ANNUAL REPORT
2021
Annual Report 2021
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Our Mission
Empowering OEMs and dealers with an
innovative SaaS platform to optimise
sales and marketing processes.
Our Values
Family Spirit: It is not just a definition, it is the
way we feel: we inspire each other, we support one
another and we work to achieve common goals.
Growth: Every day we grow as a company because
customers trust us. Our customers trust us because
we grow as a company.
Innovation: Innovation is in our DNA and we blaze
new trails in the automotive industry every day.
Passion for Customers: Our customers are at
the centre of what we do and it is our mission to
help them excel.
Doing the Right Thing: Our Values connect
and inspire us to always do our best, both as
individuals and professionals.
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Contents
2021 Highlights 3
At a Glance 5
Chairman’s Statement 7
CEO’s Statement 9
Enabling the Best Automotive Customer Journey 10
A Mission Critical Solution 12
Our Business Strengths 14
Market Overview 16
Business Model 18
Our Strategic Framework 20
Our ESG Vision 25
Financial and Operating Review 27
Financial KPIs 32
Stakeholder Engagement and S172 Statement 33
Principal Risks and Uncertainties Facing
the Company 34
Board Approval 36
Governance Section 38
Governance Overview 40
Non-Executive Directors’ Report 45
Board of Directors 47
Directors Report 51
Remuneration Committee Report 56
Independent Auditor’s Report 69
Consolidated Statement of Profit and Loss and Other
Comprehensive Income 76
Consolidated Statement of Financial Position 77
Consolidated Statement of Cash Flows 78
Consolidated Statement of Changes in Equity 79
Notes Forming Part of the Consolidated Financial
Statements 80
MotorK Plc Statement of Financial Position 119
MotorK Plc Statement of Changes in Equity 120
Notes Forming Part of the MotorK Plc Financial
Statements 121
2021 Highlights
2021 highlights showcasing success over last year
Revenues
€27.6M
+43%
2020 - 19.3M
ARR
(1)
€15.1M
+51%
2020 - 10M
EBITDA
(2)
€0.8M
POSITIVE
2020 - (1.1M)
Net Cash
(3)
€34.4M
+€55M
2020 - (€20.6M)
Acquisitions
(4)
3
Spain & France
2020 - 0
Customers
650+
+7%
2020 - 599
1
Annual Recurring Revenues (“ARR”) is defined as the yearly subscription value of the customer base at the end of the reporting period
2
Adjusted for share based payment expenses and exceptional items related to expenses that are not strictly inherent to the underlying business performance.
3
Including lease liabilities as per IFRS 16 accounting standards
4
Two acquisitions completed in December 2021, one binding Letter of Intents signed as of December 2021 and completed in February 2022
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STRATEGIC REPORT
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At a Glance
MotorK is Europe’s leading automotive sales and marketing technology company and
the only player in EMEA able to provide a full stack of products and services to support
the digitalisation of the entire car sale process.
No other technology player in Europe has the same level of vertical expertise in the
automotive industry.
€27.6M
400+
10 Offices
Revenues
Employees
UK, Italy, Spain, France,
Germany, Israel, Portugal
The definitive, ready-to-use web
platform, allowing you to
maximise traffic acquisition and
lead generation performance.
• +1,300 online websites.
• 1 million leads generated.
• +900 dealers online
The CRM platform specifically
designed to support the activities of
car dealerships and automotive
manufacturers.
• 450 leads managed per
operator each month.
• 7% lead to contract rate.
• 30% lead/negotiation rate.
The stock management platform
that can update your car inventory
or launch customisable campaigns
in one click.
• c.859k vehicle publications
managed daily.
• c.315k vehicles managed
daily.
• 112 publication portals.
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~100+ Integrations – Open APIs, Enhanced Integration
• MotorK’s products are easily integrated with leading third-party technology providers in the market and are designed
to fit the growing needs of automotive operators.
A trusted partner
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Chairman’s Statement
“Against an industry backdrop marked by
uncertainty and supply chain issues,
MotorK has delivered another strong year
of growth, as well as achieving the
milestone of our successful IPO on the
Euronext market.”
Amir Rosentuler
Chairman
A pivotal year for MotorK Overview
It gives me great pleasure to welcome you to the inaugural MotorK Annual Report, following the Company’s successful IPO
in 2021. This was a pivotal point in our history, heralding the start of the next exciting phase of growth for our business and
bringing new shareholders on board to support our plans going forward. The Company raised approximately €75 million at
IPO which will be used to drive continued investment in innovation to maintain our technological leadership as well as
providing financial muscle as we grow both organically and through acquisition.
MotorK operates in a dynamic but currently uncertain market. During the year we have seen the industry distracted by the
ongoing effects of the COVID-19 pandemic in general and the global semiconductor shortage more specifically impacting
the supply chain. As a result, automotive retailers ran extremely low inventory levels and were unable to meet consumer
demand for cars which remained high during the period. In fact, in 2021 sales of new cars in the EU fell by 2.4% to 9.7
million units, despite the record low base of comparison of 2020 (already down 3.3 million units compared to the pre-
COVID-19 level).
And yet in spite of these pressures, MotorK has delivered another successful year of growth. Our revenues grew by over
40%, we expanded our customer base and, as anticipated, we delivered a positive EBITDA result for the year. These are
noteworthy and satisfying achievements.
Market opportunities
Dealerships often lack the right software applications or tools to operate efficiently, so SparK’s lead management, sales
and service and maintenance capabilities can help them track and serve customers more effectively and optimise the full
sales process.
We see significant potential for developing our unique SaaS platform further to increasingly address these needs as the
industry continues to evolve rapidly. In fact, drawing from a number of industry sources, we see a €5.4 billion opportunity
in Europe alone. Many OEMs use fragmented software providers, so by centralising functions such as stock management,
marketing, online engagement and customer relationship management, SparK can deliver an integrated suite of
applications and reduce operating costs.
You can find more market analysis on page 16 of this report.
Corporate development
The global automotive industry is facing a wave of consolidation across all fronts – be it on the OEM side, dealerships,
suppliers or leasing companies. To balance our strong anticipated organic growth profile, we aim to take an active role in
this dynamic (but fragmented) ecosystem and act as a consolidator. During 2021 we continued our geographical
expansion into the main European markets through three successful acquisitions: Dapda in Spain and Fidcar in France.
Early 2022 we further announced the acquisition of FranceProNet in France.
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With a strong balance sheet and shareholders supportive of our growth strategy, we are well-positioned to take advantage
of acquisition opportunities in the future and ensure a long-term value creation.
Our people
The key assets of our business are our people and I am proud of the way they have responded to the impacts of the global
pandemic over the last two years. Rising to face these challenges, the Company has continued to bring skilled talent into
our ranks, doubling the number of full time employees over the last year alone to around 400 people currently. Our ability
to effectively integrate so many new people into such a fast-paced environment is key to our success and has been made
possible due to our strong no-blame, team-based corporate culture.
MotorK has developed an enduring family spirit across its teams and remains committed to the development and
wellbeing of its workforce. We have in place broad training programmes open to employees at all levels of the business
that feed into our skills mapping process. This ensures the business has the right mix of skills and experience to drive our
internal growth plans. The Company established flexible working practices at the start of the pandemic to enable our
people to continue to work safely, supported by a welfare plan tailored to their needs.
We remain committed to attracting, incentivising and retaining the best talent at all levels and will continue add to their
number as we harness the opportunities for growth in our markets. My thanks go to all those who have joined us over the
last year and I look forward to welcoming new colleagues in the year ahead.
Governance and sustainability
Our IPO was a definitive moment in the history of MotorK and a validation of the strategy we have been successfully
executing over the last few years. Now that we are a listed company with more formalised responsibilities to our various
stakeholders, during the course of the current year we will be implementing best practices in terms of Board composition,
corporate governance and structure.
We are at an early stage in our ESG (environmental, social and governance) journey, but remain committed to deliver on
our objectives, which have been framed by the United Nations Sustainable Development Goals (“SDGs”). In relation to
environmental matters, we aim to protect the environments in which we operate as a business and to minimise our impact
on them. As highlighted above, we aim to promote and secure the wellbeing of our people in the workplace, taking an
inclusive approach to recruitment across the business. We also aim to adopt best practice in our governance, ensuring
transparency and the highest ethical standards within the business. You can find more information on how we integrate
our ESG activities into our day-to-day operations on page 25.
In conclusion
It is my privilege to serve as Chairman and I welcome the responsibility and trust involved in helping shape this great
business for continued success in the future. On behalf of the Board of Directors and the leadership of MotorK I wish to
commend our people for the way they have embraced the family spirit mindset at MotorK and responded positively to the
challenges of new working practices caused by the pandemic.
I wish also to thank our shareholders for their support through the IPO and beyond. I am confident that as we execute our
strategic growth plan our SaaS platform will play an important role in enabling the automotive industry to evolve.
Amir Rosentuler
Chairman
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CEO’s Statement
“The results for 2021 are the highest we
have recorded since MotorK was founded
in 2010. This achievement is made more
notable considering the ongoing market
disruption caused by the global
pandemic.”
Marco Marlia
Chief Executive Officer
Overview
I would like to start my maiden report to shareholders by echoing the words of our Chairman: 2021 was a pivotal year for
our Company as we successfully listed MotorK on the Euronext exchange in Amsterdam. While this brings greater
transparency and scrutiny to our business it also gives us a substantially raised profile and, critically, a means to raise
capital efficiently to support our ongoing growth strategy.
For any business, the IPO process is intensive, absorbing a significant amount of management’s time and resources. So, I
am all the more pleased that the underlying business was not distracted but remained focused on its growth plan; indeed,
the results for 2021 are the highest we have recorded since MotorK was founded in 2010. This achievement is made more
notable considering the ongoing market disruption caused by the global pandemic. Our headline financials have grown
strongly across the board and this strong momentum has continued into the current year, positioning us well to deliver
value for our shareholders going forward.
This solid financial foundation to our business supports the ongoing innovation and development of our SparK platform.
As we highlight above, dealerships are coming under pressure from the double impacts of changes in consumer behaviour
and structural changes across the automotive retail value chain. However, we believe that we have the right mission-
critical solutions at the right time. Our tools will help dealerships digitise their capabilities rapidly to deliver an
omnichannel experience for car buyers as well as mitigate margin erosion as OEMs seek to change the relationship
between themselves and the dealerships.
The demand for high value, centralised and streamlined software applications is not restricted to the dealerships. While
dealerships remain central to our strategy, SparK has also been developed to support OEMs as they continue to digitise
and transition to an agent model. As part of this change, OEMs are looking to take more control of the consumer journey,
from marketing and initial lead generation, through the sales process and into customer service and retention activities.
Marco Marlia
Chief Executive Officer
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Enabling the Best Automotive Customer Journey
Even before the COVID-19 pandemic the current sales model of the automotive retail
industry was challenged by shifting customer expectations, new mobility offerings and
technological disruptions such as digitalisation, connected vehicles and vehicle
electrification.
Dealers remain critical in the buying process…
• Dealership visits are the No. 1 factor influencing purchasing decisions followed by test drives.
1
• Customers make 2-3 dealership visits on average per car buying journey. Dealership visits are the prime
opportunity to physically experience the car.
1
The business model of a dealership needs to evolve to reflect customer preferences and maintain their value-adding
position in the buying journey. While consumers expect to be able to buy their next car online, dealers remain essential
when making a car purchasing decision and stay the central point of contact. The graph below highlights when consumers
prefer an offline touchpoint versus the aspects of the buying journey they would prefer to be done online.
Source: McKinsey & Company, 2020, A future beyond brick and mortar – disruptive change ahead in the automotive retail.
1
McKinsey & Company, A future beyond brick and mortar – disruptive change ahead in the automotive retail, 2020.
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…but need to adapt to the omnichannel revolution
• Big OEMs like Mercedes want to sell 25% of their cars online by 2025
2
.
• 72% of consumers expect to be able to buy their next car online
3
.
• But only 15% of dealers think that their current sales approach fits the digital age
3
.
The current retail model no longer meets customers’ expectations. While pain points differentiate highly there is a
consistent pattern of a lack of omnichannel centric experience and the absence of transparency along the buying journey.
In a survey conducted by Capgemini, 92% of customers consider a personal touchpoint as essential; however, in parallel,
72% claim that they expect to buy their next vehicle online
4
. The study showed that consumers prefer to buy from an OEM
or dealer website if the online process provided is seamless. Dealers need an even stronger focus on value-adding
activities for customers to remain relevant and establish a profound relationship with their customers.
Source: Accenture: The future of Automotive Sales (2019) as well as Capgemini Invent: Automotive Agency Sales Model, 2020
2
McKinsey & Company, A future beyond brick and mortar – disruptive change ahead in the automotive retail, 2020.
3
Capgemini Invent: Automotive Agency Sales Model, 2020
4
Accenture, The Future of Automotive Sales, 2019.
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A Mission Critical Solution
In an evolving market structure…
• OEMs are putting pressure on dealer margins
The transition to an “agent model” forces dealers to be more customer centric and efficient in lead
transformation.
• The market is consolidating
In 2020 the number of dealers declined by 2% due to increased competition and higher operating costs
5
.
• There is increased competition in the used car market
B2C online platforms are gaining traction. While they are currently only handling 1% of the used cars sold, it’s
likely that this number will increase in the future.
6
On a macroeconomic level the automotive retail industry is experiencing several trends simultaneously. Leading the
transformation is the introduction of the agent model by the OEMs. The OEM hereby interacts directly with the customer
and takes responsibility for the sale transaction, while the dealer acts as an agent. The aim of the model is to eliminate
price competition of same dealer brands and further gaining back the control of margins. This effect is paired with a
consolidation of the market, where big dealer groups benefit from an economy of scale. Lastly, online B2C platforms for
used cars are introducing a new channel to consumers to market their used vehicles.
Source: Capgemini Invent: Automotive Agency Sales Model, 2020
5
ICDP European Car Distribution Handbook 2020.
6
Management assumption based on publicly available data
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…MotorK enables dealerships to address these challenges
The MotorK founders identified these trends early on and saw an opportunity to build on; the SparK platform was born.
SparK provides with its holistic offering the required tools to dealerships to master current market challenges and to
remain competitive. The platform is tailor-made for the automotive industry and offers a range of automotive-specific
features with respect to operations, marketing and sales. It is designed to be used on any scale, from small single
showroom dealers to regional networks of franchise dealerships and automotive OEMs.
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Our Business Strengths
While the automotive industry is one of the largest industries in the world, it is highly
traditional and fragmented, particularly the digital automotive retail industry. MotorK
is well positioned to support the key players in the industry in terms of scale, product
suite and regional exposure.
The Group is well positioned relative to its key competitors to benefit from structural growth in a large market
primed for digital disruption
• The global automotive retail software market in the EMEA region, where the Group operates, is highly fragmented,
with the Group estimating that no player has a market share exceeding approximately 0.5% of the overall market.
• The Group’s competitive positioning within its market is supported by the Group’s belief that following the effects of
the COVID-19 pandemic, a SaaS platform is now perceived as essential by the key players in the market, whereas in
the past it may have been considered as a non-essential product.
• The Group is well positioned relative to its key competitors in terms of scale, product suite and regional exposure, and
can leverage this positioning to constantly improve its product and the customer experience.
The Group offers a first at-scale one-stop-shop SaaS platform for automotive retail
• The Group’s platform supports customers throughout the entire vehicle lifecycle and customer journey with more
than 100 automotive-specific features, providing a clear competitive advantage.
• If any new competitor wanted to replicate the Group’s access to APIs, it would require a significant investment of
financial resources and time (i.e. several years) by the competitor and the Group believes it would be able to respond
effectively to the emerging threat.
• The Group’s response would be supported by the more efficient process the Group has developed with respect to API
integrations, which has reduced the time it takes to complete an integration from approximately five months to
between two and three months.
Attractive value proposition driven by state-of-the-art technology and product features with substantial benefits
• The Group is staying ahead of its competition by dedicating substantial resources to R&D spend annually (28% of
revenue in 2021) in order to continuously develop and upgrade its product suite, continue to provide advanced
technology to customers and, more broadly, support its sustained growth.
• Through this focus on R&D, the Group has developed a highly efficient product suite built on state-of-the-art
technology, as evidenced by the improvement in the performance indicators recorded by customers who have
implemented the SaaS platform for the first time.
• Following the implementation of the SparK platform, the Group’s customers tend to register an increase in the
appointments booked, in the click to lead conversion rate and in the lead to sales conversion rate.
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Our Business Strengths continued
Highly efficient go-to-market strategy resulting in a fast-growing and loyal customer base
• The Group is able to generate strong interest from potential customers, in particular through proof of value (“PoV”)
demonstrations, leading to 75% of appointments converting into contracts, according to a recent pipeline analysis in
Italy that included upsell and cross-sell opportunities.
• The Group’s product only represents 0.1% of its customers’ revenue on average, according to management’s estimate
based on the Average Contract Value of customers and publicly available information.
• The Group has consistently grown its customer base, with the total number of customers more than doubling since
2017.
• MotorK has demonstrated a strong ability to retain customers, managing to reduce Churn rate in FY 2021 to 6.6%
compared to 8.6% in FY 2020. The Churn rate level observed in FY 2020 was largely attributable to the impact of
COVID-19. For reference, the group registered a 3.5% Churn rate in FY 2019. In parallel, the Group has exhibited a solid
track record of continuously increasing customer value, with the Average Contract Value per retail customer growing
annually on average at 19% since 2018. Overall, this resulted in a Net Revenue Retention Rate (“NRR”) of 105% in FY
2021 up from 90% in FY 2020. The NRR level in FY 2020 was essentially affected by the increase in Churn rate related to
the global impact of the pandemic. Before the impact of COVID-19, the Group’s NRR was at 117% in FY 2019).
• The Group’s sales strategy has proven effective in producing a high lifetime value (“LTV”) relative to a comparatively
low customer acquisition cost (“CAC”), resulting in a strong LTV:CAC ratio of approximately sixteen times (16x) for the
FY2021. This represents a short payback period of 11 months, meaning it takes 11 months for the Group to recover the
cost of the acquisition of a retail customer.
Attractive financial profile combining top-line growth, revenue visibility and strong margin potential
• The Group has a track record of rapid growth, having delivered a 31% Sales CAGR over 2018–2021.
• For the fiscal year 2021 54% of Group revenue was recurring revenue. Increasing the share of revenue derived from
subscription-based contracts is a key priority of the Group.
• The Group has historically demonstrated operational excellence, enabling the Group to record a positive Adjusted
EBITDA in 2021.
• As revenue continues to grow, the Group believes that it can reach a healthy level of Adjusted EBITDA Margin,
benefiting from relatively low variable costs and natural operational leverage.
Highly experienced management team with technological expertise and an impressive track record of growing
businesses
• The Group’s management team has a proven track record of creating value for shareholders through developing
powerful consumer insights, designing value enhancing products for customers and building scalable global
operations, all while preserving the same visionary spirit that drove the business of the Group from the start.
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Market Overview
The global automotive retail software market in the EMEA region, where MotorK
operates, is highly fragmented, and we estimate that no player has a market share
exceeding approximately 0.5% of the overall market.
MotorK’s competitive positioning within its market is supported by our belief that following the effects of the COVID-19
pandemic, a SaaS platform is now perceived as essential by most of the players in the market, whereas in the past it may
have been considered as a nice-to-have product by less digitally savvy dealers. This change in perception is due to the
ongoing omnichannel evolution of the industry, which has been further accelerated by the COVID-19 pandemic.
Addressing a large and growing market
€1.4BN
Current addressable market
(Automotive OEM & franchised dealers in Big 5 markets)
7
€4.8BN
Automotive OEMs and all car dealers
in Europe
8
€5.4BN
Automotive OEMS and dealers for
all vehicles in Europe
8
Source: Management estimate based on publicly available information
Underserved addressable market
In the context of the overall global automotive distribution market, MotorK operates exclusively in the automotive retail
software market within the EMEA region. The structure of the reference market for the products and digital solutions
offered by us consists of the following automotive retail players:
Source: (1) ACV represents the average contract value. Management assumptions based on forecasted pricing of existing product suite.
(2) Includes tractors, trucks and motorbikes – Cars OEMs brands, source: Sophus3: The Digital Car Buyers in Numbers, 2018.
(3) ICDP European Car Distribution Handbook 2020, 1.5 showrooms per dealer group assumption.
(4) Management estimates based on publicly available information for EU (CLIMMAR 2020).
(5) GIPA – 2020 Declarations enseigne / presse.
7
Current addressable market = France, Germany, Great Britain, Italy, and Spain
8
Data point of €4.8BN only includes car dealers, whereas data point of €5.4 BN includes any kind of automotive dealers such as truck, tractor, motorbike etc.
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Unique positioning within the automotive retail software market in EMEA
We believe that we are well positioned in the competitive environment due to our scale, international presence and ability
to anticipate and adapt to fast-moving trends in the automotive distribution industry.
Note: Based on Company estimates.
The diagram above illustrates a representation of the European competitive landscape, by comparing us with competitors
in terms of size of R&D capabilities, regional footprint and approach to technology. We are able to strongly differentiate
ourselves in our approach to technology, as we have chosen to develop a full SaaS solution from the start, whereas most
competitors, and especially the largest, tend to have on-site, non-integrated solutions. Our regional footprint is also
among the largest in the automotive retail software market, enabling us to address the needs of OEMs across multiples
countries.
Global trends in automotive retail create opportunities
Future of mobility solutions
Agent model
Online disruption
• Autonomous driving, electric vehicles
and other advanced technologies are
reshaping the automotive industry as
we know it today.
• Big data and its analytics through
predictive AI tools will be essential to
remain competitive in the market and
strengthen relationships with
customers.
• A shared economy in big cities is
changing behaviours and the need for
ownership.
• For MotorK we see great momentum for
dealers using our platform as we enrich
our offering with predictive AI solutions.
• Reinvention of the automotive sales
model with a customer centric sales
approach.
• Customers purchase cars directly from
OEMs, while the dealer remains the
single touchpoint for customer, but acts
solely as an agent.
• Big organisational challenges for OEMs
and dealers to ensure premium
interaction for consumer.
• MotorK’s holistic platform offers all
parties the right tools to ensure a
seamless customer journey.
• Tailored marketing activities to find the
right momentum to engage with
customers.
• Introduction of a new distribution
channel: e-commerce platform, creating
a seamless and hassle-free purchasing
experience with full transparency.
• MotorK provides the right tools to OEMs
and dealers to offer an enhanced
omnichannel experience.
Note: API (“Application Programming Interface”) is a type of software intermediary that allows two applications to exchange information. APP stands for mobile application.
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Business Model
The European automotive market is currently going through a period of evolution.
As previously elaborated, technology-savvy consumers are increasingly seeking to purchase cars online but still expect an
omnichannel customer experience – where they can shift across multiple channels and touchpoints, online and offline, in
a seamless way. Despite this sea-change in customer behaviour, both OEMs and dealerships have been slow to digitise
their offerings. Those that have invested in their infrastructure in the past now operate an inefficient and fragmented mix
of IT systems across their operational, sales and marketing activities.
Our SaaS platform has been developed to deliver mission-critical automotive applications across the internet to address
both of these challenges. The modular platform supports both the entire customer journey and the full vehicle lifecycle
and can be scaled from managing the digital presence of a small single showroom dealer up to supporting the sales and
marketing functions of a regional network of franchise dealerships for an automotive OEM across EMEA.
Currently, SparK offers around 100 automotive-specific features, providing a clear competitive advantage over less well-
developed peers. We remain committed to investing in developing the platform’s modules further so that we can maintain
our lead over the peer group and in the last year alone invested (€7.8 million or 28% of revenue) in our R&D activities. The
ongoing success of our model is driven by our commitment to bring the best software development talent into the
business and retaining them through our team-based corporate culture and our internal talent development programmes.
This approach offers a clear value proposition to our automotive OEM and dealership customers. By passing the
management of key applications to MotorK, they are freed from the cost of installing, maintaining and upgrading software.
They can also avoid the complexity of software security and hardware management. Customers can choose which
applications they want to meet their needs and simply require a secure internet connection to access them.
The Group’s SaaS platform products are generally offered to dealerships under subscription agreements with terms of
between 12 and 36 months (with certain agreements even longer in duration). These subscription agreements generate
recurring revenues recognized point in time at the delivery of the platforms and visible cash flows for the Company. These
cash flows support the ongoing development of the platform to deliver additional value-added modules of functionality,
creating further stickiness with our customers.
