net nanc e cos ts (6 , 6 8 4 ) 2 , 26 6 (4 , 418) Loss b efore tax ( 2 7, 3 0 8 ) 2,26 6 (25 , 0 42) Loss for th e year at trib ut abl e to the eq uit y h old er s of the Co mp any ( 29,630) 2 , 26 6 ( 2 7, 3 6 4 ) Forei gn ex change differ ences on tr ansla tion of fore ign operati ons (5 0 7 ) (2 , 26 6) ( 2 ,7 7 3) Ot he r co mpre he nsive l oss fo r the ye ar, net of tax (5 0 7 ) (2 , 2 6 6) (2 , 7 7 3) Basi c and d ilute d ear nin gs pe r share ( in pe nc e) (3 3 .6) 2 .6 (31.0) Co ns ol id ate d S t ate m en t of F in an ci al Po si ti on a n d Co ns ol id ate d S t ate m en t of C ha n ge s in E qu it y Foreign currency translation reserves (9 47 ) (2 , 2 6 6) ( 3 , 2 13) Retained losses (3 5 , 5 5 3) 2 , 266 ( 33,28 7) Basis of consolidation Th e Con soli dated Fi nan cial S t ateme nts co nsis t of the nanc ial statem ent s of the ul tima te parent C o mpany a nd all e nti ties c ont roll ed by the C om pany. Co ntrol i s ach ieved w he re the C om pany h as the p ower to gove rn th e na nci al and ope rati ng poli cie s of an inves tee enti t y, has the rig hts to vari able re tur ns fro m its i nvolve me nt wit h the i nvestee a nd has t he abili t y to use it s power to af fect i ts ret urn s. T he re sult s of subsi diar ies acq uire d or so ld are i ncl ude d in th e Co nso lidate d Fin anc ial S t ateme nts from t he date on w hic h co ntrol c om me nc es un til the d ate on whi ch control cease s. All i ntra - Gro up tra nsa ctio ns , bala nc es , inc om e and ex pe nse s are eliminat ed on consolidation. Em pl oyee Be ne t T ru s t Th e assets an d liabil itie s of the Empl oyee B en e t T ru st (“ E BT ” ) havebe en in clu ded in th e Co nsol idated F inan cial S t ateme nts . Any asse ts held by the E BT cea se to be reco gnis ed on th e Con soli dated S tatem ent of F ina nci al Posi tio n whe n the a sset s vest u nc ond itio nall y in ide nti e d ben e ciar ies . Th e cost s of purchas ing own sha res hel d by the EBT are sh own as a ded uc tion a gain st e qui t y . Th e pro ce e ds fro m the s ale of own sh ares hel d inc reas e equ it y. Neit her t he pu rch ase no r sal e of own sha res lead s to a gain or l oss b ei ng re co gnise d in th e C onso lid ated S tatem ent of Co mp rehe nsi ve Inco me . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 3 CORPORA TE GOVERNANCE 1 . Acco un ti ng p oli cie s co nti nu ed Business combinations Th e Grou p use s the a cqui siti on me tho d of ac cou ntin g to acc oun t for busi nes s co mbin atio ns. T he c on side rati on tr ansfer red by t he Gr oup to obtai n co ntro l of a subsi diar y is cal cul ated as the s um of th e acq uisit ion d ate of assets t rans ferre d, li abili tie s inc ur red , and t he eq uit y interes ts iss ue d by the G roup, w hic h inc lud es th e fair valu e of any ass et or lia bili t y arisi ng fro m a co ntin ge nt co nsi der atio n arr ang em ent . Acq uisit ion co sts are rec ogn ise d in prot or los s as incur red . At the acqu isit ion date, th e iden ti abl e asse ts acqu ired an d the liabi liti es assu me d are re co gnis ed at th eir fa ir valu e at the a cqu isiti on date, exce pt tha t liabi liti es or e qui t y ins tru me nts rel ated to share - bas ed pay me nt ar ran ge men ts of the a cqu iree o r sh are - b ase d paym ent a rra nge me nts of th e Gro up en tered in to to replac e share - bas ed pay me nt ar ran ge men ts of the a cqu iree a re me asure d in acc ord anc e with IF RS 2 at the ac quisi tio n date. Wh en th e co nsid erat ion t ransfe rre d by the G roup i n a bus ines s combinat ion incl udes a con tingent considera tion arr angement, the con ting ent c on side rati on is m easu red at i ts ac quisi tio n - d ate fair valu e and in clu de d as par t of the c ons ide ratio n tra nsfer red in a b usi nes s co mbin atio n. C hang es in fa ir valu e of the c onti nge nt c onsi de ratio n that qu alif y as m eas urem en t pe rio d adju stm ents a re adjus ted retr ospectively , with correspondi ng adj ustments again st goodwil l. Measurement per iod adjustments are adjustments that arise from addi tio nal infor mati on o btain ed d uri ng th e meas ure men t pe rio d (which c ann ot exce ed o ne ye ar fro m the a cqui siti on date) abou t fac ts and ci rcu mst anc es tha t existe d at the a cqui siti on date. Th e subs equ en t acc ou nting fo r cha nge s in th e fair valu e of the con ting ent c on side rati on th at do not q uali f y as me asure me nt pe ri od adjus tme nts d ep end s on how t he c onti nge nt co nsi der atio n is clas si ed . Co ntin ge nt con side rati on that is clas si e d as equi t y is not rem easu red at su bse que nt re po r tin g dates an d its s ubse qu ent set tl em ent is a cc oun ted for wit hin e qui t y. Othe r co ntin gen t con side rati on is re me asure d to fair valu e at sub seq ue nt rep or ting dates with ch ang es in fair valu e rec ogn ised in pro t or loss . Ide nti ab le asse ts acq uire d and liabi liti es assu me d are measu red at thei r acq uisi tio n date fair valu es . Go odwi ll is stated af ter sepa rate rec ogn itio n of other id enti a ble intangible asset s. If the acc ou ntin g for busin ess co mb inati ons invol ves provi sion al amo unts , whic h are nal ised in a sub seq uen t repo r ti ng pe rio d dur ing the 1 2- m onth m easu rem ent pe ri od as pe rmi t ted und er IF RS 3 , resta teme nt of the se prov isio nal am oun ts may be re qu ired i n the subsequ ent reporting period. Foreign currency Functional and presentational currency Th e fun cti onal c ur ren cy of Auc tio n T e chn ol og y Grou p plc a nd i ts subsi diar ies , oth er th an the U S ho ldi ng co mp anie s, a re mea sure d usin g the c urre nc y of the p rim ar y e co no mic e nviro nm ent in w hic h the enti t y op era tes. T he U S hol din g co mpan ies i ncl udin g: A TG Medi a US Inc ., Proxibi d Bidc o Inc ., Platin um Pare nt Inc ., Plati num Inte rm edia te Inc ., Platin um Pur chas er In c. and L ive Auc tio ne er s Inc. have a fun ctio nal c ur ren cy of po unds s terl ing . Th e Co nso lidate d Fin anc ial S tatem ents a re pres ente d in po und s ster ling . T ransactions and balance s T ran sac tion s de nom inated i n forei gn cu rre nci es are tr ansl ated into th e fun ctio nal c ur ren cy at the e xchan ge r ates prevail ing o n the d ate of the tran sac tion . M one tar y asse ts and li abili tie s den om inated i n foreig n cur ren cie s are tra nslate d into po unds s terli ng at th e rates of exch ang e at the re po r tin g date. Ga ins an d los ses ar isin g on fore ign c ur ren cy bor rowin gs , to the ex tent t hat th ey are us ed to prov ide a h edg e aga inst the G roup’s eq uit y i nvestm ent s in over seas u nde r t aki ngs , are ta ken to othe r co mpre he nsive i nc om e toget her w ith th e exch ang e dif fere nc e arisi ng o n the n et inves tme nt in th ose u nd er t aki ngs . A ll othe r exchan ge dif fere nc es on mo net ar y ite ms are taken to prot an d loss . Group companies On c ons olid atio n, th e ass ets an d liabi liti es of forei gn op er ation s are tran slated in to pou nds ste rlin g at the r ate of exchan ge pre vailin g at the rep or ting date and th eir st ateme nts of pro t or los s are transl ated at the averag e exchan ge rates for the yea r . Exc han ge dif fere nc es arisi ng , if any, are rec ogn ise d in othe r co mp reh ensi ve inc om e and acc umu lated in a fo reign e xchan ge tr ansl atio n rese r ve. O n dis pos al of a foreig n op erat ion , th e co mpo ne nt of othe r co mp rehe nsi ve inc om e relati ng to that foreign op er atio n is reco gnis ed in pro t or l oss . Go odwi ll and fai r valu e adjus tme nts ar isin g on th e ac quisi tio n of a foreig n enti t y are tre ated as ass ets an d liab ilit ies of th e foreig n enti t y and tr ansl ated at the a cqu isit ion c losi ng rate. T his is t he n revalu ed at the ye ar- en d rate wit h any forei gn exch ang e dif fere nc e taken di rec tly to the tra nslati on res er ve. Propert y , plant and equipment Prop er t y, plant and e qui pm ent is s tated at c ost l ess a cc umul ated depreciation and impairment losses. Cos t in clu des th e or igin al pur chas e pr ice of th e ass et an d the c osts at trib ut abl e to brin gin g the as set to its wo rk ing c on dit ion fo r its intended use. De pre ciati on is cha rge d to the Conso lid ated S tatem ent of Pro t or Loss over th e estim ated usef ul lives of eac h par t of an item of prop er t y, plan t and equ ipm ent . Th e Dire ctor s reasse ss the us eful ec on omi c lives a nd es timate d resid ual val ues o n an an nual b asis. Th e esti mated us eful li ves are as fo llows: Lease ho ld imp rovem ents 3 t o 7 years str aigh t line Co mpu ter e quip me nt 3 to 5 yea rs st raigh t line Fix tures an d t tin gs 3 to 5 years s traig ht line Th e gain o r los s aris ing o n the d ispo sal o r retire me nt of an as set is deter min ed as t he dif fe ren ce b et wee n the n et sal e pro ce ed s and t he car r y ing a mou nt of the a sset a nd is re co gnis ed in t he C ons olid ated S tatem ent of Pro t or Los s. Intangible assets Ide nti a ble int angi bl es are those whi ch can be so ld sepa ratel y, or whic h aris e from l eg al rig hts re gard less of w heth er t hose r igh ts are se par abl e. Goodwill Go odwi ll is state d at cos t les s any ac cu mulate d imp airm en t los ses . Go odwi ll is not am or tise d bu t is revi ewed for i mpai rm ent at l eas t annu all y . For th e pu rp ose of im pair me nt testi ng , go odwi ll is allo c ated to eac h of the Gro up’s cash - g en era ting uni ts (“ CG Us” ) exp e cted to bene t fro m the sy ne rgie s of the c omb inati on . CG Us to whic h go od will has b ee n allo cated a re tested for i mpa irm ent a nnu ally, or mo re fre que ntl y whe n the re is an indicat ion that th e unit may be impa ired . If the rec overa ble amo unt of th e cas h - g ene rati ng uni t is le ss th an the c ar r y ing am ou nt of the uni t, the im pair me nt los s is alloc ated rs t to redu ce th e carr yin g amo unt of any g oo dwill al lo cated to th e uni t and th en to the ot he r asse ts of the un it p ro - r ata on th e basi s of the c arr yin g amo unt of e ach asse t in the u nit . A n imp air me nt los s rec og nise d for go o dwill is n ot rever sed i n a subs equ en t per io d. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 4 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Internally generated intangible assets Inc lud ed wit hin inter nall y gen erate d sof twa re are devel op men t cos ts in rela tion to sof t ware w hic h are ca pit alise d whe n the r elated p roje cts me et th e rec og niti on c riter ia of an in tern ally g en erate d intan gib le asse t, th e key cr iter ia be ing as fol lows: • tech nic al feasib ilit y of th e co mpl eted i ntan gibl e ass et has b ee n established; • it c an be d em ons trated t hat th e asse t will ge ne rate pro bab le fu ture economic benets; • ade quate tech nic al, nan cial an d other res ourc es are availa ble to complete the dev elopment; • the ex pe ndi ture at tr ibu ta ble to the i ntan gib le ass et c an be re liab ly measured; and • mana gem en t has th e abili t y and i ntenti on to use o r sell t he ass et . Th ese p roje cts ar e desi gne d to enh anc e the ex isti ng sof t ware wi thi n the G roup. S al ari es ass oc iated wi th deve lo pme nt tim e an d dire ctl y attrib utable overheads are capitalised within intangibl e assets. Th e Grou p onl y ca pit alise s inter nall y gen er ated co sts fr om th e con g urati on an d capi talis atio n of SaaS pro jec ts whe n it is able to obtai n ec ono mic b ene ts from th e acti viti es ind ep en den t from the SaaS solution itself. E xp end itu re on resear ch acti vi ties is rec ogn ise d as an expens e in the per io d in which it is inc urre d. D evel opm ent c osts re co gnise d as assets are am or t ised o n a st raig ht- lin e basis ove r the ir exp ec ted us eful life . Deve lop me nt exp end itur e is only amo r tis ed over the pe rio d the Grou p is expe cted to ben e t and is subje ct to annual imp air me nt testing . Other intangible assets Intan gib le asse ts acqu ire d in a busine ss co mbi natio n and rec og nise d sep aratel y from g oo dwil l are re co gnise d ini tiall y at th eir fai r value at the ac quis itio n date. S ubs eq uen t to initi al rec og niti on , inta ngi ble asse ts acq uire d in a bu sine ss c omb inati on are r epo r te d at cos t les s accumulated amor tisation and impairment losses. Amor tisation Am or tisati on rel atin g to capi talis ed sof t ware d evel op me nt co sts is rec og nise d thro ugh c ost of s ales w hils t amo r tis atio n in res pe ct of non -s of t ware inta ngi ble s is rec og nise d thro ugh a dmin istr ative exp ense s. A m or t isatio n is ch arge d to the C on soli dated S t ateme nt of Pro t or Los s on a strai ght- lin e basis over th e estim ated usefu l lives of intan gib le asse ts unle ss suc h lives are in de ni te. The es timate d usefu l lives a re as follows: Sof tware 3 to 1 0 years Bra nd 5 to 1 5 year s Cus tome r relati ons hips 7 to 1 4 ye ars Non- compete agreemen t 4 years Th e esti mated us eful li fe and am or tisati on me tho d are rev iewe d at the end of e ach re po r ti ng pe ri od , with t he ef fec t of any ch ang es in esti mate bei ng ac co unted fo r on a p rosp ec tive ba sis. Imp ai rme n t of no n- n an cia l ass et s (exclud ing g oo dw ill) At eac h rep or ting da te, the G roup re views t he c arr yin g amo unts of i ts tang ibl e and in tang ibl e asse ts to deter min e whe the r the re is any indi cati on that th ose ass ets have suf fere d an impai rm ent lo ss . If any suc h ind icat ion ex ists , th e rec overa ble a mo unt of th e asse t is esti mated to dete rmi ne th e ex tent of th e imp air me nt los s (if any). Wh ere the ass et do es not ge ne rate cash ows th at are inde pe nde nt from ot her a sset s, th e Gro up es tima tes the re cove rab le am oun t of the CGU to wh ich t he ass et be lo ngs . Th e rec overa ble a mo unt is th e high er of fai r value l ess c os ts to sell and valu e in use. In ass essi ng valu e in use, the es tim ated futu re cash ows are disc ou nted to their pres ent val ue usin g a pre - tax dis co unt rate that ree ct s cur rent ma rket asse ssm ent s of the time valu e of mon ey and th e risks sp ec i c to the asset for whi ch the es timates of fut ure cas h ows have not bee n adjus ted. If the rec over abl e amou nt of an asset (or CGU) is es timate d to be less than i ts ca rr ying a mo unt , the c ar r yi ng am ou nt of the as set (or CG U) is redu ce d to its re cove rab le am oun t. A n im pair me nt lo ss is re co gnis ed imm edi ately in pro t or lo ss . Wh ere an i mpai rm ent l oss s ubse qu entl y rever ses , th e car r y ing amo unt of th e asse t (or CGU ) is inc reas ed to the r evise d es timate of its re cove rab le am oun t, b ut so t hat th e inc rease d c arr yin g amo unt doe s not exc ee d the c ar r y ing am ou nt that wo uld have b ee n deter min ed h ad no im pai rm ent l oss b ee n rec og nise d for th e asse t (or CGU ) in p rio r year s. A reve rs al of an im pair me nt los s is re co gnise d imm edi ately in the C ons olid ated S tatem ent of Pro t or Lo ss to the ex tent th at it e limin ates the i mpai rm ent l oss w hic h has be e n rec og nise d for the as set i n pri or ye ars . Cas h an d c ash e q uiva le nt s, a nd r es tr ic ted c as h Cash a nd c ash e quiv alen ts inc lud e ca sh in ha nd , dep osi ts he ld at c all with b anks a nd oth er sh or t-ter m high ly liq uid inve stm ents w ith o rig inal matur iti es of thre e mo nth s or le ss. Restrict ed cash Restr ic ted cas h inc lud es c ash h eld by th e Gro up whi ch c an on ly b e use d to exchange or se t tle a spe ci c liabili t y in the fu ture . Financial instruments Recognition, initial measuremen t and derecognition Fin anc ial assets and na nci al liabili ties are reco gnis ed when the Grou pbe co me s a p ar ty to the co ntra ctua l provisio ns of the nan cial inst ru men t and ar e meas ure d ini tiall y at fair valu e adju sted by tran sac tion co sts , except for those carr ie d at fair value throu gh pro t or loss w hic h are me asur ed ini tial ly at fair va lue . Su bse que nt me asur eme nt of nanci al assets and nan cial liab iliti es is des cr ibe d below. Fin anc ial ass ets are d ere c ogni sed w hen t he c ontr ac tual r ights to th e cash ows from the nan cial asse t expire, or when the nan cial asset and all substan tial risks and rewards are transferre d. A nanc ial liabili t y is dere c ogn ised w he n it is ex t ingu ish ed , disc harg ed , ca nc elle d or e xpire s. Cl as si c at io n and su bs eq u en t mea su re me n t of nan c ial as se ts For th e purp ose of subs eq uen t measu rem ent , the Gro up cl assi e s its na nci al asset s into the followin g catego ri es: na nci al asse ts at amo r tis ed co st , nan cial as sets at fair valu e throu gh pro t or l oss (“ F V TP L ” ) and na nci al asset s at fair value thro ugh oth er co mpre he nsive in co me ( “ F V TOC I ” ). Fi na nc ia l as se ts a t am or tis ed c os t Fin anc ial asse ts at amor tise d cos t are non - der ivat ive na nci al asset s with xed or deter mi nabl e paym ents th at are not quoted in an ac tive mar ket. Af ter init ial re co gni tion , th ese a re meas ure d at amo r ti sed c os t usin g the ef fe ctive i nteres t met ho d, le ss pr ovisio n for im pair me nt . Disc oun ting is om it ted wh ere the ef fec t of disco untin g is immater ial . Th e Grou p’s cash a nd ca sh eq uival ent s, tr ade a nd mo st oth er rec eiv able s fall into this catego r y of na nci al instr um ent s. Th e Grou p rec og nise s a los s allowan ce fo r exp ec ted cre dit l oss es (“ EC L ”) o n nan cial as sets tha t are measu red at amo r ti sed c ost . Th e amo unt of ex pe cted c redi t lo sses i s upd ated at ea ch re po r tin g date to re ec t chan ges in cre di t risk sin ce ini tial re co gni tion of the res pe cti ve nancial instr ument . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 5 CORPORA TE GOVERNANCE 1 . Acco un ti ng p oli cie s co nti nu ed Th e Group re co gnis es lifetim e ECL on tr ade re cei vab les . The EC L on thes e nan cia l assets are es timate d using a provi sion m atrix ba sed on th e Grou p’s histori cal c re dit l oss ex pe rie nc e, ad juste d for facto rs that are sp eci c to the rece ivab les , gen er al ec ono mic c ond iti ons an d an asse ssm en t of both th e cur ren t as well as t he fore cas t dire ct ion of con di tion s at the re po r ti ng date, i ncl udi ng tim e valu e of mon ey wh ere appropriat e. All in co me and ex pe nses rel ating to na nci al assets th at are rec og nise d in the Co nso lidated S t ateme nt of Pro t or Loss are prese nted wi thin n anc e cos ts or na nc e inc ome , exce pt for impa irm en t of trad e rec eiv able s whic h is pre sen ted wit hin oth er administrative expenses . Cl as si c at io n and su bs eq u en t mea su re me n t of nan c ial li ab ili ti es Th e Group ’s nanci al liabil itie s incl ud e bor rowing s and trad e and othe rpayabl es . Fin anc ial lia bili ties a re meas ure d at amo r ti sed c os t usin g the ef fe ctive interes t meth od , exce pt for nan cial lia bili ties he ld for trad ing or desi gnated at F V T PL , that are car rie d at fair value wi th gains or l osse s rec og nise d in the Co nso lidated S t ateme nt of Pro t or Loss . All i nteres t- relate d cha rges a nd , if app lic abl e, c hang es in a n inst ru men t ’s fair value th at are re po r ted in t he C ons olid ated S t ateme nt of Prot or Lo ss are incl ude d withi n nan ce co sts or na nc e inco me . Hedge accounting Th e Grou p des igna tes foreig n cur ren cy lo ans as h ed ging i nst rum en ts in resp e ct of forei gn cu rre ncy r isk a nd he dg es of net i nvest men ts in foreig n ope rati ons . Hed ges of foreig n exchan ge ris k on r m co mmi tme nts are ac cou nted for as cas h ow hed ges . At the in ce ptio n of the h edg e rel ation ship, t he Gr oup d oc um ents th e relati ons hip b et wee n the h ed ging i nstr um en t and th e he dge d ite m, alon g wit h its r isk ma nag eme nt o bje ctive s and i ts st rateg y for und er taki ng var io us he dge t rans ac tion s. Fur the rm ore , at the i nc epti on of the he dg e and o n an on goi ng ba sis, t he Gr oup d oc ume nts wh eth er the h edg ing i nstr um ent is ef fe cti ve in of fset t ing c han ges i n fair valu es or cas h ows of the hed ge d item at tri but abl e to the hedg ed ris k , whic h is whe n the h ed gin g relati ons hips m ee t all of th e followin g hedge eff ectiveness requir ements: • the re is an e co nom ic rel atio nshi p bet we en th e he dge d ite m and th e hedgin g instrume nt; • th e ef fec t of cred it r isk do es n ot dom inate th e value c han ge s that resul t fro m that e co no mic re latio nsh ip; and • th e he dge r atio of th e he dgin g rela tion ship is t he sa me as t hat resul tin g from t he qu anti t y of the h edg ed i tem that t he Gr oup actu ally h ed ges a nd th e quan tit y of th e he dgin g ins tru me nt that t he Grou p act uall y uses to he dg e that q uanti t y of he dge d ite m. If a hedg ing rel ation ship c ease s to meet the he dg e effe cti ven ess requ irem ent r elati ng to the h edg e rati o bu t the r isk ma nag eme nt obje ct ive for th at desi gnated h ed gin g relati ons hip re main s the s ame , the G roup a djus ts the h ed ge rati o of the h edg ing re latio nsh ip (i.e . rebal anc es th e he dge) so tha t it me et s the qu alif y ing c ri teri a again . He dge a cc oun ting is d isco ntin ue d whe n the h ed gin g inst ru men t expi res or is sold , term inated or exer cise d, o r no long er qu ali es for hed ge a cc ount ing . Gain s and l osse s ac cum ulated i n the fore ign cur ren cy tr ansla tion re ser ve are in clu de d in the C o nsol idated S tatem ent of Pro t or Los s on disp osal of the fore ign op er ation . Rev enue recognition Th e Grou p rec og nise s reven ue wh en i t has tra nsfer red t he pro mise d ser vic es to custom ers in an am oun t that re ec ts the co nsid era tion to whic h the y exp ec t to be ent itle d in exc han ge for th ose s er v ic es. Marketplace rev enues Mar ketpla ce re venu es in clu de c omm issi ons ( bas ed o n a per ce ntag e of the pr ic e of items s old at a uc tion), auc tio n fees ( b oth pay - as - you - go an d subscription based), auction -related ser vices and payment processing. Commission fees Th e Grou p rec og nise s co mmis sio n fees as a n age nt on t he bas is that the re is no c ont rac tual re latio nshi p wit h the e nd - con sum er of go od s sold a t auc tion a nd th e Gro up will re ce ive i ts co mmis sio n ir resp ec tive of whet her t he en d - c on sum er ma kes its p ayme nt to the au cti on h ous e. Th e co mmis sio n ele me nt of both s ubs cri ptio n and p ay- a s -yo u - g o con tra cts (see b elow) is base d on t he valu e of the i tems s old at auc tion a nd as su ch is s ubje ct to in he rent u nc er t aint y an d ca nnot b e esti mated re liabl y in ad van ce. T he G rou p has d eterm ine d that i t is not pos sibl e to make a relia ble e stim ate of the co mm issio ns th at will be ear ne d und er a pa r ti cula r co ntra ct an d as su ch th e co mmis sio n ele me nt of auc tio n reven ue is not r ec ogn ise d until t he au ctio n has co mpl eted an d the reve nu e valu e is kn own. Auction fees Co ntra cts wi ll t ypi call y sp ec if y an eve nt ( pay - as - you - go) or pe rio d of time d uri ng whi ch th e auc tio n ho use may h ost a n umb er of eve nts (subscr iptio n) as well as othe r auc tio n - rel ated ser vic es . Auc tion fe es so ld un de r subs cr iptio n - ba sed c on trac ts , in whi ch th e per form anc e ob ligati on is th e prov isio n of acc ess to th e tech nol og y plat for m and any auc tion - related se r v ice s spe ci e d in the co ntr act for that p eri od of tim e, a re rec og nise d str aigh t- line ove r the ter m of the con tra ct . This re co gnit ion re e cts th e fact that the c ont rac t allows for con tinu ous u sag e of the tec hn olo gy p lat form a nd it s fun cti onal it y toget her w ith any a uct ion - related s er vic es. Auc tion fe es so ld un de r pay - as - you - go c ontr act s resul t in a p er for ma nc e obli gatio n that is s atis e d by p rovid ing acc ess for the duratio n of th at spe ci c auc tio n. As aucti ons ty pic all y comp lete within one to thre e days, the G roup re c ogn ises reve nu e on c omp leti on of th e auc tio n. Auction-related ser vices Auction - related servic es include mirrored bidding, customer supp or t, buy - i t- now f unc tio nali t y, online c atal ogu ing an d the p rovisi on of p ers onn el to ope rate the au cti on . Th ese c ont rac ts are d ee me d to repre sent a s ingl e per form anc e obligati on , on the basis that the custom er coul d not b en e t from t he au ctio n - re lated se r v ice s with ou t also h aving a cc ess to th e auc tion p lat for m, an d the refore are n ot dis tinc t pe r for man ce o blig atio ns. Payment processing Paym ent s is an opt ion al ser vic e if cu stom er s have ele cte d to have paym ents p roc es sed fo r winni ng au cti ons v ia the P aym ents fea ture. Th e paym ent p roc es sing fe e, wh ich is re c ogn ised a t a poi nt in tim e whe n the c oll ec ted paym en t is remi t ted to the s ell er, is based o n the agre ed co mm issio n rate appli ed to the paym ent pro c esse d. T he Li ve. Paym ent s ser vic e is a dis tinc t pe r for man ce o blig atio n base d on th e cap abili t y of bein g sepa rately id enti ed (option al ser vic e) and provid ing t he cu stom er a se r vi ce th at ca n be us ed o n its own . Th e reven ue re co gnise d is th e full fe es re ce ived o n the p aym ent pro ces s as the G rou p is act ing as p rin cip al in th e paym ent p roc es s. Th e Group ha s prim ar y res po nsib ilit y for ful ll ing the se r v ice to the cus tome r and h as sol e disc retio n in es tab lishi ng th e pri ce s. T he exp ense s for th e fees pa id to the oth er pa r ti es invol ved in t he pro c ess is rec og nise d sep aratel y wit hin c ost of sa les . Digital mark eting and adv er tising Mar keting re venu es are p rin cip ally d er ived f rom b ann er ad ver tising and fe es ge ne rated fro m em ail c amp aigns . Reve nue is re c ogn ised i n line wi th th e satisfa cti on of the c am paig n obj ec tives (i .e. at th e po int that th e cam pai gn em ails are s ent o r over th e pe rio d that t he ba nne r is provi ded o n th e websi te) . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 6 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Auction services revenues For ba ck- of c e and sof t ware tec hno lo gy pro duc ts , aucti on reven ues sold under subscription- based contracts, in which t he per formance obli gatio n is th e provis ion of ac c ess to the te chn ol og y plat for m and any auct ion - related se r v ice s spe ci e d in the co ntra ct for that pe ri od of time , are re co gnis ed st raig ht- lin e over th e term of th e co ntra ct . Th is rec og niti on re ec ts the fac t that the co ntr act all ows for conti nuo us usag e of the tec hn olo gy p lat form a nd i ts fun cti onal it y tog eth er wi th any auction- related services . Auc tion r evenu es so ld un de r pay - as - you - go c ontr act s resul t in a per form anc e obli gatio n that is satis e d by providi ng acc ess for th e dura tion of that sp ec i c auc tion . As au ctio ns t ypi cal ly co mpl ete withi non e to three days , the Grou p rec ogn ises reve nue on c om plet ion of the auct ion. Content-related services Co ntent- re lated se r v ice s pri mar ily i ncl ude p rin t and di git al adve r tis ing revenu es an d sub scr ipti ons to the A nt ique s T ra de Gaze t te. Th e Group identi ed one per fo rma nc e obligati on for print adver t ising ser vic es whi ch is to in clu de th e adve r t in a p ar ti cul ar ed itio n of the Ant iqu es T rade Gazet te. The per fo rma nc e obligati on is satis e d and revenu e is re co gnis ed at th e poi nt that t he ma gazi ne is p ublis he d. W he re the ad ver t is feature d in a nu mb er of ed itio ns , the p er fo rm anc e ob ligati on is satise d over the per io d that the adver tise me nt is feature d. Revenu e is rec og nise d evenl y over th e pe rio d that t he ad ver tisem en t is feature d. For mag azi ne subs cr iptio ns , custo mer s rec eive a sp eci ed nu mbe r of edi tio ns dur ing t he su bsc ript ion p er iod . Reve nue is re c ogn ised e venl y ov er the subscrip tion period. Contrac t balances Ti ming of reve nu e rec og niti on may d if fer fro m the ti min g of invoici ng to custom er s. C ont rac t asse ts rep rese nt reve nue re c ogn ised p ri or to invoic ing whe n it has satis ed its p er for ma nce o blig ation an d has the unc on diti ona l rig ht to payme nt . Co ntra ct liab ilit ies co nsis t of fees rece ive d related to unsatis e d per form anc e ob ligati ons at t he e nd of the p er iod . Ta x a t i o n T ax on the pro t or loss for the year co mp rise s curre nt and deferre d tax . T ax is rec og nise d in the Co nso lidate d S tatem ent of Pro t or Los s excep t to the ex tent t hat it re lates to item s rec og nise d dire ctl y in equ it y, in whic h case i t is re co gnis ed in e qui t y. Cur rent t ax is t he exp e cted ta x paya ble o n the t axab le in co me for t he yea r , usin g tax r ates and l aws enac ted or s ubs tanti vel y ena cted at th e rep or ting date, an d any adju stm ent to ta x payab le in re spe c t of previ ous ye ars . Defer red ta x is provid ed on tem po rar y di f feren ces b et wee n the car r y ing am oun ts of assets and lia bili ties for n anc ial rep or ting pur po ses an d the a mou nts us ed for t axati on pu rp ose s. T he foll owing temp ora r y dif fe renc es ar e not prov ide d for : th e ini tial re co gni tio n of goo dwil l; the i niti al rec og niti on of as sets o r liab iliti es tha t affe ct nei the r acc ou nting n or tax able p ro t other th an in a busin ess combination; and differences relating to in vestments in subsidiaries t o the ex te nt that t hey will p rob abl y not reve rse i n the fore se eab le fu ture . Th e amo unt of d eferre d ta x provi ded i s base d on th e exp ec ted mann er of re alisati on o r set tl em ent of th e ca rr y in g amo unt of ass ets and lia bili ties , usi ng ta x rates an d laws en acte d or su bsta ntive ly ena cted at th e rep or ting d ate. A defer red t ax as set is re c ogn ised o nl y to the exte nt that it is pro babl e that fu ture ta xabl e pro ts will be availab le aga inst w hic h the as set c an b e util ised . Th e car r y ing a mou nts of defe rre d tax a sse ts are rev iewed at e ac h repor ting dat e. Em pl oyee be ne ts Sh or t-ter m ben e t s Sh or t-ter m empl oye e ben e t obli gatio ns are me asure d on an undi sco unted b asis an d are ex pen sed a s the re lated se r v ice is provid ed . A prov isio n is rec og nise d for th e amo unt ex pe cted to b e paid un der sh or t-ter m cash b onu s or pro t- sha rin g plans if th e Grou p has a pre sen t leg al or c on str uc tive ob liga tion to pay th is amo unt as a resul t of past s er vic e provi de d by the e mpl oyee a nd th e obli gatio n ca n be estimated reliably . De n e d con tr ib ut io n pla ns Obl igati ons for co ntr ibu tio ns to den ed co ntr ibu tio n pen sion pl ans are rec og nise d as an expen se in the C ons olid ated S tatem ent of Pro t or Loss as in cur red . Share-based payments Th e Grou p me asure s the c ost of s er v ic es re cei ved in e xchan ge for share o ption s base d on the gra nt‐ da te fair value of the award and rec og nises t he co st ove r the p eri od of re quir ed se r vi ce fo r the award . Th e Group ac co unt s for awards of shares to employe es as sha re ‐ base d co mp ens atio n as they ve st wi th a co rre sp ond ing c redi t to rese r ve for sh are - base d paym en ts. T he fai r valu e of optio ns is cal culate d usin g an opt ion p ric ing m od el . Th e num be r of optio ns ex pe cted to ves t is revi ewed an d adjus ted at the e nd of eac h rep or ting p er io d suc h that t he am oun t rec og nise d for ser vic es re cei ved as c on side rati on for t he eq uit y i nstr um ent s gra nted shall b e bas ed o n the nu mb er of e quit y i nst rum en ts that eve ntua lly vest . Up on th e exerc ise of sha re opti ons , any p roc ee ds re ce ived f rom share o ptio n ho lde rs are re c ord ed as an i nc rease to sh are ca pit al. Leases Th e Group ’s leases pre do mina ntly rel ate to prop er t y, main ly of ces , however t he Gro up’s leas e po r t folio a lso in clu des ot her a sset s suc h as motor ve hicl es an d co mpu ter e quip me nt. Th e Grou p rec og nise s all le ases o n the C on soli dated S tateme nt of Fin anc ial Po siti on , apar t fro m in c ases wh ere t he le ase is for a p er iod of less than 1 2 months or is for an asset with a low value. Low -va lue and sho r t- term l ease s co ntin ue to be c harg ed to the C o nsol idated S tateme nt of Prot and Loss on a stra ight- li ne basis over the perio d of the lease . Lease liab ilit ies are reco gnis ed at the presen t value of fu ture leas e paym ents , de term ine d usi ng th e imp lici t intere st rate in th e le ase wh ere availab le, o r usin g an in cre me ntal b or rowin g rate app ropr iate to the subsi diar y and l ease ter m wh ere an i mpl ici t interes t rate is not avai labl e or ap pro pri ate. A co rres po ndin g rig ht of use as set is r ec ogn ise d, equ ival ent to the v alue of th e lea se lia bilit y, whic h is de pre ciate d in a stra ight li ne over t he sh or ter of the us eful e co no mic li fe of the ass et an d the le ase ter m. T h e dep rec iatio n is re co gnis ed as an a dmin istr ative exp ense w ithi n over hea ds. T he u nwindi ng of th e disc oun t on th e prese nt value of the lease liabil it y is reco gnise d as a nan ce cha rge over th e leas e term . Ren t paym ent s are use d to redu ce t he le ase lia bili t y and are d iscl ose d as de bt rep aym ents i n the C on soli dated S t ateme nt of Cash Fl ows. Lease term s inclu de any option s to e x tend whe n it is reaso nab ly c er t ain th at the ex tensio n will b e taken . Lease li abili ties are re mea sure d when th ere is a chan ge in fu ture le ase paym ents a risi ng fro m a ch ang e in an in dex o r rate, a c han ge in th e esti mate of the am ou nt exp ec ted to be paya ble u nde r a resi dual v alue guar ante e, or a s app ropr iate, c han ges i n the as sess me nt of whe the r a purc hase o r ex ten sio n optio n is rea son abl y cer tain to b e exercis ed o r a termi natio n opt ion is re aso nabl y ce r t ain not to be e xercis ed . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 7 CORPORA TE GOVERNANCE 2 . Si gn i ca nt j ud ge me nt s a nd key sou r ces o f es tim at ion u nc e r ta in t y Th e prep arati on of th e Gro up’s Co nsol idated F ina nci al S tate men ts req uires t he us e of cer tain ju dg em ents , es timates a nd ass umpt ion s that affe ct th e rep or ted amo unts of as sets , lia bili ties , in co me an d exp ens es. Est imates and ju dge me nts are evalu ated co ntinu all y, and are bas ed on his toric al exp er ien ce an d other fac tors , inc ludi ng exp ec tati ons of futu re events t hat are b eli eved to be re aso nabl e un der t he ci rcum sta nc es. Key estim ation u nce r t ainti es are the key assum ptio ns co nc er ning th e futu re and othe r key sourc es of estim atio n unc er t aint y at the rep or tin g date that may have a signi ca nt risk of cau sing a mater ial adjus tm ent to the car r y ing am oun ts of assets and lia bili ties wi thin th e nex t pe rio d. Chan ges i n ac cou ntin g est imates may b e ne ce ssa r y if th ere ar e cha nge s in the c irc ums tan ces o n whic h th e esti mates were b ase d, o r as a resul t of new info rma tion o r mo re exp er ien ce . Sig ni c ant jud gem en ts are thos e that the Gro up has mad e in the pro ces s of apply ing th e Group ’s accou ntin g poli cie s and that have the mos t signi can t effe ct on th e amou nts rec og nise d in the na nci al statem ent s. Sig ni c ant jud gem en ts and key sourc es of estim atio n unc er taint y are prov ide d bel ow: Estimates Impairment of goodwi ll At leas t on an a nnu al basis , o r if the re is an im pai rm ent in dic ator, manage me nt pe r for ms a rev iew of th e car r y ing va lue s of goo dwill a nd intan gib le ass ets . Thi s requ ires an e sti mate of the val ue in us e of the c ash - gen er ating u nit ( “C GU ” ) to whic h the g oo dwill a nd int ang ibl e asse ts are allo cated . T o esti mate the valu e in use, man age me nt esti mates the ex pe cted fu ture c ash ows fro m the CG U and disc ou nts the m to their prese nt val ue at a d eterm ine d disc ou nt rate, w hic h is app rop riate for th e co untr y whe re the g oo dwill a nd in tang ibl e asse ts are all oc ated to. Fore ca stin g expe cte d cash ows and sele c ting an ap prop riate disc ou nt rate inhe rentl y requ ires es timati on . Se nsi tivi t y anal ysis has be en per form ed over th e estim ates ( se e note 1 2). The res ulti ng cal cul ation is se nsi tive to the assum ptio ns in resp ec t of future c ash ows , the disc oun t rate and l ong -ter m grow th r ate appli ed . Man age me nt co nsi der s that th e ass umpt ions m ade re pre sen t the ir be st es timate of th e fut ure cash ows gen erate d by the CGU s, and th at the disc ou nt rate and lon g -ter m grow th rate use d is appro pr iate given the r isks ass oci ated with th e spe ci c c ash ows . Judgements LiveA uctioneers cons ideration Th e Group ac qui red Li ve Auc tio ne ers o n 1 Octob er 20 21 for total cons ide ratio n of £40 4 .0 m. Pl ease se e note 1 1 for fur the r detail s. Ju dge me nt was requi red in de termi ning wh eth er the ro llover o ptio ns and rest ric ted stoc k unit s grante d, pre do mina ntly to manag em ent sh oul d be clas si e d as cons ide rati on or rem une rati on for pos t- c om binat ion se r vi ce s. Th e indi cator s und er IF RS 3 were reviewe d for eac h of these ele me nts . One of the key indi cator s unde r IF RS 3 leadi ng to manage me nt ’s conc lusi on th e elem en ts shou ld be trea ted as cons ide ratio n is that non e of the share ho lde rs , inc lud ing m anag em ent , are re qui red to co ntin ue in e mpl oym en t for the o ptio ns an d restr ic ted stoc k uni ts to vest . Goodwill and other intangible a ssets arising from business combinations Th e purc has e pri ce of an a cqu ired c om pany is al lo cated b et wee n int angi ble as sets a nd th e net t ang ible a sset s of the ac qui red b usin ess wi th the resi dual am oun t of the purch ase pr ice re co rde d as goo dwill . Th e deter minat ion of the valu e of the intan gibl e asset s requi res sign i ca nt judg em ents an d esti mates to be made by the Dire ctor s. T hes e judg eme nts ca n incl ude , bu t are not limite d to, the cash ows that an asset is exp ec ted to gen erate in t he fu ture a nd th e app rop riate weig hted aver age c ost of c api tal . Of th e int angi ble s acq uire d, th e cus tome r rel atio nship balan ce s are es pe ciall y se nsit ive to cha nge s in ass umpti ons a roun d disc ou nt rates an d cus tome r at tr itio n rates (see n ote 1 1 ). At the date of a bu sine ss c omb inati on , go odw ill is req uire d to be all oc ated to the ap pro pri ate CGU s and m ay onl y be rea llo cated i n limi ted circ ums tan ces . Addi tio ns to good will for Live Au cti on ee rs is allo cate d on a split of 80 % and 20 % be twe en A & A and I& C respe ct ivel y. Th e allo cati on was c alc ulated b ase d on th e net p rese nt val ue of se gme nt c ontr ibu tio n mar gin fro m th e roll ou t of th e paym ents p lat for m. Jud ge me nt is also requi red in de term inin g appro pr iate useful e co no mic live s (“ U EL ” ) of the intan gibl e asse ts arisi ng from b usin ess co mbin atio ns. Ma nag em ent makes thi s judge me nt on an ass et clas s basis and has de term ine d that co ntra cts wi th cus tome rs have a UEL of seven to 14 years; br and s have a UE L of ve to 1 5 years ; sof t ware has a U E L of thre e to 1 0 year s; and n on - co mp ete agre em ent s have a UE L of four y ears. Functional currency of subsidiaries Foll owing th e acqu isiti on of Live Au cti one er s , a review was per fo rm ed to ensur e that the fun cti ona l curr enc y of each sub sidia r y with in the Gro up had b ee n co rre ctl y dete rmi ne d give n the rev ise d str uc ture an d op era tion s of the Gr oup. W he n ass essi ng th e fun cti onal c ur ren cy ag ains t the requ irem ent s and guid anc e of IA S 21 ”T he Ef fec ts of Chang es in Fore ign E xc han ge Rates” the re is an elem ent of judg em en t requi red , in par ticular for int erme diate holding entities. As a res ult of th e revi ew, the fun cti on al cur ren cy for al l enti ties wa s de em ed to be th e cu rre ncy of th e pr imar y ec on om ic env iron me nt in whi ch the ent itie s ope rate with no c hang es pro pos ed , excep t for A TG Medi a US Inc ., Proxib id Bid co Inc ., Plati num Pa rent In c., Pla tinu m Interm edi ate Inc ., Platin um Pur chas er In c. and L ive Auc tio ne er s Inc. T he fun cti on al cur ren cy of these en titi es was dee me d to be poun d sterli ng rath er than U S doll ars . As A TG Me dia U S Inc . and Proxibi d Bidc o Inc . were par t of the Group prev io usly a pr ior pe ri od adju stm ent is req uire d to be disclo sed (see note 1 ). Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 8 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 3. Al ter na tive p er f orm an ce m eas ur es Th e Group us es a numb er of alter nati ve per fo rma nc e measu res ( “ AP Ms” ) in additi on to those me asur es rep or te d in acc orda nc e with IF RS . Su ch A PMs are n ot de ned ter ms und er IF RS an d are not intend ed to be a substi tu te for any IFRS mea sure . The Di rec tors be lieve tha t the AP Ms are imp or tant whe n asse ssin g the on goin g na nci al and op erat ing pe r for man ce of the Gro up and do not c ons ide r them to be mor e impo r t ant than , or sup er ior to, the ir equ ival ent IF RS . T he AP Ms im prove the co mp arab ilit y of infor matio n bet we en rep or ting p eri ods by adjus tin g for factor s suc h as on e - of f items a nd th e timi ng of acq uisi tio ns. Th e AP Ms ar e use d inter nall y in the m ana gem en t of the Gro up’s busi nes s pe r for man ce , bud get ing an d fore cas ting , an d for de term inin g E xec uti ve Dire ctors ’ remu ner atio n and that of other ma nag em ent thro ug hou t the bu sine ss. T he A PM s are also prese nted ex ter nall y to meet investor s’ req uire men ts for fur t he r clari t y and tra nsp aren cy of the Grou p’s nanc ial pe r for man ce . Whe re items of pro t or co st are be ing exclud ed in an A PM , the se are inc lud ed els ewhe re in our rep or ted na nci al inform atio n as they repre sen t actu al inc om e or cos ts of the Group . Ot he r co mme nta r y wi thin th e A nnu al Rep or t and Ac c ount s (CFO’s Revi ew pag es 3 2 to 36), sho uld b e refer red to in o rde r to fully a ppre cia te all the fac tors t hat af fect t he Gr oup. Net nanc e cos ts for the year e nde d 30 S epte mbe r 20 21 have bee n restate d as detail ed in note 1 . Adjusted EBITD A Adjus ted EB IT DA is the mea sure use d by the Dire ctor s to assess the tr adin g per fo rma nc e of the Group’s busi nes ses an d is the measu re of seg me nt pro t . Adjus ted EB IT DA repre sen ts pro t /(l oss) before taxati on , nan ce c osts , de pre ciati on and am or tisati on , share - bas ed paym en t expe nse and excep tion al ope rati ng item s. Adju sted EB IT DA at seg me nt level is co nsis tently d en ed bu t exclu des c entr al admi nistr atio n cos ts incl udi ng Directors’ salaries. Th e followin g table pr ovide s a reco nci liatio n from pr o t /(los s) before tax to adjusted EB IT DA : Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Pro t /(los s) befo re t ax 9, 2 7 9 (25 , 0 42) Adjustments for: Net nanc e cos ts (note 8 ) 7 ,5 38 4,41 8 Am or tisati on of ac quire d int angi ble a sset s (note 1 2) 26,59 1 13 , 2 19 Am or tisati on of inter nal ly ge ne rated sof tware (note 1 2) 4 ,11 8 4 , 5 76 De pre ciati on of prop er ty, plant an d equi pme nt (note 1 3) 280 228 De pre ciati on of right of use ass ets (note 1 7 ) 920 74 3 Sh are - b ase d paym ent e xpe nse (note 21 ) 5,226 1 1 , 892 Exceptiona l opera ting it ems – 2 1, 7 6 5 Adjusted EBITD A 53,9 52 3 1,7 9 9 Th e followin g table pr ovide s the cal cul atio n of adjusted EB IT DA marg in whic h repre sen ts adjus ted EBI T DA divi ded by reven ue : Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Rep or te d reven ue (note 4,5 ) 1 1 9,846 70, 0 8 0 Adjusted EBITDA 5 3 ,95 2 3 1, 7 9 9 Adjusted EBITDA margin 45% 45% Th e basis for t reatin g the se ite ms as adju sti ng is as foll ows: Share-based payment expense Th e Grou p has is sue d sha re awards to em ploye es an d Dire c tors: at th e tim e of IP O; for t he ac quis itio n of Li veA uc tion ee rs ; and o pe rates seve ral emp loye e share sc he mes . Th e share - base d paym ent ex pe nse is a signi c ant no n - cash c harg e drive n by a valuatio n mod el whic h referen ces the G roup’s sha re pri ce . As t he Gro up is s till ea rly i n its li fe cycle as a n ewl y listed b usin ess t he ex pen se is dis tor ti ve in th e sho r t ter m an d is not repre sen tative of the ca sh pe r form anc e of the busi nes s. In addi tio n as the share - bas ed pay men t expe nse in clu de sign i ca nt char ges rel ated to the IP O and Li ve Auc tio ne ers ac quis iti on , it is not repre sent ative of the Gro up’s steady state op er ation al per form anc e. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 13 9 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 3. Al ter na tive p er f orm an ce m eas ur es c onti nue d Exceptional operating i tems Th e Group ap pli es judg em ent in id enti f yin g signi can t items of inc ome an d expe ndi ture th at are discl ose d sepa ratel y from othe r admi nistr ative exp ense s as excepti ona l where , in the jud gem en t of the Direc tors , they n ee d to be disclos ed se par ately by vir t ue of their nat ure or size in orde r to obtain a c lea r and c ons istent p rese ntati on of th e Grou p’s ong oing b usin ess p er form anc e. S uc h item s cou ld in clu de, b ut m ay not b e limi ted to, listin g cos ts asso ciate d with the IP O, co sts ass oc iated with bu sin ess co mb inati ons , gains an d loss es on the dis pos al of busin ess es, sig ni c ant reo rgan isatio n or rest ru ctu rin g cost s and imp air men t of good will and ac quire d inta ngib le ass ets. A ny item cla ssi e d as an excepti ona l item will be sign i ca nt and not at tr ibu tab le to ongoi ng op er ation s and will be sub jec t to spec i c quan tita tive and qu alit ative thre sho lds set by and app roved by the Dire ctor s pri or to bein g classi ed as exce ptio nal. Th e exce ption al op er ating i tems a re det aile d be low : Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Acquisition costs – (1 3,323) Lis ting co sts – (8 , 4 42) T ot a l exce p tio na l o pe ra ti ng i te ms – (2 1,7 6 5 ) Th ere were n o exce ptio nal o pe ratin g item s for the ye ar en de d 30 S e ptemb er 2 02 2 . For th e year end ed 3 0 Se ptemb er 20 21, the Group’s excepti ona l ope ratin g cos ts are in resp ec t of listing co sts of the IP O and the ac quis itio n cos ts pred om inan tly rela ting to the acq uisit ion of Live Au cti on ee rs Gro up and Au cti on Mo bili t y LLC (see note 1 1 ). Th e busi nes s has un de r ta ken focu sed a cqu isit ive ac tivi t y whi ch has b e en st rategi cal ly im ple me nted to inc reas e inc om e, se r v ice r ang e and cri tic al mass of the Gro up. Ac quisi tio n cos ts co mpr ise le gal , professio nal an d other c onsu lta ncy ex pen di ture inc ur red . The n et cas h out ow related to exc eptio nal o pe ratin g item s in th e year is £4 .0 m (30 S eptem be r 20 21 : £19 . 1 m) . Adjusted earning s and adjusted diluted earnings per share Adjus ted ear nin gs exclud es sha re - b ased pay me nt exp ens e, exce ptio nal item s ( op erat ing and nan ce), amor tisat ion of acq uire d intan gibl e asse ts, a nd any re lated ta x ef fec ts. Th e followin g tab le prov ide s a rec on cili ation f rom l oss af ter t ax to adju sted e arn ings : Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Los s a t tr ib ut a bl e to eq u it y s ha re h ol de rs o f th e C om pa ny ( 6 ,12 7 ) ( 2 7, 3 6 4 ) Adjustments for: Amor tisation of acquir ed intangible a ssets 26,59 1 13 , 2 19 E xce ptio nal na nc e items (2 2 1) ( 7, 9 1 8 ) Share - based payment expense 5, 2 26 1 1 ,892 Exceptiona l opera ting it ems – 2 1, 7 6 5 Defer red ta x on unre alise d foreig n exchan ge dif fere nc es 15 , 8 9 9 – T ax o n adju sted i tems (5, 2 54) (2,394 ) Adjusted earnings 3 6 , 114 9, 2 0 0 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 0 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Number Number Rep o r te d wei gh te d aver ag e nu m be r of s ha re s 12 0 , 3 6 4 , 8 3 1 88,248,037 Adjus tme nt for : weigh ted averag e effe ct of share s issue d in the pe rio d up to and incl udin g the IP O – 11,7 5 1,9 6 3 Adjusted w eighted a verage number of share s in issue 12 0 , 3 6 4 , 8 3 1 1 00, 000,000 Weighted ave rag e num be r of share s hel d by the T rus t (61 , 74 1) (62 2) Effe ct of dilu tive shar e optio ns 2, 1 38,826 12 8 ,1 0 6 Nu mb e r of o rd in ar y sh ar es a nd d il ut ive o pt io ns 12 2 , 4 41 ,9 16 1 0 0 , 1 2 7, 4 8 4 p p Adjusted di luted earnings per share (pence ) 29.5 9.2 Th e basis for treati ng thes e items not alre ady d e ned ab ove as adjust ing is as follows: Amortisation of acquired intangible assets including software acquired through business combinati ons Th e amo r tis atio n of acq uire d inta ngib les a rise s fro m the p urch ase c onsi de ratio n of a num be r of sep arate ac quisi tio ns. T he se ac quisi tio ns are por t folio inve stm ent d ec isio ns that to ok pl ace at d if feren t tim es and a re item s in the C o nsol idated S tateme nt of F inan cial P osi tion t hat rel ate to M& A ac tivi t y rath er th an th e tradi ng p er for ma nc e of the bu sine ss . Th e cal cula tion fo r the ye ar en ding 3 0 S e ptemb er 20 21 h as be en re stated to inc lud e an adju stm ent of £ 3 .4m fo r acq uire d sof t ware in tang ibl e asse ts as well as c usto mer r elati ons hips , br ands a nd no n - com pe te agre em ents . T his is du e to a chan ge in p oli cy. E xce pt io na l na n ce ite ms E xce ptio nal na nc e items in clu de foreig n exchan ge dif fere nc es ari sing on th e revalu ation of the fore ign cur re ncy lo ans , interc omp any and c ash hel d on es crow (restr icte d cas h), moveme nts in c on ting ent c ons ide rati on an d cos ts in cur red o n the e arl y rep aym ent of lo an c osts . Th ese excep tion al na nce i tems are exclu de d from adju sted ear nin gs to provide rea der s with he lpful ad diti ona l inform ation o n the pe r form anc e of the busi nes s acro ss p eri ods b e caus e it is c ons istent w ith h ow the b usin ess p er fo rma nc e is rep or ted and as ses sed by t he B oard . De fer re d t a x on u nr ea li se d fo re ig n exch a ng e di ff er e nc es In calc ulat ing the ad justed ta x rate, the Gr oup excl ude s the potenti al fut ure imp act of the defer re d tax ef fec ts on unre alise d foreign exc hang e dif fere nc es arisi ng on inter co mpany. The un realis ed forei gn excha nge dif fe renc es were not re co gnis ed in the G roup’s pro t for the year du e to dif fere nc es in th e fun cti onal c ur ren cy bas is und er ta x an d acc ou ntin g rul es for th e US h ol ding e nti ties . T a x on a dj u st ed i te ms T ax on ad justed i tems inc lud es the ta x ef fect of acq uire d intan gibl e amo r tis atio n, exce ptio nal (oper ating an d na nce i tems) and share - base d paym ent ex pen se. In ca lcu latin g the adjus ted tax rate , the Grou p exclud es the p otential fu ture im pac t of the deferre d tax ef fe cts on de du ctib le goo dwil l and in tan gibl e amo r ti satio n (other tha n inter nall y ge ner ated sof t ware), as th e Gro up prefer s to give us ers of i ts ac co unts a v iew of the tax ch arg e based o n the cur rent s tatus of suc h items . Defer red ta x would on ly cr ystal lise on a sale of the rel evant bu sin esse s, whi ch is not antic ipated a t the c urre nt tim e, a nd su ch a s ale, b ei ng an exc epti ona l item , woul d resul t in an e xcept ion al tax i mpa ct . Adj us te d n um be r of o rd in a r y sh ar es f or F Y21 Th e adjuste d numb er of ordi nar y sh ares for 3 0 Se ptemb er 20 21 re ec ts the nu mbe r of shares in iss ue at IP O adjuste d for the dilu tive ef fec t from no n - veste d/no n - exe rcise d ordi nar y shares gr anted af ter the IP O thro ugh Lo ng T e rm In cen tive Pla n awards to the Exe cu tive Dire ctor s and othe r sen ior m anag em ent . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 141 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 3. Al ter na tive p er f orm an ce m eas ur es c onti nue d Proform a rev e nue Th e Grou p has m ade c er tain ac quis itio ns th at have affe cted t he c omp ara bilit y of t he Gro up’s resul ts . T o aid c om par ison s bet we en F Y2 2 an d F Y 21 in the CFO ’s Review, the pri or year re sult s have bee n prese nted to inclu de the fu ll year resu lts as if the ac quisi tio n of Live Auc tio ne ers an d Auc tion M obi lit y had o ccu rre d on 1 Octo be r 202 0. In addi tio n, profor ma reve nue is sta ted at cons tant exch ang e rates with th e prio r year co mpar ative s bei ng res tated us ing c urr ent ye ar exch ang e rates. T his m easu re is pre sen ted as a me ans of eli mina ting th e ef fec ts of excha nge rate uc tuati ons on th e year- o n - year rep or ted resul ts. Refer to the glo ssar y on pag e 1 76 for the full de ni tio n. Th e followin g tab le prov ide s a rec on cili ation of p roform a reven ue fro m rep or ted resu lts for t he yea r en ded 3 0 S e ptemb er 20 21: Unaudited Y ear ended 30 S eptember 20 21 £000 Reported rev e nue 70 ,080 Acquisition related adj ustment 31, 7 2 5 Constant curren cy adjustment 6 ,1 0 0 Proform a rev e nue 1 0 7, 9 0 5 Adjusted net ( de bt) / c ash Adjus ted ne t (debt)/ cas h co mpr ises e x tern al bo rrowi ngs n et of ar ran gem en t fees , ca sh and c ash e qui vale nts an d allows m anag em ent to mon itor th e ind ebte dnes s of the G rou p. Adjus ted ne t (debt)/cash exclud es l ease li abili tie s and c ash h eld in e sc row (restric ted c ash). 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Cash a nd c ash e quiv alen ts exclu din g rest ric ted ca sh (note 1 5) 51 , 8 17 17 3 , 6 75 Cur rent l oan s and b or rowing s (note 1 8) (3 0 ,9 8 3) (3 5 3) Non - cu rre nt lo ans an d bo rrowi ngs (note 1 8) (14 9 , 8 6 2) ( 14 8 , 6 8 6 ) T otal l oans a nd bo rrow ings ( 180 ,845) (1 49 ,039 ) Adjusted net ( de bt) / c ash ( 1 29,028 ) 24, 6 3 6 Adj us te d fre e cas h ow and ad ju s ted fr ee ca sh ow co nve rs io n Adjus ted fre e cash ow repres ents c ash ow fro m op erati ons le ss ca pit alise d devel op men t cos ts, whi ch in clu de deve lop me nt cos ts in relati on to soft ware that are c api talis ed whe n the rela ted proje cts m ee t the rec og niti on cr iter ia und er IA S 3 8 “In tang ibl e Ass ets” for an inter nall y gen er ated inta ngi ble as set . Move me nt in wo rk ing c api tal is ad juste d for bala nc es rel ating to exce ptio nal i tems . Th e Gro up mo nito rs it s ope rati ona l ef c ien cy wit h referenc e to oper atio nal cas h conve rsi on , de ne d as adjusted fre e cas h ow as a perc ent age of adjus ted EB IT DA . Th e Group us es adjus ted cas h ow mea sures for th e same pu rp ose as adju sted pro t m easu res, in o rde r to assist reade rs of the acc ou nts in und ers tan din g the ope rati ona l per fo rma nc e of the Group . The t wo measu res use d are adjus ted fre e cash ow and adjus ted fre e cash ow conver sion. Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Adjusted EBITD A 53,9 52 3 1,7 9 9 Ca sh g en e ra te d by op er a tio ns 49, 4 0 9 1 5,866 Adjustments for: Exceptiona l opera ting it ems – 2 1, 7 6 5 Work ing c api tal f rom exc epti onal a nd oth er i tems 4 ,98 3 ( 5,098) Addi tio ns to inter nally g en er ated sof t ware (note 1 2) (4 , 2 0 9) ( 1,9 5 6) Addi tio ns to prop er t y, plant and e qui pm ent (note 1 3) (27 0) ( 14 9 ) Adj us te d fre e ca sh ow 4 9, 9 13 3 0 , 42 8 Adj us te d fre e ca sh ow co nver si on (%) 9 2 .5% 9 5 .7 % Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 2 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 4. Op er at ing s eg me nt s Th e ope ratin g seg me nts re ec t the Grou p’s manage me nt and inte rnal re po r tin g str uc ture , which is use d to assess bot h the pe r for man ce of the busi nes s and to allo c ate resou rce s with in the G rou p. Th e asse ssm en t of per form anc e and al lo cati on of reso urc es is foc use d on t he c atego r y of cus tome r for eac h t yp e of act ivi t y. Th e Boa rd has deter min ed an op er ating ma nage me nt str uc ture alig ne d aroun d the four co re acti vi ties of the Gro up. Li ve Auc tio ne ers , whic h was acq uire d in th e year, has be en all oc ated to the A r t s & An tiqu es se gme nt . Th e four o per atin g seg me nts are as fol lows: • Ar t & Ant iq ue s (“A& A”) auc t io n reve nu es: fo cus ed o n of ferin g auc tio n hou ses t hat sp ec ialise i n the s ale of ar ts and a ntiqu es ac ce ss to the plat for ms the -s ale roo m.c om , live auc tion e ers .co m and lot- tissi mo.c om . A signi c ant pa r t of the Grou p’s ser vi ces is prov isio n of the platfo rm as a mar ketpla ce for t he A & A auc tio n hou ses to se ll the ir go od s. T he se gm ent a lso ge ne rates ea rnin gs th roug h add itio nal s er v ic es su ch as mar keting i nc ome a nd th e livea uc tion ee rs .co m paym en ts plat for m. T he G rou p co ntra cts wi th cu stom ers p red om inant ly un de r ser vic e agre em ents , wh ere th e num be r of auc tio ns to be he ld an d the s er v ic e offe rin g dif fer s from c lie nt to clie nt. • In du s tr ial & Co m me rc ia l (“ I& C ” ) au c tio n reve n ue s: focus ed o n offe rin g auc tio n hou ses th at spe ci alise i n the sa le of ind ust rial a nd co mme rci al go ods a nd ma chin er y acc es s to the plat for ms B idS pot te r .com , Bi dS pot ter.co.uk an d proxib id.c om , as well a s i - bid der.com for con sum er sur pl us and reta il retur ns. A sign i ca nt par t of the Group’s ser v ic es is provisi on of the plat for m as a marketpl ac e for the I&C auc tion h ous es to sell t hei r go ods . Th e se gme nt als o ge ner ates ear nin gs thro ug h addi tio nal se r vi ce s suc h as mar ketin g inc om e. T he G roup con tra cts wi th cu stom ers p red omi nant ly un der s er vic e agre em ent s, wh ere t he nu mbe r of auc tio ns to be he ld an d the s er v ic e offe rin g dif fer s from c lie nt to clie nt. • Auc t io n Se r v ic es: in clu des reve nue s from the G roup’s auc tion ho use ba ck- of c e pro duc ts with Au cti on Mo bili t y and othe r white lab el product s inc luding Wa vebid.com. • Content: f oc use d on th e A ntiqu es T r ade G azet te pap er an d onl ine m agaz ine . Th e busi nes s focu ses o n two s trea ms of inc om e: s ellin g subs cr iptio ns to the Gazet te and selli ng adve r ti sing sp ace wi thin th e pape r and onl ine . The Di rec tors have disc los ed infor matio n requ ire d by IFR S 8 for the Co ntent se gme nt des pite the se gm ent not me et ing the re po r tin g thres hol d. Th ere are n o und iscl ose d or ot her o pe rati ng se gm ents . An a naly sis of the re sul ts for the y ear by re po r tab le se gm ent i s as follows: Y ea r e nd ed 3 0 S ep te m be r 2 02 2 A&A £000 I&C £000 Auction Ser vices £000 Content £000 Centrally allocated costs £000 T otal £000 Rev enue 55, 2 79 5 2 ,7 75 8,636 3 ,15 6 – 1 1 9 ,846 Adj us te d E BI TDA (see not e 3 for de nit io n and reconciliat ion ) 45, 777 4 5,629 6,090 1, 0 8 9 (4 4 , 6 3 3 ) 5 3,9 52 Am or tisati on of int angi ble as set s (note 1 2) ( 18,504 ) (10 , 9 3 1) (1 , 2 74 ) – – (3 0, 7 0 9) De pre ciati on of prop er ty, plant an d equi pme nt (note 1 3) (8 7 ) (17 6) (6) (11 ) – (2 8 0 ) De pre ciati on of right of use ass ets (note 1 7 ) (4 7 5 ) ( 3 8 1) (13) (5 1) – (9 2 0) Sh are - b ase d paym ent e xpe nse (note 21 ) ( 1,848 ) (89 3) (3) – (2 , 4 8 2) (5 , 2 2 6) Operating prot/( loss ) 24,86 3 33, 248 4 ,79 4 1, 0 2 7 ( 4 7, 11 5 ) 16 , 8 17 Net nanc e cos ts (note 8 ) – – – – ( 7 ,538 ) ( 7 ,538) Pro t /(los s) befo re t ax 24,86 3 33, 248 4 ,79 4 1, 0 2 7 (5 4 , 6 5 3) 9, 2 79 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 3 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 4. Op er at ing s eg me nt s co ntin ue d Y ea r en de d 30 S e pt em b er 2 02 1 (res ta te d) A& A £000 I&C £000 Auc tion Ser vices £000 Content £000 Centr ally allocated costs £000 To t a l £000 Rev enue 16 , 2 0 3 4 3, 695 7, 1 2 9 3,05 3 – 70 ,0 8 0 Adj us te d E BI TDA (see not e 3 for de nit io n an d recon ciliation) 13 , 9 3 8 3 7, 8 9 7 5 , 276 1, 0 6 3 (2 6 , 3 75 ) 3 1, 7 9 9 Am or tisati on of int angi ble as set s (note 1 2) (4 , 3 0 7 ) ( 12 , 3 2 1) ( 1 ,16 7 ) – – ( 1 7, 7 9 5 ) De pre ciati on of prop er ty, plant an d equi pme nt (note 1 3) (5 3) ( 16 0 ) (6) (9) – (2 2 8) De pre ciati on of right of use ass ets (note 1 7 ) (25 9) (410) (17 ) (5 7 ) – ( 74 3 ) Sh are - b ase d paym ent e xpe nse (note 21 ) ( 1 ,4 1 5) (3 , 2 76) ( 61) – ( 7, 1 4 0 ) (1 1 , 892) E xce ptio nal op erat ing item s ( note 3) – – ( 1 ,1 0 7 ) – (2 0, 6 5 8) (2 1, 7 6 5 ) Operating prot/( loss ) 7, 9 0 4 2 1, 7 3 0 2 ,9 18 9 97 ( 5 4 ,17 3 ) (20 , 624) Net nanc e cos ts (note 8 ) – – – – (4 , 418) (4 , 418) Pro t /(los s) befo re t ax 7, 9 0 4 2 1, 7 3 0 2 , 9 18 9 97 ( 5 8 , 5 9 1) (25, 0 42) Net nanc e cos ts for the year e nde d 30 S epte mbe r 20 21 have bee n restate d as detail ed in note 1 . Se gm ent as sets whi ch exclu de defer re d tax asse ts are meas ure d in the sam e way as in the nan cial st ateme nts. T hes e asset s are alloc ated base d on th e op er ation s of the se gm ent a nd th e physi cal l oc atio n of the as set . 