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How we share value with our stakeholders
Customers
We substantially drive
down the marketing lead
generation costs for our
customers, at the same
time dramatically
improving click-to-lead and
lead to sale conversion
rates. Our technologies
play an important part in
improving their operational
efficiency, enabling them to
quickly and effectively
follow changes in
consumer behaviour.
Employees
MotorK is an inspiring and
dynamic place to work,
fostering its employees
through a culture based on
an inclusive family spirit
among its teams. We are
aiming to play a pivotal role
in the evolution of the
automotive retail industry.
Our digital technologies
enable our employees to
work at the forefront of this
change and we support
their development through
a range of training
schemes.
Investors
MotorK is a high growth,
mission-critical technology
company, employing a
financial model that
generates high levels of
recurring revenues and
cash flow. These features
should generate attractive
investment returns for
shareholders. As the
Company complements
organic growth with
acquisitions it intends to
create step-changes in its
growth profile over time,
accelerating investment
returns.
Wider society
MotorK’s technology helps
both automotive OEMs and
car dealerships pivot
quickly to new consumer
behaviours, making the car
buying and ownership
process more streamlined
for their customers. The
functionality of the SparK
platform enables MotorK’s
customers to help
consumers through an
increasingly complex
customer journey while at
the same time delivering an
integrated and holistic
customer experience.
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Our Strategic Framework
MotorK has a clear and simple business. Our strategy is built around helping our
customers drive growth, which in turn enables us to increase our own scale and
presence.
Our strategy is to focus activities and financial resources exclusively on the SaaS business for B2B customers in order to
benefit from the higher margins and stronger revenue visibility. Within our SaaS platform we intend to continue to
leverage expertise acquired in the development of ready-to-use systems for the automotive sector to develop and directly
market – under the “SparK” brand – new modules covering a wider range of functions, to properly meet the evolving needs
of customers and the market.
To deliver this strategy and to consolidate our position as Europe’s leading automotive sales and marketing technology
company we have a developed a model to drive our growth based on four pillars.
1. Product innovation – Continued focus on innovation to further strengthen the value proposition of the
Group
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As a leading technology company in our market sector, innovation is in MotorK’s DNA. Our ongoing focus on R&D activities
allows us to provide our customers with solutions that are at the forefront of our industry, further strengthening our value
proposition. Our commitment to R&D is borne out in our numbers: during the year to December 2021, we employed 98
people in R&D (mainly in our R&D centre in Italy). We also opened a second R&D centre in Portugal and in total spent €7.8
million on R&D during the period, equating to 28% of revenue (2020: €4.9 million, 25% of revenue).
We believe that our platform offers the richest functionality of any competing automotive retail system, but we are not
resting on our laurels. We intend to improve existing products by introducing new functions, such as OEM show room and
support of all sales methods; advanced appointment booking and centralisation of all the touch points; and new
marketing tools and automations for our media module.
We also plan to launch new products in areas such as online B2B sales and auctions tools; a mobile application for sales. In
addition, the Group is considering the expansion of its product offering into new verticals and introducing new types of
services, as well as the potential development of new processes such as after-sales customer engagement and loyalty,
asynchronous communication, a fully-online sales process and customisation of workflows.
During the period we grew ARR by 51% (of which 23% was organic) against the backdrop of an unpredictable automotive
market which saw in the BIG 5
9
markets a new car registration down of 27% versus 2019 levels and at their lowest levels
since 1985
10
. This situation was exacerbated by a shortage of semiconductors across the industry that is unlikely to be
resolved until the second half of 2022.
2. Growing our loyal customer base – upselling and cross-selling
MotorK has developed strong relationships with its customers and has managed to steadily increase its ratio between ARR
and number of customers. Our customers have chosen to increase the number or the value of services purchased from us
as our value proposition to them has become stronger. Relationships with customers start with the purchase of the core
offering of a module, which provides for a limited number of users. Over time, as they become more confident and adept
with the functionality, they typically purchase additional users or add additional locations to their core subscription.
We plan to expand our existing customer base further through dedicated sales and customer success teams implementing
cross-selling and upselling strategies that utilise existing modules to cross-sell, new products developed or acquired, new
features available for upsell, as well as to expand to more users.
9
BIG 5 in Europe: Germany, Spain, France, UK and Italy.
10
JATO.com, New Car registrations in Europe’s largest market at lowest since 1985, 14.01.22
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3. Winning new customers – Leveraging an effective go-to-market strategy to win new customers
Building on our successful track record of growing our number of customers we aim to win new OEMs and dealers by
leveraging the strength of our product, executing a highly effective go-to-market strategy and by increasing brand
visibility.
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4. Winning new markets – Roll out offering into new markets and countries
MotorK is a market leader in Italy and has a strong market presence in France, Spain and Germany. We aim to replicate our
existing business model in order to increase our presence in countries where we currently operate and expand into new
countries within the EMEA region where we have complementary business and/or potential scale synergies.
In particular, we are focusing on expansion organically and through an ongoing acquisition plan. This growth is primarily
focused on countries which are close to the geographic area in which we currently operate, such as the DACH area
(Germany, Austria and Switzerland), France and Benelux. We are also looking to in-fill our presence in other countries in
the EMEA region in order to achieve complete coverage in Europe (e.g. the Nordics and CEE regions).
To inform and support our territorial expansion plans we undertake a detailed analysis of:
The potential customer base
and use of the acquisitions
to migrate customers
The use of synergies between
countries, taking into account the
peculiarities of each country
The offer of high quality
support to its main customers
The implementation of
faster API plans to secure
product completion
Our organic growth strategy has been highlighted above and we are supporting this with a disciplined M&A strategy. We
have successfully acquired and integrated six targets since our inception in 2010 and plan to continue to consolidate the
market through:
• identifying targets which offer potential for us to add market share or to enhance our attractive recurring revenue
model;
• identifying targets which offer potential for expanding our customer base or for cross-sell opportunities for our
existing products; and/or
• developing innovative products which are complementary to our existing products.
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Prior to our IPO in November 2021, we announced the acquisition of three accretive businesses:
• Fidcar SAS: a French company that has developed e-reputation and predictive marketing solutions that capture data
related to the customer journey, using AI to determine the retail preferences and habits of customers.
• PDA DAPDA, SL and DAPDA Media, SL (together “Dapda”): a Spanish leader in providing digital lead generation and
management tools to automotive retailers.
• FranceProNet SAS: a top-tier French digital agency specialising in web solutions for the automotive sector, providing
dealerships with web design and specialised SEO-tools.
In aggregate, these acquisitions were made for a total consideration of up to €13.8 million in cash and stock, subject to
certain performance-related conditions. The first two of these acquisitions completed during the current reporting period,
with FranceProNet completing in February 2022.
Strategic priorities in 2022
Our priorities for 2022 remain focused on executing our core strategy across two main streams:
Disclaimer
The Annual Report & Financial Statements contain certain forward-looking statements with respect to the operations,
performance and financial condition of the Group. Such forward-looking statements speak only as of the date of this
Annual Report & Financial Statements and are expressly qualified in their entirety by the cautionary statements included
in this Annual Report & Financial Statements. Without prejudice to its obligations under Dutch law and English law in
relation to disclosure and on-going information, the Company undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this Annual
Report & Financial Statements should be construed as a profit forecast.
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Our ESG Vision
MotorK recognises the importance of sustainability in our business and the positive impact we can have by embracing ESG
best practice. As a recently-listed company we are at a relatively early stage in our ESG journey, but we have already
established a framework based on our core Values as a business. These form the foundation of our ESG Vision as we
embrace five core United Nations SDGs:
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In order to execute this vision across our business, we have developed a diversified ESG strategy built on the four pillars of
Governance, Human Capital, Environment and Customer Satisfaction:
Diversified ESG strategy relying on four main pillars
Governance
Human Capital
Environment
Customer Satisfaction
• Undergoing process to
ensure one-third female
presence on the Board on
Directors in the next future
• Regular meetings regarding
business performance to
ensure transparency and
inclusion towards
employees
• Training programmes,
covering topics beyond
those strictly work-related
• Welfare plan tailored to
employee needs
• Efforts to ensure flexibility
during the Covid-19
pandemic, to allow
employees to work in a safe
environment
• Hiring campaigns for highly
skilled candidates
• Approval of a bonus option
for employees linked to the
completion of the IPO
• Efforts to ensure minimal
environmental impacts
linked to the energy
consumption, water
consumption and waste
production of our offices
• Undergoing process to
implement a Net Promoter
Score system in order to
understand the degree of
customer satisfaction
ESG objectives
• Appoint a Sustainability
Ambassador in order to
strategically promote ESG
aspects
• Integrate the current policy
and governance system with
ESG aspects, such as
inclusion and diversity,
development and training of
human resources,
protection of the
environment, health and
safety at the workplace
• Formalise a smart working
policy
• Implement a process of
skills mapping and define a
competency matrix to drive
internal growth paths
• Evaluate the current
remuneration practices in
order to align role
contribution with
remunerations
• Define initiatives to improve
meetings productivity
• Initiate a mapping and
monitoring process of
environmental impacts in
order to define initiatives
and solutions to further
minimise impacts
• Leverage on the first results
of the Net Promoter Score to
define and implement an
action plan and target
potential improvements
Decreasing employee turnover rate
(1)
Employee engagement survey
87%
Participation Rate
3.8/5
Overall Satisfaction
Note: (1) As of December 2021.
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Financial and Operating Review
Group performance overview
During the financial year ended 31 December 2021 the Group has confirmed the strong growth track of the previous years.
Revenue increased by 43% compared to FY 2020 amounting to €27.6 million. The robust performance was led by a strong
organic growth of all revenue streams, and sustained by the contribution of the December revenues of the acquired
companies for €0.3 million.
In terms of profitability, Adjusted EBITDA closed positive at €0.8 million.
Further details of Group performance are provided in the paragraphs below.
Results for the year
€’000
2021
2020
Revenues
27,560
19,329
Cost for marketing and call centre
(6,654)
(6,029)
Personnel costs
(17,553)
(12,340)
R&D capitalisation
3,490
2,661
Other costs
(6,008)
(4,754)
Adjusted EBITDA
835
(1,133)
Exceptional costs
(3,242)
(77)
Stock option plan cost
(9,714)
(134)
EBITDA
(12,121)
(1,344)
Depreciation and amortisation
(4,235)
(3,186)
EBIT
(16,356)
(4,530)
Finance costs
(4,818)
(1,820)
Finance income
11
16
Loss before tax
(21,163)
(6,334)
Corporate income tax
(2,765)
925
Loss – continued operations
(23,928)
(5,409)
Profit – discontinued operations
403
42
Loss for the period
(23,525)
(5,367)
Revenue
2021 Group revenue amounted to €27.6 million compared to €19.3 million in FY 2020, an increase of 43% year-on-year.
Revenue by product and service line
€’000
2021
2020
y-o-y change
€’000
SaaS platform revenue
16,304
9,766
67%
Digital marketing revenue
7,674
6,805
13%
Other revenue
3,582
2,758
30%
Total
27,560
19,329
43%
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The increase compared to the previous period is spread across all the revenue streams and led by the performance of SaaS
platform revenue amounting to €16.3 million, an increase of 67% compared to the previous period.
Organic growth has been topped up by the December 2021 revenues contribution of Dapda and Fidcar, acquired in
December 2021, for €0.3 million.
The strong revenue performance of the Group is confirmed by the 67% increase of recurring revenue to €14.8 million for
the year ended 31 December 2021.
SaaS platform revenue
€’000
2021
2020
y-o-y change
Recurring revenue
14,820
8,868
67%
Contract start-up revenue
1,484
898
65%
SaaS platform revenue
16,304
9,766
67%
Recurring revenue as % of total revenue
54%
46%
8%
SaaS platform revenue as % of total revenue
59%
51%
9%
From a geographical standpoint the principal market continues to be Italy, representing 81% of Group revenues in both FY
2021 and FY 2020. The growth in FY 2021 is pushed by the subsidiaries of the Group, especially MotorK Deutschland GmbH
which has quadrupled its revenues due to delivery to a major OEM client in Germany.
€’000
2021
2020
y-o-y
change
UK
–
0%
103
1%
-100%
Italy
22,255
81%
15,604
81%
43%
Spain
1,495
5%
1,444
7%
4%
France
1,838
7%
1,671
9%
10%
Germany
1,972
7%
507
3%
289%
Total
27,560
100%
19,329
100%
43%
Opex
Costs, net of development costs capitalised, amounted to €26.7 million in 2021, an increase of 31% compared to the
previous period, and in line with the accelerated growth strategy pursued by the Group. The change is mainly due to the
increase of R&D costs (60% growth compared to the previous year) and personnel costs as shown in the tables below:
€’000
2021
2020
y-o-y change
€’000
Total R&D expenses
7,850
4,902
60%
– of which capitalised
(3,490)
(2,661)
31%
– of which expensed in the income statement
4,360
2,241
95%
Total R&D expenses as a percentage of Group total revenue
28%
25%
3%
€’000
2021
2020
Salaries and other personnel costs
13,882
9,778
Social security costs
3,671
2,562
Total personnel costs
17,553
12,340
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Adjusted EBITDA
Adjusted EBITDA for the year was €0.8 million compared to a negative Adjusted EBITDA for the previous period (negative
for €1.3 million). Adjusted EBITDA is a non-IFRS financial measure used by management to monitor the operating profit of
the Group and is calculated as EBITDA net of exceptional costs and stock option expenses which are not strictly inherent to
the underlying business performance. Exceptional costs amounting to €3.2 million include mainly IPO costs accounted for
as per IAS 32 of €1.9 million, €0.4 million related to severance payment indemnities and related costs for employees who
left the Group and have not been replaced, and €0.4 million for M&A related costs. Stock option plan costs amounted to
€9.7 million with the Increase compared to last year mainly relating to the vesting of a certain amount of stock options
assigned to key employees on the day of the IPO.
Finance costs
Finance costs for the period were €4.8 million compared to €1.8 million in 2020. The increase compared to the previous
period is mainly due to the €2.3 million one-off cost related to the repurchase of the warrants over shares, entitled to
European Investment Bank, in the context of the repayment of the financial loan in place which occurred at the end of
November 2021.
Taxation
Corporate income tax was negative for €2.8 million (positive for €0.9 million in 2020) and it is composed by the tax provision
in Israel for €2.1 million and by the write-off of the deferred tax assets accrued last year for €0.7 million. Management did
not accrue deferred tax assets on tax losses to carry forward and other timing differences in the UK and Italy for an amount
of approximately €4.6 million.
Loss for the year
Loss for the year was €23.5 million compared to a loss of €5.4 million for the previous period. Despite the strong revenue
performance, the loss for the year is higher by €18.1 million due to both the one-off costs incurred during the year and to
the fact that the Group continued to invest in people and R&D with the aim to enhance the structure and support our
strategy geared at exponential growth in the incoming years.
Group capital structure and financial position
€’000
2021
2020
Tangible assets
3,076
1,693
Intangible assets
17,953
9,862
Deferred tax assets
–
698
Fixed assets
21,029
12,253
Contract assets
13,580
10,204
Net working capital
(3,761)
(496)
Net assets available for sale
3,278
3,649
Deferred tax liabilities
(659)
(245)
Employees benefit liability and provision
(3,475)
(2,634)
Total invested capital
29,992
22,731
Cash and cash equivalents
43,257
11,824
Financial assets
106
262
Financial liabilities
(8,958)
(32,683)
Net financial position
34,405
(20,597)
Net equity
64,397
2,134
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Fixed assets
Fixed assets were €21 million as at 31 December 2021 compared to €12 million as at 31 December 2020. The increase of
€8.7 million was mainly related to R&D capital expenditure, net of depreciation of the year for €0.4 million, and to goodwill
and other intangible assets arising from the allocation of the consideration paid for the acquisition of companies
completed by the Group in December 2021.
Contract assets
Contract assets were €13.6 million as at 31 December 2021 compared to €10.2 million as at 31 December 2020. Contract
assets represent the right to bill (net of invoices already issued) related to the DealerK SaaS multi-year contracts whose
revenues have been already recognised at a point in time upon the delivery of access to the platform, according to IFRS 15.
The increase compared to the previous period is related to the increase of SaaS platform revenues as reported above.
Net assets available for sale
Net assets available for sale were €3.3 million as at 31 December 2021 compared to €3.6 million as at 31 December 2020.
Such financial caption includes the net between intangible assets, trade receivables and trade payables of the business
unit DriveK, classified as held for sale as per IFRS 5.
Net financial position
Net financial position was a net cash position of €34.4 million as at 31 December 2021 compared to a net debt position of
€20.6 million as at 31 December 2020. The change compared to last year is related to the proceeds cashed by the Group
following the IPO which occurred in November 2021 for an amount of approximately €70 million, net of bank commission.
In order to re-balance the financial structure of the Group and reduce borrowing costs, part of the IPO proceeds have been
used to pay €25.7 million, including interest and other sums accrued, for the reimbursement of the financial loans in place.
For a further analysis of cash flow movements in 2021, please refer to the paragraphs below.
Net equity
Net equity was €64.4 million as at 31 December 2021 compared to €2.1 million of the previous period. The increase
compared to last year is mainly related to the capital increase following the IPO which occurred in November 2021, and
additionally, due to the net result of the year.
Group cash movements for the year
€’000
2021
2020
Cash and cash equivalents at the beginning of the period
11,824
9,406
Adjusted EBITDA from continuing operations
835
(1,133)
Decrease/(increase) in working capital
763
(380)
Decrease/(increase) in contract assets
(3,376)
1,020
Operating free cash flow
(1,778)
(493)
Taxes paid
(127)
(250)
Cash flow from investing activities – tangible assets
(132)
(17)
Cash flow from investing activities – R&D
(3,552)
(3,179)
Free cash flow
(5,589)
(3,939)
Exceptional items
(2,681)
(77)
Free cash flow from discontinued operations
774
2,899
Cash flow from investing activities – M&A
(5,350)
0
Cash flow from financing activities
(25,791)
3,982
Cash flow from equity movements
70,065
0
Others
5
(447)
Net increase/(decrease) in cash and cash equivalents
31,433
2,418
Cash and equivalents at the end of the period
43,257
11,824
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Operating free cash flow
Operating free cash flow was negative €1.8 million in FY 2021 compared to €0.5 million in FY 2020. Operative cash burn
compared to the previous period is related to the increase of working capital due to the increase of contract assets which
has drawn cash of €3.4 million in 2021.
Free cash flow
Free cash flow was negative €5.6 million in FY 2021 compared to €3.9 million in FY 2020. Cash burn compared to the
previous period is due to the result of operating free cash flow and R&D investments for €3.6 million compared to €3.2
million in FY 2020.
Cash flow from investing activities – M&A
Cash flow from investing activities amounting to negative €5.4 million represents the consideration paid for the
acquisition of PDA DAPDA, SL, DAPDA Media, SL, Fidcar SAS and Liotey Sarl, net of the cash acquired.
Cash flow from financing activities and equity movements
The cash flow from financing activities (including cash flow from equity movements) is positive for €44.3 million and is
related to the following offsetting reasons: IPO capital increase occurred in November 2021 for approximately €70 million
net of bank commission and repayment of financial loan in place including interests as shown in the table above.
Dividend
MotorK Group management intends to retain any future distributable profits to expand the growth and development of
the business and, therefore, does not anticipate paying any dividends to its shareholders in the foreseeable future.
Events affecting the Company (and its subsidiaries) which have occurred since the end of the
financial year (key financial covenants are included here)
Loan reimbursement and refinancing
As previously communicated to the market in the first months of 2022, the Group has completed the reorganization of its
financial structure, repaying the loan in place with Creval for €0.4 million and refinancing the loan with Illimity Bank by
obtaining fresh liquidity for €1.8 million with a longer maturity date and reduced borrowing costs. The new loan in place
with Illimity Bank is guaranteed by SACE SIMEST for 90% of its principal amount and new financial covenants are in place
to be tested annually, starting from December 2022: leverage ratio (net financial position / EBITDA) and gearing ratio (net
financial position / net equity).
Acquisition of FranceProNet SAS
On 1 February 2022 MotorK Group completed the acquisition of FranceProNet SAS (“FranceProNet”), a top-tier French
digital agency specialising in web solutions for the automotive sector. FranceProNet is a trusted partner to dealers seeking
to unlock the full potential of digitalisation, providing them with web design and a highly specialised SEO-first approach
refined over nearly 20 years, while also integrating training, digital marketing and lead generation services.
The integration of such a company in MotorK Group will leverage the technological expertise and extensive local market
knowledge to further reinforce the strategy of the Group.
Outlook
In the first months of 2022 the international context appears to be even more challenging than the previous year. Although
the impacts of the pandemic are lessening and, at the date of this financial statements, it is reasonable to think that the
regional lockdowns put in place during 2020 and 2021 will not be repeated in 2022, the international environment has
been shaken. Firstly, by market volatility due to the possible increase of interest rates applied by international central
banks, and secondly, beginning in the last days of February 2022, by the ongoing crisis between Russia and Ukraine. Such
conflict is negatively impacting the automotive industry, and even if the Group does not operate directly in such markets
and no key suppliers are based in Russia and Ukraine, the persistence of the conflict may cause issues in terms of supply-
chain constraints for the industry in general. The Group will keep monitoring the impact of the current political
environment on its customers, its business, and the industry as a whole and provide updates as necessary. That being
said, at this stage, given the nature of the business of the Group, MotorK confirms the previously stated guidance in terms
of revenues, EBITDA and ARR mentioned in this annual report.
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Financial KPIs
We monitor the key financial performance of the Group against a number of different
benchmarks and these are set in agreement with the Board.
Reasons for choice
How we calculate
Outlook
Annual recurring revenue (ARR)
€15.1M
vs €10M last year
ARR is the main indicator
for SaaS businesses like
ours as it shows our ability
to attract and retain
customers generating
recurring revenues.
It represents the yearly
subscription value of the
Group’s customer base at
the end of the reporting
period.
The Group expects
ARR for FY 2022 to
be in the range €28-
30 million.
Revenue growth
43%
Our strategy is centred on
delivering significant top
line growth in the next few
years. Hence, this is a
fundamental KPI to track
our strategic performance.
Calculated as increase in
revenue percentage year-
on-year.
The Group targets
for FY 2022 a growth
of approximately 63-
71% including
revenue from M&A.
Recurring revenue as % of total
revenue
54%
vs 46% last year
Measures the ability of the
Group to focus on the
recurring component of
Group revenue, that is the
most scalable and value-
adding.
Calculated as recurring
revenues as a percentage
total Group revenue.
The Group targets
70% recurring
revenue for FY 2022.
Organic revenue growth
41%
Due to the number of
acquisitions the Group
makes this measure helps
to make revenue data
comparable year-on-year.
Calculated as increase in
revenue percentage year-
on-year without taking
into account revenues
generated by new M&A
during the year.
The Group targets
for FY 2022 an
organic growth of
approximately 30%.
Adjusted EBITDA
€0.8M
vs -€1.1M last year
This is a consistent
measure of trading
performance, aligned with
the interests of our
shareholders.
Adjustments are related to
expenses that are not
strictly inherent to the
underlying business
performance.
Calculated as operating
profit before interests,
taxes, amortisation and
depreciation net of
exceptional costs and
stock option expenses.
The Group targets
for FY 2022 an
adjusted EBITDA in
the range between
€9-9.4 million.
Adjusted EBITDA margin
3%
vs -6% last year
This is a consistent
measure of performance
needed to ensure costs of
the Group are in line with
the level of business being
generated.
Calculated as Adjusted
EBITDA as a percentage of
total Group revenue.
The Group targets
for FY 2022 an
Adjusted EBITDA
margin of
approximately 20%.
Data shown are related to FY 2021 (compared to the previous year period where needed).
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Stakeholder Engagement and S172 Statement
“Engaging with all our stakeholders in our day-to-day business is a core part of the Group’s strategy”
The Board is mindful of its responsibilities to all stakeholders when considering the likely consequences of the
implementation of its business strategy and long-term decisions. The Board considers its key stakeholders to be its
employees, customers, suppliers and investors. It is through regular engagement with these stakeholders that the Board is
able to understand the issues that are most important to each group and make informed judgements when implementing
the Group’s strategy and long-term decision making.
This section comprises our Section 172 statement, setting out how the Board have, in performing its duty over the course
of the year, had regard to the matters set out in Section 172(1)(a) to (f) of the Companies Act 2006.
How the Group engages with its key stakeholders
Stakeholders
Why it is important
to engage
Areas of impact
addressed
Actions taken by management
and/or the Directors
COVID-19
considerations
Employees
• Our services are
rendered almost
entirely by our
internal workforce,
with limited
outsourcing.
• Employees represent
our biggest asset and
their relevant costs
have the greatest
impact on our P&L
compared to other
factors.
• We have a legal and
ethical responsibility
to their wellbeing.
• Training and
development.
• Wellbeing.
• Internal
communication
and
participation.
• Group culture
engagement.
• Regular employee satisfaction
surveys.
• Regular Townhalls open to all
employees.
• Access to training both for
personal development and on
work-related topics.
• Share options plan extended to all
employees.
• Bonus options granted for the IPO.
• Company cruise in November for
all employees.
• Comprehensive objectives and key
results system put in place to align
Company and personal goals.
• We have constantly
aligned our remote
working policies to the
pandemic evolution
throughout the year,
opening our offices
when feasible and
ensuring social
distancing and safety.
Customers and
suppliers
• Their performance
directly impacts our
financial, operational
and responsible
performance.
• We are commercially
responsible to
customers and
suppliers.
• Customer
satisfaction.
• Support to
customers with
temporary
difficulties.
• Innovative
strategic
partnership.
• Careful selection
of trustworthy
suppliers.
•
Implemented regular monitoring
of Net Promoter Scores
[1]
.
• In certain cases, we
offered temporary
discounts to customers
affected by the
automotive market
slowdown due to the
pandemic.
• Our training services
have been converted
from physical to
remote.
Investors
• Our strategic and
operational decision
making is influenced
by our investors’
views.
• We are dependent on
access to funding.
• We are accountable
to our shareholders.
• IPO funding.
• Communication
with investors.
• Set up of a new investors’ section
on our website.
• Completed an IPO with the
support of the pre-existing
shareholders and attracting a vast
majority of new investors with a
long-term investment view. Total
raise of €75 million.
• Started coverage by two analysts’
houses.
• Met with more than 250 potential
investors, both one-to-one and in
group meetings.
• Our IPO roadshows
and investors’
meetings were almost
entirely held remotely.
[1] Note: if it is intended to include NPS data in the strategic report, consider cross-referring to those scores.
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Principal Risks and Uncertainties Facing the Company
Risk management framework
In order to pursue our growth strategy we recognise the importance of balancing
entrepreneurial spirit and a conscious risk-taking approach. As a newly listed company
we are making multiple efforts to improve our risk awareness and to emphasize the
importance of risk management. We strongly believe that controlled risks will result in
long-term value for our stakeholders.
Risk governance
Our risk governance model is based on the presence of three different levels of risk management: the Board of Directors,
the Audit Committee and management, who actively take accountability for managing risks and controls.
Board of Directors
The Board of Directors has overall responsibility for the Group risk management and internal control system, being
responsible for determining the strategy, setting the objectives, defining the risk appetite and influencing the culture of
risk management. These goals are pursued through maintaining internal controls systems that ensure the
accomplishments of our mission, and not taking any substantial risks without them first being reduced to an acceptable
level.
Audit Committee
The Audit Committee monitors and reviews the scope and the effectiveness of the Company’s systems of risk and internal
control. The Committee’s responsibilities also include the oversight of matters relating to relations with auditors, funding,
information technology and cyber security, and tax.
Management
Group management is responsible for enacting guidelines, projects and activities under the Board’s and the Audit
Committee’s review, monitoring risk in line with the strategic objectives of the Group, as well as managing day-to-day
risks.
Risk profile
MotorK sets out the risk appetite using internal and external sources, and interviews with management and stakeholders
of the Group. Due to the listing of the Company in November 2021, the Board of Directors has been working to set up the
highest standards of risk management, through the following main actions:
• Setting-up of proper governance in view of the listing. All the relevant bodies have been formed and organised, and all
the required procedures, rules and charters have been approved and published.
• Addressing specific areas in 2021:
– Cyber security. During 2021, management conducted a comprehensive cyber security assessment with the
assistance of an external firm specialised in the field. Moreover, the Company entered into a new cyber risk
insurance policy with a primary insurer.
– Privacy. A new Data Protection Officer has been appointed, represented by an external firm specialised in this
domain. Since appointment, a comprehensive review has been executed and actions are currently being carried out
in line with the identified improvement plan.
– D&O insurance coverage review. The Company entered into a new D&O insurance policy in line with the higher
standards required for a listed entity.
• Kick-off of a comprehensive risk management review project. Management kicked-off a risk management review,
requiring the support of a specialised external firm, whose main goals are expected to be delivered by H1 2022,
including:
– a risk assessment report;
– a five-year risk management plan;
– address of first improvement priorities identified.
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Risk identification
The risk identification phase is to identify risks which could endanger the achievement of our strategic objectives in the
short and long term. A continuous assessment of various factors is needed. To facilitate the risk identification process we
have defined three different risk categories: a) industry and market risks, b) business operation risks and c) legal and
financial risks. It is worth mentioning that risks may also be interdependent, meaning an increase in one category of risk
may cause an increase in others. It is the responsibility of the Executive Management Team to be aware of this
interdependence and assess the effect in a consistent and inclusive manner.
The principal risks identified to which the Group is exposed are set out below, together with a detailed description, the
likelihood of occurrence in the near term and the actions taken to mitigate such risks:
Scale of risk: 1 to 3, with 1 being the most likely
Industry and market risks
Risks
Risk description
Mitigation
Likelihood in the
near term
Dependence
on the
automotive
distribution
market
Dependence on the automotive
distribution market, which is highly
sensitive to geo-political and
macroeconomic conditions and is
subject to a high level of fluctuation.
Such a level of fluctuation could lead to
reduced demand for the Group’s
services.
• The growth strategy of the Group
provides a differentiation of
geographical area in which the
business will be expanded.
• MotorK continuously adjusts its
business propositions in order to
offer a key service for its customers
despite market fluctuations.
Business operation risks
Risks
Risk description
Mitigation
Likelihood in the
near term
Failing to
meet the
growth
strategic
targets
The Group may fail to successfully
complete acquisitions as part of its
growth strategy, and therefore fail to
sustain its growth rate, or could face
unexpected risks related to expansion
in new international markets by failing
to conduct due diligence, and therefore
failing to achieve synergy.
• MotorK Group has established a
dedicated team focused on post-
merger integration activities to
ensure synergies are met.
• Ongoing monitoring of post-
merger integration KPI.
• Involvement of “Big 4” firms in the
due diligence process.
• Retention plan for key employees
of targets companies.
Cyber
vulnerabilities
The Group’s internal IT systems, or
those of its partners, providers or
consultants, may fail or suffer cyber-
attacks, security breaches, system
outages and other incidents, which
could result in a material disruption of
the Group’s product development
programmes and subsequent losses
and possible reputational damages.
• Antivirus and antimalware
protection systems.
• First cyber assessment run by a
third-party company.
• Coverage insurance policy in
place.
• Introduction of appropriate
warranties and guarantees clauses
in contracts with third parties.
2
3
3
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Legal and financial risks
Risks
Risk description
Mitigation
Likelihood in the
near term
Credit risk
Credit risk is the risk of financial losses
if a counterparty fails to meet its
contractual obligations. The Group is
mainly exposed to credit risk from
receivables towards customers.
• Group exposure is monitored
centrally by the finance
department and by top
management on a periodical basis.
• Specific credit collection policies
are applied in all Group
subsidiaries.
• No significant concentration of
counterparties given the number
of customers.
• No historical track record of
significant credit losses.
Liquidity risk
Liquidity risk is the risk that MotorK
Group will not be able to meet its
financial obligations as they fall due.
• Liquidity risk is managed centrally
and continuously assessed by
management.
• Cash flow forecast projections are
drawn up periodically and
reviewed at regular intervals based
on adjusted projections.
• MotorK maintains adequate cash
available in banks to meet the
short-term obligations by
matching the maturity profiles of
financial assets and liabilities.
Data
protection
issues
Risk relating to a breach of applicable
data protection laws and regulations.
• Appointment of a Data Protection
Officer pursuant to EU Data
Protection Legislation.
• Data Protection Officer
appointment attached to
contracts involving the processing
of personal data.
Risk of
infringement
of intellectual
property
rights
Risk relating to the Group’s ability to
secure and protect its intellectual
property and the infringement of
intellectual property of others.
• Introduction of appropriate
warranties and guarantees clauses
in the contracts.
Board Approval
Approved by the Board on 5 April 2022
Marco Marlia
Director
5 April 2022
3
3
3
3
Annual Report 2021
37
CORPORATE GOVERNANCE
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Governance Section
Amir Rosentuler
Chairman
The Board recognises the importance of sound corporate governance.
Dear Shareholders
As Chairman of the Board of Directors of MotorK plc, I am pleased to introduce the Group’s first corporate governance
report for the period ended 31 December 2021. The corporate governance statement provides an overview of how the
Board of Directors has operated during the past financial year and the key issues considered.
Since my appointment in June 2021, I have been impressed with the good governance processes in place relative to the
Group’s global corporate size, and in the Company’s commitment to fostering an innovative and inclusive culture. The
Board of Directors is committed to sound corporate governance. The Company is voluntarily applying the Dutch Corporate
Governance Code (the “Dutch Governance Code”). A copy of the Dutch Governance Code can be found on
https://www.mccg.nl/publicaties/codes/2016/12/8/corporate-governance-code-2016-en.
The Company fully endorses the underlying principles of the Dutch Governance Code and applies the Dutch Governance
Code as the guiding principles for its corporate governance policy. The Company complies with relevant best practice
provisions of the Dutch Governance Code in a manner consistent and proportional to the size, risks and complexity of the
Group’s operations. The Board of Directors believes that good governance plays a key part in the Group’s ability to achieve
its medium and long-term strategic aims and supports the creation of value for all our stakeholders. As such, good
corporate governance and social responsibility plays a key part in the Company’s strategy and long-term value creation for
its shareholders.
The Board of Directors will provide annual updates on our compliance with the Dutch Governance Code. Please refer to
pages 42 to 44 for more details.
During the financial year ending 31 December 2021, the following changes were made to the Group’s key corporate
governance arrangements:
• I was appointed as a Non-Executive Chairman and Independent Director in June 2021 (information on my background
can be found on page 47);
• the Remuneration Committee, the Audit Committee and the Selection and Nomination Committee were formed in
anticipation of the listing of the Company’s shares;
• the terms of reference for the functioning of the Remuneration Committee, the Audit Committee and the Selection
and Nomination Committee were adopted; and
• a diversity policy in respect of specific diversity targets to promote diversity within the Board was also adopted.
The above-mentioned terms of reference and diversity policy are published on the Company’s website.
The main Group-wide governance documents are our Code of Conduct and the Board Rules, which set out our
responsibilities to the Company, to each other and what our stakeholders may expect from us. Together with our policies,
these documents guide us in making smart, sound decisions in our day-to-day work and professional relationships with
our customers and suppliers.
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The Board of Directors has ultimate responsibility for the Group’s system of internal control and for reviewing its
effectiveness. My ambitions for the composition of the Board of Directors are to maintain its Directors, each of which has a
deep understanding of the Company and the industry in which the Company operates, and where applicable, broaden the
range of experience, expertise and diversity, in line with the Board Profile (a copy of which is published on the Company’s
website).
In the following section we outline the Group’s approach to corporate governance and compliance with the principles of
the Dutch Governance Code.
Amir Rosentuler
Chairman
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Governance Overview
MotorK plc is a public limited company incorporated and registered in England and Wales and headquartered in Italy. It
acts as a holding company for its subsidiaries, details of which are set out on pages 81. MotorK's shares are listed on the
Euronext Amsterdam.
MotorK has a two-tier governance structure formed of the Board of Directors and the Executive Management Team. There
is also a third governing body: the Company's shareholders. In the following sections, we provide information on these
governing bodies and their responsibilities and duties.
The Board of Directors and Executive Management Team
The Board of Directors is comprised of one Executive and four Non-Executive Directors. The Board of Directors considers
that Amir Rosentuler, Måns Hultman and Mauro Pretolani are independent in character and judgement and that there are
no relationships or circumstances which are likely to affect their independent judgement.
The Board of Directors is responsible for the Company’s strategic leadership, determining the fundamental management
policies of the Company and overseeing the performance of the Company’s business. The Board of Directors is the
principal decision-making body for all matters that are significant to the Company, whether in terms of their strategic,
financial or reputational implications. The Board of Directors has final authority to decide on all issues save for those
which are specifically reserved to the General Meeting of shareholders by law or by the Company’s Articles of Association.
During the year, all serving Directors attended (in the main by video conference due to the restrictions imposed as a result
of the COVID-19 pandemic) the scheduled Board meetings that were held. In addition to the scheduled Board meetings, a
number of ad hoc Board meetings were held. Directors are provided with appropriate and timely information by the
Group’s management and the Directors are free to seek any further information they consider necessary. Details of the
number of Board meetings attended by each Director can be found on page 45.
Members of the Board of Directors are appointed by the shareholders for four-year terms. The Executive Director may
serve any number of consecutive terms. Non-Executive Directors may be reappointed once for an additional four-year
term and thereafter, the Non-Executive Director may again be reappointed but for not more than two consecutive terms of
not more than two years each.
Day-to-day operating decisions are made by an executive management team (the “Executive Management Team”). The
current Executive Management Team consists of nine key members, including the CEO, each of whom oversees a specific
aspect of the business. Details of the Executive Management Team can be found on page 49.
Overview of Board Committees
The Board of Directors is supported by the Audit, Remuneration and Selection and Nomination Committees, details of
which are set out below. Each Committee has written terms of reference setting out its duties, authority and reporting
responsibilities, copies of which are published on the Company’s website. A summary of the activities as from the listing
and during the year ended 31 December 2021 of each of the below-mentioned committees can be found on page 48.
Audit Committee.
The Audit Committee’s role is to assist the Board of Directors with the discharge of its responsibilities in relation to
financial reporting, including reviewing the Group’s annual financial statements and accounting policies, external audits
and controls, reviewing and monitoring the scope of the annual audit and the extent of the non-audit work undertaken by
external auditors, advising on the nomination for appointment of external auditors and completing the preparatory work
for the Non-Executive Directors’ decision making regarding the supervision of the integrity and quality of the Company’s
financial reporting and the effectiveness of the Company’s internal risk management and control systems.
The Audit Committee consists of two Non-Executive Directors: Mauro Pretolani, as Chair of the Audit Committee, and Amir
Rosentuler as a member. All members, including the Chairman of the Audit Committee, meet the requirements of
members of the Committee pursuant to the terms of reference. In addition, Mauro Pretolani has competence in
accounting and auditing.
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Remuneration Committee
The Remuneration Committee advises the Board of Directors in relation to its responsibilities regarding the determination
of the remuneration of Board members. The Remuneration Committee is tasked with submitting a clear and
understandable proposal to the Board of Directors concerning the remuneration policy to be pursued.
The Remuneration Committee is chaired by Måns Hultman and Amir Rosentuler is a member. All members, including the
Chairman of the Remuneration Committee, meet the requirements of members of the Committee pursuant to the terms of
reference.
Selection and Nomination Committee
The Selection and Nomination Committee assists the Board of Directors in reviewing the size and composition of the
Board of Directors and proposes appointments and reappointments. It periodically assesses the functioning of individual
Directors and is also responsible for drawing up plans for the succession of Directors.
The Selection and Nomination Committee is chaired by Amir Rosentuler and Mauro Pretolani is a member. All members,
including the Chairman of the Selection and Nomination Committee, meet the requirements of members of the
Committee pursuant to the terms of reference.
Shareholders
A General Meeting is held within six months of the end of every financial year. The general purpose is to receive and adopt
the accounts and the reports of the Directors (including the Directors’ Remuneration Report) and auditors.
A General Meeting is called by notice sent by the Directors. Shareholders representing at least 5% of the total voting rights
of all the members who have a right to vote have the ability to (i) request that the Directors call a General Meeting and (ii)
require a resolution to be put before a General Meeting that they have so convened. Every shareholder may attend, speak
and vote at a General Meeting.
Unless the Companies Act 2006 or the Articles of Association require a larger majority, resolutions tabled at the General
Meeting are adopted by a simple majority of votes cast.
MotorK recognises the importance of engaging with its shareholders. For further details please see the Stakeholder
Engagement section on page 33.
Internal controls and risk management
The Board of Directors has overall responsibility for the Group’s system of internal controls. The system is designed to
manage, rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable
assurance against material misstatement or loss.
The Directors believe that the Group has internal control systems in place appropriate to the size and nature of the
business. The key elements are:
• Group Board Meetings, at a minimum of four times per year, with reports from and discussions with the Executive
Management Team on performance and, at least two times per year, on key risk areas in the business;
• monthly financial reporting, for the Group and for each subsidiary, of actual performance compared to budget and the
prior year;
• annual budget setting; and
• a defined organisational structure with appropriate attribution of responsibility.
The Board of Directors also regularly meets with the external auditor on matters identified in the course of the statutory
audit.
Furthermore, the Company has selected an advisor that will support the Company in its development of the internal
control and risk management systems during the next financial year.
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Conflicts of interest
The Board of Directors ensures that there are effective procedures in place to avoid conflicts of interest by Board
members. Each of the Directors has a statutory duty to avoid conflicts of interest with the Company and to disclose the
nature and extent of any such interest to the Board of Directors.
If a situation arises in which a Director has, or can have a direct or indirect interest that conflicts, or possibly may conflict,
with the interests of the Company, the Director in question must declare the nature and extent of his or her interest to the
other Directors and provide all relevant information to the Board of Directors, so that the Board of Directors (excluding the
Director concerned) can decide whether a declared (potential) conflict of interest of a Director qualifies as a conflict of
interest within the meaning of the relevant laws.
The Board of Directors, in such a scenario, may (subject to the Company’s Articles of Association) resolve to authorise the
conflict and such authorisation may include whether the Director can take part in the decision-taking process of the Board
of Directors in respect of any situation in which he or she has a conflict of interest.
Similarly, the Dutch Governance Code requires the Directors to avoid any form of conflict of interest with the Company and
the Directors and to immediately report any (potential) conflict of interest to the Chairman under provision of all relevant
information.
In the past financial year, there were no transactions made in which there was a conflict of interest.
Further information as to how the Board of Directors deals with (potential) conflicts of interest may be found in the Board
Rules (a copy of which is available on the Company’s website).
Advisors
The Board of Directors is in regular contact with its advisors to ensure that the Group is, at all times, compliant with
applicable rules and regulations.
The Company has engaged remuneration experts, who provide advice to the Board of Directors in relation to
remuneration. Additional information can be found in the Directors’ Remuneration Report on page 56.
In addition, the Company has engaged primary law firms as advisors to the Company as to UK and Dutch law.
An overview of compliance with the Dutch Corporate Governance Code
The Board of Directors is responsible for the corporate governance of the Company and for compliance with the Dutch
Governance Code which was voluntarily adopted as from listing of the Company on Euronext Amsterdam. The Company
acknowledges the importance of good corporate governance. The Company regards the Dutch Governance Code and its
underlying principles as the guiding principles for the corporate governance of the Company.
The Company in principle complies with the relevant principles and best practice provisions of the Dutch Governance
Code addressed to the Board of Directors. The deviations from the Dutch Governance Code are noted below. Compliance
with the Dutch Governance Code is based on the “comply or explain” principle. In this table we provide an overview of the
best practice provisions the Company does not comply with and explain why this is the case.
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Best practice provision
Deviation
Explanation
Provision 1.3 Internal audit function
The Company does not have an
internal audit function in place.
The Board of Directors believes, in
consultation with the Audit Committee,
that the Company has not existed as a
listed company long enough to install its
own dedicated internal audit function. The
Company will consider each year whether
an internal audit function is necessary.
Best practice provision 3.1.2 which
provides that, inter alia, the following
aspects should be taken into
consideration when formulating the
remuneration policy (a) if shares are
being awarded, the terms and
conditions governing this. Shares shall
be held for at least five years after they
are awarded; and (b) if share options
are being awarded, the terms and
conditions governing this and the terms
and conditions subject to which the
share options can be exercised.
Share options cannot be
exercised during the first three
years after they are awarded. A
number of the options granted
under the EMI Plan will vest
and be exercisable also within
the first three years following
the IPO. Also, the lock-up
commitments agreed upon in
connection with the shares
resulting from the exercise of
the options granted under the
EMI Plan will expire prior to five
years following the award of
such shares.
The Company deviated from the best
practice provision 3.1.2 in order to retain
its Directors, each of which has a deep
understanding of the Company and the
industry in which the Company operates.
Principle 3.1 states that the
remuneration policy applicable to
executive board members should be
clear and understandable, should focus
on long-term value creation for the
company and its affiliated enterprise,
and take into account the internal pay
ratios within the enterprise. The
remuneration policy should not
encourage executive board members to
act in their own interest, nor to take
risks that are not in keeping with the
strategy formulated and the risk
appetite that has been established. The
non-executive directors are responsible
for formulating the remuneration policy
and its implementation.
The Company does currently
not have a remuneration policy
in place.
The remuneration policy will
fundamentally codify the existing
principles as previously communicated to
potential investors pre-listing. This
remuneration policy will be presented for
approval by shareholders at the 2022 AGM.
Best practice provision 4.3.2 states that
the company should give shareholders
and other persons entitled to vote the
possibility of issuing voting proxies or
voting instructions, respectively, to an
independent third party prior to the
general meeting.
The Company does not provide
the option of an independent
third-party.
The Company’s shareholders’ structure is
composed of stable shareholders and
some stable investors and as far as the
Board of Directors is aware, no retail
investors currently hold shares in the
Company in a significant way, and
therefore the Board of Directors is satisfied
that it is not necessary to appoint an
independent third- party at this time. The
Board of Directors will continually review
this decision ahead of future General
Meetings of the shareholders.
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In-control statement
In accordance with best practice provision 1.4.3 of the Dutch Governance Code, the Board of Directors states that:
• the report provides sufficient insights into any failings in the effectiveness of the internal risk management and
control systems;
• the aforementioned systems provide reasonable assurance that the financial reporting does not contain any material
inaccuracies;
• based on the current state of affairs, it is justified that the financial reporting is prepared on a going concern basis;
• the report provides information on those material risks and uncertainties that are relevant to the expectation of the
Company’s ability to continue as a going concern for a period of 12 months after the preparation of this report.
With reference to article 5:25c, section 2 sub c, of the Dutch Financial Supervision Act and based on the audit of the
financial statements by the external auditor, Marco Marlia (Chief Executive Officer) and Andrea Servo (Chief Financial
Officer) state that, to the best of their knowledge:
• the financial statements as included in this report provide a true representation of the assets, liabilities and the
financial position as at 31 December 2021, as well as the profit for financial year 2021 of the Company and the
companies included in the consolidation;
• the Annual Report provides a true representation of the situation on 31 December 2021, and the course of business at
the Company and at companies included in the consolidation for the financial year 2021 and the Annual Report
includes a description of the material risks the Company faces.
Long term value creation
A detailed explanation of the Board of Directors’ view on long-term value creation and the strategy for its realisation, also
describing which contributions were made to long-term value creation in the past financial year, as well as both the short-
term and long-term developments are included in the Strategic Report on pages 4.
Diversity policy
We have adopted a diversity policy for the Board of Directors. The diversity policy is posted on the Company’s website. The
Company believes that diversity in the composition of the Board of Directors in terms of age, gender, expertise,
professional background and nationality is an important means of promoting debate, balanced decision making and
independent actions of the Board of Directors.
The Company furthermore recognises that diversity should not be limited to the Board of Directors, but should in principle
extend to all areas of the Company’s business, including but not limited to other key leadership positions.
The following specific diversity target has been identified to improve the diversity within the Board of Directors:
maintaining the gender diversity within the Board of Directors such that at least 20% of the Board of Directors will consist
of women.
Values and Code of Conduct
We have adopted a Code of Conduct which applies to all of our employees, including the Directors. The Code of Conduct is
posted on the Company’s website.