30 S eptember 2022 30 Se p te mb e r 20 21 T otal non-current assets £000 Additions to n on-current assets £000 To t a l non- current assets £000 Additi ons to non- current assets £000 A& A 506,484 395,6 83 50,4 33 1,7 14 I&C 19 9 , 5 0 4 58, 829 1 33,320 7 15 Auction Ser vices 31, 7 0 4 2 01 2 7, 2 1 8 2 9 , 5 11 Content 91 15 13 1 10 7 3 7, 7 8 3 4 5 4,7 28 2 11 ,1 0 2 3 1,9 5 0 Th e Group ha s taken adva ntag e of paragr aph 23 of IFR S 8 “Op era ting S eg me nts” and do es not pr ovide se gm ent al anal ysis of net asse ts as this inform atio n is not used by the Dir ec tors in op erat ion al dec isio n - ma ki ng or mo nitor ing of busi nes s per form anc e. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 4 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 5. Rev enue Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Prod uct a nd cu stome r t yp es A& A 55, 2 79 16 , 2 0 3 I&C 52 ,7 75 4 3, 695 Auction Ser vices 8,636 7,1 2 9 Content 3 ,15 6 3 ,05 3 1 1 9 ,846 70, 0 80 Primary ge ographical markets Uni ted Kin gd om 1 8,539 1 8, 901 Nor th America 9 7, 7 6 5 4 7, 7 7 3 Ge rm any 3,5 42 3,406 1 1 9 ,846 70, 0 80 Ti min g of tra nsfer of g oo ds an d se r vic es Point in time 11 0 , 5 3 9 6 2 ,14 2 Ove r tim e 9,3 0 7 7, 9 3 8 1 1 9 ,846 70, 0 80 Th e Grou p has re co gnis ed th e follow ing as sets a nd lia bili ties re lated to co ntra cts wi th c ustom er s: 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 1 Oc to be r 2020 £000 Contract assets 837 5 97 784 Cont ract liabili ties 1, 7 8 3 1, 3 6 7 5 75 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 5 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 6. Operating prot / (loss ) Op erat ing pro t /(loss) is stated af ter charg ing /(crediti ng) the followi ng: Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Emp loy me nt cos ts (note 7) 35 ,725 3 3,23 4 Am or tisati on of int angi ble as set s (note 1 2) – Acquired int angible assets 2 6,59 1 13 , 2 19 – Intern ally ge ne rated sof t ware 4 ,11 8 4 , 5 76 De pre ciati on of prop er ty, plant an d equi pme nt (note 1 3) 280 228 De pre ciati on of right of use ass ets (note 1 7 ) 920 74 3 E xce ptio nal op erat ing item s ( note 3) – 2 1, 7 6 5 Net ex change diff erences (5 6) – Th e total remun erat ion of the Gro up audi tor and it s af liates for ser vic es to the Grou p is analys ed be low : Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Fee s payabl e for the Grou p’s annual n anc ial state men ts 628 537 Fees payable f or assurance ser vices: – Interim rev iew 10 0 10 0 T otal audit fees 728 637 Non -audit assurance ser vices 365 4 ,9 9 0 T otal non-audit fees 365 4 ,9 9 0 T otal auditor’s remuneration 1, 0 9 3 5, 627 In F Y 21 the cos ts in relati on to other no n - au dit ass uran ce se r v ice s have bee n incu rre d in resp ec t of fees asso ciated wi th acqu isit ion s and the IP O. The no n - au dit fee s for F Y2 2 rel ated to a revi ew of the closi ng bala nc e she et of Live Auc tio ne er s. T hese have be e n inclu de d as excepti ona l ope rati ng i tems (see note 3). Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 6 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 7 . St af f c os ts a nd n u mbe r s S taf f co sts for t he yea r were as foll ows: Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Wages and salaries 2 7, 6 6 5 19 , 3 18 So ci al se cur it y c osts 2,2 59 1 ,666 Pension costs 575 35 8 Sh are - b ase d paym ent e xpe nse (note 21 ) 5,226 1 1 , 892 T otal employment costs 35 ,725 3 3,23 4 Th e mont hly avera ge num be r of empl oyees (i ncl udi ng E xec uti ve Dire ctors) by funct ion: Ye a r ended 30 S eptember 2022 Number Ye a r ended 30 S e pte m be r 2021 Number Management 10 9 Administ rative employees 48 39 Operational employees 284 19 5 Avera ge n u mb er o f em pl oye es 342 24 3 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 7 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 8. Ne t n an ce c os ts Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Foreign exchange gain 2 , 070 11,1 8 9 Interes t inc om e 57 9 Movemen ts in contingen t consider ation – 1, 4 6 2 Finance income 2 ,1 2 7 12 , 6 6 0 Interes t on loa ns and bo rrowi ngs ( 7, 2 1 4 ) ( 8 , 0 7 1) Movemen ts in contingen t consider ation (1, 8 4 9) – Interes t on leas e liabili tie s (13 7 ) (65 ) Interes t payabl e on prefere nc e shares – (6 , 3 2 8) Am or tisati on of nan ce co sts (4 6 5 ) ( 2 , 614 ) Finance costs (9,6 6 5 ) ( 1 7 , 078) Ne t n an ce c os t s (7 ,538) (4, 418) Net nanc e cos ts for the year e nde d 30 S epte mbe r 20 21 have bee n restate d as detail ed in note 1 . 9. T axa tio n Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Cu rr e nt t a x Cur rent ta x on pro t /(l oss) for the year 11 , 3 9 5 4,566 Adjustments in respect of prior years (9 0 3) (4 0) T otal current tax 10 , 4 9 2 4 , 526 Deferred tax Cur rent ye ar 6,328 (3,039 ) Adjustments from change in tax rates (56 4) 1, 2 9 9 Adjustments in respect of prior years (8 5 0) (4 6 4) Deferred tax 4 , 9 14 (2 , 2 0 4) Ta x e x p e n s e 15, 4 0 6 2,322 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 8 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 9. T axa tio n co ntin ue d Th e tax on th e Group’s pro t /(l oss) before tax dif fe rs from th e the ore tica l amou nt that woul d arise us ing the s tand ard ta x rate applic abl e to pro ts of the Gro up as follows: Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Pro t /(los s) befo re t ax 9, 2 7 9 (25 , 0 42) T ax at Uni ted Ki ngd om ta x rate of 1 9% (20 21 : 1 9 %) 1,7 6 3 (4,75 8) T ax ef fe ct of : E xp ens es not de duc tibl e for tax pu rp oses – 6,839 Additional items deductible f or tax purposes (1, 6 4 9) – Dif fere nc es in overs eas ta x rates ( 1, 3 17 ) 283 Defer red ta x on unre alise d foreig n exchan ge dif fere nc e 15 , 8 9 9 – Fore ign exc hang e dif fere nc e not d edu cti ble /(taxab le) for tax pu rp ose s 3,027 ( 4 3 1) Defer red ta x not rec og nise d – ( 3 8 1) Adjus tme nt to ta x cha rge in re spe c t of defer red ta x ar ising o n ac quisi tio n – (25 ) Adjustments from change in tax rates (56 4) 1, 2 9 9 Adjustments in respect of prior years (1, 7 5 3 ) (5 0 4) Ta x e x p e n s e 15, 4 0 6 2,322 For th e year e nd ed 3 0 S eptem be r 20 2 2 , addi tio nal i tems de du ctib le for t ax pu rp ose s inc lud e rest ric ted sto ck un its g ranted o n ac quisi tio n of Live Au cti on ee rs whic h vested wi thin th e year, rese arch an d devel op me nt cred its an d US state tax d edu cti ons . Defer red ta x on unre alise d foreig n excha nge d if feren ce a nd fore ign exc hang e dif fere nc e not d edu cti ble /(taxabl e) arise du e to dif fere nce s in th e fun cti onal c ur ren cy bas is und er ta x and a cc ou nting r ul es for th e US h old ing e ntit ies . Th e unre alise d fore ign exch ang e dif fere nc es were n ot re co gnise d in th e Gro up’s pro t befor e tax giv ing ris e to the per mane nt dif fere nc e. Adju stm ent s from ch ang e in tax rates are due to inc rease s in the ble nde d US rate for both fed er al and s tate ta xes. For th e year e nd ed 3 0 S eptem be r 20 21, expens es not d ed uc tibl e for ta x pur po ses in clu de in terest o n prefe renc e sh ares in cu rre d up to the Grou p’s IPO. Th e Group ’s tax affair s are gover ne d by loca l tax reg ulati ons in the U K , US an d Ger many. Given the un ce r tai ntie s that cou ld aris e in the appl icat ion of th ese re gu latio ns , judg em ents a re of ten re quire d in d eter minin g the t ax th at is du e. W here m ana gem en t is aware of potenti al unc er taint ies in l oc al jur isdi cti ons , that a re judg ed m ore li kely th an not to res ult in a l iabil it y for ad dit ion al ta x, a p rovisi on is ma de for mana gem en t’s be st es tim ate of the liab ilit y, deter min ed wi th refere nc e to simila r tran sac tio ns and t hird - p ar t y a dvi ce . Thi s provis ion at 3 0 Se ptemb er 2 0 22 a mo unted to £1. 1 m (20 21 : £1.4m). Fac to rs t h at m ay af fe c t fu tu re t a x ch ar g es Th e UK Bud ge t on 3 March 20 21 ann ou nc ed an inc reas e in the UK co rp or atio n tax rate from 1 9% to 25% with ef fec t from 1 A pri l 202 3. A s it has be en sub stan tivel y ena cted at the bal anc e she et date, th e effe ct of the rate incr ease on de ferre d tax is re ec ted in the C onso lid ated Fin anc ial S tatem ents . Th e cur rent ta x exp ense for th e year would have be e n £1 .9m if the expe cted in cre ased ra te of co rp orat ion ta x at 25% for the UK entities had applied. T ax re co gni sed i n othe r co mpre he nsi ve inc om e and e qui t y : Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Other comprehensive income Inc om e tax 3,07 4 – Equity Defer red ta x (15 0) 64 T ax re co gnis ed in othe r com pre he nsive in co me inc lud es inc om e tax o n the Grou p’s net investm ent h edg e. Defe rre d tax dire ct ly rec og nise d in equit y relat es to share- based payments. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 14 9 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 0. Loss p er s ha re Loss p er sha re is calcu lated by divi ding th e loss for th e year at tri but abl e to ordinar y share hol der s by the weighte d average nu mb er of ordin ar y share s ou tsta ndin g dur in g the ye ar, a f ter exclu din g the we ighted ave rag e num be r of non -ves ted or dinar y sha res. Dilu ted los s per sh are is calc ulated by div idin g the los s for the year at tr ibu tab le to ordinar y share ho lde rs by the weig hted averag e numb er of ordi nar y sh ares in clu din g non - ves ted/no n - exe rcise d ordi nar y shares . Dur ing th e year and pr io r year, the Gro up awarde d co ndi tion al share awards to Direc tors and c er tain em ploye es thr oug h an L TI P ( se e note 21 ). The no n - veste d/no n - exer cise d ordi nar y sh ares are ant i - dilu ti ve given the lo ss for th e yea r and are t he refore exclu de d fro m the wei ghted ave rage n um ber of o rdin ar y s hares fo r the p urp os e of dilu ted ear nin gs pe r share calculation. Ye a r ended 30 S eptember 2022 £000 Restated Ye a r ended 30 S e pte m be r 2021 £000 Los s a t tr ib ut a bl e to eq u it y s ha re h ol de rs o f th e C om pa ny ( 6 ,12 7 ) ( 2 7, 3 6 4 ) Number Number Weig ht ed ave ra ge nu m be r of sh ar es 120 , 3 6 4 , 8 3 1 8 8,248,03 7 Weighted aver age nu mb er of shares he ld by the Em ploye e Be ne t T r us t ( 61 , 74 1) (62 2) Weig ht ed ave ra ge nu m be r of sh ar es 1 20, 303,090 8 8 , 2 4 7, 4 1 5 Dilu tive sh are optio ns 2, 1 38,826 1 2 8 ,10 6 Dil u ted we ig h ted ave r ag e nu mb e r of s ha re s 12 2 , 4 41, 9 16 8 8 , 3 75 , 521 p p Bas ic l os s pe r s ha re ( 5 .1 ) (31.0) Dil u ted l os s pe r s ha re ( 5 .1 ) (31.0) 1 1 . Business combinations Business com binations f or the year ended 30 September 2022 Acq ui si ti on of Plat in u m Pare n t Inc. (“ Li veA uc ti on ee r s”) On 1 Oc tobe r 2021, the Grou p acqui red 100 % of the equi t y share ca pit al of Live Auc tio ne ers . Li veA uct ion ee rs is the prov ide r of a curated onli ne mar ketpla ce foc use d on the No r th A me ri can A & A seg men t, de sign ed for live auc tio ns of coll ec tibl es , antiqu es and ne ar t . Th e pur pos e of the acq uisit ion was to fu r th er s tren gt hen t he Gro up’s pres en ce in th e U S and ex pan d its A & A se gme nt an d ac cel er ate the Gro up’s buil d ou t of an onli ne auc tio n eco syste m that will be ne t all sta keho lde rs via th e addi tion of an integr ated paym en ts solu tio n. Consideration Th e max imu m co nsid era tion p ayabl e of £4 0 4.7m ( $5 4 3.9m), com pri sed: • upfro nt cas h co nsid erat ion of £ 35 8 . 8m ($ 4 8 2 .2m); • rollove r optio ns and res tri cted sto ck uni ts in Auc tio n T ec hno lo gy Gro up plc in exch ang e for share opti ons pr evio usl y held in L ive Auc tio ne er s’ pare nt co mpa ny, Platinum P aren t Inc ., for th e valu e of £2 7 .3m ($ 36 .7 m); and • con ting ent c ons ide ratio n of up to a maxi mum £ 1 8.6 m ($25.0 m), subje ct to the pe r for man ce of Live Au cti one er s again st ce r ta in targ ets for the year en ding 31 D ec em ber 2 021. Mana ge me nt cal cul ated the fa ir valu e of the c onti ng ent c ons ide ratio n bas ed o n the ex pe cted fo rec asts fo r the e arn - ou t pe rio d and d isc oun ted usin g the ac quis iti on’s inter nal rate of retu rn , resu ltin g in a lia bili t y of £17 .9m ($24.0 m). The targ ets we re met i n full a nd ca sh co ntin ge nt con side rati on of £18.0 m was pai d dur ing th e year e nd ed 3 0 S eptem be r 20 2 2 . Paym ent s for the fa ir valu e of co nting en t con side rati on at acq uisit ion date are pres ented in th e Co nsol idated S t ateme nt of Cash Flows wi thin c ash ows fro m investi ng acti vi ties . Paym ent s for the cha nge s in the fair value of co ntin gen t con side rati on sin ce acq uisi tio n date are presen ted withi n cash ows from n anci ng ac tivi tie s. E xch ang e dif fere nc es to reser ves were re c ord ed wi thin for eign e xchan ge di f feren ces o n tra nslat ion of fore ign o pe ratio ns in t he C ons olid ated S tate me nt of Co mpre he nsi ve Inco me or Lo ss. T he unwin din g of discou nt of £0.7m is repo r ted as a na nc e cost in th e Co nsol idated S t ateme nt of Pro t or Loss. Purchase price alloc ation Mana ge me nt asse sse d the fa ir valu e of the a cqui red as sets a nd lia bili ties as p ar t of t he pu rcha se pr ic e allo cati on ( “ PPA ” ). Thi s was pre pare d on a provis ion al basis a nd dis clo sed i n the G roup’s C ond en sed C on soli dated F ina nci al S tatem en ts for the s ix mo nths e nd ed 31 M arc h 20 22 a nd subs equ ent ly na lise d in the sec on d half of F Y2 2 . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 0 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Th e fair value s of the assets an d liabili ties foll owing th e nali satio n of the purc hase pr ic e allo cati on are set ou t bel ow: Boo k valu e £000 Fair value adjustmen ts £000 Fina l fair value £000 Acquired intangible assets – so f t ware 8 ,1 3 3 16 , 3 61 24,4 94 Acquired intangible assets – cust o mer relationships 2 7, 0 5 3 92 ,970 1 20,0 23 Acquired intangible assets – brand 2 , 275 19 ,1 8 2 2 1, 4 5 7 Inter nally g ene rated sof tware 1, 8 2 0 – 1, 8 2 0 Property, p lant and equi pment 88 – 8 8 Right o f use assets 959 – 959 T rade r eceivables and o ther receivable s 3 , 9 74 – 3 , 9 74 Inc om e tax rec ei vabl e/( payabl e) 19 4 (6 4 4 ) (4 5 0) T rad e and ot her p ayabl es (4 ,7 3 3) (1,78 4) (6 , 5 17 ) Lease liabilitie s (1, 0 6 3 ) – (1, 0 6 3) Defer red ta x liabi liti es ( 11 , 2 8 7 ) ( 30,865) ( 4 2 ,15 2 ) Net as sets on acquisition 2 7, 4 1 3 95,220 12 2 , 6 3 3 Go od wi ll (note 12) 2 8 1, 3 41 T otal consideration 4 0 3 , 9 74 Co ns id er a tio n sa tis e d by: Init ial cas h cons ide ratio n 28 8 , 5 24 De bt amou nts set t led 70,239 Fair valu e of equ it y in terest 2 7, 3 2 2 Contingent considera tion – cash 16 , 8 6 5 Contingent considera tion – equity 1, 0 2 4 4 0 3 , 9 74 Ne t ca sh o w ari si ng on a cq ui si tio n: Init ial cas h cons ide ratio n 28 8 , 5 24 De bt amou nts set t led 70,239 3 5 8 ,76 3 Intangible assets Intan gib le asse ts repre sen t custo mer re latio nshi ps, au cti on tech no log y plat for m, pay me nt tech nol og y and bra nd for whic h amo r tis atio n of £13.4m has b e en ch arge d for th e year e nd ed 3 0 S eptem be r 20 2 2 . Th e inta ngib le as sets wil l be am or tise d over th eir re spe ct ive exp e cted us eful ec on omi c lives: cus tome r relati ons hips of 1 4 years , auc tio n techn olo gy pl atfo rm of 1 0 years , paym ent tec hn olo gy of ve year s and bra nd of 1 5 year s. O f the i ntan gibl es ac qui red , the c ustom er re lati ons hip bal anc es are e sp eci ally s ensi tive to ch ang es in as sum ptio ns aro und di sco unt r ates and c ustom er at t rit ion r ates. A 1 % cha ng e in the c usto mer a t tri tio n rate resul ts in a £ 1 2.0 m ch ang e in th e valua tion . Deferred tax Th e fair valu e adju stm ent to th e defer red t ax li abili ties of £ 3 0.9m relates to th e defer red t ax lia bili t y rec og nise d on th e ac quire d int angi ble as set a nd the ta x ef fec t of the oth er fai r valu e adjus tme nts . Ot h er f ai r val ue a dj us t me nt s Dur ing th e meas urem en t per iod , the Gro up n alise d the valu ation of on erou s con trac ts and co sts not ac cr ue d. Adj ustm en ts were made to the provis ion al PPA resul ting i n an inc reas e in tra de an d othe r payab les of £ 1 .8 m and i nc ome t ax p ayabl e of £0.6 m . Th e fair valu e of the a sset s acq uire d inc lud es gro ss tra de re ce ivab les of £4 . 1 m. At ac quis itio n date, t he Gro up’s bes t es timate of tra de re cei vabl es ex pe cted n ot to be co l le c te d a m o un te d to £ 0. 3 m . Goodwill Go odwi ll arise s as a result of the sur plus of co nsid era tion over th e fair value of the se par ately ide nti ab le ass ets acq uire d. T he main rea son lead ing to the rec og niti on of goo dwill is the fu tur e eco no mic be ne ts arisin g from as sets whi ch are not ca pab le of bein g indi vidu ally id enti ed and se par ately re co gnis ed ; thes e inc lud e the va lue of fu tur e tech nol og y inc lud ing th e roll ou t of the pay me nts pl atfo rm to the w ide r Grou p, syn ergi es ex pe cted to be re alise d po st ac quis itio n , new cu stom er re latio nshi ps an d the fai r value of t he ass em ble d wor k force w ithi n the busi nes s acq uire d. G oo dwill d edu cti ble fo r tax p ur pos es am oun ts to £18. 1 m . Acq uisit ion c os ts of £nil (3 0 Se ptem be r 20 21 : £ 1 2.0 m) dire ctl y related to th e bus ines s co mbi natio n have be e n imm edi ately ex pe nse d to the Co nso lidated S t ateme nt of Pro t or Loss as par t of adminis trati ve expe nse s and inc lud ed wit hin exce ptio nal item s ( se e note 3 ). Bet wee n 1 Oc tobe r 2021 an d 30 S eptem be r 20 22 , Li ve Auc tio ne ers c ont rib uted £ 3 8.7m t o Group reve nue s and a pro t before ta x of £5.0 m. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 1 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 1 . B us ine ss c om bi na tio ns c onti nue d Business com binations f or the year ended 30 September 202 1 Acq ui si ti on o f Auc t io n Mo bi li t y LLC On 1 6 Octo be r 202 0, the G roup ac qui red 100% of the eq uit y sh are cap ita l of Auctio n Mob ilit y L LC for a total maximu m con side rati on of $ 4 3 .3 m (equival ent to £ 3 3.4 m), co mpr isin g upfro nt cas h co nsid era tion of $ 3 3 .0m (equ ival ent to £ 25.4 m), defer red c on side rati on of $ 0.3 m (equiv alen t to £0.2 m) and co ntin gen t co nsid erat ion of u p to a maxi mum $ 1 0.0 m (equiva len t to £7 .7 m), su bje ct to the p er fo rma nc e of the ac qui red c om pany again st c er t ain ta rget s. Au cti on M obil it y prov ide s a cus tomise d au ctio n sof t ware p lat form , a le adin g whi te labe l app a nd web d evel op er, f or auc tion h ous es . Th e pur po se of the a cqu isiti on was to fu r th er st ren gth en th e Gro up’s prese nc e in th e US . At acquis iti on , the Dire ctor s cal culate d the fair valu e of the conti nge nt co nsid era tion ex pe cted to be paid , base d on a weighted aver age prob abili t y mo de l, re sult ing in a l iabil it y of £ 3.9m. T h e key inpu ts to the m od el were r evenu e grow t h assu mptio ns an d pe rce ntag e pro bab ilit y weight ings ap plie d to foreca st ear n - o ut c ash ows . At the date of acquisi tio n, Auc tio n Mob ilit y L LC had net ass ets wit h a fair value of $1 3.8 m (equival ent to £10.6m). Th e acqu isiti on ac co untin g is set ou t b elow. Final fair value £000 Intan gib le asse ts – sof twa re 2 ,78 6 Intan gib le asse ts – custom er rel atio nshi ps 6,094 Intan gib le asse ts – bran d 371 Intan gib le asse ts – non - co mpe te agree me nt 1, 2 8 6 T rade r eceivables 4 62 Other debt ors and pr epayment s 6 47 Cash a nd c ash e quiv alen ts 476 T rade payables ( 12 9) Accr uals and c ontrac t liabiliti es (1, 3 8 9) Net as sets on acquisition 10 , 6 0 4 Go od wi ll (note 12) 18 , 9 7 2 T otal consideration 29 , 5 76 Co ns id er a tio n sa tis e d by: Cash consideration 25 , 424 Co ntin gen t co nsid erat ion (note 1 6) 3 , 9 18 Defer red c onsi de ratio n 234 29 , 5 76 Ne t ca sh ou t ow ari si ng o n acq u isi ti on: Cash consideration 25 , 424 Less : cash and c ash eq uival ent s balan ces ac qui red (476) 24 ,9 4 8 Go odwi ll arise s as a result of the sur plus of co nsid era tion over th e fair value of the se par ately ide nti ab le ass ets acq uire d. T he main rea son lead ing to the rec og niti on of goo dwill is the fu tur e eco no mic be ne ts arisin g from as sets whi ch are not ca pab le of bein g indi vidu ally id enti ed and se par ately re co gni sed ; thes e inc lud e the va lue of th e asse mb le d work fo rce wi thi n the bu sin ess ac qui red . Al l the g oo dwill re co gnis ed is exp ec ted to be de du ctib le for in co me t ax p urp ose s. Acq uisit ion c osts of £1. 1m dire ctl y related to the bus ines s com bin atio n were imm edia tely exp ens ed to the Co nsol idated S t ateme nt of Pro t or Loss as par t of adminis trati ve expe nse s and inc lud ed wit hin exce ptio nal item s ( se e note 2) . Th e fair valu e of the as sets a cqu ire d inc lud es gro ss tra de re ce ivab les of £ 0.5 m whic h were ex pe cte d to be full y rec over abl e. Th e Grou p’s cont ing ent c ons ide ratio n as at 3 0 S eptem be r 20 21 am ounte d to £2 .3 m . Th e Gro up reg ular ly p er fo rms a re view of t he on goi ng busi nes ses to ass ess th e imp act of t he fair va lue of th e co ntin gen t co nsid erat ion . Th e ch ang e of £1.5m (2020 : nil ) in th ese fai r valu es was rep or te d as nan ce inc om e in the Co nso lida ted S tatem ent of Pro t or Los s. E xch ang e dif feren ce s to reser ves were re co rde d withi n foreign exchan ge dif fer enc es on tr ansl ation of foreig n ope rati ons in th e Con soli dated S tate men t of Comp reh ens ive Pro t or Los s. Be twe en 16 Oc tobe r 202 0 and 3 0 Se ptemb er 20 21, Auc tio n Mob ilit y L LC con trib ute d £5.8 m to Group reve nue s and a pro t of £0.2 m for the year en de d 30 S eptem be r 2021. If the acquis itio n had oc cu rre d on 1 Octob er 20 20 , Grou p revenu e would have be en £ 70.3 m and Gro up los s before t ax wou ld have b ee n £ 27 .3m . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 2 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 2 . Goo dw ill a nd o th er i nt an gi ble a sse t s Sof t war e £000 Customer relationships £000 Brand £000 Non- compete agreem ent £000 To t a l acquired intangible assets £000 Internally generat ed sof t ware £000 Goodwill £000 To t a l £000 Cost 1 Oc tobe r 20 20 9, 37 3 5 4,42 9 11, 2 8 3 – 75, 0 85 9, 8 9 4 1 24,02 3 20 9, 0 0 2 Acq uisit ion of b usin ess (note 1 1 ) 2,78 6 6,094 371 1, 2 8 6 10 , 5 3 7 – 18 , 9 7 2 2 9, 5 0 9 Additi ons – – – – – 1, 9 5 6 – 1,9 5 6 Exchange differ ences (2 14) ( 70 6) (2 28) (5 0) ( 1,1 9 8 ) (3 6 5 ) ( 1, 8 3 5 ) (3 , 3 9 8) 30 September 2021 11 , 9 4 5 5 9 , 817 11, 4 2 6 1, 2 3 6 8 4, 424 11 , 4 8 5 14 1 ,16 0 2 3 7, 0 6 9 Acq uisit ion of b usin ess (note 1 1 ) 24,4 94 1 20,023 2 1, 4 5 7 – 16 5 , 9 74 1, 8 2 0 2 8 1, 3 4 1 4 4 9 ,1 3 5 Additi ons – – – – – 4, 209 – 4, 209 Exchange differ ences 5 ,9 5 3 2 7, 9 6 6 5 , 493 260 39, 672 2 ,11 8 66,477 10 8 , 2 6 7 30 September 2022 42, 392 2 0 7, 8 0 6 38,37 6 1, 4 9 6 29 0,070 19 , 6 3 2 488 ,9 78 798,6 80 Amor tisation and impairment 1 Oc tobe r 20 20 1,9 61 4 , 7 17 628 – 7, 3 0 6 2,84 3 – 10 ,1 4 9 Am or tis ation 3, 42 2 8 , 24 6 1, 2 5 8 293 13 , 2 19 4 , 5 76 – 1 7, 7 9 5 Exchange differ ences (7) (16 ) (6) 4 (2 5 ) (87 ) – ( 112 ) 30 September 2021 5 , 3 76 12 , 9 4 7 1, 8 8 0 297 20,50 0 7, 3 3 2 – 2 7, 8 3 2 Am or tis ation 6 ,11 8 1 7, 4 3 6 2 ,73 6 3 01 26, 591 4 ,11 8 – 30 ,70 9 Exchange differ ences 924 2,023 47 7 10 6 3,5 30 1,15 6 – 4,686 30 September 2022 12 , 418 32 ,406 5,093 70 4 5 0 ,6 21 12 , 6 0 6 – 63, 227 Net book value 1 Oc tobe r 20 20 7, 4 1 2 4 9 , 7 12 1 0,655 – 6 7, 7 7 9 7, 0 5 1 1 2 4,023 19 8 , 8 5 3 30 S e ptemb er 20 21 6,569 4 6 , 870 9, 5 4 6 939 6 3 ,9 2 4 4 ,15 3 14 1,1 6 0 20 9, 23 7 30 September 2022 2 9 , 9 74 17 5 , 4 0 0 33, 283 792 23 9, 4 49 7, 0 2 6 48 8 ,978 735,453 Intan gib le asse ts, oth er tha n goo dwill , have a nite life and are amo r tis ed over th eir exp ec ted usef ul lives at the rates se t out in the ac co unt ing pol icie s in note 1. Impairment asse ssment Th e go odwi ll and i ntan gibl es at tr ibu ted to eac h of the G rou p’s cash - g en er ating u nits (CG Us) and gro ups of CG Us ar e asse sse d for im pair me nt at leas t ann uall y or m ore fre qu entl y whe re th ere are i ndi cator s of impa irm ent . T he G roup tes ts for im pair me nt of go od will at th e op erati ng seg me nt leve l rep rese ntin g an agg reg ation of C GU s, th e leve l at whi ch go od will is m oni tored by m anag em ent . No C GU o r gro up of CG Us is larg er than an op er atin g segm ent as de n ed by IF RS 8 “Op er ating S eg me nts” befo re aggre gati on . The re cove rabl e amo unt for CG U group s has be en de termi ne d on a value in use basi s (“ VI U ” ). Th e tabl e be low se ts ou t the c ar r yi ng valu es of go o dwill an d othe r ac quire d int angi ble as set s allo cated to ea ch C GU at 3 0 S epte mbe r 20 2 2 alon g with th e pre - ta x disco unt rates ap plie d to the risk- ad justed c ash ow fore ca sts and th e lon g -ter m grow th rate. 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Val u a t i o n method Lon g - ter m growth rat e Pre -ta x discount rate A& A 304,282 3 2 , 74 2 VIU 3% 13 . 4 % I&C 16 2 , 615 9 0 ,17 9 VIU 3% 13 . 4 % Auction Ser vices 22 ,0 81 18 , 2 3 9 VIU 3% 12 .1 % T otal goodwill 4 88 ,9 78 14 1,1 6 0 Wh en testi ng for i mpai rm ent , re cover abl e amo unts fo r all of the G rou p’s CGUs a nd gro ups of C GUs a re mea sure d at the ir valu e in us e by disc oun ting th e futu re expe cte d cash ows from the ass ets in the C GUs . Th ese cal cul atio ns use cas h ow proj ec tion s base d on Boa rd app roved bud ge ts and app roved pla ns. W hile th e Grou p prepa res a ve -ye ar plan , level s of unce r tai nt y inc rease as th e plann ing ho rizon ex tend s. Th e Grou p’s plan focus es more c lose ly on th e nex t thre e year s, howe ver for the pur po ses of the im pair me nt testin g the ve -ye ar forec ast s are use d as we do n ot anti cipa te the lo ng - term g row th rate to be a chie ved un til af ter thi s time . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 3 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 2 . Goo dw ill a nd o th er i nt an gi ble a sse t s con tinu ed Th e key assu mptio ns an d esti mates us ed for va lue in u se c alcu latio ns are s umm aris ed as fol lows: Assumption Approach Risk-adjusted cas h ows are de termi ne d by referen ce to th e bud get fo r the ye ar followi ng th e bala nc e she et d ate and fore cas ts for th e followi ng four year s, af ter whi ch a lon g -ter m pe rp etui t y grow th rate is appli ed . The m ost re ce nt nan cia l budg et app roved by the Bo ard has b ee n pre pare d af ter c onsi der ing t he cu rre nt e co no mic e nviro nme nt in e ach of th e Gro up’s mar kets. T he se proje c tion s repres ent th e Dire ctor s’ bes t estim ate of the future p er for man ce of the se busi nes ses . Long-term gro wth rates are appl ied af ter the fore c ast pe rio d. T hes e are base d on ex tern al rep or t s on lon g -ter m GD P grow th rates for the mai n mar kets in whi ch ea ch C GU o pe rates. T he refore , the se do n ot exce ed t he lo ng - ter m averag e grow th r ates for th e individual mark ets. Pre-tax discount rates are de rive d fro m the p os t-ta x weig hted aver age c ost of c api tal ( “ WACC ” ) whic h has b ee n ca lcu lated usi ng th e cap ita l asse t pri cin g mo del . Th ey are we ighted b ase d on th e ge og rap hic al area i n whic h the C GU g rou p’s revenue is g en er ated. Th e assu mpti ons us ed in t he c alc ulatio n of the WACC a re be nc hma rked to ex ter nall y availab le da ta and t hey re pres ent the Gro up’s curre nt mar ket asse ssm ent of the tim e value of mon ey and r isks sp eci c to the CGUs . Movem ent s in the pre - ta x disc ou nt rates for C GU s sinc e th e year e nde d 3 0 S eptem be r 20 21 are dr iven by c han ges i n mar ket- bas ed in pu ts. Any uns ystem atic ris k on the CG Us has be en in he rentl y buil t into the cash ows of each of the CGU s and the refore no addi tio nal el em ent of r isk has b e en in clu de d in the d isc oun t rates use d at 3 0 S eptem be r 20 2 2. Sensitivit y analysis At 30 S e ptemb er 20 2 2 un de r the i mpai rm ent as ses sme nts p repa red th ere is n o imp air me nt req uire d. H owever, both the A & A an d Auc tio n Se r v ice s CGU s have limi ted h eadro om a nd are ve r y se nsi tive to a move me nt in any o ne of th e key assu mptio ns . Man age me nt have the refore p er fo rm ed sens iti vit y a naly sis bas ed o n reaso nab ly p ossi ble s ce nari os in clu din g inc reasi ng th e disc oun t rates an d redu cin g the C AGR o n the f utu re fore cas t cash ows , both of which are feasible give n the curre nt futu re unce r ta int y of macro - ec on omi cs . For th e A & A CGU , und er th e base c ase t her e is hea droo m of £ 28 .0 m at 30 S e ptemb er 2 02 2 . For the recoverable amount to f all t o the carr ying value, the discount rate would need to be increased to 1 3.9% from 1 3.4%, the long -term grow t h rate red uce d to 2. 2% f rom 3 .0% , o r th e CAGR f rom F Y2 2 o n the ve -ye ar future forecas t cash ows reduc ed by o ne perc enta ge point . Wi th an u nc er t ain macro ec on omi c ou tlo ok , it is dif cu lt to mo de l the precis e impa ct o n busi nes s pe r for man ce at th is tim e but s ho uld th ere b e an e co nom ic dow ntur n the A & A se gm ent is li kely to be i mpa cted in t he sh or t term d ue to reduc e d sale s and m argin s bu t it wou ld the n be e xpe c ted to retur n to highe r grow t h in later ye ars . Man age me nt has m od elle d a sc en ari o whe re A& A CGU r evenu e de cli nes 4% in b oth F Y2 3 and F Y24 , resu ltin g in a cu mul ative d ec rease of 8 % wit h a retur n to stee pe r grow th f rom F Y25 to F Y27 . Gi ven th e Grou p ca n pull l ever s to redu ce dis cret ion al sp end , ma nage me nt has m od ell ed th at 3 3% of th e reven ue lo st c an be re gai ne d thro ugh c ost s avin gs (which would maintai n the Group’s gross pro t margin at c .66%). T he overall impact on the ve - yea r adjus ted EBIT DA CAGR is a reduct ion of 2 % . A potent ial inc rease of 1% in disco unt rate o r a reaso nab le worst- c ase incre ase of 2 % in the d isc ount rate a nd 2% redu cti on in ve - ye ar CAGR grow th rate c oul d result in an im pair me nt in th e ran ge of £5 9.0m to £ 96 .0 m. For th e I&C CG U, und er th e base cas e there is he adro om of £3 55 .8 m and th ere is no realis tic ch ang e of assumpti on that wou ld cau se the CG U ’s carr ying amount to e xceed its recoverable amount. For Au cti on S e r vi ces wi th a h eadro om of £ 1 .7 m for the re c overab le am ou nt to fall to the c arr yin g valu e, th e disc oun t rate would n e ed to be inc rease d to 1 2 .6% from 1 2 . 1%, the lon g - term grow t h rate reduc ed to 2. 3% fro m 3.0 % , or the CAG R on the cas h ows red uc ed by thre e per ce ntag e poi nts. A uc tion S e r vi ce s is par ticu lar ly se nsi tive to the l ong -ter m grow th r ate and dis cou nt rate ap plie d. A n in cre ase of 1 % in th e disc oun t rate and 1% reduct ion i n the l ong -ter m grow th r ate coul d resu lt in a n imp air men t of £3 .6m . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 4 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 3 . Prop e r t y , pl an t an d eq ui pme n t Land and buildings leasehold £000 Co mp ute r equipment £000 Fixtu res, ttings and equipment £000 To t a l £000 Cost 1 Oc tobe r 20 20 249 28 6 11 0 645 Additi ons 16 95 38 14 9 Exchange differ ences (20) ( 11) (4) (35 ) 30 September 2021 245 370 14 4 759 Acq uisit ion of b usin ess (note 1 1 ) 56 – 32 88 Additi ons 3 25 3 14 270 Disposals – (20 8) – (2 0 8) Exchange differ ences 221 20 2 18 1 60 4 30 September 2022 525 617 371 1, 513 Accumulated depreciation 1 Oc tobe r 20 20 37 89 41 16 7 Char ge for th e year 73 13 8 17 2 28 Exchange differ ences (8) (6) (1) ( 15 ) 30 September 2021 10 2 2 21 57 380 Char ge for th e year 10 2 14 0 38 28 0 Disposals – (20 8) – (2 0 8) Exchange differ ences 205 17 3 15 7 5 35 30 September 2022 409 326 252 987 Net book value 1 Oc tobe r 20 20 2 12 19 7 69 478 30 S e ptemb er 20 21 14 3 14 9 87 379 30 September 2022 11 6 2 91 11 9 526 Th ere is n o materi al dif fere nc e be twe en t he pro pe r t y, plant a nd e quip me nt ’s histori cal c os t value s as sta ted above a nd th eir fai r valu e equ ival ents . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 5 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 4 . T rad e an d ot he r re ce iva bl es 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Current T rade r eceivables 12 , 6 6 0 6 , 74 4 Less : loss prov isio n (846 ) (5 0 3) 11 , 8 1 4 6 , 2 41 Other debt ors and pr epayment s 3 ,1 3 9 2 , 8 61 Contract assets 837 5 97 15 , 7 9 0 9, 6 9 9 Non-current Other debt ors and pr epayment s 90 85 15 , 8 8 0 9,78 4 Th e Gro up applie s the IFR S 9 “Fin anc ial Instr ume nts” simpl i ed appro ach to m easu rin g expec ted credi t los ses using a lifetim e exp ec ted credi t los s provis ion for t rad e rec ei vabl es and c on trac t ass ets . T o me asure ex pe cte d cre dit l oss es on a c oll ec tive ba sis, t rad e rec eiv abl es and c on trac t ass ets are grou pe d base d on si mila r cre dit r isk an d age ing . T he co ntr act a sset s have simil ar ris k ch arac teris tic s to the tr ade re ce ivab les fo r simil ar t yp es of con tra cts . Th e exp ec ted lo ss mo de l inc or po rates cu rre nt an d for ward - l oo ki ng infor mati on o n mac roe co no mic fa ctor s affe cti ng th e Grou p’s custom er s. Th e averag e cre dit p er io d on sa les is 3 0 days af ter t he invoi ce h as be en is sue d. N o inter est is c harg ed o n ou tsta ndi ng tra de re ce ivab les . At 30S e ptemb er 20 2 2 (2021: nil) th ere were no c ustom er s who owed in exces s of 1 0 % of the total trade de btor bala nc e. Th e age ing of tr ade re ce ivab les at 3 0 S ep temb er was: 2022 2021 Gross £000 Loss provision £000 Expec ted loss rate % Gross £000 Loss provision £000 Expe cted loss rate % Within 3 0 days 11, 3 8 5 2 59 2% 5 ,7 2 8 23 – Be twe en 3 0 an d 60 d ays 4 61 93 20% 336 6 2% Be twe en 6 0 an d 9 0 days 249 99 40% 14 9 34 23% Ove r 90 d ays 565 395 70 % 5 31 4 40 83% 30 September 12 , 6 6 0 846 7% 6 , 74 4 503 7% Th e movem en t in the l oss p rovisi on du rin g the ye ar was as foll ows: Ye a r ended 2022 £000 Ye a r ended 2021 £000 1 Oct ober 503 458 Ar ising on ac quisi tion 277 – Inc rease in lo ss allowan ce re co gnis ed in Co nso lida ted S tatem ent of Pro t or Los s 2 26 174 Uncollectable amounts written off (29 0 ) (111 ) Exchange differ ences 13 0 ( 18) 30 September 846 5 03 T rad e rec eiva ble s and co ntra ct asse ts are wri t ten off wh ere the re is no reaso nab le exp ec tatio n of recove r y. Indicato rs that the re is no reaso nab le exp e ctati on of re cove r y in clu de , amo ngs t othe rs , the fa ilure of a d ebtor to en gag e in a rep aym ent p lan wi th the G rou p, and a fai lure to make con trac tual p aym ents fo r a pe rio d of greater t han 120 days past du e. Impa irm en t losse s on trad e rec eiva ble s and co ntra ct asse ts are pres ented as ne t impai rm ent lo sses wi thin o per atin g pro t. S ubs equ ent rec overi es of am oun ts prev iou sly wr it ten of f a re cre dited a gain st th e sam e line i tem . Th e ca rr y ing a mo unt of tr ade an d othe r re cei vabl es app roximates to the ir fair v alue . Th e total am ount of t rade re c eiva ble s that we re past d ue b ut not i mpa ired we re £ 0.3 m (202 1 : £ 0. 2m). Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 6 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 5 . Cas h an d ca sh e qu iva le nt s Cash a nd c ash e quiv alen ts co mp rise c ash at b ank a nd in ha nd an d cas h hel d in es crow. Th e car r y ing a mou nt of the se ass ets ap proxi mates to thei r fair val ue. 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Cash in bank 51, 8 17 17 3 , 67 5 Cash h el d in esc row – 2 2 3 ,7 76 51 , 8 17 3 9 7, 4 5 1 Cash in ba nk inc lud es cas h of £2 .4m (20 21 : £2 .4 m) held by the T ru stee of the Gro up’s Empl oyee B en e t T ru st relati ng to pre - IP O sha re awards for em ploye es . Th ese f und s are res tri cted an d are not ava ilab le to circ ulate wit hin th e Grou p on d em and . As a resul t of the capi tal rais ing on 17 Jun e 20 21, the cas h, ne t of transa ctio n fees ass oc iated wit h the acqu isit ion an d nan cin g of Live Au cti on ee rs was tran sferre d to an escrow acc ou nt. T he fu nds he ld at 30 S eptem be r 2021 wer e restr icte d and are not availab le to circul ate withi n the Gro up on de man d. Th e fun ds were rele ase d on 1 Octob er 20 21 for the ac quisi tio n of Live Auc tio ne er s ( see n ote 1 1 ). 1 6 . T rad e an d ot he r paya bl es 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Current T rade payables 2 , 3 75 9 31 Payro ll ta x and oth er s tatu tor y li abili ties 5 ,13 3 2 , 8 10 Contingent considera tion – 2, 794 Accr uals 9, 4 8 9 9 ,408 Cont ract liab ilities 1,7 8 3 1, 3 67 18 , 7 8 0 1 7, 3 1 0 Th e car r yi ng amo unt of trad e and othe r payabl es clas si e d as nan cial lia bili ties at amo r ti sed c ost ap proxim ates to their fair value . Co ntin gen t co nsid erat ion c om pri ses lia bili ties c on ting ent o n the f utu re pe r for man ce of ac qui red b usin esse s he ld at fair va lue an d defer re d con side rati on pay able a t a set am ou nt in th e fu ture. T he se lia bili ties a re rem easu red ea ch p er iod a nd th e rem easu rem ent is re c ogn ised i n the Co nso lidated S t ateme nt of Pro t or Loss . Dur ing th e year en ded 3 0 Se ptemb er 20 2 2 , co nting en t cons ide ratio n inc rease d by £1 7 . 9m for the acq uisit ion of Live Au cti on ee rs (note 1 1), fair value adjus tme nt /unwin ding of disc ou nt of £1 .8 m repo r ted as a na nce c ost (note 8 ) and forei gn exchan ge dif fer enc es of £0.7m on translati on of foreig n ope ratio ns rep or ted in the Co nso lidate d S tateme nt of Ot her C om preh en sive Inc om e or Loss . All c onti nge nt co nsid erat ion was set t led du rin g the year en de d 30 S eptem be r 20 22 in c ash of £2 2 .2 m and equ it y of £1 .0 m. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 7 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 7 . Leases Th e Grou p lea ses as sets i ncl udin g pro pe r t y, motor vehi cle s and c om pu ter equ ipm en t. Th e weigh ted averag e in cre men tal b or rowing r ate cont rac ted in 2 02 2 was 6 .6% (2021 : 5. 