The Company closely monitors the effectiveness of and compliance with the Code of Conduct. Violations of the Code of
Conduct are usually determined through, among other things: periodic training activities to employees; reports received in
accordance with the whistleblowing management procedures; and checks forming part of the standard operating
procedures of the Group. For all Code of Conduct violations, the disciplinary measures taken are commensurate with the
seriousness of the case and comply with local legislation. The relevant corporate departments are notified of violations, if
any, irrespective of whether criminal action is taken by the authorities.
Anti-takeover measures
The Company currently has no anti-takeover measures in place.
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Non-Executive Directors’ Report
Introduction
This is the report of the Non-Executive Directors of the Company over the financial year 2021, as referred to in best practice
provision 2.3.11 of the Dutch Governance Code.
Pursuant to the Dutch Governance Code it is the responsibility of the Non-Executive Directors to supervise the policies
carried out by the Executive Director and the general affairs of the Company and its affiliated enterprise, including the
implementation of the strategy of the Company regarding long-term value creation. With a view of maintaining
supervision on the Company, the Non-Executive Directors regularly discuss the Company’s long-term business plans, the
implementation of such plans and the risks associated with such plans with the Executive Director.
Details of the current composition of the Board of Directors, including the Non-Executive Directors, are set forth in the
section “Board of Directors” on pages 47 to 48.
Supervision by the Non-Executive Directors
The Non-Executive Directors supervise the policies carried out by the Executive Director and the general affairs of the
Company and its affiliated enterprise. In so doing, the Non-Executive Directors have also focused on the effectiveness of
the Company’s internal risk management and control systems, the integrity and quality of the financial reporting and
Company’s long-term business plans, the implementation of such plans and the risks associated.
The Non-Executive Directors supervised the adoption and implementation of the strategies and policies by the Company,
reviewed this Annual Report, including the Remuneration Report and the Group’s financial results, received updates on
legal and compliance matters, and have been regularly involved in the review and approval of transactions entered into
with related parties. The Non-Executive Directors have also reviewed the report of the Board of Directors and its
Committees.
The Board of Directors may allocate certain specific responsibilities to one or more individual Directors or to a Committee
comprised of eligible Directors of the Company. In this respect, the Board of Directors has allocated certain specific
responsibilities to the Audit Committee, the Remuneration Committee and the Selection and Nomination Committee.
Meetings of the Board of Directors
Directors are expected to prepare themselves for and to attend all Board of Directors meetings, the Annual General
Meeting of shareholders and the meetings of the Committees on which they serve, with the understanding that, on
occasion, a Director may be unable to attend a meeting.
As from listing, there was one meeting of the Board of Directors during the year 2021. An overview of the attendance of the
individual Directors per meeting of the Board of Directors and its Committees is set out below.
Director
Board of Directors
Audit Committee
Remuneration
Committee
Selection and
Nomination
Committee
Amir Rosentuler
1/1
--
--
–.
Marco Marlia
1/1
--
--
–.
Måns Hultman
1/1
--
--
–.
Laurel Charmaine
Bowden
0/1
--
--
–
Mauro Pretolani
1/1
--
--
–
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During this meeting, the key topics discussed related to: the Group’s acquisitions and the preliminary 2022 Budget.
Moreover, certain items were submitted and resolved by the Board of Directors through specific written resolutions, as
provided by the Company’s by-laws.
Independence of the Non-Executive Directors
Best practice provisions 2.1.7, 2.1.8 and 2.1.9 of the Dutch Governance Code contain detailed rules relating to the
independence of Non-Executive Directors. The most important requirement is that a majority of the Non-Executive
Directors be independent in the sense of best practice provision 2.1.8. Currently, three out of four Non-Executive Directors
are considered to be independent in this sense.
Laurel Charmaine Bowden is not independent within the meaning of best practice provision 2.1.8, since she is a partner at
83 North III Limited Partnership (“83 North”) and 83 North holds approximately 20% of the shares in the Company.
In accordance with best practice provision 2.1.10, the Board of Directors is of the opinion that the independence
requirements for Non-Executive Directors as referred to the Dutch Governance Code are met by the Company.
Evaluation of the Board of Directors and its Committees
The Non-Executive Directors are expected to meet to discuss the functioning of the Board of Directors and its Committees,
the functioning of the Chief Executive Officer, the corporate strategy and the main risks of the business, pursuant to best
practice provisions 2.2.6, 2.2.7 and 1.1.2 of the Dutch Governance Code.
As from listing, there was one meeting of the Board of Directors during the year 2021. Moreover, certain items were
submitted and resolved by the Board of Directors through specific written resolutions, as provided by the Company’s by-
laws. The Board of Directors intends to hold an evaluation during the year 2022 after a proper initial functioning period.
Committees
Audit Committee
A description of the Audit Committee’s role, responsibilities and composition is set out on page 40. As from the listing and
during the year ended 31 December 2021, the Audit Committee has initiated the selection of an advisor that will support
the Company development path of the internal control and risk management system in 2022.
Remuneration Committee
A description of the Remuneration Committee’s role, responsibilities and composition is set out on page 41. As from the
listing and during the year ended 31 December 2021, the Remuneration Committee undertook the preparatory work for
the drafting of the Company’s Remuneration Policy, including the adoption of a new share-based remuneration scheme.
Selection and Nomination Committee
A description of the Selection and Nomination Committee’s role, responsibilities and composition is set out on page 41. As
from the Company’s listing and during the year ended 31 December 2021, the Selection and Nomination Committee, on
the basis of the Retirement Schedule of the Board of Directors posted on Company’s website, focused on the
reappointment of the Group’s CEO, Marco Marlia. During the course of the next financial year, the Selection and
Nomination Committee will focus on the drafting of a succession plan and a retirement plan for the Executive and Non-
Executive Directors of the Company.
Internal audit function
The Non-Executive Directors believe that the Company has not existed as a listed company long enough for it to be
necessary for it to install its own dedicated internal audit function. Senior staff members in the finance department of the
Company are partially dedicated to risk and control management. The CFO oversees risk management tasks. An update on
risk management activities, findings, conclusions and actions are provided to the Audit Committee, where priorities are
set and guidance is provided to follow up on identified areas of concern and to further enhance risk and control
management. The Audit Committee is further supported by the relevant subject matter experts throughout the Company.
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Board of Directors
Amir Rosentuler Chairman / Independent Director
Mr. Rosentuler, who currently serves as the Non-Executive Chairman of the Company,
joined the Group in 2020. Mr. Rosentuler has 25 years of executive management and
entrepreneurial experience in leading technology companies, including more than 15
years of experience in NASDAQ and NYSE listed companies. Mr. Rosentuler is
currently the chairman and board member of several companies. Previously, Mr.
Rosentuler was the co-chief executive officer of Deutsche Telekom HBS Inc., a
subsidiary of Deutsche Telekom AG, based in Silicon Valley, California. Mr. Rosentuler
completed the Executive Leadership, Business Administration, Management and
Operations Program at Babson College.
Marco Marlia CEO & Co-founder
Mr. Marlia, who is currently the CEO of the Company, joined the Group in 2010 as a co-
founder. Mr. Marlia is a serial entrepreneur experienced in running digital companies.
In addition to the Group, Mr. Marlia has co-founded several other companies (Nextre
Engineering, Biquadra and Nomesia), a web design agency and a search engine
optimisation agency. Mr. Marlia holds a bachelor’s and master’s degree in Economics
from Bocconi University and he is author of various books such as “Il Metodo
DealerK” and “Wikis: Tools for Information Work and Collaboration”. Further, Mr.
Marlia earned a bachelor’s degree in Institutions and Financial Markets from Bocconi
University.
Måns Hultman Non-Executive Director / Independent Director
Mr. Hultman has over 30 years of experience in the technology industry. He was chief
executive officer of Qlik and a member of the board of directors of Hybris (since
acquired by SAP). Since 2012, he has been partner at Zobito, which is a shareholder of
the Company. In addition to serving as a Director of the Company, Mr. Hultman
currently serves as a director for Ikano Group, Musikborsen AB, Zobito 1 and 2, Zobito
3 AB and Crossbow AB and an owner of Tassaka AB. Previously, Mr. Hultman served in
various leadership positions for other companies.
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Board of Directors continued
Laurel Charmaine Bowden Non-Executive Director
Ms. Bowden is a partner at 83 North. She has over 15 years of investment experience
and has led investments in and been on the boards of many leading European
technology companies, including iZettle (acquired by PayPal), Just Eat (LSE: JE),
Ebury (50% acquired by Santander), Hybris (acquired by SAP), and Qliktech (NASDAQ:
QLIK). Some of Ms. Bowden’s current company boards and investments include
BlueVine, Critizr, Celonis, Exotec, Form3, Holidu, HungryPanda, Lendbuzz, Mirakl,
MotorK, Paddle, SellerX, Wolt and Workable. Ms. Bowden was previously on the
boards of Investec PLC and Ltd and at JVP and GE Capital in London. Further, Ms.
Bowden earned a BSc in Electrical & Electronic Engineering from the University of
Cape Town and an MBA from INSEAD.
Mauro Pretolani Non-Executive Director / Independent Director
Mr. Pretolani is senior partner at Fondo Italiano d’investimento SGR, a venture capital
fund mainly acting in the Italian market, a position he has held since 2017. In addition,
Mr. Pretolani currently serves as a director for Termo, Healthware Group, Everli
(formerly Supermercato24) and BeMyEye. Further, Mr. Pretolani earned a bachelor’s
degree in Business and Economics from Sapienza Universita di Roma and an MBA
from Harvard Business School.
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Executive Management Team
In addition to the CEO, the following individuals comprise the Executive Management Team:
Andrea Servo Global Chief Financial Officer
Mr. Servo, currently the global CFO of the Company, joined the Group in 2021. Prior to
joining the Group, Mr. Servo served as chief financial officer of DentalPro, Italy’s leading
dental services provider and a portfolio company of BC Partners, where he led the company
through various extraordinary transactions. Between 2013 and 2016, Mr. Servo was chief
financial officer of publicly traded SEAT Pagine Gialle, a company engaged in digital
advertising. He joined Seat Pagine Gialle in 2000 as group tax manager before serving as the
company’s chief accounting officer from 2008 to 2013. Mr. Servo earned a bachelor’s degree
in Economics & Business from the University of Turin and is a chartered auditor and
accountant in Italy.
Etienne Jacquet (appointed January 2022) VP of Corporate Development & IR
Mr. Jacquet, currently Vice President Corporate Development and Investor Relation, is a
highly experienced corporate finance leader and dealmaker, having completed over €100
billion worth of transactions across various jurisdictions and industries in the last 15 years.
He most recently served as director of corporate finance & investor relations at Econocom
SE, a European leader in digital transformation services, listed on Euronext. During his
tenure, he executed several divestitures as part of the group’s deleveraging objective and
developed a multiyear acquisition pipeline in line with the renewed external growth
strategy. Prior to this, Mr. Jacquet was an executive director at Lazard where he was one of
the most senior members of the EMEA Telecom & Tech team. Over the period, he was
critical in securing numerous high-worth transactions and carried out extensive coverage of
Corporates, Private Equity and VCs in the tech sector on an international basis. Prior to this,
Mr. Jacquet served at Morgan Stanley for 8 years, most recently as a senior vice president
within the TMT team. Over the period, he played a pivotal role in executing over 40
transactions and gained a strong capital market expertise managing several IPOs and
Capital raises. Mr. Jacquet holds a Master of Science (MS) degree from Télécom Paris, as
well as a Master of Finance & Strategy from Sciences Po Paris.
Nir Erlich Chief Innovation & Product Officer
Mr. Erlich, currently Chief Product Officer (“CPO”) of the Company, joined the Group in
2020. With over 20 years’ of professional experience in the tech sector, Mr. Erlich has a vast
experience leading SaaS product offerings and has led different companies as founder and
chief executive officer. Most recently, he was head of product at Moteefe and chief
executive officer (and founder) at Craft.io.
Joe Sanchez (appointed April 2022) Chief Revenue Officer
Joe Sanchez, currently the Chief Revenue Officer, joined the group in April of 2022. Mr.
Sanchez has 30 years of experience in various sales functions across both enterprise and
mid-market companies. Joe has participated in high-growth organisations where he built
and led sales, customer success, inside sales, eCommerce, and marketing organisations. He
has led teams acquiring and managing billions of dollars in revenue through various
channels. Most recently, Joe spent 3 years at a private equity backed SaaS company
providing software platforms to mid-market businesses where he served as the Chief Sales
Officer. Joe is educated in USA where he earned a BSFS Degree in International Economics
from Georgetown University School of Foreign Service in Washington, DC.
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Tommaso Carboni Head of Global Sales & Country Manager, Italy
Mr. Carboni, currently Head of Global Sales and Country Manager Italy of the Company,
joined the Group in 2018. Mr. Carboni has 20 years of experience in sales, marketing and
communications across different companies and industries. He joined the Group in 2018 as
the Country Director for Italy and, in 2020, became the Head of Global Sales. Previously, he
was employed by Google and was responsible for strategic digital consultancy to some of
Google’s top global partners (e.g. automotive sector customers) and their agencies at the
EMEA level. Mr. Carboni also spent 15 years at Ford Motor Company, where he served in
various roles, the last one being marketing director. Mr. Carboni earned a master’s degree
in Management Engineering from the Tor Vergata University of Rome.
Jean Pierre Diernaz Chief Strategy Officer and Country Manager, France
Mr. Diernaz, currently Chief Strategy Officer and Country Manager France of the Company,
joined the Group in 2019. With over 25 years of experience in automotive digital marketing,
Mr. Diernaz has a wide knowledge of the industry and of its problems within the digital
transformation. After more than 10 years at Ford, where he has covered the position of
advertising and marketing services manager, he landed at Nissan in 2005 as general
marketing communications for Europe. In May 2010, he started covering the position of
marketing director EMEA of Infiniti, the premium brand of Nissan group. In 2014, he became
managing director of the electric cars business unit for Europe. Mr. Diernaz then became
vice president marketing & digital Europe and thus, responsible for product launching,
price strategy, communications and digitalization. Mr. Diernaz earned an MBA from ISG
(Paris) and completed the Executive Leadership Program at IESE (Spain).
Luigia Corvino Chief HR Officer
Ms. Corvino, currently Chief Human Resources Officer (“CHRO”) of the Company, joined the
Group in 2021. Ms. Corvino has over 20 years of experience across e-business services, web
development management, digital consulting and human resources. Before joining the
Group, she was head of organisation & people development and human resources director
at ePrice and senior account executive at Banzai Consulting. Ms. Corvino has also served as
general coordinator and head of IT and web projects at O.R.P. (Vatican City State) and
senior account executive at Interactive Thinking S.r.l. Ms. Corvino earned a bachelor’s and a
master’s degree in Economics from Bocconi University.
Asaf Polturak Chief of Staff
Mr. Polturak, currently Chief of Staff of the Company, joined the Group in 2020. Mr. Polturak
has over 10 years of experience across consultancy, private equity and hedge funds. Before
joining the Group in 2020, he was the chief investment officer of Adir Capital, a boutique
Hedge Fund & Family Office. Mr. Polturak earned a bachelor’s degree in Economics from Tel
Aviv University and an MBA from Harvard Business School.
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Directors Report
The Directors present the Annual Report together with the audited consolidated
financial statements and the audited financial statements.
Results and dividend
The consolidated statement of profit and loss and other comprehensive income for the year ended 31 December 2021 is
set out on pages 76 and shows the loss for the year.
No interim dividend was declared during the year and the Directors have not recommended a final dividend for the year
ended 31 December 2021.
Directors and changes to the Board of Directors and Executive Management Team
The Directors of the Company during the year ended 31 December 2021 were Amir Rosentuler (appointed June 2021),
Marco Marlia, Måns Hultman, Laurel Charmaine Bowden and Mauro Pretolani. Details of the members of the Board of
Directors at 31 December 2021 are set out on pages 47 and 48.
In addition to the CEO, the members of the Executive Management Team of the Company during the year ended 31
December 2021 were Andrea Servo, Nir Erlich, Tommaso Carboni, Jean Pierre Diernaz, Luigia Corvino and Asaf Polturak.
Martin Hughes served the Company as Chief Technology Officer (“CTO”) until December 2021; Etienne Jacquet is the
Company’s Vice President of Corporate Development and Investor Relations since January 2022, Joe Sanchez is the
Company’s Chief Revenue Officer since April 2022.
Directors’ indemnities
The Company maintains Directors’ and officers’ liability insurance which gives appropriate cover for legal action brought
against its Directors, subject to the conditions set out in the Companies Act 2006. The policy was in force throughout the
period and at the date of the approval of these financial statements.
Political donations
The Group did not make any political donations in the financial period.
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Directors and their beneficial interests
The Directors of the Company and their beneficial interest in the ordinary shares of the Company as at 31 December 2021
were as follows:
Director
Position
Appointed
Ordinary shares
Amir Rosentuler
Chairman / Independent
Director
11 June 2021
120,000 (0.3%)
Marco Marlia
Chief Executive Officer
10 October 2014
5,481,580 (13.6%)
Laurel Charmaine Bowden
Non-Executive Director
14 January 2019
–
Måns Hultman
Non-Executive Director /
Independent Director
22 August 2016
–
Mauro Pretolani
Non-Executive Director /
Independent Director
22 August 2016
138,400 (0.3%)
Significant shareholdings
So far as the Company is aware (further to normal notification) and based on public data available, the following
shareholders held legal or beneficial interests in ordinary shares of the Company exceeding 3% as at 31 December 2021:
Name
Shares
%
83 North III Limited Partnership
7,864,655
19.5%
Marco Marlia
5,481,580
13.6%
Fabio Gurgone
5,285,080
13.1%
Marco De Michele
5,285,080
13.1%
Capital International Limited
2,300,000
5.7%
Zobito AB*
2.965.400
7.35%
M&G Investment Management Limited
1,230,768
3.1%
*Aggregated Zobito ownership through various vehicles.
There are no restrictions as to voting rights.
Future developments
Particulars of any important events affecting the Company which have occurred since the end of the financial year and an
indication of likely future developments in the business of the Company are described in the Strategy section of the
Strategic Report on pages 4 and are incorporated into this report by reference.
Disclosure of information to auditors
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware, and
each Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or herself
aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
Subsidiaries outside of the UK
Details of the Company’s subsidiaries are set out at pages 81.
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53
Capital structure
MotorK confirms that no shares in the Company were either:
• purchased or acquired by the Company under section 659 CA 2006;
• acquired by the Company’s nominee, or by another with Company financial assistance, the Company having a
beneficial interest under section 662(1) CA 2006;
• made subject to a lien or other charge taken (whether expressly or otherwise) by the Company and permitted by
section 670(2) or CA 2006 (exceptions from general rule against a company having a lien or charge on its own shares).
The Company also confirms that there are no ordinary shares without voting rights or that confer no or a limited right to
share in the profits or reserves of the Company.
Details of the issued share capital, together with details of the movements during the year, are shown in Note 21 to the
Consolidated Financial Statements. The Company has one class of ordinary share and each ordinary share carries the right
to one vote at general meetings of the Company.
Financial risk management and financial instruments
The Group implements a careful approach to financial risk management. During the year 2021 the Group has entered into
transactions involving derivative instrument only related to the repurchase of the warrants over shares, entitled to
European Investment Bank, in the context of the repayment of the financial loan in place which occurred at the end of
November 2021. Details of which the Board of Directors considers the main financial risks facing the Company are set out
under the “Risk identification” paragraph within the Principal Risks and Uncertainties section on pages 34.
Risk relating to the seasonality of the Group’s operating results
The Group’s results of operations are slightly affected by seasonal and cyclical factors in the automotive market. Such
fluctuations in the sales for dealerships may lead to lower sales volumes for the Group in specific months during summer
and winter. Seasonality risk is naturally mitigated by the nature of our products, which enhance the ability of the dealers
to overcome the effects of sales downpeaks, and the operating model, based on SaaS products offering, which improves
the stability of our incomes.
Risk relating to interest rate changes
The Group is exposed to risks associated with changes in variable interest rates, as certain of its credit facilities may bear
interest at a floating rate. An increase or decrease in interest rates would affect the Group’s current interest expenses and
the Group’s refinancing costs; however, this is not considered to be material. Interest rate risk may be mitigated against, in
part, by the Group entering into hedging transactions in the form of derivative financial instruments, although such
transactions are not risk-free. Given the limited amount of floating rate loans incurred by the Group, no such hedging is
currently in place.
Greenhouse gas (GHG) emissions
Due to the nature of MotorK business direct ecological impact in terms of GHG emissions, energy consumption and energy
efficiency from our operations are mainly related to the consumption of electricity in the Group premises. Indirect
ecological impacts are related mainly to the cloud services provided by our external suppliers and by the business travel of
MotorK people. During 2021 MotorK reduces the use of facilities across Europe providing the possibility for all the
employees to work remotely to safeguard the health of employees and their families and also substantially reduced
business travel compared to the pre-pandemic period. Due to this fact, GHG emissions, energy consumption and energy
efficiency data relating to the Group’s operations, our offices and staff travel is not significant for the year ending 31
December 2021 and not reported in such Annual Report. The Board of Directors recognise that the Group has a corporate
and social responsibility to minimise the ecological impact from our operations and look forward to launching a more
formalised approach to sustainability in the future.
Engagement with suppliers, customers and others
For a detailed analysis of the Group's engagement with its various stakeholder groups, please refer to the Stakeholder
Engagement and S172 Statement section on page 33.
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Non-discrimination and harassment
The Company places significance on fostering a diverse, inclusive work environment where all ideas, perspectives, and
backgrounds are considered. Employees will be hired on the basis of objective criteria (such as knowledge, expertise,
proven qualities, performance and behaviour). None of the employees should face discrimination on the basis of race,
colour, sex, sexual orientation, marital status, religion, political affiliation, nationality, ethnic background, social origin,
age, disability, works council membership, or any other way.
Responsibility Statement
The Directors are responsible for preparing the Annual Report & Financial Statements.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
have prepared the Group and Company financial statements in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”).
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• State whether IFRS have been followed, subject to any material departures disclosed and explained in the Group and
Company financial statements respectively; and
• Prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and
to enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Director’s Report and other information
included in the Annual Report & Financial Statements is prepared in accordance with applicable law in the United
Kingdom and the Netherlands.
The Directors as at the date of this report, whose names and functions are listed in the Board of Directors Report on pages
47 confirm that:
• So far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware;
and
• The Director has taken all the steps that he or she ought to have taken as a Director in order to make himself/herself
aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act
2006.
Going concern
In view of the Group’s resources, net cash as at 31 December 2021 of €34.4 million and limited cash flow consumption by
operations in 2021 of €5.6 million, and based on the overall financial condition of the Group as further outlined in this
Annual Report & Financial Statements, the Directors have reasonable expectation that the Group has adequate resources
to continue in operation for the foreseeable future.
For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
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Signed by
Marco Marlia
Chief Executive Officer
5 April 2022
and
Andrea Servo
Chief Financial Officer
5 April 2022
Auditors
BDO LLP has signified its willingness to continue as independent auditors to the Company.
Website publication
The Directors are responsible for ensuring the Annual Report & Financial Statements are made available on a website.
Financial statements are published on the Group’s websites in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Group’s websites is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein.
Approval by the Board of Directors
The report of the Directors was approved by the Board of Directors on 5 April 2022 and signed on its behalf by:
Marco Marlia
Director
5 April 2022
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Remuneration Committee Report
Måns Hultman
Chair of the Remuneration Committee
Structure of the Remuneration Committee Report
In line with the requirements of the UK reporting regulations and the applicable provisions of the Dutch Governance Code,
this report is divided into three sections:
1. This Annual Statement: summarising the work of the Remuneration Committee (the “Committee”) and our approach
to Directors’ remuneration.
2. The Directors’ Remuneration Policy (the “Policy”): which summarises the framework under which Directors’ pay is set
and how it links to strategy. The Policy will be subject to a binding shareholder vote (by way of ordinary resolution) at
the 2022 AGM.
3. The Annual Report on Remuneration (the “Report”): which sets out remuneration outcomes for 2021 and how, subject
to shareholder approval, the Committee intends to apply the Policy in 2022. This section will be subject to an advisory
shareholder vote at the AGM.
The Committee is chaired by Måns Hultman (an Independent Non-Executive Director) and its member is Amir Rosentuler.
I am pleased to present the Directors' Remuneration Report on behalf of the Board
At the end of 2021, the Committee terminated the prior arrangements which existed in the Company's pre-listed
environment and began work to develop the Policy to meet the relevant corporate governance requirements with the aim
of ensuring competitiveness, alignment, incentivisation and proportionality.
The Policy has been designed to provide a remuneration framework that will:
• deliver fair, responsible and transparent remuneration, contributing to creating long-term value by the Company for
its stakeholders;
• attract, motivate and retain highly qualified individuals and reward them with a market competitive remuneration
package that focuses on achieving sustainable financial results aligned with the long-term business strategy of the
Company;
• align the interests of the Directors with the Company’s shareholders and other stakeholders;
• adhere to principles of good corporate governance and appropriate risk management whilst ensuring compliance
with competitive market trends and statutory requirements in the respect of the societal context around
remuneration and the interests of the Company’s shareholders and other stakeholders.
Consistent with overarching regulatory requirements and statements set out in the Company's Prospectus, the Committee
implemented the post-listing aspects of its Policy for its Executive Directors and Non-Executive Directors, details of which
are further set out in the Policy.
MotorK has delivered another successful year of growth. As a Committee, we have sought to make decisions which
effectively drive and support growth, whilst continuing to align with best practice remuneration and governance
expectations pursuant to the requirements of the UK reporting regulations and the Dutch Governance Code.
I hope that this maiden report is clear and informative and I look forward to the presentation of the Policy for shareholder
approval at the 2022 AGM. The Committee trusts that it will receive your support.
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Måns Hultman
Chair of the Remuneration Committee
Section 2: Directors' Remuneration Policy
(a) Introduction
The Committee determines the Company's policy on the structure of the remuneration for Executive Directors and
Executive Management Team and is responsible for governing the remuneration policy for the broader employee
population.
Procedure
The following sets out the Policy, which fundamentally codifies our existing principles as previously communicated to
potential investors pre-listing. This Policy will be presented for approval by the Company’s shareholders at the AGM of
April 28, 2022 and, if approved, will apply to payments made after that date. The Policy will be available on the Company’s
website.
It is intended that the Policy will apply for three years, although in light of the Committee's efforts to continually develop
the Policy in order to ensure that it allows the Committee to put in place an appropriate and balanced remuneration
package which reflects the size and complexity of the Group, the Executive's experience, skills and responsibility in the
Group as well as market practice, the Committee may seek approval for a new policy at an earlier point if it is considered
appropriate.
When reviewing the Policy, the Committee uses scenario analyses to recognize the different outcomes of the Policy, by
taking into account elements such as internal pay differentials and maximum pay-out of annual bonuses and long-term
incentives.
Compliance
The Policy is compliant with the relevant requirements from the UK company law as well as in principle with the rules of
the Dutch Governance Code, which the Company applies voluntarily.
Principles
The objectives of the Policy are to:
• reward Executive Directors and senior management and support performance-driven culture;
• provide a level of remuneration to attract, motivate and retain high-calibre employees and reward them with a market
competitive remuneration package;
• encourage long-term value creation and support the execution of the Company’s strategic and operational objectives;
• motivate individuals and align interests of the Executive Directors with the Company's shareholders and other
stakeholders; and
• adhere to principles of good corporate governance and appropriate risk management.
The Board of Directors and the Committee believe the foregoing objectives are best achieved by a remuneration structure
whereby:
1. basic pay is set at a level such as to support the recruitment and retention of Executive Directors of the calibre
required to implement the Group's business strategy and is reflective of the individual's skills, experience,
performance and role within the Group;
2. short-term incentive plans (“STIP”) are set at a level such as to incentivise year-on-year delivery of short-term
financial, strategic and operational objectives in furtherance of the Group's business strategy and creation of
shareholder value;
3. long-term incentive plans ("LTIP") are put in place to align the interests of the Directors and shareholders of the
Company concerning long-term value creation, providing an avenue through which the Company's executives can
earn significant rewards subject to shareholders likewise having obtained a good return; and
4. benefits are provided to executives on a cost-effective basis to aid attraction and retention of Executive Directors.
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Illustration of the application of the remuneration policy
Based on the Policy terms described in the next sections, the following charts illustrate the application of the Policy in
different scenarios ranging from no to target achievement of the STIP and LTIP targets and conditions, in combination
with LTIP shares appreciation over the relevant period ranging from zero to fair value at grant date to 50% increase.
Salary levels (and consequently the other elements of the remuneration package which are calculated as a percentage of
salary) are based on those intended to apply in 2022.
The LTIP grant level is shown as 200% for the CEO and 100% for the Executive Chairman.
(b) Remuneration components for Executive Directors and Executive Management Team ("Executives")
In line with the above principles and objectives, various remuneration components are combined to ensure an
appropriate and balanced remuneration package comprising the following elements:
• Fixed remuneration (base salary, benefits and pension);
• Short-term incentive (performance-based cash bonus); and
• Long-term incentive (conditional equity-based award that vests based on performance).
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Base
salary
Purpose and
link to
strategy
To support the recruitment and retention of talented Executives to deliver the Group's
strategy by offering a package that is reflective of the individual's skills, experience and
responsibility in the Group, whilst remaining competitive in relevant talent markets.
Operation
Base salaries are set by the Committee and reviewed on an annual basis. Base salaries are
paid in cash on a monthly basis. Base salary levels are targeted at market rates and
benchmarked periodically against an appropriate peer group of other companies of a
similar financial size and complexity to MotorK.
Opportunity
Any changes for Executives take into account the individual's skills, experience and
performance, significant changes in responsibilities, together with wider market practice
and MotorK’s performance and wider pay practices.
The maximum level of basic salary will not be greater than the current salary as increased,
typically in line with the market. If an individual is appointed at a lower salary, for example,
to reflect inexperience as a listed company director, larger increases may be awarded over
future years as they prove their capability.
Performance
measures
N/A
Pension
and
benefits
Purpose and
link to
strategy
Provides an appropriate structure of benefits on a cost-effective basis to aid attraction and
retention of Executives.
Operation
Benefits include provision of death, disability and medical insurance cover, directors'
liability insurance, pension contributions, company car, and IT equipment.
Opportunity
Dependent on individual circumstances and the cost to the Company of providing the
benefit.
The Company provides access to pension schemes based on local legal requirements or
where provision is customary in a particular local market.
Employer pension contributions to executive directors under the defined contribution
arrangement and cash allowances in lieu of pension are made at the minimum level
required by law or best practice in the relevant jurisdiction.
Performance
measures
N/A
Short
Term
Incentive
Plan
(“STIP”)
Purpose and
link to
strategy
To provide Executives with a reward for delivery of short-term financial, strategic and
operational objectives.
Operation
Executives may be eligible to participate in a discretionary short-term (every six months or
annually) incentive scheme.
The Committee oversees the setting of suitable short-term targets and performance
measures.
Opportunity
The maximum STIP opportunity under this Policy is 300% of base salary.
Performance below the threshold for each financial target results in zero payment in
respect of that element. Payment rises from 0% to 100% of the maximum opportunity for
levels of performance between threshold and maximum with 75% of base salary normally
payable for on-target performance.
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Performance
measures
Subject to the achievement of certain targets relating to financial (including, but not
limited to, revenues or EBITDA adjusted achievements) or operational (including, but not
limited to, customers’ satisfaction, geographical expansion, M&A execution) KPIs,
depending on the role.
Long
Term
Incentive
Plan
(“LTIP”)
Purpose and
link to
strategy
To align the interests of Executives and shareholders in growing the value of the Group
over the long-term.
Operation
LTIP grants are intended to be made annually and consist of Performance Stock Options
(although Conditional Share Awards may also be used). These Performance Stock Options
will vest over three years in three equal tranches but will only become exercisable at the
end of the three-year performance period, to the extent the performance conditions are
satisfied.
The exercise price of the Options will be equal to the market value of a share in the
Company as at the date the Options are granted (potentially averaged over a short period
pre-grant). Once exercisable, Options may be exercised until the tenth anniversary of the
date of grant. Shares acquired pursuant to the exercise of Options will be subject to a
holding period which expires on the fifth anniversary of the date the Option was granted
during which they may not be disposed of (save to cover any tax or social security liabilities
which arise on the acquisition of the shares).
The Committee retains flexibility, consistent with the rules of the LTIP, to grant
Performance Share Awards. Any Performance Share Awards will vest over three years in
three equal tranches, but shares will only become eligible to be acquired by participants at
end of the three-year performance period, to the extent the performance conditions are
satisfied. The same holding period would apply as applies to Performance Stock Options.
Malus and clawback provisions apply (see details below).
Opportunity
The number of Performance Stock Options to be granted and the recipients and quantum
will be determined by the Board or Remuneration Committee. The maximum value of
Performance Stock Options which may be granted to an Executive Director in any
particular financial year is equivalent to 720% of their base salary as at the date of grant.
Should the Committee decide to grant Performance Share Awards, the maximum value of
Performance Share Awards which may be granted to an Executive Director in any
particular financial year is equivalent to 300% of their base salary as at the date of grant.
If a combination of Performance Share Awards and Performance Stock Options are
granted, the maximum value would be between 300% and 720% of base salary as at the
date of grant, adjusted in proportion to the type of Award granted.
The Committee has the discretion to adjust the formulaic outcome to ensure it reflects the
underlying performance of MotorK.
A payment equivalent to the dividends accrued on vested shares may be paid at the point
of vesting (or in the case of options, exercise) in shares or cash.
Performance
measures
Vesting of LTIP awards is subject to the achievement of performance conditions as
outlined below. Each of the performance conditions separately determines part of the
vesting of the LTIP award. The relative weighting of the performance conditions may be
varied by the Committee to ensure the LTIP best supports MotorK’s strategy.
The Committee currently intends to apply the performance conditions with the following
weightings:
• 45% Growth in Annual Recurring Revenues (“ARR”);
• 45% Relative Total Shareholder Return (“TSR”), reflecting the combination of share
price development and paid out dividends to reflect the return received by
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61
shareholders. MotorK’s TSR performance will be measured relative to the relevant
index;
• 10% Non-financial metrics: ESG related or other strategic imperatives.
For each measure, performance below threshold results in zero payment. Payment rises
from 25% to 100% of the maximum opportunity for that measure for levels of performance
between threshold and maximum. For non-financial targets, this approach will be followed
as far as reasonably practicable.
The Committee will have discretion to set different measures and weightings for awards in
future years to best support the strategy of the business at that time, provided that the
vesting of at least 80% of the LTIP award will be subject to financial-based performance
conditions.
Selection of Performance Targets
The performance-related elements of remuneration will take into account the Group’s risk policies and systems, and will
be designed to align the senior executives’ interests with those of shareholders. The Committee reviews the metrics used
and targets set for all of the Group’s senior executives (not just the executive directors) every year, in order to ensure that
they are aligned with the Group’s strategy and to ensure an appropriate level of consistency of arrangements amongst the
senior executive team.
All financial targets will (where appropriate) be set on a sliding scale. Non-financial targets are set based on individual and
management team responsibilities. The annual bonus plan performance metrics include a mix of financial targets and
non-financial objectives, reflecting the key annual priorities of the Group. The financial metrics include TSR, which was
chosen as it provides an external assessment of the Company’s performance against a peer group. TSR also aligns the
rewards received by executives with the returns received by shareholders.
The non-financial objectives will be measurable and based on individual and/or team performance, and will be consistent
with the achievement of the Group’s strategy.
The Committee has chosen to include an ESG-related performance measure to recognise MotorK’s commitment to being a
socially and environmentally responsible business. The Committee will review the choice and relative balance of
performance measures and the appropriateness of performance targets prior to each grant of awards under the LTIP.
The Committee retains discretion to set different targets for future awards, providing that, in the opinion of the
Committee, the new targets are no less challenging in light of the prevailing circumstances than those set previously.
Loans
The Company does not provide any loans or guarantees to Executive Directors and the Executive Management Team.
(c) Service Agreements and Policy on payments for loss of office
Executive Directors are appointed at the AGM for the duration of 4 (four) years. The service agreement may be terminated
by the Executive Director with a notice period of 6 (six) months and by the Company with a notice period of 6 (six) months
or with the applicable statutory notice period. In case the Company terminates the service agreement of an Executive
Director (other than in cases of summary dismissal), the Executive Director may be entitled in exceptional circumstances
to a severance payment up to one-year base salary.
Leaver arrangements
The Company takes into account the service agreements including the variable remuneration plan rules, market practice
and the conduct of the individual when determining leaver arrangements. In addition to the severance payment
mentioned above, a leaving Executive Director may be eligible to retain or receive value under their variable remuneration
awards, in accordance with the plan rules.
Under the LTIP and the STIP, an Executive Director will be treated as a “good leaver” if he or she leaves due to death,
injury, disability, retirement with the agreement of the board, redundancy, a transfer of the business unit in which he is
employed to a third party, circumstances in which the group company by which he is employed ceases to be controlled by
the Company, or such other reason as the Committee may in its discretion decide.
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Short Term
Incentive Plan
If the Executive qualifies as a good leaver, the individual may remain eligible for an STIP pay-out
with respect to the year of termination on a pro-rated basis and is payable after the end of the
financial year.
Long Term
Incentive Plan
Unvested LTIP awards normally lapse on termination of the service agreement, however if the
Executive qualifies as a “good leaver”:
• Vesting of the LTIP is subject to the application of the performance measures at the end of
the normal vesting period and will be on a pro-rated basis;
• Vested awards will remain subject to a 2-year holding period.
Change of control
In the event of a change of control of the Company:
• Payments under the Annual Bonus plan are calculated on a pro-rated basis and are subject to the application of the
performance measures.
• Vesting of the LTIP is subject to the application of the performance measures at the date of the event and will
normally be on a pro-rated basis.
Upon a change of control of the Company, the plans will automatically terminate, and no further awards will be made.
Outplacement services and legal fees and reimbursement of legal costs may be provided where appropriate. Any statutory
entitlements or sums to settle or compromise claims in connection with a termination would be paid as necessary.
The term of appointment for Non-Executive Directors is 4 (four) years and their appointments are subject to termination
on 4 (four) months’ notice other than in cases of summary dismissal. If their position is terminated, they are entitled to
reimbursement of any outstanding fees and expenses.
(d) Malus and Clawback Policy
LTIP awards may be recovered or reduced in cases of fraud, dishonesty or deceit, gross misconduct, conduct which
resulted in significant losses to a Group company, a material failure of risk management or other corporate failure, a
serious health and safety event or a material financial misstatement in the audited financial results of the Group. The
Committee may apply malus (revise incentive awards prior to vesting) and clawback (reclaim incentive awards post
vesting) to reduce an award or determine that it will not vest or only vest in part.
Clawback may operate during the period of two years from the date an LTIP award pays out.
(e) Use of Discretion
The Committee may apply its discretion in the execution of the remuneration policy or related incentive plans when
agreeing remuneration outcomes to help ensure that the implementation of our remuneration policy is consistent with
underlying Company performance and is equitable to all stakeholders.
The Committee operates the Group’s variable incentive plans according to their respective rules and in accordance with
governing legislation. To ensure the efficient administration of these plans, the Committee will apply certain operational
discretions. These include the following: - selecting the participants in the plans on an annual basis; - determining the
timing of grants of awards and/or payment; - determining the quantum of awards and/or payments (within the limits set
out in the policy table above); - determining the extent of vesting based on the assessment of performance; - making the
appropriate adjustments required in certain circumstances (e.g. change of control, rights issues, corporate restructuring
events and special dividends); - determining “good leaver” status for incentive plan purposes and applying the
appropriate treatment; and - undertaking the annual review of weighting of performance measures, and setting targets for
the annual bonus plan and the LTIP from year to year.
If an event occurs which results in the annual bonus plan or LTIP performance conditions and/or targets being deemed no
longer appropriate by the Committee (e.g. a material acquisition or divestment), the Committee will have the ability to
adjust appropriately the measures and/or targets and alter weightings, provided that the revised conditions or targets are
not materially less difficult to satisfy (taking account of the relevant circumstances).
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63
Ultimately, the payment of any bonus is entirely at the discretion of the Committee. Equally, the operation of share
incentive schemes is at the discretion of the Committee.
(f) Approach to recruitment remuneration
Executive Directors’ base salary is set at a level appropriate to recruit a suitable candidate, taking into account external
market competitiveness and internal equity. The level of base salary may initially be positioned below the mid-market of
the relevant benchmark, with the intention of increasing it to around the mid-market of the relevant benchmark after an
initial period of satisfactory service.
Individuals will be able to receive a contribution to a pension plan in line with the policy.
Where a new Director is forfeiting incentive awards granted by his or her existing employer, compensation in the form of
awards under the LTIP or otherwise may be made, the maximum value of which will be that which the Committee, in its
reasonable opinion, considers to be equal to the value of remuneration forfeited. The LTIP (or other) awards will be
granted on terms that take due account of the nature of the entitlements in terms of (for example) type of award, time
horizon, fair value and performance Conditions.
The Committee will offer benefits in line with the policy for existing Executive Directors (but may consider other benefits
from time to time, including relocation expenses).
The Company’s policy is to give notice periods according to the applicable statutory notice period and in any case no
longer than 6 months.
(g) Non-Executive Directors’ Remuneration Policy
The purpose and strategy of the Company’s Non-Executive Directors’ remuneration policy is to provide a competitive fee
which will attract and retain high calibre individuals and reflects their relevant skills and experience.
Fee levels for each role are determined after considering the responsibility of the role, the skills and knowledge required
and the expected time commitments and are reviewed periodically considering the salary increase for the general
workforce and the level of fees paid by companies of a similar size and complexity.
Additional fees may be paid in relation to extra responsibilities undertaken, and in exceptional circumstances, if there is a
temporary yet material increase in the time commitments for Non-Executive Directors.
The Company pays any reasonable expenses that a non-executive Director incurs in carrying out their duties as a director,
including travel, Directors’ and Officers’ Liability Insurance hospitality related and other modest benefits and any tax
liabilities thereon, and the provision of advice relating to any such tax liabilities, if appropriate.
Chairman’s And Non-Executive Directors’ Letters Of Appointment
The following table provides details of the terms of appointment for the Chairman and the current non-executive
directors:
Non-executive
Date of appointment
Expected expiry date of current term
Amir Rosentuler
11 June 2021
End of the AGM to be held in 2025
Måns Hultman
22 August 2016
End of the AGM to be held in 2024
Laurel Charmaine Bowden
14 January 2019
End of the AGM to be held in 2023
Mauro Pretolani
22 August 2016
End of the AGM to be held in 2024
(h) Consultation and existing commitments
The Company and the Group may honour all obligations and commitments that were entered into prior to this Directors’
Remuneration Policy taking effect. The terms of those pre-existing obligations and commitments may differ from the
terms of this Remuneration Policy and may include (without limitation) obligations and commitments under service
contracts, long term incentive schemes (including previous plans), pension and benefit plans.
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64
In formulating this Directors’ Remuneration Policy, the Committee consulted with a number of major shareholders and,
where possible, took into account available information about market standards and sought advice from a professional
compensation advisor. The Committee Chair is also available for questions at the AGM. Any feedback that the Committee
receives is taken account of when formulating future Remuneration Policy.
Although employees are not consulted directly on Executive Directors’ Remuneration Policy, the Committee takes into
account the pay and employment conditions of other employees in the Group when setting the remuneration of the
Executive Directors.
The remuneration approach is consistently applied at levels below the Executive Directors. At senior levels, remuneration
is increasingly long term and ‘at risk’ with an increased emphasis on performance related pay and share-based
remuneration.
Section 3: Directors' Remuneration Report
Directors’ emoluments and compensation (audited)
Set out below are the emoluments paid to the Directors for the year ended 31 December 2021 and the year ended 31
December 2020:
Name of Director
Salary
and fees
(Euro)
Taxable
benefits
(Euro)
Pension
related
benefits
(Euro)
Total Fixed
Remuneration
Annual
bonus and
long term
(Euro)
Stock
options
granted
(Euro)
Total Variable
Remuneration
Total 2021
(Euro)
Amir Rosentuler
119,689
*
-
26,404
146,093
-
8,982,024
8,982,024
9,128,117
Marco Marlia
200,000
3,419
23,518
226,937
25,000
-
25,000
251,937
Laurel Charmaine
Bowden
-
-
-
-
-
-
-
-
Måns Hultman
5,000
-
-
5,000
-
-
-
5,000
Mauro Pretolani
5,000
-
-
5,000
-
-
-
5,000
*(ILS 451,022) paid by MotorK Israel Ltd between 11 June 2021 and 31 December 2021
Name of Director
Salary
and fees
(Euro)
Taxable
benefits
(Euro)
Pension
related
benefits
(Euro)
Total Fixed
Remuneration
Annual
bonus and
long term
(Euro)
Stock
options
granted
(Euro)
Total Variable
Remuneration
Total 2020
(Euro)
Amir Rosentuler
-
-
-
-
-
-
-
-
Marco Marlia
134,000
2,237
23,516
159,753
-
-
-
159,753
Laurel Charmaine
Bowden
-
-
-
-
-
-
-
-
Måns Hultman
-
-
-
-
-
-
-
-
Mauro Pretolani
-
-
-
-
-
-
-
-
Annual Bonus
The objective of the annual bonus remuneration component is to ensure that the executive directors focus on realising
their short-term operational objectives, leading to longer term value-creation.
Following the Admission of the Company's shares to Euronext Amsterdam, between the directors of the Company, only
the Chief Executive Officer participated in the annual bonus scheme and was eligible to earn an award of up to 75% of
salary, subject to the attainment of specific performance targets to be defined by the Board of Directors upon a proposal
of the Committee. The table below summarises the bonus earned for the year:
Name of Executive Director
Bonus for 2021
Bonus for 2020
Marco Marlia
25,000
-
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65
Scenario analyses of the possible outcomes of the variable remuneration element of the annual bonus described above
and its effect on the remuneration of the CEO were conducted at the point of award. No other scenario analyses have been
undertaken by the Committee during the year ended 31 December 2021.
Pension
During the year ended 31 December 2021, Marco Marlia received pension contributions of €23,518 and Amir Rosentuler
received pension contributions of €26,404.
Payments to past directors
No payments were made to past directors during the year ended 31 December 2021.
Payments for loss of office
No payments for loss of office were made during the year ended 31 December 2021.
Long-term incentives
EMI Share Option Plan
In October 2021, with a number of years having elapsed since the original scheme was put in place (the "Original Share
Option Plan"), an amended version of the Group share option scheme (the "EMI Share Option Plan") was designed and
implemented by the Company in anticipation of the listing of the Company's shares. The EMI Share Option Plan allows for
options to be issued over ordinary shares, up to a maximum market value of €3,000,000 at the time of grant.
The option exercise price will usually be at fair market value of the shares at the time of grant. Total options were awarded
under the EMI Share Option Plan on admission of the Company's shares to Euronext Amsterdam equal to approximately
0.5% of the number of ordinary shares in issue at the time, with an exercise price of Euro 0.337 per share. The initial option
awards have no performance conditions and vest over a four year period starting from the day of listing.
In addition, a number of grants were made under the Original Share Option Plan. Following these grants, the Company has
a total of 861,877 unvested options in issue pursuant to the Original Share Option Plan and the EMI Share Option Plan,
equating to approximately 2.1% of the issued share capital as at 31 December 2021.
Directors' Interest in Shares
The interests of each person who was a Director of the Company (together with interest held by his or her connected
parties) were:
Name of Director
Number at 31
December
2020
Number at 31
December 2021
Unvested share
options at 31
December 2021
Vested,
unexercised
share options
Options
exercised in the
Period
Amir Rosentuler
-
120,000
-
1,263,979
120,000
Marco Marlia
5,481,580
5,481,580
-
-
-
Laurel Charmaine
Bowden
-
-
-
-
-
Måns Hultman
-
-
-
-
-
Mauro Pretolani
138,400
138,400
-
135,000
-
The option awards held by each Director during the financial year ended 31 December 2021 are as follows:
Name of Director
Number at 1
January
2021
Issued in the
period
Exercise
ed in the
Period
Number at
31 December
2021
Exercise
Price (€)
Vesting
period / date
Amir Rosentuler
-
1,383,979
120,000
1,263,979
0.01
November
2021
*
*Mr. Rosentuler was awarded 1,383,979 options pursuant to the EMI Share Option Plan all of which vested immediately prior to the Company's initial public offering. On 5
November 2021, Mr. Rosentuler exercised 120,000 of his vested options and subscribed for 120,000 ordinary shares of €0.01 each in the Company. As at 31 December 2021, Mr.