2%). Land and buildings leasehold £000 Computer equipment £000 Motor vehicles £000 T otal £000 Rig h t of us e as se ts 1 Oc tobe r 20 20 1, 5 19 3 97 8 1,9 2 4 Additi ons 336 – – 336 Modicati on ( 7 9) – – ( 7 9) De pre ciati on cha rge for the yea r (52 2 ) (2 14 ) (7) ( 74 3 ) Exchange differ ences ( 17 ) (2 0) – (37 ) 30 September 2021 1, 2 3 7 16 3 1 1, 4 0 1 Acq uisit ion of b usin ess (note 1 1 ) 959 – – 95 9 Additi ons 67 – – 67 De pre ciati on cha rge for the yea r ( 752) ( 16 7 ) ( 1) (9 2 0) Exchange differ ences 200 7 – 207 30 September 2022 1 , 7 11 3 – 1, 7 14 Lease liabilities 1 Oc tobe r 20 20 1, 5 3 8 42 0 6 1, 9 6 4 Additi ons 336 – – 336 Modicati on (8 8) – – (88) Interes t char ge for the year 60 13 1 74 Lease pay me nts (5 75 ) (2 3 4) (7 ) (8 16) Exchange differ ences (18) (20) – (38) 30 September 2021 1, 2 5 3 17 9 – 1, 4 3 2 Acq uisit ion of b usin ess (note 1 1 ) 1, 0 6 3 – – 1, 0 6 3 Additi ons 67 – – 67 Interes t char ge for the year 13 2 5 – 13 7 Lease pay me nts (9 0 9) ( 18 7 ) – ( 1, 0 9 6 ) Exchange differ ences 231 6 – 2 37 30 September 2022 1, 8 3 7 3 – 1 ,840 Cur rent 74 3 3 – 74 6 Non- current 1, 0 9 4 – – 1, 0 9 4 30 September 2022 1, 8 3 7 3 – 1 ,840 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 8 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Th e charg e rec ogn ise d in the Co nsol idated S t ateme nt of Pro t or Loss for the ye ar was as follows: Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 De pre ciati on cha rge (9 2 0) ( 74 3 ) Interes t char ge inc lud ing ne t gain on mo di c atio n (13 7 ) (6 5 ) ( 1 ,057) (80 8) Th e non - ca nc ella ble l ease r enta ls are paya ble as fol lows: 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Wi thin 1 ye ar 8 81 74 7 Be twe en 1 a nd 2 yea rs 408 4 67 Be twe en 2 a nd 5 yea rs 556 11 4 Ove r 5 year s – – 1, 8 4 5 1, 3 2 8 At 30 S e ptemb er 20 21 an d 20 2 2 , the re were n o non - ca nc ella ble c om mit me nts rel ating to sh or t-ter m lea ses o r low -v alue l ease c om mi tme nts . 1 8. Loan s an d bo rr owin gs Th e car r yi ng amo unt of loa ns and bo rrowi ngs cl assi e d as nan cial li abili ties at am or tised c ost ap proxim ates to their fair valu e. 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Current Secured bank loan 30,9 8 3 – Uns ec ured l oan n otes – 353 30 ,98 3 35 3 Non-current Secured bank loan 14 9 , 8 6 2 14 8 , 6 8 6 14 9, 8 6 2 14 8 , 6 8 6 1 80,845 1 49 ,0 39 Th e Grou p ente red in to a Se nior F acili tie s Agre em ent o n 17 June 20 21 whi ch in clu de d: • a senio r term lo an facili t y (the “S e nio r T er m Facili t y ” ) for $ 20 4 .0m for th e acqui siti on of Live Au ctio ne er s. T he S eni or T er m Faci lit y was drawn down in full o n 30 Se ptem be r 2021 pr io r to compl etio n of the acqu isiti on of Live Au cti one e rs on 1 Oc tobe r 2021. The loa n will be due for repay me nt on 17 June 2 026 ; and • a mul ti - c urre nc y revol ving c re dit wo rk ing c api tal fac ili ty (th e “ Revol vin g Cre dit Fa cili t y ” ) for $ 49.0 m . Und er th e ter ms of the fa cili t y, the Revolv ing C red it Fac ilit y was e x tend ed d uri ng th e year e nde d 3 0 Se ptem ber 2 0 22 . A ny su ms ou tst andi ng un de r the Revo lvi ng Cr edi t Faci lit y will be d ue for re pay men t on 17 June 20 25 , sub jec t to the o ptio nali t y of a fur ther 12- mo nth ex ten sion . T he fac ilit y h ad not b ee n dr awn down as at 30 S e ptemb er 2 02 2 . Th e Se nio r Facili ties Ag ree me nt con tain s an adjusted n et leve rage c ovena nt whic h tests the rati o of adjusted ne t debt aga inst ad justed E BI TDA and an intere st cove r ratio whic h tests the rat io of adjusted E BI TDA ag ains t net na nc e charg es , in eac h case as at the last date of each na nci al quar ter , com me nci ng wit h the na nci al quar ter endi ng 30 S ep temb er 20 21. Th e Grou p has com plie d with th e nan cial c ovena nts of its bor rowin g faci liti es dur ing t he yea r en ded 3 0 S ep temb er 20 2 2 . On 10 Oc tobe r 20 22 , a prep aym ent of $ 4 3 .7 m was paid on the S eni or T er m Facil it y. In the absen ce of any other pre pay men ts, th e nex t sch ed ule d repay me nt woul d be $ 8 .7 m on 31 M arch 2 0 24. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 15 9 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 1 8. Loan s an d bo rr owin gs c on tinue d T he m ovem ents i n loa ns and b or rowin gs are as fol lows: 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 1 Oct ober 14 9 , 0 3 9 21 4,603 Repay me nt of loa ns an d bor rowin gs (3 5 9) ( 10 8 , 9 5 6) Repa yments of pr ef erence share s – ( 1 1 7, 7 1 6 ) Pro ce eds f rom l oans a nd b or rowing s – 17 6 , 6 3 9 Pro ce eds f rom t he iss ue of prefer enc e sh ares – 7 14 Acc ru ed inte rest an d amor tisat ion of na nce c osts 7, 6 7 9 16 ,9 5 3 Repa yment o f in ter est ( 7, 2 8 3 ) (26 , 3 8 8) Exchange differ ences 31, 76 9 (6 , 8 10 ) 30 September 1 80,845 1 49,039 Th e cur renc y pro le of the loan s and bo rrowi ngs is as follows: 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 US dollar 1 80,845 1 49 ,0 39 Th e weigh ted averag e intere st c harg e (in clu ding e arl y rep ayme nt fee s and a mo r tis ed c ost wr it ten of f ) for t he yea r is as follows: Ye a r ended 30 S eptember 2022 % Ye a r ended 30 S e pte m be r 2021 % Secured bank loan 4% 16 % Preferen ce s hares – 12 % Su bor dinate d loan n otes – 16 % Uns ec ured l oan n otes – 12 % Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 0 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 9. D efe rr ed t a xati on Th e movem en t of net d eferre d ta x liab iliti es is as foll ows: Capitalised goodwill and intangibles £000 Ta x losses £000 Other £000 T otal £000 1 Oc tobe r 20 20 ( 1 4,6 7 5) 2 ,11 8 969 ( 11, 5 8 8 ) Am ou nt cred ited /( cha rge d) to S tateme nt of Pro t or Loss 1,9 9 3 ( 74 8 ) 959 2 ,20 4 Am ou nt cre dite d to equi t y – – 64 64 Exchange differ ences 453 – (27 ) 426 30 S e ptemb er 20 21 ( 12 , 2 2 9 ) 1, 3 7 0 1,9 6 5 (8, 8 9 4) Defer red ta x asse t (2 , 62 8) 1, 3 7 0 1, 6 2 4 366 Defer red ta x liabi liti es (9 , 6 0 1) – 3 41 (9, 26 0) 1 Oc tobe r 20 21 ( 12 , 2 2 9 ) 1, 3 7 0 1, 9 6 5 (8 , 8 9 4) Acq uisit ion of b usin ess (note 1 1 ) (4 3 , 5 14) 548 8 14 ( 4 2 ,15 2 ) Am ou nt cred ited /( cha rge d) to S tateme nt of Pro t or Loss 6, 327 3, 526 ( 14 , 7 6 7 ) (4 , 9 14 ) Am ou nt cha rge d to equi t y – – ( 15 0 ) ( 15 0 ) Exchange differ ences (8 , 8 69) 67 3 (3 12 ) (8 , 5 0 8) 30 September 2022 (58,285) 6 ,11 7 ( 1 2 ,450) (6 4 , 61 8 ) Deferr ed tax asset – – – – Deferred tax liabiliti es (58,285) 6 ,11 7 ( 1 2 ,450) (6 4 , 61 8 ) No defer red ta x asse t has be en rec og nise d in resp ec t of unused ta x los ses in the U K of £0.7 m (2021: £0 .7 m) as it is not cons ide red pro bab le that the re will be fu ture ta xabl e pro ts availab le to offse t these ta x los ses . The lo sse s may be car rie d for ward in de ni tely. In prese ntin g the Gro up’s deferre d tax bal anc es , the Gro up of fset ass ets and lia bili ties to the ex tent we have a legall y enforc eab le rig ht to set off the ar isin g inc om e ta x liabi liti es an d asse ts whe n tho se defe rre d tax b alan ce s rever se. T a x lo sse s inc lud e unre lieve d intere st in t he U S , whe re the re are suf cie nt ta xabl e pro ts forec as t to be availa ble in th e futu re to enable th em to be utilis ed . The se los ses are availa ble in de ni tely. Ot he r inc lud es th e tax ef fe ct o n unre alise d forei gn exch ang e dif fere nc es an d share o ptio ns . Th e temp ora r y dif fe ren ces re latin g to the un remi t ted ea rni ngs of over sea s subs idiar ies a mo unted to £1. 1 m (20 21 : £ 22 . 8m). However, as the Grou p ca n con trol w heth er i t pays di vid end s fro m its su bsid iari es an d it c an co ntro l the ti min g of any div ide nds , no d eferre d ta x has b ee n provid ed o n the u nre mit te d ear ning s on th e basis t he re is no in tentio n to repatr iate the se am oun ts. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 161 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 20. Sha re c ap it al a nd r ese r ves 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Aut hor ise d, c alle d up a nd ful ly pai d 1 2 0, 525 , 3 0 4 ordi nar y share s at 0.01p each (202 1 : 1 1 9, 9 99,99 0 o rdina r y sh ares at 0 .01 p eac h) 12 12 12 12 Th e movem en ts in sh are ca pit al, s hare p remiu m and ot he r rese r ve are s et ou t be low : Number of shares Share capital £000 Share premium £000 Other reserve £000 1 Oc tobe r 20 20 1, 0 5 2 , 74 3 11 – 1,12 5 Sh ares issu ed for gr ant of pre - I PO sh are awards and pre - adm issio n awards 41, 8 3 4 – – 4 02 Share buyback (10 , 7 8 3) – – – Capi tal reo rganisatio n – Su bdi visio n of sha res cre atin g 97 ,994 , 1 0 0 shar es at 0.01p each 9 7, 0 1 4 , 15 9 – – – – Sh are bu yb ack (3 9, 3 3 7 , 2 10) (5 ) – – – Shar es issu ed for IP O 4 1 ,239 ,257 4 2 4 7, 4 3 1 – Shares issued for business combination 1 9, 999, 990 2 – 2 4 3 ,9 9 8 Sh are issu e co sts – – ( 11, 5 2 8 ) ( 7,1 4 0 ) 30 S e ptemb er 20 21 1 1 9 , 999 , 990 12 235, 903 238,385 Shares issued for business combination 50 6 ,9 2 6 – – – Share options ex ercised 10 ,1 4 4 – – – Sh are issu ed for SI P and ES PP 5 , 4 11 – – – Sh ares is sue d to the T r ust 2,833 – – – 30 September 2022 12 0 , 5 2 5 , 3 0 4 12 235, 903 238,385 For t he yea r e nd ed 3 0 Se pte m be r 202 2 525, 31 4 ordi nar y s hare s of 0.01 p eac h wit h an agg reg ate nom inal val ue of £5 3 we re issu ed for o ptio ns tha t vested . Th ese i ncl ude d 5 0 % of the restr ic ted stoc k units gr anted for the L ive Au ctio ne er s acqu isiti on (see note 1 1 ), Long T e rm In ce ntive Pla n Awards (“ L TIP Awards” ), share s issue d und er the S hare In ce ntive Pla n (“ S IP ” ) and Emp loye e S tock Pu rch ase Plan ( “ ES P P ” ) an d to the T r us t for L TIP Awards th at have vested in the year but n ot yet exe rcise d. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 2 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT For t he yea r e nd ed 3 0 Se pte m be r 2021 Th e Comp any cond uc ted a re o rgani satio n of i ts share capi tal to facili tate a l istin g to th e premiu m segme nt of the Of ci al List of the Fina nci al Co ndu ct Auth or it y and to t rade on the Lond on Sto ck E xchan ge Main Mar ket f or listed sec uri tie s. The Co mpa ny was i nc or por ated on 1 8 Janua r y 20 21 to act as th e ho ldin g co mpa ny for the G rou p and is sue d on e ordi nar y share of 0 . 1 p at £1.00. O n 25 Janu ar y 2 0 21 , the C om pany is sue d 5 0, 0 0 0 non -voti ng red e ema ble p referen ce s hares w ith a n omi nal val ue of £1.00 ea ch . On 17 Febr uar y 20 21, the Com pany is sue d 1,08 3 ,793 o rdin ar y s hares of 0. 1p e ac h with an aggre gate nomin al value of £10,8 3 8 followin g the sha re for share exchan ge for the entire share capit al of A uct ion T op co Lim ited . From 1 O ctob er 20 2 0 to 1 7 F ebr ua r y 20 21, the Grou p issu ed 41 , 8 3 4 sha re awards (see n ote 21 ). O n 1 7 Feb rua r y 2 021, a purch ase for can ce llatio n of 10,783 or dina r y sh ares of £ 0.01p was canc elle d. T he a ggre gate no min al valu es of the s hare s can ce lle d was £107 . 8 3. On 26 Fe br uar y 20 21, the capi tal re org anis atio n co mpr ise d: • the o rdina r y sh ares we re sub div ide d suc h that t he nu mb er of ord inar y sha res in crea sed by 100 a nd th e nom inal va lue of sh ares d ec reas ed from 0 . 1 p to 0.01 p; • the C om pany c om ple ted the p urc hase for c an ce llatio n of 39, 23 3 , 35 7 o rdin ar y s hare s of 0.01 p eac h and 103 , 85 3 o rdin ar y s hares of 0 . 1 p for cash c on side rati on of £ 2 .0 0. T he ag gre gate nom inal v alue of th e sha res ca nc ell ed was £4 ,962 ; • the C om pany re pur chas ed an d ca nc elle d th e 50 , 0 0 0 red ee mab le prefe renc e sh ares of £1.00 at n omi nal val ue; a nd • in con ne cti on wit h the IP O, the Co mpa ny issue d 41 , 2 39, 25 7 ordi nar y sh ares of 0.01 p eac h with an agg regate no mina l value of £4, 1 24 f or a cash c on side rati on of £ 247 .4m . On 17 June 20 21, as par t of a c api tal rais ing , th e Co mpa ny issu ed 19 ,99 9,990 o rdi nar y s hare s of 0.01 p eac h wit h an agg reg ate nomi nal val ue of £2 , 0 0 0 for a c ash c onsi de ratio n of £ 24 4 .0m . Reserves Th e followin g de scr ib es the n ature an d pu rp ose of ea ch res er ve withi n equ it y : Retained losses Retai ned l osse s repre sent th e pro ts/(l oss es) of the Gro up mad e in cur rent an d prec edi ng year s. Other reser ve Th e othe r rese r ve c omp ris ed: • a mer ger re ser ve that ar ose o n the G roup re o rganis atio n and is t he ad just men t of the c omp arati ve and c ur rent ye ar c onso lid ated rese r ves of the G roup to re e ct th e statu tor y share c api tal an d sha re pre mium of Au cti on T ech no log y Gro up pl c as if i t had always ex isted ; and • share p rem ium , net of s hare is sue c os ts, re co gni sed i n the oth er re ser ve in ac co rdan ce wi th se cti on 61 2 of the C om pan ies Ac t 20 0 6 for th e equ it y rai se on 17 June 2 021 v ia a ca shb ox plac ing . Capital redemption reserve Th e cap ital r ede mpt ion re ser ve arose o n the r ede mpti on o r pur chas e of the C om pany ’s own sh ares . Share option reserve Th e share o ptio n rese r ve re lates to share o ptio ns award ed (see n ote 21 ). For ei gn e xch an g e res er ve Th e f orei gn exchang e reser ve com pri ses all foreig n exchang e differe nc es arisin g from the trans latio n of th e nanc ial stateme nts of fo reig n operat ions . 21 . E m ploye e be ne t s De n ed c on tr ib uti on p en sio n pl an s Th e Group o pe rates a numb er of de ne d con trib ut ion pe nsi on pla ns. Th e total exp ens e relati ng to the se pla ns in th e cur ren t year was £ 0.6 m (20 21 : £ 0. 4m). The re was £ 78 ,0 0 0 a cc rui ng to the se pe nsio n sc he mes as at 30 S e ptemb er 2 02 2 (20 21 : £4 8 , 0 0 0). Share-based payments Th e Group ha d thre e share - base d paym ent pl ans in ef fec t in the 20 22 nan cial yea r , detail s of which are set ou t in this note and the Di rec tors’ Remun erat ion Re por t. Shares a wards pre-IPO including pre -admission awards From 1 3 Janua r y 20 20 to 1 7 Fe br uar y 2021, 231 ,2 9 3 ordin ar y sha res in Auc tio n T op co Li mited we re issue d to its empl oyee s and No n - E xe cu tive Dire ctor s. As pa r t of the Gro up reo rgan isati on des cr ibe d in note 20 the ordi nar y shares in Au ctio n T op co L imi ted were exchan ge d in a share for share e xchan ge wi th Au ctio n T e ch nol og y Gro up pl c, s ubd ivid ed s uc h that th e num be r of ordi nar y share s inc rease d by 100 to 23 , 129,3 0 0 and redu ce d by 9,627 ,0 4 3 shares as par t of the share bu yb ack . T his resul ted in 1 3, 5 02 , 25 7 ord inar y shares lis ted in the IP O. Th e hold er s were subje ct to a ser v ice c ond itio n and , as such , the sh ares rep rese nt rem une rati on for ser vic e the reby co nsti tu ting an IF RS 2 equ it y - set t led , sha re - b ased ar ra nge me nt. In ad diti on , the pre - admis sio n awards are subje ct to a three - year ho ldin g per io d subje ct to the rec ipie nt ’s conti nue d emp loy men t. In Jan uar y 2021, the Group ma de an ann oun ce me nt to pursu e an IPO o n the Lon don S to ck E xch ang e. As a resul t, a sha re - b ase d payme nt exp ens e was reco gnis ed in the C ons olid ated S tatem ent of Pro t or Lo ss , bein g the fair valu e of the awards at thei r resp ec tive gra nt dates. T he pre - IP O share awards ves ted on the date of the IP O. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 3 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 21 . E m ploye e be ne t s co ntin ue d LT I P Th e Long T e rm In ce ntive Pla n (“ L TIP ” ) is the pri mar y long - ter m inc enti ve plan for app roximatel y 1 30 of emp loye es with in the Gro up. Un de r the plan , annu al awards , base d on a perc ent age of salar y, may be of fered . It is expe c ted that thes e awards will nor mal ly vest over a thre e - ye ar per io d subje ct to the rec ipie nt ’s conti nue d em ploy me nt at the date of vesting and , for E xec uti ve Dire ctors , the sat isfac tion of pe r for man ce con di tion s to be measure d over thre e na nci al years . L A LT I P Awards und er the L T IP were gr anted to emp loye es on acq uisi tio n of LiveA uc tion ee rs on 1 Oc tob er 20 21. Th ese awards will ves t over a range from o ne to six -ye ar p eri od su bje ct to the r eci pie nt ’s cont inu ed e mpl oym ent at t he date of vest ing . SI P a nd E S PP Th e Group o per ates a Share In ce ntive Pla n (“ SI P ” ) and E mpl oyee S to ck Purc has e Plan (“ E S PP ” ) in which all em ploye es , inc ludi ng E xec uti ve Dire ctor s, are eli gibl e to par tici pate. Th e plans were ap proved by sha reho ld ers in 20 21 and im ple me nted with ef fec t from 1Nove mb er 20 21. UK par ticip ants in the S IP may invest up to £1 , 80 0 of thei r pre - ta x salar y each year to purc hase sh ares in the C omp any. For each share ac qui red , the Co mpa ny purch ases a matchi ng shar e. Emp loye es mus t remai n with the Gro up for thre e years fro m the date of purchas e of each Par tne rsh ip Sh are in orde r to qualif y for the matchi ng share , and for ve year s for the share s to be tra nsfer red to them ta x free . The em ploy ee is enti tle d to divi de nds on sha res purc has ed , and to vot e at shareh old er me eti ngs . The re is a similar sc hem e for intern atio nal emp loye es und er th e ESP P . De fer re d bo nu s – eq ui t y set t le d Th e Defer red S hare Bo nus Pl an (“ D S BP ” ) is a discreti on ar y pla n for Exe cu tive em ploy ees to defer a por tio n of their cas h bon us into an award of share s. O f the annu al inc ent ive to Exe cut ive Dire ctor s, 25 % is deferre d into shares un de r the DS B P . Deferre d share s must no rm ally b e held for a per io d of thre e year s. Th e share awa rds/optio ns set o ut b el ow are ou tst andi ng at 3 0 S eptem be r 20 2 2. Share-based paym en t expe nse £000 Options at 1 Oc to b er 2 021 Number Gr a nt ed i n t he year Number E xer ci se d during the year Number Cancelled/ forfeited during th e yea r Number Options at 30 S eptember 2022 Number Pre - admission awards 909 6 42 ,6 86 – – ( 93,6 17) 5 4 9, 0 6 9 LT I P 2,530 4 8 3 , 6 41 7 0 6,75 7 (10 ,14 4) ( 1 3 7, 2 0 7 ) 1,043,047 L A L TIP 1, 3 01 – 2 4 2 ,17 4 – (5 , 93 3) 236, 241 Defer red b onu s – equit y se t tle d 33 – 8 ,636 – – 8,636 Pay rol l ta x 453 n /a n /a n /a n /a n /a T otal 5, 226 1 ,12 6 , 3 2 7 9 5 7, 5 6 7 (10 ,14 4 ) (2 36 , 75 7 ) 1, 8 3 6 ,9 9 3 Th e share awa rds/optio ns set o ut b el ow are ou tst andi ng at 3 0 S eptem be r 20 21. Share - based paym ent expense £000 Op ti on s at 1 Oc to be r 20 2 0 Number Gr an te d i n th e year Number Su b di vi si on o f share awards Number E xer ci se d during the year Number Cancelled/ forfeited during th e yea r Number Op ti on s at 30 S e pte m be r 2021 Number Pre - I P O share awards 1 0 ,12 4 18 9 , 4 5 9 3 0,8 57 2 1, 8 11, 2 8 4 ( 1 2,834,327 ) ( 9 , 1 9 7, 2 7 3 ) – Pre - admission awards 795 – 10 ,9 7 7 1 ,086,7 23 – (4 5 5 , 0 14 ) 6 42 ,6 86 LT I P 855 – 5 0 2 , 24 4 – – (1 8,603 ) 4 8 3 , 6 41 Pay rol l ta x 11 8 n/a n /a n /a n /a n /a n /a To t a l 1 1 ,892 18 9 , 4 5 9 5 4 4, 078 22 ,8 98 , 007 ( 1 2,834,32 7) (9,670 , 8 9 0) 1 ,12 6 , 3 2 7 All s hare o ptio ns ou tst andi ng are e qui t y - set tl ed an d are o ptio ns to subs cri be for n ew ord inar y sha res of 0.01p each in th e Co mp any. The fair value is dete rmi ne d at the date of gran t and is not subse que ntl y reme asure d unle ss co ndi tion s on whic h the award was granted are mo di e d. Th e share o ptio ns gr anted i n the ye ar have no m arket p er fo rm anc e co ndi tio ns ass oci ated wit h the m and s o fair val ue is de e me d to be the s hare pri ce at d ate of grant . Th e weig hted avera ge fair v alue p er o ptio n gra nted du rin g the ye ar was £1 1 .8 4 (20 21 : £7 .8 0). Th e resu ltin g fair val ue whi ch is exp ens ed over t he se r vi ce p er iod i s adjus ted, b ase d on ma nag em ent ’s bes t est imate, fo r a per ce ntag e of emp loye es that w ill le ave the Gro up. Th e weigh ted averag e exerc ise pr ic e of the o ptio ns exerc ised wa s £nil (20 21: £3.2 0) and the m arket p ri ce at da te of exercise was £ 9.5 0 (2021: £7 .8 0). Th e optio ns o uts tand ing at 3 0 S epte mb er 20 2 2 had a we ighte d averag e exerc ise pr ic e of £nil (20 21 : £nil ) an d a weigh ted averag e rema inin g co ntra ctu al life of 1 .72 years (20 21 : 2.4 ye ars). The re are 6 ,0 72 sha re opti ons wi th a wei ghted aver age e xercis e pri ce of £ nil exercis abl e at 30 S e ptemb er 2 02 2 (20 21 : nil ). Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 4 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 22. Financial instruments Th e Group is exp os ed to risks that ar ise from i ts use of nan cial ins tr ume nts . This note des cr ibe s the Gro up’s obje ctive s, p olic ies an d pro ces ses for man agin g thos e risks and th e meth od s used to measu re the m. T he sign i ca nt acc oun ting p olic ies re gardi ng n anc ial inst ru men ts are dis clo sed i n note 1 . Fin an ci al in s tr um en ts by c ate go r y 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Fi na nc ia l as se ts h el d at a mo r t ise d c os t T rad e and othe r rec eiva ble s ( exclu ding p repay me nts and no n - n anc ial ass ets) 1 3,078 7, 3 8 5 Cash a nd c ash e quiv alen ts 5 1, 8 17 3 9 7, 4 5 1 64 ,895 404,836 Financial liabilities held at amortised cost T rad e and othe r payabl es (excludin g non - nan cial lia bili ties) ( 1 3,64 7) ( 11, 7 0 6 ) Loan s and bo rrowin gs ( 180 ,845) ( 14 9,039 ) Fi na nc ia l lia bi li tie s hel d at fa ir va lu e th ro ug h pr o t or lo ss Contingent considera tion – (2,7 9 4) (19 4 , 4 9 2) (16 3 , 5 3 9 ) Financial risk manage ment Th e Group ’s activi ties an d the exis tenc e of the above nan cia l instr um ent s expos e it to a variet y of nan cial ri sks. T he B oard has over all resp onsi bili t y for th e deter min atio n of the Gr oup’s ris k mana ge men t obje c tives a nd po lic ies . Th e overal l obje c tive of the B oa rd is to set p olic ies that se ek to reduc e ong oin g risk as far as pos sibl e with ou t undul y affe ctin g the Gro up’s com peti tive ne ss and e xibi lit y. Th e Group is exp os ed to the followin g nan cial r isks: Credit risk Th e Grou p’s expo sure to cre di t risk a rise s fro m cas h and c ash e qui vale nts , as well as o uts tand ing re ce iva ble s (note 1 4). Th e Group ’s cash and cas h equi vale nts are all hel d on dep osi t with le adin g intern atio nal ban ks and he nc e the Dire ctor s con side r the cre di t riskas so ciated wi th suc h balan ce s to be low . For bank s and na nci al insti tu tion s only in de pen de ntly rate d par ti es wit h a minimu m rating of “ A ” are accept ed. Th e Grou p prov ides c red it to cus tome rs i n the n or mal c our se of bus ine ss. T he a mo unts p rese nted in th e Co nso lida ted S tatem en t of Fin anc ial Posi tio n in rel ation to th e Gro up’s trad e rec eiv able s are pre sen ted ne t of loss al lowan ces . T he Gro up m easu res lo ss all owanc es at an a mou nt equ al to the lifetime EC L using b oth quali tati ve and quan tit ative infor matio n and anal ysis bas ed on th e Grou p’s historic al exp eri en ce and for ward - l oo ki ng infor matio n. D uri ng the yea r there was a deb it to the Co nsol idated S t ateme nt of Pro t or Loss of £0. 2m (20 21 : £ 0.2 m) t o inc rease t he lo ss all owanc e. Th e car r yi ng amo unt of na nci al asset s reco rde d in the n anc ial state men ts, whi ch is net of imp air men t loss es , repres ents th e Grou p’s maximum exposure t o credit risk. Liquidit y risk Liq uidi t y risk ar ises fro m the Gro up’s manag em ent of work ing c api tal and th e amou nt of fundi ng req uire d for grow th. I t is the risk that th e Grou p will enc ou nter dif cu lt y in me eti ng its n anc ial obl igati ons as the y fall due. T he Gro up mana ges i ts cash an d bor rowin g requi rem ents th roug h prep arati on of annu al cash ow forec asts re e cti ng kn own com mi tme nts and an tici pated proj ec ts in orde r to maxim ise intere st inc om e and mini mise intere st exp ens e, whils t ensu rin g that the Gr oup has su f cie nt liqui d resou rce s to meet the op er atin g nee ds of the Grou p. Bo rrowi ng facili tie s are arra nge d as nec es sar y to na nc e requi rem ents . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 5 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 22 . Fi na nc ial i ns t ru me nt s co ntin ued Th e table b elow an alys es the Gro up’s nan cial lia bili ties bas ed on th e per iod re main ing to the co ntra ctua l matur it y dates at the rep or ting date. Th e amou nts disc los ed in the ta ble are th e car r yi ng amo unts an d undis co unted ne t con trac tual c ash ows . 2022 Carrying amount £000 Contractual ca sh ows £000 Du e le ss t h an 1 year £000 Be t wee n 1 a nd 5 yea rs £000 Ove r 5 ye ar s £000 Loan s and bo rrowin gs 1 80,845 18 2 , 67 3 31, 3 4 2 1 5 7, 9 4 1 – T rad e and ot her p ayabl es 13 , 6 4 7 13 , 6 4 7 13 , 6 4 7 – – 30 September 2022 19 4 , 4 9 2 1 96,320 4 4 ,9 89 1 5 7, 9 4 1 – 2021 Carr ying amount £000 Contra ctual ca sh ows £000 Du e le ss th an 1 year £000 Be t we e n 1 and 5 yea rs £000 Ove r 5 ye ar s £000 Loan s and bo rrowin gs 1 49 ,039 15 1, 2 2 3 35 3 15 0 , 8 7 0 – T rad e and ot her p ayabl es 11, 7 0 6 11, 7 0 6 11, 7 0 6 – – Contingent considera tion 2, 794 2,7 94 2,794 – – 30 S e ptemb er 20 21 16 3 , 5 3 9 16 5 , 7 2 3 14 , 8 5 3 15 0 , 8 7 0 – For ei gn e xch an g e ris k Fore ign exch ang e risk is the ris k that movem en ts in exchan ge rates affe ct th e pro tabi lit y of the busi nes s. T he Gro up’s polic y is, whe re pos sibl e, to allow Gro up en titi es to set tl e liabi liti es de no minate d in the ir lo c al fun cti ona l cur ren cy ( pr imar ily p ou nd ste rlin g, U S do llar s or e uro) with th e cash g en er ated fro m the ir own op er atio ns in th at cur ren cy. Th e Grou p ear ns reve nue a nd in cur s co sts in l oc al cu rre nc ies an d is abl e to mana ge forei gn exch ang e ris k by matchi ng th e cur ren cy in wh ich revenu e is ge ne rated an d exp en ses are i ncu rre d. Movem en ts in th e exchan ge r ate of the US d oll ar and t he eu ro aga inst s terli ng have an i mpa ct o n both th e resu lt for t he pe ri od an d equ it y. Th e car r y ing a mou nts of th e Grou p’s foreign c ur ren cy de no mina ted mo net ar y as sets a nd mo ne tar y liabil itie s at the re po r ti ng date are as fo llows: 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Net f oreign currency monetary (l iabili ties )/ assets US dollars (14 3 , 8 9 0 ) 233,466 Euros 1 , 888 791 Th e US d olla r- de no minated m on eta r y ass ets at 3 0 S epte mbe r 20 21 in clu de d cas h hel d on es crow (see n ote 1 5 ). Th e followin g tab le de tails t he Gro up’s sen siti vi t y to a 1 0 % (20 21 : 5%) stre ngt hen ing a nd weake ning i n pou nd s terlin g aga inst t he U S dol lar an d euro . Th e sen siti vit y a naly sis in clu des o nly fo reign c ur ren cy de no min ated mo net ar y i tems an d adju sts th eir tr ansl atio n at the p er iod e nd for a 5% c hang e in fore ign c ur renc y rates . Wh ere p oun d ster ling s tren gt hen s 10% (2021 : 5%) again st th e rele vant c urre nc y, a negati ve num be r bel ow indi cates an inc reas e in pro t in the Co nso lida ted S tatem ent of Pro t or Los s and the C ons olid ated S tatem ent of Chan ge s in Equit y an d a posi tive nu mb er ind icates a de cre ase in pro t in the C ons olid ated S tatem en t of Prot or Lo ss and th e Con soli dated S tate men t of Chang es in Equi t y. For a 1 0% (20 21 : 5%) weakening in po und ster lin g agains t the rel evant cu rre nc y, the re would be an e qual an d opp osi te impac t on the pro t in the C ons olid ated S tatem ent of Pro t or Los s and the C ons olid ated S tatem en t of Change s in Equit y. Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 US dollars Chan ge in pro t for th e year in Co nsol idated S t ateme nt of Pro t or Loss 15 , 8 4 2 ( 11 , 0 6 3 ) Chan ge in pro t in C ons olid ated S tatem ent of Cha nge s in Equit y (1,9 5 3) (61 0) Euros Chan ge in pro t for th e year in Co nsol idated S t ateme nt of Pro t or Loss (3) (4 9) Chan ge in pro t in C ons olid ated S tatem ent of Cha nge s in Equit y (18 3) 10 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 6 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Net inv estment hedge On 3 0 Se ptemb er 20 21, the S en ior T e rm Fac ilit y was drawn d own in US dol lars by Auc tio n Bidc o Li mited , a UK subs idia r y, prior to com ple tion of the ac quisi tio n of Live Auc tio ne ers o n 1 Octob er 20 21. In Jun e 202 2 , the S en ior T e rm Fac ilit y was de sign ated as a hedg e of the net invest me nt in the U S do llar d en omi nated su bsid iari es . Th ere was n o inef fe cti vene ss re co rde d from t he ne t inves tme nt in fore ign e nti t y hed ge s. 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Net inv estment hedge Loan s and bo rrowin gs 1 80,845 US d olla r car r y ing a mou nt of S eni or T e rm Fa cili t y $1 83,0 00 – He dge r atio 1: 1 – Chan ge in c ar r y ing a mou nt of S eni or T e rm Fa cili t y as a resu lt of fore ign cu rre nc y movem en ts sin ce Ju ne 20 2 2, re co gnis ed in Co nso lidate d S tateme nt of Pro t or Los s and Ot he r Com pre he nsive In co me or Los s ( 1 6 ,17 3 ) – Chan ge in v alue of h ed ged i tem us ed to dete rmi ne he dg e ef fect iven ess 16 ,17 3 – In te re st r at e ris k Th e Group was exp ose d to interest rate ris k durin g the year b ec aus e entit ies in the Gr oup bo rrowe d fun ds at oati ng intere st rates. T he re were loan s of £180.8 m ou tst andi ng at 3 0 S eptem be r 20 2 2 (20 21 : £ 14 9.0m). Th e sens iti vit y an aly ses be low have be en deter min ed bas ed on th e exp osu re to interest rates . For oatin g rate liabil iti es , the anal ysis is pre pare d assu ming t he am ou nt of liabi lit y o uts tand ing at t he rep or tin g date was ou tsta ndin g for th e who le pe ri od . If interes t rates had be en 20 0 bp s highe r/lower and all othe r varia ble s were held c ons tant , the Gro up’s pro t for the year en de d 30 S e ptemb er20 2 2 woul d incr ease or de c rease by £ 3.3 m (2021: nil impact). This is main ly at tr ibu tab le to the Group’s exp osur e on its vari abl e rate Se nio r T e rm Fac ili ty. Capital risk manageme nt Th e Grou p’s obje cti ves wh en ma nagi ng ca pit al are to safegu ard th e Gro up’s abili t y to cont inu e as a goi ng co nc er n and to ma intai n an opti mal cap ital s tr uct ure whi ch p rovid es an ad equ ate retur n to share ho lde rs . Th e Gro up set s the a mou nt of ca pita l it re quire s in pro po r ti on to ris k . Th e Grou p man ages i ts c api tal st ru ctur e and ad justs i t in th e ligh t of chan ge s in ec on om ic co ndi tio ns an d the r isk ch ara cter istic s of the u nd erl yi ng asse ts. In ord er to maintai n or adjus t the ca pita l stru ctu re, th e Grou p may adjust th e amou nt of divid end s paid to shareh old er s, retu rn c api tal to share ho lde rs , issu e new s hare s, o r sel l asse ts to redu ce d ebt . Fair va lu e of n an ci al in s tr um en ts Th e fair value of na ncia l assets an d nan cia l liabili tie s are deter mine d in acc or dan ce wit h IFR S 1 3 “ Fair Value Me asur eme nt ” as follows: Lev el 1 Th e fair value of na ncia l assets an d nan cia l liabili tie s with sta nda rd terms an d con diti ons an d trade d on ac tive liqu id mar kets is determ ine d with refe renc e to quoted m ar ket pri ces . Lev el 2 Th e fair value of othe r nan cial ass ets an d nan cial lia bili ties (excludi ng der ivati ve inst rum en ts) is deter min ed in ac co rdan ce wi th gen er ally acc epte d pric ing mo de ls base d on disc oun ted cash ow analy sis usin g pric es fro m obse r va ble cu rre nt mar ket trans acti ons an d deal er qu otes for similar instrume nts. Lev el 3 If one or m ore sign i ca nt inpu ts are not bas ed on ob ser vabl e market dat a, th e instr um ent is in clu ded in le vel 3. Th e Group ’s contin gen t cons ide ratio ns are cla ssi e d as level 3. T he re are no other nan cial ins tr ume nts . Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 167 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 22 . Fi na nc ial i ns t ru me nt s co ntin ued Financing activiti es Th e movem ents in ass ets/(l iabil itie s) ari sing fro m na nci ng acti vi ties are as follows: 2022 1 Oc to b er 2 021 £000 Arising on acquisition £000 Fair valu e move me nt s £000 Other non-cash move me nt s £000 Ca sh ow £000 Exc ha ng e differences £000 30 S eptember 2022 £000 Cash a nd c ash e quiv alen ts 3 9 7, 4 5 1 – – – (35 4 ,7 2 0) 9, 0 86 5 1, 8 17 T ot a l na n ci ng as se ts 3 9 7, 4 5 1 – – – (35 4 ,7 2 0) 9, 0 86 5 1, 8 17 Bank loans ( 14 8 , 6 8 6 ) – – ( 7, 6 7 4 ) 7, 2 8 3 ( 3 1,7 6 8 ) ( 180 ,845) Loan notes (3 5 3) – – (5 ) 359 (1) – Contingent considera tion (2 ,7 9 4) ( 1 7, 8 8 9 ) (1, 8 4 9) 1, 0 2 4 2 2 ,16 8 (6 6 0) – Lease liabilitie s (1, 4 3 2 ) (1, 0 6 3) – (2 0 4) 1, 0 9 6 (2 3 7 ) ( 1 ,840) T ot a l na n ci ng li ab ili ti es (15 3 , 2 6 5 ) (18 , 9 5 2 ) (1, 8 4 9) (6, 8 59) 3 0 ,9 0 6 (32,666 ) ( 18 2 , 6 8 5 ) 2021 1 Oc to be r 20 2 0 £000 Arising on acquisition £000 Fair value move me nt s £000 Other non- cash move me nt s £000 Cas h o w £000 E xch an ge differences £000 30 S e pte m be r 2021 £000 Cash a nd c ash e quiv alen ts 1 4 ,19 3 4 76 – – 3 7 8 ,11 6 4,666 3 9 7, 4 5 1 T otal n anc ing ass ets 1 4 ,1 9 3 4 76 – – 3 7 8 ,11 6 4,666 3 9 7, 4 5 1 Preferen ce s hares ( 12 5 , 4 14 ) – – (6 , 3 2 8) 13 1, 74 2 – – Bank loans ( 7 8 , 5 4 3) – – (8 ,5 07 ) ( 6 7, 6 5 9 ) 6, 023 (14 8 , 6 8 6 ) Loan notes (10 , 6 4 6) – – ( 2 ,11 8 ) 11 , 6 2 4 787 (3 5 3) Contingent considera tion (1, 0 4 0 ) ( 3 , 9 18 ) 1, 4 6 2 (7) 522 18 7 (2 ,7 9 4) Lease liabilitie s (1,9 6 4 ) – – (3 2 2) 816 38 (1, 4 3 2 ) T otal n anc ing lia bili ties ( 2 1 7, 6 0 7 ) (3 , 9 18 ) 1, 4 6 2 ( 1 7, 2 8 2 ) 7 7, 0 4 5 7, 0 3 5 ( 15 3 , 2 6 5 ) Ot he r non - cas h movem ents in clu de ac cr ue d nan ce co sts , amo r tis atio n of nanc e cos ts , addit ions to leas e liabili tie s and co nting en t considera tion - equity portion. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 8 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT 23. Rela ted p ar t y tr an sac t ion s For t he yea r e nd ed 3 0 Se pte m be r 202 2 Th ere were n o rel ated par t y tran sac tio ns. For t he yea r e nd ed 3 0 Se pte m be r 2021 Th e followin g rel ated par t y tran sac tio ns took p lac e: • Prefere nc e share s inc lud ing in teres t were rep aid o n 1 Marc h 20 21 to: – T A A sso ciates Ma nag em ent L P amou ntin g to £97 . 1 m – ECI Pa r tn ers L L P amou ntin g to £29.4 m – Me mb ers of th e man age me nt team am ou ntin g to £5.3 m . • A loan note issu ed to a memb er of the man age me nt team was repaid on 26 Fe bru ar y 2021. Interest of £49,0 0 0 was waived on 26 Feb ru ar y 2 021. • Su bor dinate d loan notes in clu ding inte rest he ld by ECI Par tne rs L LP an d T A As soc iates Man age me nt LP am oun ting to $1 5 .2 m ( eq uival ent of £10. 9m) were repa id on 1 M arc h 20 21 . • On 3 0 S eptem be r 20 20 , T om H arg reaves , a Dire ctor of th e C omp any, rece ived a l oan of £ 7 ,0 0 0 ; th e full a mou nt an d related i nteres t were repai d on 26 Fe br uar y 20 21. • On 30 De ce mb er 20 20 prefere nce sha res of £0.3 m were issued to Breon Co rc ora n, a Non - E xecu tive Dire ctor. On 1 5 Janu ar y 20 21 prefere nce share s were issued to Non - E xe cu tive Dire ctor s Sc ot t Forb es and Penny L adk in - B ran d for £0.2m eac h. Th e proc ee ds from the red em ptio n of thei r preferen ce share s inclu din g interest amo unti ng to £0 .7 m were use d to appl y for the subscr iptio n of ordi nar y shares on IPO. Ke y management personnel compensation Th e Group ha s deter min ed that th e key manage me nt pe rso nne l con sti tute the B oard an d the mem be rs of the Lead er shi p T eam . Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Sh or t-ter m empl oye e ben e ts 4 ,600 2 ,7 26 Post- em ploy me nt be ne ts 73 55 Share - based payment expense 3,0 62 2, 287 T otal k ey management personnel compensation 7, 7 3 5 5,06 8 Remuneration of Directors Fur th er de tails of the Dire c tors’ rem une rati on and sh are opti ons are se t out in the Re mun er ation C om mit te e Repo r t o n pages 9 8 to 1 12. Th e total amou nts for Dire ctor s’ remu ne ratio n were as follows: Ye a r ended 30 S eptember 2022 £000 Ye a r ended 30 S e pte m be r 2021 £000 Sh or t-ter m empl oye e ben e ts 1, 0 9 1 5 74 Post- em ploy me nt be ne ts 46 26 Share - based payment expense 1,1 5 2 1, 0 61 T otal Directors remuneration 2,289 1, 6 61 24. Event s af te r t he ba la nc e she e t dat e On 10 Oc tobe r 20 22 , a prep aym ent of $ 4 3 .7 m was paid on the S eni or T er m Facil it y. In the absen ce of any other pre paym en ts, th e nex t sch ed ule d repay me nt woul d be $ 8 .7 m on 31 M arch 2 0 24. Th ere were n o othe r eve nts af ter th e bala nce s he et da te. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 16 9 STRATEGIC REPORT CORPORA TE GOVERNANCE FINANCIAL ST A TEM ENTS 25. Lis t of su bs idi ar ies In acc ord anc e with se cti on 4 0 9 of the Co mpa nies Ac t 20 0 6, a full lis t of subsidi arie s, th e regis tered of ce an d the ef fect ive pe rce ntag e of equit y owne d inc lud ed in t hes e Co nso lidate d Fin anc ial S t ateme nts at 3 0 S eptem be r 20 2 2 are dis clo sed b el ow. Subsidiar y under takings R eg is te re d of c e Principal activity Proportion held A TG Medi a Holdin gs Limi ted T he Har leq uin Buil ding , 65 Sou thwar k Str eet , Lond on , SE1 0H R, Uni ted Kin gdo m Holding compa ny 10 0 % A TG Media US Inc . S ui te 800 , 1 1 25 S. 103rd S tree t, Om aha , NE, 6 8, 1 24, Unite d States Holding company 10 0 % A TG Nomi ne es Limi ted Th e Harle qui n Buildin g, 65 So uthwa rk S tre et, Lon do n, SE1 0 HR , United Ki ngd om Dor mant 10 0 % Auc tion Bid co Limi ted T he Harl eq uin Build ing , 65 Sou thwar k Stre et , Lond on , SE1 0H R, Uni ted King do m Holding comp any 10 0 % Auction Fl uency Limited T he Harl eq uin Build ing , 65 Sou thwar k Stre et , Lond on , SE1 0HR , Uni ted King do m D orma nt 10 0 % Auc tion Hol dc o Limite d The Har le quin Buil din g, 65 Sou thwar k St ree t, Lon don , SE1 0H R , United Kin gd om Holdi ng compa ny 10 0 % Auc tion Mid co Limi ted T he Harl eq uin Build ing , 65 Sou thwar k Stre et , Lond on , SE1 0H R, Uni ted King do m D orm ant 10 0 % Auc tion Mo bili t y LLC 1 20 9 Oran ge S tre et , Wilmin gton , DE , 1 98 01, Uni ted S tates Provi sion o f auct ion trading soft ware 10 0 % Auc tion Paym en t Netwo rk LLC S uite 80 0 , 1 1 25 S. 1 03 rd S tree t, Om aha , NE, 68 , 1 24, Unite d States Provi sion o f auction trading soft ware 10 0 % Auction T echnology Grou p Germany GmbH Grosse Backerstrasse 9, 20095, Hamburg, Ger many Prov ision of a uction trading soft ware 10 0 % Auc tion T e chn olo gy Grou p UK Hol din gs Limite d Th e Harle qui n Buildin g, 65 So uthwa rk S tre et, Lon do n, SE1 0 HR , United Ki ngd om Dor mant 10 0 % Auc tion T op co Lim ited T he Har le quin Buil din g, 65 So uthwar k St ree t, Lon don , SE1 0H R , United Kin gd om Dorm ant 10 0 % Bids pot ter Inc . S ui te 800 , 1 1 25 S. 103rd S tree t, Om aha , NE, 6 8,1 24, Unite d Sta tes P rovi sion o f auct ion trading soft ware 10 0 % LiveAuctioneers Inc. 40 Wes t 25th S t ree t, N ew Y or k , N Y 1 0 010, Unite d S tates Hold ing comp any 10 0 % LiveAuctioneers LLC 4 0 West 25th S t ree t, N ew Y or k , N Y 1 0 010, United S tates Pr ovis ion of auction trading soft ware 10 0 % Met ropre ss Limi ted T he Har leq uin Buil ding , 65 Sou thwar k St ree t, Lond on , SE1 0H R , United Kin gdo m Provision of auction trading soft ware 10 0 % Ped dar s Manage me nt Limi ted T h e Harle quin Bui ldin g, 65 So uthwar k S tree t, Lon do n, SE1 0H R , United Ki ngd om Dor mant 10 0 % Platin um Interm edi ate Inc . 