Rosentuler held 1,263,979 vested but unexercised stock options
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Total Shareholder Return ("TSR") Performance
The Committee has considered the requirement for a performance graph comparing the Company's TSR with that of a
comparable indicator. The Committee does not currently consider that including the graph will be meaningful because the
Company only listed in November 2021 and has not declared a dividend for the year ended 31 December 2021. In addition,
the remuneration of the Executives is not currently linked to TSR. The Committee intends to include data relating to TSR
performance in future iterations of the Directors' Remuneration Report.
Annual percentage change in remuneration of directors and employees and internal pay ratio
The table below shows the percentage change in salary, taxable benefits and annual bonus set out in the single figure of
remuneration tables paid to each Director in respect of the 2020 and 2021 financial years compared to that of the average
pay of all employees of the Group:
Director
Salary/fees % Change
Benefits % Change
Annual bonus % change
Amir Rosentuler*
N.A.
N.A.
N.A.
Marco Marlia
49%
53%
0
Laurel Charmaine Bowden
N.A.
N.A.
N.A.
Måns Hultman
N.A.
N.A.
N.A.
Mauro Pretolani
N.A.
N.A.
N.A.
Average all employees
38%
-19%
31%
*Amir Rosentuler was appointed as a Director part-way through FY 2021
The internal pay ratio is calculated based on the average 2021 remuneration of all Group employees vis-à-vis the 2021
remuneration of the CEO. The internal pay ratio for the year 2021 is 4.74 for the Chief Executive Officer, Marco Marlia.
Relative importance of spend on pay
The chart below shows the difference in actual expenditure between 2020 and 2021 on personnel costs adjusted for all
employees, in comparison to investments for future growth in R&D and M&A chosen as a significant benchmark for this
analysis due to its relevance for the strategic plans of the Group.
To date, no dividend has been paid by MotorK and there is no intention to pay a dividend at this stage as all monies are
being retained in the business for future investment.
Investments for future growth*
Personnel costs
+€5.7 million
+178%
2021: Euro 8.9 million
(2020: Euro 3.2 million)
+€15.3 million
+123%
2021: Euro 27.8 million
(2020: Euro 12.5 million)
*It is calculated as the amount of cash flow from investing activities – R&D plus cash flow from investing activities – M&A reported in the Group cash movements for the year
included in the Financial and Operating Review section
As the Directors have not recommended a dividend for 2020 or 2021, the Directors do not consider it helpful to the
interpretation of the relative importance of spend on pay data to include dividend data in the above chart.
Statement of implementation of remuneration policy in the following financial year
Salary
The Committee will keep the level of salaries paid to its employees and Executive Directors under close review and will set
it at such a level in order to help achieve the overall objectives of the Policy and generate long-term value for the Company
and its shareholders through increased performance. Increases to salaries, if deemed appropriate by either the Committee
or employees discharging managerial duties within the Group, will be determined and communicated to employees on an
individual basis.
Annual Bonus
The CEO will be eligible to earn an annual bonus of up to 75% of base salary in line with the previous year.
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LTIP
The Committee intends to design and implement a long-term incentive plan and make awards to the Executives
accordingly. The Committee has considered the performance of the Company to date and has consulted with its external
remuneration advisors in order to accurately benchmark the vesting profile and weighting of the proposed awards
appropriate and in line with market practice.
Non-Executive Directors' Remuneration
The Board has reviewed the Non-Executive Directors fee structure and has agreed a specific fee card based on the roles
and responsibilities of the directors (see table below - annualised amounts, to be paid out proportionally to the actual
length of tenure in the year) to take effect from the listing of the Company on 5 November 2021.
Role
Amir Rosentuler
(euro)
Laurel Charmaine Bowden
(euro)
Måns Hultman
(euro)
Mauro Pretolani
(euro)
Chairman
324,000
-
-
-
Non-Executive Director basic fee
-
-
30,000
30,000
Additional Fees:
17,500
-
7,500
12,500
Chairman of the Audit Committee
-
-
-
7,500
Chairman of the Remuneration Committee
-
-
7,500
-
Chairman of the Selection and Nomination
Committee
7,500
-
-
-
Member of the Audit Committee
5,000
-
-
-
Member of the Remuneration Committee
5,000
-
-
-
Member of the Selection and Nomination
Committee
-
-
-
5,000
TOTAL
341,500
-
37,500
42,500
The remuneration report was approved by the Board on 5 April 2022 and signed on its behalf by:
Måns Hultman
Chair of the Remuneration Committee and Director
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FINANCIAL STATEMENTS
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Independent Auditor’s Report
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2021 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of MotorK Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2021 which comprise the Consolidated Statement of Profit and Loss and Other Comprehensive
Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of
Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary
of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is the
applicable law and UK adopted international accounting standards. The financial reporting framework that has been
applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally
Accepted Accounting Practice).
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 2 to the Group financial statements, the Group in addition to complying with its legal obligation to
apply UK adopted international accounting standards, has also applied IFRSs as issued by the International Accounting
Standards Board (IASB).
In our opinion the Group financial statements give a true and fair view of the consolidated financial position of the Group
as at 31 December 2021 and of its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with IFRSs as issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and
the Parent Company’s ability to continue to adopt the going concern basis of accounting included:
• A review of the Director’s assessment of going concern and consideration of the key assumptions used in the
forecasts.
• Consideration of the Director’s sensitivity analysis along with performing further sensitivities on the revenue.
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• Testing around the cash raised as part of the IPO in the period including substantiation its receipt into the Group’s
bank accounts.
• An assessment of the appropriateness and accuracy of cash flow forecasts by comparison of historical performance
versus budget.
• An assessment of the historic and forecast cash-usage relative to the existing and forecast funds available.
• A review of whether the disclosures are appropriate for the circumstances of the entity and provide sufficient
information about the Group and its subsidiaries and the Directors’ consideration of their ability to continue as a
going concern.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as
a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Overview
Coverage
11
98% of Group profit before tax
98% of Group revenue
97% of Group total assets
Key audit matters
Revenue recognition 2021
Materiality
Group financial statements as a whole
€550k based on 2% of Revenue
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by
the Directors that may have represented a risk of material misstatement.
Of the group’s 16 reporting components, 2 were identified as significant and material (this includes the Parent Company
component) with full scope audit procedures being performed for group purposes and 6 were identified as not-significant
but material where specific balances and risks were identified as being in scope for specified audit procedures. These
were tested by the group audit team using a percentage allocation of the group materiality. We conducted analytical
reviews of financial information (including enquiry) on a further 8 not-significant and immaterial components.
Members of the group audit team completed all audits except for 1 full scope audit which was audited by the Italian BDO
network member firm. The group audit team performed audit procedures on the group consolidation process.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to
conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group
financial statements as a whole. Our involvement with component auditors included the following:
The group audit team directed the work of the component audit team. This included providing detailed audit instructions
and setting of component materiality. As a result of travel restrictions due to COVID-19 there were no planned visits
completed in person but instead alternative interactions were completed on a remote basis instead. The group audit team
11
These are areas which have been subject to a full scope audit.
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held video calls in order to attend component planning and completion calls together with open dialogue maintained
throughout the audit. We also performed reviews of the component audit team’s working papers.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. This matter was
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on this matter.
Key audit matter
How the scope of our audit addressed the key audit
matter
Revenue
recognition
Refer to the
Accounting
Policies of the
Group in Note 5
for further detail
on the policies
impacting
revenue
recognition
together with
Note 7 detailing
the estimation
uncertainty over
valuation of
customer
contracts and
Note 9 for the
financial
disclosure of
revenue.
The amounts reported in relation to
revenue represent information of
significant interest to many users of
the financial statements. This puts
revenue at a greater risk of
manipulation, bias and misstatement.
As per the auditing standards (ISA 240)
there is a rebuttable presumption that a
significant fraud risk in relation to
revenue recognition exists, given that
this is commonly either explicitly or
implicitly linked to senior management
remuneration and hence there is a
heightened incentive to manipulate.
We identified this significant risk to be
over cut-off and manual adjustments to
all revenue streams and the incorrect
application of IFRS 15 (Revenue from
contracts with customers) judgement
around the revenue recognition of
licence (at a point in time at the start of
a licence) and maintenance revenue
(over the licence’s term), the estimation
of the proportion identified as
maintenance revenue and whether a
provision was required against revenue
for early termination.
Given the estimation/judgement
involved together with the relative audit
effort employed to test this significant
risk, it has been identified as a Key Audit
Matter.
Our procedures included but were not limited to
• We walked through the revenue process and
evaluated the design and implementation of
related controls;
• Tested that the revenue recognition was in line with
the contractual terms specifically considering when
control was passed to a customer for both licence
and maintenance revenues;
• Tested the percentage of revenue identified as
maintenance revenue back to support and
benchmarked against market expectations;
• On a sample basis tested the input accuracy of the
maintenance term start and end to contract
together with the computational accuracy of the
revenue recognition in the period.
• Tested the existence and accuracy of revenue
through sample testing back to support;
• On a sample-basis tested contract terms and
conditions to identify any onerous performance
conditions (specifically around customer
termination mid-term);
• For a cut-off sample of revenue either-side of year
end we tested back to support to check that the
revenue had been recognised in the correct period;
and
• Tested non-standard journals to revenue.
Key observations
We did not identify any indicators to suggest that the
revenue recognition was inappropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below
these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified
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misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
Parent company financial statements
2021
2021
Materiality
€550k
€285k
Basis for determining
materiality
2% of group revenue
2% of total assets
Rationale for the
benchmark applied
We considered revenue to a key performance
measure for users to evaluate the financial
performance of this business in a growth
phase.
We consider total assets to be the
appropriate benchmark for this group
holding company.
Performance
materiality
€358k
€214k
Basis for determining
performance
materiality
Performance materiality was set at 65% (2020:
75%) of materiality, taking into account
various factors including the expected total
value of known and likely misstatements,
brought forward misstatements, the number
of material estimates, the spread of results
within the group and the expected use of
sample testing.
Performance materiality for the Parent
Company was set at 75% (2020: 75%) of
materiality taking into account various
factors including the expected total value
of known and likely misstatements,
brought forward misstatements, and the
number of material estimates.
Component materiality
We set the materiality for the one component (other than the parent which is covered above) as 95% of Group materiality
given its size and our assessment of the risk of material misstatement of that component. Component materiality for this
component was €523k. In the audit of each component, we further applied performance materiality levels of 65% of the
component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately
mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of €21,000
(2020: €18,383). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
Annual Report other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the Directors’ report.
Matters on which
we are required to
report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records
and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
European Single Electronic Format (ESEF)
In the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the
European Parliament and the Council with regard to regulatory technical standards on the specification of a single
electornix reporting format is regulated that the annual financial report of MortoK plc , has been prepared in single
electronic reporting format (ESEF). The requirements to be met are set out in the aforementioned delegated regulation
(these requirements are hereinafter referred to as: the RTS on ESEF).
In our opinion, the annual financial report made up in XHTML format, including the partly tagged consolidated financial
statements as included in the reporting package by MotorK Plc, has been prepared in all material respects in accordance
with the RTS on ESEF.
Management is responsible for preparing the annual financial report including the financial statements in accordance with
the RTS on ESEF, whereby management combines the various components in a reporting package. Our responsibility is to
obtain reasonable assurance for our conclusion whether the annual financial report in this reporting package, is in
accordance with the requirements. We have taken into consideration what is stated in Alert 43.
Our procedures included:
• Obtaining an understanding of the entity’s financial reporting process, including the preparation of the annual
financial report in XHTML-format;
• Obtaining the reporting package and performing validations to determine whether the reporting package containing
the inline XBRL instance document and XBRL extension taxonomy files have been prepared in accordance with the
technical specifications; and
• Examining the information related to the consolidated financial statements in the reporting package to determine
whether all required taggings have been applied and whether they are in accordance with the RTS on ESEF.
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Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in which
it operates, and considered the risk of non-compliance or fraud by the Group.
• We designed audit procedures at both the Group and significant component levels to detect material misstatements
due to fraud and error.
• We focused on laws and regulations that could give rise to a material misstatement in the Group and Parent Company
financial statements, including, but not limited to, accounting standards, Companies Act 2006 and certain
requirements from tax legislation
• Use of BDO tax specialists.
• Our tests included agreement of the financial statement disclosures to underlying supporting documentation, review
of correspondence with regulators and legal advisors, enquiries of management, review of board minutes and review
of significant component auditors’ working papers.
• We also addressed the risk of management override of internal controls, including testing journals and evaluating
whether there was evidence of bias by the Directors in estimates or judgements that represented a risk of material
misstatement due to fraud. To address the risk of fraud due to revenue recognition through our journals testing we
obtained a list of journal entries to revenue and reviewed manual postings with values greater than predetermined
thresholds as set out in the key audit matters section of our report.
• We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members and the component auditors, and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with
laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to
become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Nigel Harker (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
2 City Place,
Beehive Ring Road, Gatwick
West Sussex, RH6 0PA
5 April 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Consolidated Statement of Profit and Loss and Other
Comprehensive Income
€’000
Note
2021
2020
Revenue
9
Costs for marketing and call centre services
10
Personnel costs
10
R&D capitalisation
10
(3,490 )
(2,661 )
Other operating costs
10
Amortisation and depreciation
10
Total costs
10
Operating loss
(16,356 )
(4,530 )
Finance expense
11
(4,818 )
(1,820 )
Finance income
11
Loss before tax
(21,163 )
(6,334 )
Corporate income tax
12
(2,765 )
Loss from continuing operations
(23,928 )
(5,409 )
Profit after income tax of discontinued operation
24
Loss for the period
(23,525 )
(5,367 )
Attributable to:
Owners of the parent
(23,525 )
(5,367 )
Other comprehensive income/(loss):
Actuarial losses arising from remeasurement of liabilities for employee
benefits that will not be subsequently remeasured to the income
statement
20
(20 )
(165 )
Gains/(losses) on exchange differences from translation of financial
statements of foreign entities that will be reclassified subsequently to
the income statement
28
(110 )
Total comprehensive loss
(23,655 )
(5,532 )
Attributable to:
Owners of the parent
(23,655 )
(5,532 )
Total comprehensive income/(loss) for the period attributable to
owners of the parent arises from:
Continuing operations
(23,928 )
(5,574 )
Discontinued operations
24
Basic and diluted EPS
Loss for the period
26
(0.79 )
(0.20 )
Loss from continuing operations
26
(0.80 )
(0.20 )
Profit from discontinued operations
26
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Consolidated Statement of Financial Position
€’000
Note
2021
2020
Intangible assets
13
Property, plant and equipment
14
Non-current assets – security deposits
15
Non-current contract assets
16
Deferred tax assets
21
Non-current assets
Trade and other receivables
16
Contract assets
16
Cash and cash equivalents
17
Assets classified as held for sale
24
Current assets
Total assets
Trade and other payables
18
Tax payable
18
Current financial liabilities
19
Current lease liabilities
19
Provisions
22
Liabilities directly associated with assets classified as held for sale
24
Current liabilities
Employees benefit liability
20
Deferred tax liabilities
21
Non-current financial liabilities
19
Other non-current liabilities
22
Non-current lease liabilities
19
Provisions
22
Non-current liabilities
Total liabilities
Share capital
23
Share premium reserve
23
Retained earnings
23
(10,157 )
(10,305 )
Total equity
Total liabilities and equity
Marco Marlia
Chief Executive Officer
5 April 2022
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Consolidated Statement of Cash Flows
€’000
31-Dec
2021
31-Dec
2020
Loss for the period from continuing operations
(23,928 )
(5,409 )
Profit for the period from discontinued operations
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible fixed assets – continuing operations
Amortisation of intangible fixed assets – discontinued operations
Finance income
(11 )
Finance expense
Income tax expense
(925 )
Share-based payment expense – continuing operations
Other non-monetary movements
Cash outflow from operating activities before changes in net working capital
(1,553 )
(636 )
(Increase)/decrease in trade and other receivables
(3,227 )
Increase/(decrease) in trade and other payables
(4,310 )
Increase in provisions and employee benefits
Cash outflow from operations
(3,504 )
Income taxes paid
(127 )
(250 )
Net cash flows from operating activities
(3,631 )
Investing activities
Cash outflow on acquisition of subsidiaries (net of cash acquired)
(5,350 )
Purchase of intangible assets
(3,729 )
(3,179 )
Purchases of property, plant and equipment
(135 )
(17 )
Non-current assets – security deposits
Net cash (used in) investing activities
(9,040 )
(3,076 )
Financing activities
Proceeds for issue of shares
IPO cost paid
(4,685 )
Bank loans repaid
(18,235 )
(341 )
New bank and other loans
(Decrease) in factoring finance
(1,114 )
Capital element of lease liabilities repaid
(836 )
(854 )
Interest paid on bank and other loans
(6,814 )
(409 )
Interest paid on lease liabilities
(76 )
(69 )
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(*) In conformity with the provisions of paragraph 33 of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”, the net financial flows attributable to
operations, investment, and financing of discontinued operations can be presented alternatively in the Notes or in the financial statements. MotorK chose to represent the
Group total cash flows in the statement of cash flow, including both continuing and discontinued operations. The additional information on the cash flows of discontinued
operations is provided in note 24.
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Consolidated Statement of Changes in Equity
€’000
Share capital
Share
premium
Retained
earnings
Total
attributable
to equity
holders of
parent
1 January 2020
(4,907 )
Comprehensive income for the year
Loss for the period
(5,367 )
(5,367 )
Other comprehensive income
Defined benefit pension scheme
(165 )
(165 )
Total comprehensive income for the year
(5,532 )
(5,532 )
Contributions by and distributions to owners
Share-based payment
Total contributions by and distributions to owners
31 December 2020
(10,305 )
Comprehensive income for the year
Loss for the period
(23,525 )
(23,525 )
Other comprehensive income
Translation reserve
(110 )
(110 )
Defined benefit pension scheme
(20 )
(20 )
Total comprehensive income for the year
(23,655 )
(23,655 )
Contributions by and distributions to owners
IPO issue of shares
Convertible equity notes issue of shares
Other issue of shares
Share-based payment
Earn out reserve
Reserve IPO costs
(4,685 )
(4,685 )
Capital reduction
(14,000 )
Total contributions by and distributions to owners
31 December 2021
(10,157 )
Share capital represents the nominal value of the share capital subscribed for.
Share premium represents amounts subscribed for share capital in excess of nominal value less related costs of share
issues.
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Notes Forming Part of the Consolidated Financial
Statements
1. General information
The Group offers a cloud-based holistic SaaS platform (named “SparK”) to support the full vehicle lifecycle and the entire
customer journey. SparK can be used to manage the digital presence of a small single showroom dealer as well as support
the sales and marketing functions of a regional network of franchise dealerships for an automotive OEM across EMEA.
On 5 November 2021 the Company, after the re-registering as a public company , listed 11,500,000 shares (approximately
28% of the issued share capital) on Euronext Amsterdam. As of 31 December 2021, the main shareholders of the Parent
Company are Marco Marlia, original founder and CEO of the Group who hold approximately 13.6% of the share capital, and
83 North, who directly holds approximately 20% of the share capital.
These consolidated financial statements as of and for the years ended 31 December 2021 together with the notes thereto
have been prepared in accordance with international accounting standards in conformity with the requirements of the
Companies Act 2006.
On 31 December 2020, the EU-adopted IFRS was brought into UK law and became UK-adopted international accounting
standards, with future changes to IFRS being subject to endorsement by the UK Endorsement Board.
2. Summary of the accounting standard used
The financial statements have been prepared in accordance with UK adopted international accounting standards and with
International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively “IFRSs”)
as adopted by the European Union (“Adopted IFRSs”) and with those parts of the Companies Act 2006 applicable to
companies preparing their financial statements under IFRSs. On 31 December 2020, the EU-adopted IFRS was brought into
UK law and became UK-adopted international accounting standards, with future changes to IFRS being subject to
endorsement by the UK Endorsement Board.
2.1 Form and content of the consolidated financial statements
The format of the consolidated financial statement and related classification criteria adopted by the Group (among the
options available under IAS 1 – Presentation of financial statement) are as follows:
• the consolidated statement of financial position shows current and non-current assets separately, and current and
non-current liabilities in the same way;
• the consolidated statement of profit and loss and other comprehensive income shows a classification of costs and
revenues by nature;
• the consolidated statement of cash flow was prepared using the indirect method.
The Company has chosen to prepare a comprehensive income statement that includes, in addition to the result for the
period, other amounts that, in accordance with the international accounting standards, are recognised directly in other
comprehensive income separately from those relating to operations with the Company’s shareholders.
The templates used, as specified above, are those that best represent the Group’s economic, equity and financial
situation.
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2.2 Subsidiaries of MotorK Plc included in the consolidated financial statements
The consolidated financial statements include the financial statements of the Parent Company, MotorK plc, and its
subsidiaries. Where necessary, specific adjustments were made at the consolidated level to standardise the Group’s
financial statements to the EU-IFRS accounting standards.
Below we report the list of companies included in consolidated financial statements prepared by the Parent Company,
MotorK Plc, as at 31 December 2021, indicating the share capital held by the Group.
Name
Country of incorporation
and principal place of
business
Proportion of ownership
interest at
2021
2020
2019
MotorK Italia Srl
Italy
100%
100%
100%
MotorK Spain Gestiones
Comerciales
Spain
100%
100%
100%
MotorK Deutschland GmbH
Germany
100%
100%
100%
MotorK France Sarl
France
100%
100%
100%
For Business Srl
Italy
100%
100%
100%
3W Net Sarl*
France
0%
100%
100%
MotorK Israel Ltd
Israel
100%
–
–
DealerK Technology Solutions,
Unipessoal Lda
Portugal
100%
–
–
Fidcar SAS
France
100%
–
–
Liotey Sarl
France
100%
–
–
PDA DAPDA, SL
Spain
100%
–
–
DAPDA Media, SL
Spain
100%
–
–
DriveK France S.A.S.
France
100%
–
–
DriveK Solution S.L.
Spain
100%
–
–
DriveK Italia S.r.l.
Italy
100%
–
–
* Merged into MotorK France starting from 1 June 2021.
During the financial year 2021, the consolidation area changed as a result of the establishment or acquisition of the
following companies:
• DealerK Technology Solutions, Unipessoal Lda incorporated in Portugal in February 2021 with the aim to build a new
R&D hub to assist the one already in place in Italy;
• MotorK Israel Ltd incorporated in Israel in April 2021 with the target to hire new talents in the digital sector;
• DriveK Italia S.r.l., DriveK France S.A.S. and DriveK Solution S.L. incorporated respectively in Italy, France and Spain
between June and November 2021 as a vehicle to complete the sale of the DriveK business unit classified as
discontinued in these consolidated financial statements.
• Fidcar SAS and Liotey Sarl innovative providers for automotive retail based in France, acquired by the Company in
December 2021.
• PDA DAPDA, SL and DAPDA Media, SL, Spanish leaders in providing digital tools to automotive retailers, acquired by
the Company in December 2021.
All the companies mentioned above are included in the consolidation financial statements from the date on which control
is transferred to the Group or from the date in which they have been incorporated.
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The registered offices of the companies disclosed above is as follows:
MotorK Italia Srl
Via Ludovico D'Aragona, 9 - 20132 Milano
MotorK Spain Gestioness Comerciales
Calle Muntaner 305 Planta PR Puerta 2 – 08021 – Barcelona
MotorK Deutschland GmbH
Destouchesstr. 68 – 80796 – München
MotorK France Sarl
3 B Rue Taylor – 75010 – Paris
For Business Srl
Via Ludovico D'Aragona, 9 - 20132 Milano
MotorK Israel Ltd
3 Arik Einstein St Herzliya, Israel
DealerK Technology Solutions, Unipessoal Lda
Avenida de República n50, 10 – 1069 – 211 Lisbon, 9
Fidcar SAS
28 rue du Chemin Vert – 75011 Paris
Liotey Sarl
28 rue du Chemin Vert – 75011 Paris
PDA DAPDA, SL
Cl Naranjo, 20 23003 – Jaen
DAPDA Media, SL
Avda De Andalucia 106 Entrepl 23006 – Jaen
DriveK France S.A.S.