4 0 West 25th S tree t, N ew Y or k , N Y 1 0 010, Unite d S tates Hold ing comp any 10 0 % Platin um Paren t Inc. 4 0 West 25th S t ree t, N ew Y or k , N Y 1 0 010, Unite d S tates Hold ing comp any 10 0 % Platin um Purc hase r Inc. 40 West 25t h S tre et , New York , N Y 10010, Unite d S tates Holdi ng compa ny 10 0 % Proxibi d Bidco Inc . Suite 80 0, 1 1 25 S. 1 0 3 rd Stre et , Oma ha, NE , 68 , 1 24 , United S tates Holdin g compan y 10 0 % Proxibi d Inc. Suite 80 0, 1 12 5 S. 1 0 3 rd St ree t, Oma ha , NE, 68 , 1 24 , Unite d States Prov ision o f auction trading soft ware 10 0 % Proxibi d UK Limited T he Harl eq uin Build ing , 65 Sou thwar k Stre et , Lond on , SE1 0H R, Uni ted King do m Provisi on of auction trading soft ware 10 0 % T urn er Bidc o Limi ted The Harle qui n Buildi ng , 65 Sout hwark S tre et , Londo n, SE 1 0HR , Unite d Kingd om Dor mant 10 0 % T urn er T op co Limi ted T he Harl equ in Build ing , 65 Sou thwark S tre et , Lond on , SE1 0HR , Uni ted King do m D ormant 10 0 % All ho ldi ngs of subsi diar ies are of ordin ar y sh ares . In addi tion , the re are 1 0 0% pre feren ce sha res hel d in Auct ion T o pc o Lim ited . Th e Unite d Kin gdo m dor ma nt com pan ies liste d above are exempt fr om pre par ing ind ivi dual ac co unts an d from l ing wit h the regis tra r indi vid ual ac co unts by v ir t ue of S ec tio n 39 4 an d 4 4 8 of the C om pani es Ac t 20 0 6 res pe cti vely. For th e year e nd ed 3 0 S eptem be r 20 2 2 , the foll owing s ubsi diar y und er tak ings of th e Gro up wer e exempt f rom th e req uire me nts of the Co mpa nies A ct 2 0 06 re latin g to the au dit of in div idua l acc ou nts by vi r tu e of Se cti on 479A of th e Co mp anie s Act 2 0 0 6. Com pany Company registration numbe r A TG Me dia Ho ldin gs Li mited 0 6 5 2 13 0 1 Auc tion B idc o Limi ted 1 240 1 1 40 Auc tion H old co Li mi ted 124 0 0 9 8 6 Auc tion Mi dc o Limi ted 12 4 0 0 8 8 1 Auc tion T e c hno lo gy Gro up UK Ho ldi ngs Li mite d 06636047 Auc tion T o pc o Lim ited 12 4 0 0 8 0 7 Proxibi d UK Li mited 09 02 3785 T urn er Bi dc o Limi ted 0896 8 359 T urn er T o pc o Lim ited 0 8 9 6 8 15 4 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 0 Financial Statements Notes to the Consolidated Financial Statements continued FINANCIAL ST A TEM ENTS STRATEGIC REPORT Note 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 ASSE TS Non-current assets Inves tm ent s 5 2 70 , 3 51 13 4 , 0 4 8 T rad e and ot her re c eiva ble s 6 246,4 57 111 , 5 9 4 T otal non-curren t assets 51 6,808 24 5 , 6 42 Current assets T rad e and ot her re c eiva ble s 6 340 10 5 Cash a nd c ash e quiv alen ts 7 – 2 2 3 ,7 76 T otal current assets 340 2 23 , 881 T otal assets 5 1 7,1 4 8 4 6 9, 52 3 LIABI LITIES Curre nt liabilities T rad e and ot her p ayabl es 8 (3 , 6 0 8) (3 , 8 3 0) T otal current liabilities (3 , 6 0 8) (3, 8 3 0) T otal liabilities (3 , 6 0 8) (3, 8 3 0) Net as sets 5 13 , 5 4 0 465 ,693 EQUIT Y Share capital 9 12 12 Sha re prem ium 9 235,90 3 235, 903 Other reser ve 9 238,389 238,389 Capital redemption reserve 9 5 5 Share option reserve 9 3 4,69 0 1, 6 4 9 Retained earnings/(losses ) 4,54 1 ( 10 , 2 6 5 ) T otal equity 5 13 , 5 4 0 465 ,693 As pe rm it ted by Se ct ion 4 0 8 of the Co mpa nies Ac t 20 0 6, n o separ ate S tateme nt of Pro t or Loss an d Ot her C om pre hen sive Inc om e or Los s is prese nted in res pe ct of the pare nt Co mpa ny. Th e pro t for the year at tr ibu tab le to the share ho lde rs of the Co mpa ny and rec ord ed th roug h the acc ou nts of the C o mpany was £ 14. 7m (8.5 month s en ded 3 0 S ep temb er 20 21: loss of £2 0.4 m). Th e Com pany F inan cial S tateme nts on pag es 1 71 to 1 75 were app roved by the Bo ard of Dire ctors o n 1 Dec em ber 2 02 2 and si gne d on its beh alfby : Jo hn - Pa ul S avan t T o m Ha rg r eaves Compa ny S tat ement of Fi na ncia l Pos iti on as at 30 September 2022 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 1 CORPORA TE GOVERNANCE Financial Statements Share capital £000 Share premium £000 Other reserve £000 Capital redemptio n reserve £000 Share option reserve £000 Retaine d earnings/ (losses ) £000 T otal £000 1 8 Janu ar y 2 0 21 – – – – – – – Comprehe nsive loss Loss an d total comp reh ens ive loss for th e per io d – – – – – (2 0 , 3 9 0) (20 , 3 9 0) T ransactions with owners Issu e of ordin ar y shar es as consid erati on for a busi nes s co mbin atio n, n et of tra nsa ctio n co sts an d ta x 17 235, 903 238,389 – – – 4 74 , 3 0 9 Sh are bu yb ack of o rdina r y sh ares , ne t of tax (5 ) – – 5 – – – Movem en t due to eq uit y - s et tle d sha re - b ase d paym ent s – – – – 1, 6 4 9 10 ,12 5 11 , 7 74 30 September 2021 12 235, 903 238, 389 5 1, 6 4 9 (10, 2 6 5 ) 465,693 Comprehe nsive prot Pro t and total co mpr ehe nsi ve pro t for the year – – – – – 14 , 7 2 8 14 , 7 2 8 T ransactions with owners Issu e of options as co nsid er ation for a busi nes s co mbin atio n, n et of tra nsac tio n co sts an d tax – – – – 28,3 4 6 – 28,3 4 6 Movement in equity -set tled share - based payments – – – – 4 ,695 78 4 ,7 7 3 30 September 2022 12 235, 903 238, 389 5 34 ,690 4,5 4 1 5 13 , 5 4 0 Compa ny S tat ement of Ch anges in E quity for the year ended 30 September 2022 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 2 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 1 . Accounting poli cies Th e followin g ac co untin g po lici es have b ee n app lie d co nsiste ntly in d eali ng wi th item s whic h are c ons ide red m aterial i n relat ion to th e Co mpa ny ’s nanc ial state men ts. General information Auc tion T e c hno lo gy Gro up plc (the “C om pany ” ) is a comp any inc or po rated in the U nited K ing do m unde r the C omp anie s Act . The C om pany was inc or po rated o n 1 8 Janu ar y 20 21 and th e co mpa rati ve per io d cove rs th e 8.5 m onth s end ed 3 0 S ep temb er 20 21. Th e Com pany is a publ ic co mpa ny limited by sha res and is reg istere d in Engl and an d Wales. T he regi stere d of c e of the Com pany ca n be found on pag e 1 32 . Th e pri nci pal ac tiv it y of th e Co mpa ny is to act as an i nvestm en t hol ding c o mpany t hat prov ide s mana ge men t ser vic es to its s ubsid iar ies . Basis of preparation Th ese n anc ial statem en ts prese nt infor matio n abo ut th e Com pany as an ind ivid ual un de r tak in g and not abo ut i ts Grou p. The se n anc ial statem ent s have bee n prepa red un de r the histor ic cos t co nventio n unl ess othe r wis e spe ci e d withi n these ac c ount ing po lici es and in acc ord anc e with F inan cia l Repo r ti ng S tan dard 101 Reduc ed Dis clo sure Fram ewor k (“ F RS 101 ” ) and the C om pani es Act 20 0 6 . In prep ari ng thes e nan cia l statem ents , the C omp any app lies th e reco gni tio n, m easu rem ent an d discl osure re quir eme nts of Intern atio nal Fin anc ial Rep or ting S t anda rds as ado pted by the EU ( “ Ado pted IFR S s” ) bu t makes ame nd men ts whe re nec ess ar y in or der to com pl y with Co mpa nies A ct 2 0 06 a nd has s et ou t be low wh ere ad vant age of th e FR S 101 disclos ure exem ptio ns has b ee n taken . In thes e nan cial s tateme nts , the Co mp any has app lied th e exempti ons availa ble un de r FRS 101 in respec t of the followin g discl osu res: • a Cash F low S tateme nt an d related n otes; • discl osu res in re spe ct of t rans act ion s with w holl y owne d su bsidi arie s; • disclosures in r espect of share- based payments; • discl osu res in re spe ct of c api tal m anag em ent ; • the ef fec ts of new but not yet ef fec tive IF RS s; • the req uire me nts of parag raph s 1 7 an d 1 8A of IA S 24 “Re lated Par t y Discl osu res”, inclu ding dis clo sure s in respe ct of the co mp ens atio n of key management personnel; • the re quir eme nts of pa ragr aph s 1 30 (f ) (ii), 130 (f )( iii), 134 (d) to 1 34 (f ) an d 1 35 (c ) to 1 35 (e ) of IA S 36 “ Im pair me nt of A sset s”; and • a separ ate S tateme nt of Pro t or Loss in lin e with th e Se cti on 4 0 8 exempt ion . Wh ere re quire d , equ ival ent dis cl osure s are gi ven in th e C onso lid ated Fi nan cial S tateme nts . Th e Co mpa ny has no ot her r elated p ar t y t rans act ion s othe r than t he co mp ens atio n of key mana gem en t per so nne l, s et ou t in N ote 23 of the con soli dated Gro up n anc ial statem en ts. Th e pri nci pal ac co unti ng p olic ies ad opte d are the s am e as tho se set o ut i n note 1 to the C ons olid ated Fi nan cial S tateme nts exc ept as n oted b e l o w. Inv estments In the Co mp any ’s nan cial st ateme nts , investm ent s in subsid iar y un de r ta kin gs are state d at cost le ss provis ion for any imp air me nt in value . Impairment of investments Th e Com pany eval uates its inves tme nts for n anc ial imp air men t where eve nts or cir cum stan ce s indi cate that the c arr yin g amou nt of such asse ts may not b e full y re cover abl e. W he n suc h evalu atio ns ind ic ate that the c ar r y ing val ue of an as set exc ee ds i ts rec over able v alue , an impa irm en t is rec ord ed . 2 . Si gn i ca nt a cc ou nti ng j ud ge me nt s a nd e st ima tes Th e prepa ratio n of nan cial st ateme nts req uires ma nag eme nt to make judge me nts , estim ates and assu mpti ons tha t affec t the app lic atio n of acc ou nting p oli cie s and t he rep or ted am oun ts of asse ts, li abili tie s, i nco me a nd ex pen ses . Act ual res ults m ay dif fer f rom th ese e stim ates. Jud ge me nts and es timates mad e by the Dire ctor s in the appl ica tion of the se acc ou nting p olic ies th at have signi c ant ef fec t on thes e nan cial statem ent s and esti mates with a sign i ca nt risk of materi al adjus tme nt in the ne x t nan cia l year are set ou t bel ow. Est imates and un de rl yin g assum ptio ns are revie wed on an on goin g basis . Revisi ons to acc ount ing es timates are re co gnise d in the yea r in whic h the e stim ate is revise d an d in any fu ture ye ars af fe cted . Th ere are no sig ni ca nt esti mates or jud ge men ts in the n anci al statem ent s. 3. S taf f c os t s Th e Com pany has no e mpl oyee s other th an the Dire c tors. T he mo nthl y averag e numb er of pe rso ns emp loye d by the Co mpany du rin g the year amo unted to thre e (2021 : thre e). Det ails of Dire ctor s’ remu ner atio n are set ou t in the Dire ctor s’ Rem une ratio n Rep or t on pages 9 8 to 1 1 2 . 4. Aud ito r ’s remu ne ra tio n Th e fees p ayabl e for the au di t of the C om pany ’s ann ual ac co unts a mo unted to £13,700 (20 21 : £0 .5m). Not es t o the Compa n y Fina nci al S tat ements Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 3 CORPORA TE GOVERNANCE Financial Statements Notes to the Company Financial Statements continued 5. Inv estments 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 1 Oct ober 13 4 , 0 4 8 – Additi ons 13 6 , 3 0 3 13 4 , 0 4 8 30 September 270 , 3 51 13 4 , 0 4 8 In Se ptemb er 20 2 2 , the Co mp any restr uc ture d its inves tme nts resu ltin g in an inc rease d invest men t in Auct ion T o pc o Lim ited of £1 1. 9 m and Auc tion H old co L imi ted, pre vio usly an in dire ct inves tme nt be co min g a direc t subsi diar y followin g the tran sfer of its shares fr om Auc tio n Midc o Lim ited to the Co mpa ny at boo k value of £1 24.7 m. Det ails of the pri nci pal sub sidia r y und er tak ing s of the Com pany at 30 S eptem be r 20 22 c an be foun d in note 25 o f the Co nso lidate d Fina nci al Statement s. 6. T ra de a nd o th er r ec ei vabl es 30 S eptember 2022 £000 30 S eptember 20 21 £000 Current Other debt ors and pr epayment s 340 10 5 340 10 5 Non-current Defer red ta x asse t 229 – Am ou nts owed by G roup u nde r t aki ngs 2 46,228 111 , 5 9 4 246,4 57 111, 5 9 4 24 6 ,797 111, 6 9 9 Am ou nts owed by G roup u nde r t aki ngs is a l oan wi th in terest r ate of 5.5 % and re payab le in S e ptemb er 20 2 9. 7 . Cas h an d ca sh e qu iva le nt s 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Restricted cash – 2 2 3 ,7 76 – 2 2 3 ,7 76 As a result of the capi tal raisin g on 1 7 Jun e 2021, the cash, net of transa cti on fees asso cia ted with the acqu isiti on and n anci ng of acquisi tio n of Live Au cti on ee rs was transfer red to an escrow acco unt . The fu nds hel d at 30 Septem be r 2021 were restr ic ted and are not available to circulate withi n the Group on de man d. Th e funds were rele ase d on 1 Oc tobe r 2021 for the acqu isit ion of Live Auc tio ne er s ( s ee note 1 1 of the Co nso lidate d Financial S tatements) . 8. T ra de a nd o th er p ayab les 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 T rade payables 11 2 – Corporation tax 1,7 8 1 – Am ou nts owed to Gro up un de r ta kin gs 235 – Payro ll ta x and oth er s tatu tor y li abili ties 15 3 49 Accr uals 1, 3 2 7 3,781 3,608 3,83 0 Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 174 FINANCIAL ST A TEM ENTS STRATEGIC REPORT 9. Sh ar e ca pit al a nd r ese r ves 30 S eptember 2022 £000 30 S e pte m be r 2021 £000 Aut h or ise d , ca lle d u p an d fu ll y pa id 1 2 0, 525 , 3 0 4 ordi nar y share s at 0.01p each (202 1 : 1 1 9, 9 99,99 0 o rdina r y sh ares at 0 .01 p eac h) 12 12 12 12 Fur th er d etail s of movem ent s in sha re cap ita l and re ser ves are ou tlin ed i n note 20 of th e Co nso lidated F in anc ial S ta teme nts. Reserves Th e followin g de scr ib es the n ature an d pu rp ose of ea ch res er ve withi n equ it y : Retained losses Retai ned l osse s repre sent th e pro ts/(l oss es) of the Gro up mad e in cur rent an d prec edi ng year s. Share option reserve Th e share o ptio n rese r ve re lates to share o ptio ns award ed (see n ote 21 of the Co nso lidate d Fin anc ial S t ateme nts). Other reser ve Th e othe r rese r ve c omp ris ed: • a merg er rese r ve that aro se on the Gr oup re org anisat ion an d is the adjus tme nt of the cos t of the equi t y to reec t the statu tor y share ca pita l and sh are pre miu m of Auc tio n T op co L imi ted; an d • share p rem ium , net of s hare is sue c os ts, re co gni sed i n the oth er re ser ve in ac co rdan ce wi th se cti on 61 2 of the C om pan ies Ac t 20 0 6 for th e equ it y rai se on 17 June 2 021 v ia a ca shb ox plac ing . 1 0. Post b al an ce s hee t even t s On 10 Oc tobe r 20 22 , Au ctio n Bid co Li mited , a subsi diar y com pany, made a prepay me nt of $4 3.7m on the S en ior T e rm Fac ilit y. In the abse nce of any othe r pre paym ent s, th e nex t sch edu le d repay me nt woul d be $ 8 .7 m on 31 M arch 2 0 24. Th ere were n o othe r eve nts af ter th e bala nce s he et da te. Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 17 5 CORPORA TE GOVERNANCE Financial Statements Glossar y A& A Ar t & Ant ique s Auction Mobility Au cti on Mo bili t y LLC Bidder sessions web s ess ions o n th e Grou p’s market plac es o nlin e with in a give n tim e fra me BidSpotter the Grou p’s market plac es o pe rated vi a the w w w.Bid Sp ot ter.co.uk and w w w.Bid Sp ot ter. co m do main Big 4 C hr istie ’s, S othe by ’s, Ph illips a nd B onh ams A & A au ctio n ho uses EBI T DA ea rni ngs b efore inte rest , ta xes, d ep rec iatio n and a mo r tis ation GMV gross m erc han dise valu e, rep rese ntin g the total nal sal e value of all lots sol d via winn ing bid s plac ed on th e mar ketpla ces o r th e plat for m, o n a profor ma bas is, e xclud ing ad diti on al fees (suc h as onli ne fee s and a uct ion ee rs’ co mmis sio ns) and sale s of retail j ewelle r y ( be ing n ew, or nea rl y new, jewell er y) i- bidd er th e Grou p’s market plac e op er ated by the w w w.i - bid der.com do mai n I&C Indu str ial & Co mme rci al KPIs key per formance indic ators LiveAuctioneers Group th e Grou p’s market plac e op er ated via t he w w w.liveau ctio ne er s.c om d oma in Live auction s Live au cti ons t yp ica lly feature a physi cal au cti on roo m (with bidd ers pa r ti cipa ting in th e room an d by phon e) supp le me nted by bids mad e onlin e. Lots are ru n cons ec uti vel y and so apar t from th e rs t lot there is no xe d time for spe ci c lot s to be ca lle d Lot-tissim o th e Gro up’s mar ketpla ce o pe rated vi a the w w w.lot-ti ssim o.co m do mai n L T IP Awards the C om pany ’s Lon g T er m Ince ntive Pl an Marketplaces th e onl ine au cti on ma rketp lac es o per ated by th e Grou p Convers ion rat e rep rese nts GM V as a p erc en tage of T H V; p revio usl y cal led “o nlin e sha re” Prof orma basis cer tain m easu res have be en use d as the acq uisit ion of Live Au cti on ee rs on 1 Oc tobe r 20 21 and Auc tio n Mobi lit y on 1 6 Octo be r 20 20 have af fec ted the c om par abili t y of the G rou p’s results of o pe rati ons for F Y2 2 . T he m easu res are prese nted for t he G roup to prov ide c om par ison s of the G roup’s resu lts b et wee n F Y21 an d F Y 2 2 as if th e acq uisi tion s had oc cu rre d on 1 Octob er 20 20 . In addi tion , profor ma reven ue is stated at co nst ant excha ng e rates with the pr ior year c om parat ives b ein g rest ated usin g cu rre nt year e xchan ge ra tes. T his me asure i s prese nted as a m ean s of elim inati ng the ef fec ts of exchang e rate uc tuatio ns on th e per iod - on - per io d repo r ted res ult s Proxibid the G roup’s mar ketpl ace o pe rated v ia th e ww w.proxi bid .co m dom ain Th e Sa lero o m th e Gro up’s market pla ce op er ated vi a the w w w.the - sal ero om .co m do main Ta k e r a t e repre sen ts the G rou p’s marketp lac e reven ue as a p erc ent age of G MV. Marketpl ace r evenu e is th e Grou p’s repo r ted revenu e exclu din g Co ntent a nd Au ctio n S er vic es reve nue THV total hamm er valu e, rep rese ntin g the total nal sal e value of all lots listed o n the mar ketpla ce s or the plat for m, o n a profor ma basi s, exc ludi ng ad diti onal fe es (such as o nli ne fee s and au cti on ee rs’ c om missi ons) and sa les of ret ail jewe llery (being new , or nearly new , jewellery) Timed aucti ons auc tion s whic h are h eld e ntire ly o nlin e (with no in - roo m or tel eph on e bidd er s) and whe re lots are o nly m ade avai labl e to online bid de rs for a spe ci c , pre - dete rmi ne d timefr am e V er ticals like-for-like industr y or invent or y, f o r example, ar t and antiques, industrial and constructio n, consume r surplus and retur ns an d sub -ve r ti cals s uc h as equ ine , real e state an d clas sic c ars Glossar y Auc t io n T ec h no lo gy G r ou p p lc A nn ua l Rep or t 20 2 2 176 Company w ebsite Th e Co mpa ny ’s website at w w w.auc tion tech nol og ygro up.co m con tain s the lates t infor matio n for sh areh ol der s. Annual Gener al Meeting Th e 20 23 AG M will be h el d on 26 Ja nuar y 20 23 at 2 : 0 0 pm at th e of c es of T raver s Smi th LL P , 1 0 Snow Hi ll, Lo ndo n EC1A 2A L . Th eAGM provi des th e Boa rd with the o ppo r tu nit y to eng age wi th share ho lde rs . Full de tails of th e busi nes s to be co nsid ere d at th e me etin g will b e inc lud ed in t he Not ice of A nn ual G ene ral M e etin g. T he Notic e of Me eti ng an d all othe r de tails for t he AGM w ill be avai labl e on the Company’s websit e , www.auction technologygroup .com. Share price informa tion Th e latest p ric e of the C om pany ’s ordinar y sha res is availa ble o n ww w.lo ndo nsto ckexcha nge .co m. AT G’s tic ker sym bo l is A TG . Registrar Th e Com pany ’s shar e registe r is maintai ned by Equi niti . Sh areh old er s sho uld co nta ct the re gistr ar, Equiniti , in con ne ctio n with c hang es of addre ss , lost sh are ce r ti c ates , transfe rs of shares etc and th ey can be c onta cted as fo llows: Sh areh old er he lpli ne: 0 371 3 8 4 20 3 0 (Intern atio nal +4 4 1 2 1 4 1 5 70 47). O pe n Mo nd ay to Friday 08 :3 0 am to 5. 3 0p m. Fur th er c ont act d etai ls ca n be foun d he re: ht t ps: / /equi niti .co m/uk / contact- us/shareholder-enquir ies/ Equin iti Li mite d Aspect Hous e Sp en ce r Road, L an cin g West Sussex BN9 9 6DA Electronic communicati ons If you would like to rece ive all share ho lde r inform atio n suc h as the An nual Re po r t a nd Not ice of M ee ting v ia ou r webs ite and re ce ive a noti c atio n by email eac h time n ew inform atio n is available , ple ase register for electronic communications a t www.shareview .co.uk. Investor Relations inv estorr elat ions@auctiont echnologygroup. com Adv ise rs: Joi n t na nc ia l adv ise r s Num is Se cu rit ies Li mite d 45 Gresham Street Lon don EC 2 V 7BF J.P . Mor gan S e cur iti es pl c 25 Bank Street Canar y Whar f London E1 4 5 JP Le ga l ad vi se rs t o th e Co mp a ny T raver s Smi th L LP 1 0 Sn ow Hill London EC1A 2A L Auditor Del oi t te LLP Hill House 1 Lit tl e New S tre et London EC 4 A 3T R Pub li c re la ti on s ad vi se rs t o th e Co m pa ny T ulc han C om muni cati ons L L P 85 Fleet S treet London EC 4Y 1AE Shareholde r Inf ormation Des igne d and pro du ce d by SampsonMay T el eph on e: 0 20 7 4 0 3 4 0 9 9 ww w. sampsonmay .com Printed b y Park Communications Th e materi al use d in th is Rep or t is from s ust ainab le res ou rces . Th epap ermil land pr inter are bot h regis tered wit h the Fore str y S tewardsh ip Co unc il(F SC) ® and addi tion ally have the Envi ronm ent alMa nage me ntS y stem IS O 1 4 0 01. It has be en pr inted us ing 100% of fsh ore win d ele ctr ici t y sou rce d fromU Kwin d and all the in ks used are ve get abl e based . ww w. auctiontechnologygroup .com
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