3B rue Taylor 75010 – Paris
DriveK Solution S.L.
CL MUNTANER 306 PI.PR Pta2 08021 Barcelona
DriveK Italia S.r.l.
Via Ludovico D'Aragona, 9 – 20132 Milano
2.3 Basis for consolidation
The criteria used by the Group to define the consolidation area and the relative consolidation principles are shown below.
Subsidiaries
The subsidiary companies are those companies that the Group controls. The Group controls a company when it is exposed
to the variability of the company’s results and has the power to influence these results through its power over the
company. Generally, it is assumed that control exists when the Company directly or indirectly holds more than half of the
voting rights, taking into account the potential exercised or converted voting rights.
All subsidiaries are consolidated using the integral method from the date on which control is transferred to the Group. On
the other hand, they are excluded from consolidation starting from the date on which this control is terminated.
Associated companies
Associates are companies over which the Group has significant influence, which is presumed to exist when the investment
represents 20% to 50% of the voting rights.
Investments in associated companies are valued according to the net equity method. This evaluation criterion can be
described as follows:
i) the Group’s profits and losses are accounted for from the date in which the significant influence or joint control started
and until the date when it ended; if, as a result of the losses, the company valued using the method in question shows a
negative shareholders’ equity, the carrying amount of the investment is cancelled and any excess attributable to the
Group, if the latter has committed itself to complying with legal or implicit obligations of the subsidiary company, or in
any case covering its losses, is recorded in a specific fund;
ii) unrealised gains and losses generated on transactions between the Parent Company and the subsidiary company
valued using the equity method are eliminated based on the value of the Group’s investment in the subsidiary;
unrealised losses are eliminated, with the exception of cases in which they are representative of impairment.
Joint arrangements
The Group applies IFRS 11 in the assessment of joint arrangements. In accordance with the provisions of IFRS 11, a joint
arrangement can be classified either as a joint operation or as a joint venture on the basis of a substantial analysis of the
rights and obligations of the parties. Joint ventures are joint control agreements in which the parties, joint venturers, who
hold joint control, have, among other things, rights to the net assets of the agreement. Joint operations are joint control
agreements that give participants the rights to the assets and obligations on the liabilities relating to the agreement. Joint
ventures are accounted for using the equity method, while investments in a joint operation involve the recognition of
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assets/liabilities and costs/revenues related to the agreement on the basis of the rights/obligations, due regardless of the
ownership interest held.
Assets held for disposal
Non-current assets or disposal groups whose book value will be recovered mainly through sale rather than through their
continuous use are classified as held for sale and are shown separately from other assets and liabilities in the consolidated
statement of financial position.
Non-current assets or disposal groups classified as held for sale are first recognised in accordance with the specific
reference IFRS applicable to each asset and liability, and subsequently recognised at the lower of the carrying amount and
the related fair value, net of sale costs. Any subsequent losses in value are recognised directly as an adjustment to current
assets or disposal groups classified as held for sale with a balancing entry in the income statement. On the other hand, a
reversal is recorded for each subsequent increase in the fair value of an asset less sales costs, but only up to the amount of
the impairment loss previously recognised. In accordance with the provisions of IFRS 5 (Non-current assets held for sale
and discontinued operations), non-current assets classified as held for sale or part of a group held for sale are not
amortised. Financial charges and other expenses attributable to the liabilities of a disposal group classified as held for sale
must continue to be recognised.
Business combinations
Business combinations are recorded according to the acquisition method.
According to this method:
• the amount transferred in a business combination is measured at fair value, calculated as the sum of the fair value of
the assets transferred and of the liabilities assumed by the Group on the acquisition date and of the equity
instruments issued in exchange for control of the acquired company. The charges ancillary to the transaction are
recorded on the income statement at the time in which they are incurred;
• the identifiable assets and the liabilities acquired are recognised at fair value at the acquisition date; an exception is
deferred tax assets and liabilities, assets and liabilities for employee benefits, liabilities or equity instruments relating
to share-based payments of the acquired company or payments based on shares relating to the Group issued to
replace contracts for the company acquired, and assets (or groups of assets and liabilities) held for sale, which are
instead valued according to their relevant principle;
• goodwill is calculated as the excess between the sum of the considerations transferred in the business combination,
the value of the net equity pertaining to minority interests and the fair value of any equity investment previously held
in the company acquired compared to the fair value of the net assets acquired and liabilities assumed at the
acquisition date. If the value of the net assets and liabilities acquired at the acquisition date exceeds the sum
determined above, the excess is immediately recognised in the income statement as income deriving from the
transaction;
• any considerations subject to conditions provided for by the business combination contract are valued at fair value on
the acquisition date and included in the value of the amounts transferred in the business combination for the purpose
of calculating the goodwill.
3. Going concern
The financial statements have been prepared on a going concern basis which assumes that the Group will have sufficient
funds available to enable it to continue to trade for the foreseeable future. Elements for the preparation on a going
concern basis are reported below:
• Group revenue increases by 43% compared to the previous year results despite the market during 2021 still being
affected by the effects of COVID-19 and related regional lockdowns.
• SaaS (software as a services) revenue increases by 67% compared to the previous year results.
• Regional lockdowns have accelerated the need of digital solutions in the market: the Group has a unique structure in
the market covering the entire customer journey and there are no strong competitors offering the same solutions.
• Due to the listing the Group has obtained new financial resources for approximately €71 million.
• Short and long-term net financial position is strongly positive.
• Top management is fully committed to ensure the respect of the 2022 Budget, providing important revenue growth
and positive EBITDA.
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4. Accounting standards in force from 1 January 2021 and interpretations applicable at a
future date
4.1 IFRS standards/interpretations approved by the IASB and endorsed in Europe
The following table lists the IFRS/interpretations approved by the IASB, endorsed in Europe and applied for the first time
this year:
Description
Endorsement date
Publication
Effective date
Amendments to IFRS 16 Leases: Covid-19-Related
Rent Concessions beyond 30 June 2021 (issued on 31
March 2021)
30 August 2021
31 August 2021
1 April 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16 Interest Rate Benchmark Reform – Phase 2 (issued
on 27 August 2020)
13 January 2021
14 January
2021
1 January 2021
Amendments to IFRS 4 Insurance Contracts – deferral
of IFRS 19 (issued on 25 June 2020)
15 December 2020
16 December
2020
1 January 2021
The amendments to IFRS 9 – Financial Instruments, IAS 39 – Financial Instruments: Recognition and Measurement, IFRS 7 –
Financial Instruments: Disclosures, IFRS 4 – Insurance Contracts and IFRS 16 – Leases is related to the response to the
ongoing reform of inter-bank offered rates (“IBOR”) and other interest rate benchmarks. The amendments aim at helping
companies to provide investors with useful information about the effects of the reform on those companies’ financial
statements. These amendments focus on the effects on financial statements when a company replaces the old interest
rate benchmark with an alternative benchmark rate as a result of the reform. The new amendments relate to:
• changes to contractual cash flows – a company will not be required to derecognise or adjust the carrying amount of
financial instruments for changes required by the interest rate benchmark reform, but will instead update the
effective interest rate to reflect the change to the alternative benchmark rate;
• hedge accounting – a company will not have to discontinue its hedge accounting solely because it makes changes
required by the interest rate benchmark reform if the hedge meets other hedge accounting criteria; and
• disclosures – a company will be required to disclose information about new risks that arise from the interest rate
benchmark reform and how the company manages the transition to alternative benchmark rates.
The adoption of the aforementioned principles and interpretations did not have material impact on the valuation of
assets, liabilities, revenues and costs of the Group.
4.2 Future financial reporting standards and interpretations
4.2.1 IFRS Standards/ interpretations approved by the IASB and endorsed in Europe
The following table shows the IFRS Standards/ interpretations approved by the IASB and endorsed in Europe whose
mandatory effective date is after 31 December 2021.
Description
Endorsement date
Publication
Effective date
IFRS 17 Insurance Contracts (issued on 18 May 2017);
including Amendments to IFRS 17 (issued on 25 June
2020)
19 November
2021
23 November
2021
1 January
2023
Amendments to IFRS 3 Business Combinations; IAS 16
Property, Plant and Equipment; IAS 37 Provisions,
Contingent Liabilities and Contingent Assets; and
Annual Improvements 2018-2020 (All issued 14 May
2020)
28 June
2021
2 July
2021
1 January
2022
It was assessed by management that the future adoption of the aforementioned principles and interpretations will not
have material impact on the valuation of assets, liabilities, revenues and costs of the Group.
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4.2.2 International Financial Reporting Standards and interpretations approved by the IASB but not yet endorsed in Europe
The International Financial Reporting Standards, interpretations and amendments to existing standards and
interpretations, or specific provisions included in the standards and interpretations, approved by IASB, but not yet
endorsed for adoption in Europe on 31 December 2021 are listed below:
Description
Effective date
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Classification of Liabilities as Current or Non-current - Deferral of
Effective Date (issued on 23 January 2020 and 15 July 2020
respectively)
Periods beginning on or after 1 January 2023
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting policies
(issued on 12 February 2021)
Periods beginning on or after 1 January 2023
Amendments to IAS 8 Accounting policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates (issued
on 12 February 2021)
Periods beginning on or after 1 January 2022
Amendments to IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction (issued on
7 May 2021)
Periods beginning on or after 1 January 2023
Amendments to IFRS 17 Insurance contracts: Initial Application of
IFRS 17 and IFRS 9 – Comparative Information (issued on 9
December 2021)
Periods beginning on or after 1 January 2023
In January 2020 the IASB issued amendments to IAS 1 – Presentation of Financial Statements: Classification of Liabilities as
Current or Non-Current to clarify how to classify debt and other liabilities as current or non-current, and in particular how
to classify liabilities with an uncertain settlement date and liabilities that may be settled by converting to equity.
In February 2021 the IASB issued amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates which clarify how companies should distinguish changes in accounting policies from
changes in accounting estimates.
In May 2021, the IASB issued amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising
from a Single Transaction which specifies how companies should account for deferred tax on transactions such as leases
and decommissioning obligations. The amendments are effective beginning on 1 January 2023, with early application
permitted.
In May 2017 the IASB issued IFRS 17 – Insurance Contracts, which establishes principles for the recognition, measurement,
presentation and disclosure of insurance contracts issued as well as guidance relating to reinsurance contracts held and
investment contracts with discretionary participation features issued. In June 2020 the IASB issued amendments to IFRS
17 aimed at helping companies implement IFRS 17 and make it easier for companies to explain their financial
performance.
Management will assess any future impacts of such principles and interpretations.
5. Accounting policies
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis
over their useful economic lives.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to
other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation
techniques (see section related to critical estimates and judgements below).
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The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the
cost of intangibles acquired in a business combination are as follows:
Intangible asset
Useful economic life
Valuation method
Contractual relationships
10/12/15 years
Estimated discounted
cash flow
Trademark
5 years
Relief-from-Royalty method
Internally generated intangible assets (development costs)
Expenditure on internally developed products is capitalised if it can be demonstrated that:
1. it is technically feasible to develop the product for it to be sold;
2. adequate resources are available to complete the development;
3. there is an intention to complete and sell the product;
4. the Group is able to sell the product;
5. sale of the product will generate future economic benefits; and
6. expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products
developed (three years). The amortisation expense is included within the administration expenses line in the consolidated
statement of comprehensive income.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are
recognised in the consolidated statement of comprehensive income as incurred.
Goodwill
Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the
identifiable assets, liabilities and contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any
non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the
existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in
the case of contingent consideration classified as a financial liability, remeasured subsequently through profit or loss.
Direct costs of acquisition are recognised immediately as an expense.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated
statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed
the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income
on the acquisition date.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly
attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items.
Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over their
expected useful economic lives. It is provided at the following rates:
Leasehold improvements
–
20% straight-line basis
Fixtures & fittings
–
16% straight-line basis
Motor vehicles
–
25% straight-line basis
Computer equipment
–
20% straight-line basis
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Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for leases of low value assets;
and leases with a duration of 12 months or less.
IFRS 16 was adopted 1 January 2019 without restatement of comparative figures. The following policies apply subsequent
to the date of initial application.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not
readily determinable, in which case the Group’s incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In
such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout
the lease term. Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes: amounts expected to be payable under any
residual value guarantee; the exercise price of any purchase option granted in favour of the Group if it is reasonably certain
to assess that option; and any penalties payable for terminating the lease, if the term of the lease has been estimated on
the basis of termination option being exercised.
Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received,
and increased for: lease payments made at or before commencement of the lease; initial direct costs incurred; and the
amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased
asset.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the
balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis
over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter
than the lease term.
Impairment of property, plant and machinery and intangible assets with a finite useful life
At each balance sheet date, the Group assesses the existence of indicators reducing the value of property, plant and
machinery and intangible assets with a finite useful life not fully amortised. If such indicators are found, the recoverable
value of the assets is estimated, with any depreciation with respect to the relative book value being recorded on the
income statement. Recoverable value is defined as the greater of either the fair value, less the disposal costs, or the
relative value in use, understood as the actual value of the future cash flows for that asset. For an asset that does not
generate largely independent cash flows, the value is determined in relation to the cash generating unit (“CGU”) to which
the asset belongs. When calculating the value in use, the expected future cash flows are discounted using a rate that
reflects the current market assessments of the cost of money in relation to the period of the investment and risks specific
to the asset. A reduction in value is recognised in the income statement when the carrying value of the asset is higher than
the recoverable value. If the conditions for a write-down previously carried out no longer subsist, the carrying amount of
the asset is restored through registration on the income statement, within the limits of the carrying value that the asset in
question would have had if the write-down had never been done and the amortisations had been carried out.
Impairment of non-financial assets with indefinitive useful economic lives
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at
the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds
its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down
accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on
the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its CGUs. Goodwill is
allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from a business combination that
gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
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Foreign currency
The Group’s functional currency is in Euros.
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in
which they operate (their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign
currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences
arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.
All overseas operations transact in Euros. Therefore, no adjustment is required on consolidation.
Financial assets
The Group’s financial assets are classified on the basis of the business model adopted to manage them and the
characteristics of the related cash flows.
a) Financial assets valued at amortised cost
Financial assets which have been verified to meet the following requirements are classified in this category:
(i) the asset is held within a business model whose objective is possession of the asset to collect contractual financial
flows; and
(ii) the contractual terms of the asset include cash flows represented solely by payments of principal and interest on the
principal amount to be repaid.
These are mainly receivables from customers, loans and other receivables.
Trade receivables that do not contain a significant financial component are recognised at the price defined for the related
transaction (determined in accordance with the provisions of IFRS 15 – Revenues from customer contracts).
Other receivables and loans are initially recognised in the financial statements at their fair value increased by any directly
attributable accessory costs to the transactions that generated them. At the time of subsequent measurement, financial
assets were shown at amortised cost, with the exception of loans that do not contain a significant financial component,
using the effective interest rate. The effects of this measurement are recognised as a financial income component.
The Group values receivables by adopting an expected loss impairment model.
For trade receivables the Group adopts a simplified approach which does not require periodic changes to the credit risk to
be reported, but rather an expected credit loss (“ECL”) calculated on the entire ECL lifetime to be recorded.
In particular, the policy implemented by the Group involves the stratification of receivables, which are broken down by
homogeneous risk categories. Different write-down percentages are applied to these categories, which reflect the
likelihood of them being recovered. These are based on historical percentages and on any forward-looking data, which
may impact the reasonable likelihood of them being recovered. Trade receivables are written down in full if they are not
reasonably likely to be recovered (e.g. overdue past a certain point, bankruptcy and/or start of legal action).
Write-downs carried out in accordance with IFRS 9 are recognised in the consolidated income statement net of any
positive effects related to releases or restorations of value and are represented under operating costs.
b) Financial assets at fair value recognized through the consolidated income statement (“FVPL”)
Financial assets that are not classified in any of the previous categories (i.e. residual category) are classified in this
category. These are mainly derivative instruments. All derivative financial instruments are measured at fair value.
Derivative financial instruments qualify for hedge accounting only when at the inception of the hedge there is formal
designation and documentation of the hedging relationship, the hedge is expected to be highly effective, its effectiveness
can be reliably measured and it is highly effective throughout the financial reporting periods for which it is designated. If
hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately within financial expenses.
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Assets belonging to this category are recorded at fair value upon initial recognition.
Ancillary costs incurred on recognition of the asset are immediately recognised in the consolidated income statement. On
subsequent measurement, FVPL financial assets are measured at fair value.
Gains and losses arising from changes in fair value are recognised in the consolidated income statement in the period in
which they are recognised under “Gains (losses) from assets measured at fair value”.
Purchases and disposals of financial assets are accounted for at the settlement date.
Financial assets are derecognised when the related contractual rights expire, or when the Group transfers all the risks and
benefits of ownership of the financial asset.
Cash and cash balances
Cash and cash equivalents include cash, bank current accounts, deposits repayable on request and other short-term and
highly liquid financial investments that are readily convertible into cash, or convertible into cash within 90 days of the
original acquisition date, and are subject to a low risk of changes in value.
Financial liabilities
Financial liabilities include financial payables, payables for leases and trade payables.
Amounts due to banks and other lenders are initially recognised at fair value net of directly attributable transaction costs
and are subsequently measured at amortised cost using the effective interest rate method. If there is a change in the
expected cash flows, the value of the liabilities is recalculated to reflect this change based on the current value of the new
expected cash flows and the initially determined internal rate of return.
Leasing payables are initially recognised at the fair value of the capital goods covered by the contract, or, if lower, at the
present value of the minimum payments due.
Trade payables are obligations to pay for goods or services acquired from suppliers in the ordinary course of business.
Trade payables are classified as current liabilities if they are paid within one year of the balance sheet date. Otherwise,
these payables are classified as non-current liabilities.
Trade and other payables are initially recognised at fair value and subsequently measured using the amortised cost
method.
Financial liabilities are eliminated from the financial statements when the obligation underlying the liability is
extinguished, cancelled or fulfilled.
With reference to the derecognition of a financial liability, new records must be created for its extinction and the
recognition of a new liability if the contractual terms are substantially different. The terms are considerably different if the
actualised value of the financial flow under the new terms, including any fee paid net of the fee received and actualised
using the original interest rate, are at least 10% different from the actualised value of the remaining financial flows of the
original financial liability. If the exchange of debt instruments or the change in the terms are recognised as an extinction,
any costs or fees paid are recorded as income or losses associated with the extinction. If the exchange or modification are
not recognised as extinction, any costs or fees sustained will adjust the accounting value of the liability and will be
amortised over the remaining term of the liability in question.
Employee benefits liabilities
Staff severance indemnity, mandatory pursuant to art. 2120 of the Italian civil code is a deferred compensation and is
based on the years of service of the employee and on the compensation received during the year of service.
According to the national law, the deferred compensation to be paid when an employee leaves the entity is based on the
years of service of the employees and on the taxable remuneration earned by the employee during the service year, i.e.,
the capital accumulated when the employment ends. The provisions are due in the event of retirement, death, invalidity or
resignation. During 2021 there were no special events, such as restructuring plans, reductions or regulations during the
reference period.
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The current value of the fund is calculated using the Projected Unit Credit Method (present value of future performance).
The obligations related to the staff severance indemnity are assessed annually by a qualified actuary. Costs for current
services are recognised as “Personnel costs”. The Group determines the financial charges by applying the discount rate
used to measure the defined benefit obligation at the beginning of the annual period to the defined benefit obligation.
Measurement of the liabilities for employee benefits, which include income from the obligation for defined benefits are
immediately recognised in other comprehensive income.
When the benefits of a plan are changed or when a plan is reduced, the resulting benefit in the benefit that relates to past
service or the gain or loss on the reduction is immediately recognised as “Personnel costs”.
Share-based payments
The Group provides share-based payment arrangements to certain employees.
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged
to the consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken
into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the
cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Non-
vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all
other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition
is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive
income over the remaining vesting period.
Assets held for sale
Assets held for sale or disposal groups whose carrying amount will be recovered principally through a sale rather than
through continuing use are classified as held for sale and presented separately from other assets and liabilities in the
consolidated statement of financial position.
A discontinued operation represents a part of the entity that has been disposed of or classified as held for sale, and:
• represents a major line of business or geographical area of operation; or
• is part of a coordinated plan to dispose of a significant business or geographical area of operations; or
• is a subsidiary acquired exclusively for the purpose of resale.
The results of discontinued operations – whether discontinued or classified as held for sale – are reported separately in the
consolidated income statement, net of tax effects.
Assets held for sale or disposal groups classified as held for sale are first recognised in accordance with the relevant IFRS
applicable to each asset and liability and are subsequently recognised at the lower of their carrying amount and fair value
less costs to sell.
Any subsequent impairment losses are recognised directly as an adjustment to assets or disposal groups classified as held
for sale with a balancing entry in the consolidated income statement.
A reversal of an impairment loss is recognised for each subsequent increase in the fair value of an asset net of costs to sell,
but only up to the amount of the cumulative impairment loss previously recognised.
In accordance with IFRS 5 (Assets Held for Sale and Discontinued Operations), assets classified as held for sale or as part of
a disposal group are not amortised.
Revenue recognition
Revenues from cloud-based SaaS platforms (WebSparK and LeadSparK) are recognised in line with IFRS 15 based on the
five steps model provided by IFRS 15. Following the assessment made by top management two separate performance
obligations were identified in the contracts:
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• The selling of the “right to use IP” to the client for which the performance obligation is satisfied point in time (at “go-
live” of the product).
• The post-contract customer support related to costs incurred to maintain the platform live for which the revenues are
recorded over time on the duration of the contracts.
Revenues from “lead generation” services are recognised when the leads are sent to the OEM (Original Equipment
Manufacturer in Automotive Sector), or to the dealer after the qualification of the lead.
Cloud-based SaaS platforms are invoiced periodically depending on the milestones and payment cadence agreed in the
contract (which may be from delivery/go-live and annually, quarterly or monthly).
Other revenue mainly refers to training activities, which is recognised when the training has been delivered.
Earnings per share
Basic earnings per share is calculated by dividing the result for the year attributable to the owners of the parent by the
weighted average number of ordinary shares outstanding during the year, excluding treasury shares.
Diluted earnings per share is calculated by dividing the result for the year attributable to the owners of the parent by the
weighted average number of ordinary shares outstanding during the year, excluding treasury shares. For the purposes of
the calculation of diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming
that rights having potential dilutive effects are exercised by all the grantees of such rights, and the result attributable to
the owners of the parent is adjusted to take into account the effects, if any, net of tax, of the exercise of those rights.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated
statement of financial position differs from its tax base, except for differences arising on:
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting or taxable profit; and
• investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal
of the difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available
against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
• the same taxable Group company; or
• different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax
assets or liabilities are expected to be settled or recovered.
6. Operating segments
Following the classification of the DriveK business as a discontinued operation, the Group has determined that it has one
operating and reportable segment based on the information reviewed by its Board of Directors in making decisions
regarding allocation of resources and to assess performance.
Non-current assets, which consist of property, plant and equipment and intangible assets, excluding goodwill, are
substantially located in Italy.
7. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed to be
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reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Judgements
• Capitalisation of development costs – Expenditure on Research is recognised as an expense and charged to the
consolidated statement of comprehensive income in the year in which it is incurred.
• Development expenditure relating to specific projects intended for commercial exploitation is capitalised as an
intangible fixed asset where the following conditions are met:
– it is technically feasible to complete the intangible asset so that it will be available for use or sale;
– it is the intention of the Company to complete the intangible asset and use or sell it;
– the Company has the ability to use or sell the intangible asset;
– the intangible asset will generate probable future economic benefits;
– the technical, financial and other resources needed to complete the development and to use or sell the intangible
asset are available to the Company; and
– the expenditure attributable to the intangible asset during its development can be measured reliably.
Estimates and assumptions
• Revenue recognition – valuation of customer contracts (see note 9).
• Impairment of goodwill – estimate of future cash flows and determination of the discount rate (see note 13).
• Income taxes – provisions for income taxes in various jurisdictions (see note 12).
• Employee benefits liabilities – actuarial assumptions (see note 20).
• Deferred tax assets – deferred tax assets are shown based on forecast future taxable income. The estimation of future
taxable income for the purpose of accounting for deferred tax assets depends on factors that may change over time
and have a significant effect on the recoverability of deferred tax assets.
• Provision for bad debt – the allowance account for trade receivables is used to record impairment losses where a
credit risk has been identified, unless the Group is satisfied that no recovery of the amount owing is possible; at that
point the amounts considered irrecoverable are written off against the trade receivables directly.
• Useful life of capitalised development costs – management has estimated that the useful life of capitalised
development costs is three years, representative of the time horizon for which the products developed are expected
to generate net cash inflows for the Group.
8. Financial instruments – Risk Management
MotorK Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s
objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods:
Capital risk management
The Group defines capital as the total equity of the Group. The Group’s capital is made up of share capital, share premium,
retained earnings and other reserves totalling €64.4 million (€2.1 million as at 31 December 2020).
The significant increase in the amount of Group capital is related to capital increase related to the listing on Euronext
Amsterdam for an amount of approximately €70 million (net of IPO fees).
The Group funds its expenditures on commitments from existing cash and cash equivalent balances, primarily received
from operating cash flow and issuance of shareholders’ equity and borrowings. There are no externally imposed capital
requirements.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group
ensures that the distributions to shareholders do not exceed working capital requirements.
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Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented
locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by
local business practices.
With regard to trade receivables, the insolvency risk is monitored centrally by the Group’s finance department, which
constantly monitors the Group’s credit exposure, the collections of trade receivables and the adequacy of bad debt
provisions on a monthly basis.
It is worth mentioning that, during 2020, the Group has implemented a specific team within the finance function managing
credit collection and a standard procedure, based on relevant frameworks applicable, to be followed by all the Group
companies.
The carrying amount of financial assets recorded in the financial statements, net of bad debt provision, represents the
Group’s maximum exposure to credit risk.
The ageing analysis of trade receivables is shown in the following table:
€’000
Not overdue
Overdue by less
than 1 month
Overdue by
1-2 month
Overdue by more
than 2 months
Total
Gross trade receivables as at
31 December 2020
4,131
212
199
771
5,313
Allowance for doubtful
receivables
–
–
–
(268)
(268)
Trade receivables as at
31 December 2020
4,131
212
199
503
5,045
Gross trade receivables as at
31 December 2021
4,147
925
330
565
5,967
Allowance for doubtful
receivables
–
–
–
(247)
(247)
Trade receivables as at
31 December 2021
4,147
925
330
318
5,720
Foreign exchange risk
Exchange rate fluctuation risk is not considered significant. Although the Parent Company is based in UK, all the other
subsidiaries are based in Europe and the most significant transactions of the Group are made in Euros, the functional
currency of the Group used for the preparation of the consolidated financial statements.
Liquidity risk
Liquidity risk typically arises when an entity is having trouble finding sufficient funds to meet its obligations and includes
the risk that the counterparties that have granted loans and/or lines of credit may request repayment. Prudent
management of liquidity risk implies the maintenance of an adequate level of liquidity, short-term securities and the
availability of funds obtainable through an adequate amount of credit lines.
Toward this end, MotorK Group implemented a series of measures and actions which made it possible for the Group to
better manage its financial position, further strengthening its structure and solidity. The finance department periodically
monitors Group financial position, cash flow and cash forecast to optimise resources and manage any temporary liquidity
surpluses. The Board of Directors receive cash flow projections and cash flow analysis on a regular basis. At the end of
2021, these projections indicated that MotorK Group is expected to have sufficient liquid resources to meet its obligations
under all reasonably expected circumstances.
It is worth mentioning that due to the listing of the Group on Euronext Amsterdam an amount of approximately €70 million
was received as capital increase (net of commissions). This amount was partially used to reimburse part of the financial
liabilities in place with European Investment Bank for an amount of €15 million plus interests and Credimi for an amount
of €1.8 million.
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As at 31 December 2021 the cash available in banks amounts to €43 million and the short-term and long-term financial
position is strongly positive.
The following table provides an analysis of cash disbursements by due date related to financial liabilities, based on
contractual repayment obligations, as at 31 December 2021 and 2020:
As at 31 December 2021
€’000
Within 1 year
2-5 years
Over 5 years
Contract value
Carrying amount
Financial liabilities
1,976
4,499
–
6,475
6,122
Lease liabilities
893
2,042
190
3,125
2,836
Trade and other payables
11,202
–
–
11,202
11,202
Other non-current liabilities
–
–
–
–
–
As at 31 December 2020
€’000
Within 1 year
2-5 years
Over 5 years
Contract value
Carrying amount
Financial liabilities
6,807
30,753
309
37,869
31,095
Lease liabilities
872
856
–
1,728
1,588
Trade and other payables
6,128
–
–
6128
6,128
Other non-current liabilities
–
816
–
816
816
Interest rate risk
As at 31 December 2021 the exposure to interest rate risk is not considered significant taking into account that there are no
financial loans with variable interest rates in place.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Trade and other receivables.
• Cash and cash equivalents.
• Trade and other payables.
• Current and non-current financial liabilities.
• Current and non-current lease liabilities.
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Financial assets
The following tables shows financial assets by category, as defined by IFRS 9, as at 31 December 2021 and 2020:
€’000
2021
2020
Financial assets at amortised cost
Non-current assets – security deposit
106
262
Trade receivables
5,720
5,045
Other receivables
355
10
Cash and cash equivalents
43,257
11,824
Trade and other receivables classified as held for sale
2,238
3,195
Total
51,676
20,336
The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
Trade receivables are stated net of provision for impairment. See note 16 for disclosure in respect of overdue trade
receivables.
Financial liabilities
The following tables show financial liabilities by category, as defined by IFRS 9, as at 31 December 2021 and 2020:
€’000
2021
2020
Financial liabilities at amortised cost
Trade payables
1,844
1,761
Current financial liabilities
1,922
6,263
Current lease liabilities
790
802
Trade payables classified as held for sale
430
715
Non-current financial liabilities
4,200
24,832
Other non-current liabilities
–
816
Non-current lease liabilities
2,046
786
Total
11,232
35,975
Fair value measurement hierarchy
The financial instruments measured at fair value are presented on the basis of the fair value hierarchy, described below:
Level 1 – quoted (unadjusted) prices in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2 – inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3 – valuation techniques for which the inputs are unobservable for the asset or liability.
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9. Revenue
Group revenue for the year ended 31 December 2021 amounted to €27.6 million, up 43% year-on-year (€19.3 million as at
31 December 2020).
Disaggregation of revenue
The Group has disaggregated revenue into various categories in the following tables.
For the year ended 31 December 2021
€’000
SaaS platform
Digital marketing
Other revenues
Total
Primary geographic market
UK
–
–
–
–
Italy
11,456
7,382
3,417
22,255
Spain
1,207
216
72
1,495
France
1,767
1
70
1,838
Germany
1,874
75
23
1,972
Total
16,304
7,674
3,582
27,560
For the year ended 31 December 2020
€’000
SaaS platform
Digital marketing
Other revenues
Total
Primary geographic market
UK
–
–
103
103
Italy
6,705
6,322
2,577
15,604
Spain
1,104
290
50
1,444
France
1,665
–
6
1,671
Germany
292
193
22
507
Total
9,766
6,805
2,758
19,329
Revenues related to SaaS platform contracts amounts to €16.3 million as at 31 December 2021 compared to €9.8 million as
at 31 December 2020. The increase compared to last year is related to the robust organic growth of the business in which
MotorK is operating. Such revenues are mainly related of the following three products:
• “WebSpark”, the web module with high technical and design-standards and 138 functionalities specifically developed
for the automotive sector;
• “StockSpark” a stock management module created to manage and import stock (i.e. a set of information data,
images) from multiple sources and export it online to maximise visibility for prospective purchasers through the
integration of external channels and the CRM module; and
• “LeadSpark”, a customisable lead management, CRM and marketing automation system module, specifically
developed to help dealerships and car manufacturers.
SaaS platform revenues are recognised on the basis of two different performance obligations implied in the agreements:
• point in time at the date of the delivery of the platform for which the costs necessary for the development, use and
basic operation of the product have already been incurred; and
• over the time of the agreement in relation to the post-contract support activities.
Digital marketing revenues amounting to €7.7 million as at 31 December 2021 compared to €6.8 million as at 31 December
2020 are related to services for the dealer in order to acquire enhanced online traffic.
Other revenues amounting to €3.6 million as at 31 December 2021 compared to €2.7 million as at 31 December 2020
mainly include revenues for training activities.
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10. Group operating profit/(loss)
Group operating loss is stated after charging/(crediting) the following:
€’000
2021
2020
Costs for marketing services
6,654
5,834
Costs for call centre services
–
195
Personnel costs
27,828
12,474
R&D capitalisation
(3,490)
(2,661)
Other operating costs
8,689
4,831
Amortisation and depreciation
4,235
3,186
Total costs
43,916
23,859
The increase of costs for marketing services is directly attributable to the increase of revenues from digital marketing as
already stated in note 9 of this section.
Personnel costs, excluding Directors’ remuneration, are shown in the following table:
€’000
2021
2020
Wages and salaries
13,325
9,260
Social security costs
3,671
2,563
Employee benefit pension cost
557
517
Severance indemnity
435
-
Earn out payments costs
126
-
Share-based payments
9,714
134
Total
27,828
12,474
The increase of the caption wages and salaries compared to last year is mainly due to the increase of the average number
of employees and to the amount of bonus paid to employees during the year 2021 (zero in 2020 due to the spread of
COVID-19). Wages and salaries include the directors’ emoluments paid in 2021 (full details are given in the Directors’
remuneration report on pages 56 to 67).
Share-based payments includes the accrual of the stock option costs as required by IFRS 2. Further details are provided in
note 23. The increase compared to last year is mainly related to the vesting of a certain amount of stock options at the day
of IPO.
Earn out payment costs are related to expenses accrued on a straight-line basis on the basis of the earn-out mechanism in
place with the previous shareholders of the Company acquired in December 2021. In particular, IFRS 3 provides that
contingent considerations that are automatically forfeited if key employees terminate is not considered as part of the
consideration paid but as remuneration for post-combination services.
Other operating expenses financial statement line includes mainly:
• Fees for legal, fiscal and administrative and HR consultants of approximately €3 million.
• Exceptional costs of €2.7 million related mainly to IPO and M&A.
The increase compared to last year is mainly related to the one-off exceptional costs related to the IPO and travelling
expenses (almost nil in 2020, the year of travel restrictions due to the spread of COVID-19).
IPO fees have been accounted for in accordance with IAS 32, allocating between equity and income statement based on
the ratio of old to new shares.
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The fees of the Group’s auditor for services provided are analysed below:
€’000
2021
2020
Audit of the Group’s financial statements
143
41
Other (*)
353
5
* includes mainly the activities related to the IPO (issuing of comfort letters on the Prospectus and other related services).
Amortisation and depreciation expenses includes:
• amortisation of intangible assets of approximately €3.3 million for the year ended 31 December 2021 (€2.2 million for
the year ended 31 December 2020) mainly related to development costs capitalised;
• depreciation of tangible assets for approximately €0.9 million for the year ended 31 December 2021 (€0.9 million for
the year ended 31 December 2020).
11. Finance income and expense
Finance income and expense are shown in the following tables:
€’000
2021
2020
Interest received on bank deposits
–
16
Gain on foreign exchange
11
–
Total finance income
11
16
€’000
2021
2020
Bank loans and overdrafts
549
194
Other loans
1,645
1,345
Hire purchase interest
–
–
Net interest expense on defined benefit pension scheme
13
16
Loss on derivative contracts
2,327
–
Other
284
265
Total finance expense
4,818
1,820
Bank loans and overdrafts include the interest paid during the year for the loan in place. Other loans include the interest
accrued for the loan entered into with European Investment Bank. The loan has been fully repaid at the end of 2021.
The loss on derivative contracts amounting to €2.3 million is related to the exercise of the put option by European
Investment Bank at the date of the repayment of the loan in relation to warrants agreements issued by the Group at the
date in which the loan was stipulated. As per the requirements of IFRS Accounting Standards, the instrument was settled
net in cash and as a consequence, a loss has been accounted in the income statement.
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12. Corporate income tax
Corporate income taxes are shown in the following table:
€’000
2021
2020
Current tax on profits for the period
–
–
R&D tax grants
150
190
Foreign subsidiaries income taxes
(2,236)
(127)
Adjustment for other provision in prior periods
(9)
28
Total current tax
(2,095)
91
Origination and reversal of temporary differences
(670)
834
Total deferred tax
(670)
834
Corporate income tax
(2,765)
925
The caption R&D tax grants is related to tax grants recognised by Italian tax authorities in relation to the capital increase
made by MotorK Plc in MotorK Italia Srl in December 2021.
Foreign subsidiaries income taxes include the accrual for corporate income taxes to be paid in Spain, France, Portugal and
mainly Israel. Regarding the tax provision recorded in Israel amounting to €2.1 million, this is due to the asymmetric
treatment of some costs (non-deductible from an Israelian tax perspective) and the recharge related to the cost-plus
application within the Group that is instead taxable.
Reversal of temporary differences is related to the reversal of deferred tax assets booked in the 31 December 2020
consolidated financial statements. The Group continually re-evaluates the expected timings of forecast taxable profits by
jurisdiction where deferred tax assets could arise. In line with IAS 12 deferred tax assets should only be recognised in the
key jurisdictions to the extent that recovery is probable (i.e. where taxable profits will be available) and, in our judgement,
the timing cannot be accurately forecast with granular clarity. In accordance with this, management has decided to write-
off the deferred tax assets booked in the previous year until taxable profit is generated in the local jurisdictions where such
assets may be used.
Group has estimated trading losses carried forwarded in the UK for an amount of approximately €21 million and in Italy for
an amount of approximately €14.5 million. Punctual computation will be prepared by management in light of the
presentation of the income tax return in each country. Deferred tax assets of approximately €4.6 million have not been
recognised on the 2021 loss by management due to the uncertainty in the timing in which such loss will be utilised.
The income taxes for the year are reconciled with the theoretical tax burden in the following table:
€’000
2021
2020
Profit/(loss) before tax (discontinued and continuing operations)
(20,760)
(6,292)
Tax using the Company’s domestic tax rate of 19.0%
(3,944)
(1,195)
R&D expenditure credit
–
(190)
Other expenditure credit
(150)
–
Foreign subsidiaries income taxes
2,236
127
Unrecognized deferred tax assets
4,626
1,020
Other movements
(3)
(687)
Total tax (credit)
2,765
(925)
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Notes to the consolidated statement of financial position
13. Intangible assets
Details of intangible assets increase and decrease for the years ended 31 December 2021 and 2020 are provided in the
following table:
€’000
Customer
relationships
Trademark
Development
costs and
software
Goodwill
Total
Cost
As at 1 January 2020
1,520
–
10,790
2,045
14,355
Additions – internally generated
–
–
3,239
–
3,239
Other changes
–
–
–
(102)
(102)
Assets classified as held for sale
–
–
(3,245)
–
(3,245)
As at 31 December 2020
1,520
–
10,784
1,943
14,247
Additions – internally generated
–
–
3,729
–
3,729
Acquired through business
combinations
1,603
70
220
5,937
7,830
Assets classified as held for sale
–
–
(177)
–
(177)
As at 31 December 2021
3,123
70
14,556
7,880
25,629
Accumulated amortisation and
impairment
As at 1 January 2020
249
–
2,920
0
3,169
Charge for the year
108
–
2,605
–
2,713
Assets classified as held for sale
–
–
(1,497)
–
(1,497)
As at 31 December 2020
357
–
4,028
0
4,385
Charge for the year
119
1
3,171
–
3,291
Assets classified as held for sale
–
–
–
–
As at 31 December 2021
476
1
7,199
0
7,676
Net book value
As at 1 January 2020
1,271
-
7,870
2,045
11,186
As at 31 December 2020
1,163
-
6,756
1,943
9,862
As at 31 December 2021
2,647
69
7,357
7,880
17,953
Customer relationship
The customer relationship amounts to €2.6 million as at 31 December 2021 (€1.2 million as at 31 December 2020). The
increase is related to the provisional fair value of customer relationship arising from the allocation of the consideration
paid for the acquisition of Dapda and Fidcar net of the amortisation of the year. Despite the loss of the year 2021,
management has assessed that there are no impairment indicators, and therefore it is not necessary to prepare an
impairment test, the reasons being the good performance in terms of revenues and EBITDA of the Group.
Trademark
Trademark costs amounted to €0.07 million as at 31 December 2021 (€nil as at 31 December 2020) and this is related to the
provisional fair value allocated using the Relief-from-Royalty method to part of the consideration paid for the acquisition
of Fidcar.
Development costs
Development costs amounting to €7.3 million as at 31 December 2021 (€6.7 million as at 31 December 2020) are due to the
Group developing most of its technology and applications in-house. Such costs are related to continued development of
new product offerings, applications, features and enhancements to existing digital services and solutions in the two
dedicated hubs in Italy and Portugal.
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Despite the loss for the year 2021, management has assessed that there are no impairment indicators and therefore it is
unnecessary to prepare an impairment test, the reason being the good performance in terms of revenues and EBITDA of
the Group.
Goodwill
Goodwill booked in the consolidated financial statements as at 31 December 2021 amounts to €7.9 million (€1.9 million as
at 31 December 2020). The increase compared to last year is related to the provisional fair value allocated to residual
goodwill generate by the acquisition of Fidcar and Liotey for €5.9 million.
As at 31 December 2020 the Group holds goodwill in respect of the MotorK Italy acquisition in 2016 (€0.1 million), the
Punsset (merged in MotorK Spain) (€0.4 million) and MotorK Deutschland acquisitions in 2017 (€0.05 million), and the For
Business (€0.2 million) and 3W Net acquisitions in 2019 (€1.1 million).
In accordance with IAS 36, goodwill is not amortised and is tested for impairment annually or more frequently if facts or
circumstances indicate that the asset may be impaired. Impairment testing is performed by comparing the carrying
amount and the recoverable amount of the CGU. The recoverable amount of the CGU is the higher of its fair value less
costs to sell and its value in use. To this end, for the purpose of verifying the recoverability of goodwill recorded under
intangible assets, a single CGU has been identified, consisting of all the operating activities of the Group as a whole (the
single CGU is equal to DealerK business unit plus corporate costs as the DriveK business unit was classified as a
discontinued operation).
The recoverable amount of the CGU is determined from value in use calculations. The key assumptions for the value in use
calculations are those regarding the discount rates, growth rates and expected changes in margins. Management
estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the
risks specific to the CGU. Changes in selling prices and direct costs are based on past practices and expectations of future
changes in the market.
As at 31 December 2021 goodwill was subjected to an impairment test taking into account past economic and financial
performance and future expectations inferable from the business plan 2022–2026. Beyond that period operating cash
flows are assumed to grow at 1.7% annually. The risk adjusted pre-tax rate (“WACC”) used to discount the CGU cash flow
forecasts is 16.2%. For the purposes of estimating the value in use of the CGU to which the goodwill is allocated, both
internal and external sources of information were used.
The results of the impairment test on goodwill as at 31 December 2021 did not reveal any impairment loss.
In assessing the value in use of the CGU, management have considered the potential impact of possible changes in the
main assumptions used. A sensitivity analysis was carried out by determining the break-even point WACC, which, keeping
the other parameters constant, would render the difference between the recoverable amount and the carrying amount of
the CGU as nil. In these circumstances, the break-even point WACC is 27.3%.
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14. Property plant and equipment
€’000
Leasehold
land and
buildings
Fixtures
and fittings
Motor
vehicles
Computer
equipment
Right-of-
use assets
Total
Cost
As at 1 January 2020
326
77
–
203
2,354
2,960
Additions
–
–
–
6
1,078
1,084
Reclassification to intangible assets
(10)
–
–
–
–
(10)
As at 31 December 2020
316
77
–
209
3,432
4,034
Additions
10
8
–
117
1,975
2,110
Acquired through business combinations
23
38
1
50
215
327
Disposals
(182)
(182)
As at 31 December 2021
349
123
1
376
5,440
6,289
Accumulated depreciation
As at 1 January 2020
190
46
–
106
1,036
1,378
Charge for the year
54
20
–
44
845
963
As at 31 December 2020
244
66
–
150
1,881
2,341
Charge for the year
41
9
1
48
845
944
Depreciation on disposals
(72)
(72)
As at 31 December 2021
285
75
1
198
2,654
3,213
Net book value
As at 31 January 2020
136
31
–
97
1,318
1,582
As at 31 December 2020
72
11
–
59
1,551
1,693
As at 31 December 2021
64
48
–
178
2,786
3,076
Right-of-use assets amounting to €2.8 million as at 31 December 2021 (€1.6 million as at 31 December 2020) are related to
the application of IFRS 16 to the lease of the offices of the Group subsidiaries and the lease of cars assigned to the
employees. The additions in the year of €2 million are related mainly to the renewal of the lease in place for the office of
MotorK Italia Srl of Milan for six years.
Right-of-use by underlying asset mainly refers to (i) automobiles for €0.3 million as of 31 December 2021 (€0.4 million as of
31 December 2020), and to (ii) office rental for €2.4 million as of 31 December 2021 (€1.1 million as of 31 December 2020).
15. Non-current assets – security deposit
Non-current assets – security deposit amounts to €0.1 million as at 31 December 2021 (€0.3 million as at 31 December
2020) includes deposits made by the Group mainly for the rental of the offices of the subsidiaries.
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16. Contract assets and trade and other receivables
Contract assets and trade and other receivables are shown in the following table:
€’000
2021
2020
Non-current contract assets
5,059
4,289
Contract assets – current portion
8,521
5,915
Total contract assets
13,580
10,204
Trade receivables
5,720
5,045
Prepayments
634
307
Other receivables
355
10
Tax receivables
732
270
Total trade and other receivables
7,441
5,632
Contract assets
As already mentioned in note 9, the financial statement line item Contract assets is related to the application of IFRS 15 on
DealerK SaaS revenue agreements and represents accrued income as at the reference date.
Revenues related to DealerK SaaS multi-year contracts (12, 24 or 36 months) are recognised on delivery (“go-live”) of the
platform, and therefore a related contract asset arises. Contract assets are subsequently billed on a monthly or quarterly
basis for the duration of the agreement with the customer.
The split between current and non-current portions depends on the duration of the agreement.
The increase compared to the previous year is related to the increase of revenue from the SaaS platform.
Trade and other receivables
Trade receivables as at 31 December 2021 amounted to €5.7 million with the year-on-year increase due to the higher
revenues generated in the fourth quarter of 2021 compared to 2020.
As at 31 December 2021 trade receivables of €0.9 million (€1.5 million as at 31 December 2020) were overdue but not
impaired. They relate to the customers with no default history.
The impairment allowance is a specific provision as provided by IFRS 9, when it is necessary to accrue a bad debt
provision.
Movements in the impairment allowance for trade receivables are as follows:
€’000
2021
2020
As at 1 January
268
234
Increase during the year
70
137
Receivables written off during the year as uncollectable
(62)
(13)
Impairment allowance for trade receivables classified as held for sale
(29)
(90)
As at 31 December
247
268
Tax receivables includes VAT receivables and mainly the tax grants granted by the capital increase in MotorK Italy for €0.1
million (so called “Superace”).
17. Cash and cash equivalents
The caption cash and cash equivalents amounting to €43.2 million (€11.8 million as at 31 December 2020) is related to cash
available in bank accounts of the Group subsidiaries. The amount includes €0.1 million of cash deposited onto prepaid
cards used by employees as petty cash as at 31 December 2021 (€0.1 million as at 31 December 2020).
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For details of changes during the analysed periods please refer to the consolidated statement of cash flow. As already
mentioned in this Annual Report, the increase in cash and cash equivalents related to the IPO proceeds net of the cash
used mainly for the repayment of the financial loan in place and M&A.
Cash and cash equivalents are deposited with top rated banks.
18. Trade and other payables and tax payable
Trade and other payables include:
€’000
2021
2020
Trade payables
1,844
1,761
Accruals
1,329
788
Total trade payables
3,173
2,549
Other payables including tax and social security payments
5,084
2,894
Total current trade and other payables
8,257
5,443
The carrying value of trade and other payables measured at amortised cost approximates fair value.
Trade payables amount to €1.84 million as at 31 December 2021 compared to €1.76 million as at 31 December 2020.
Accruals includes invoices to be received for service rendered in 2021. The increase compared to the data as at 31
December 2020 is lined up with the increase of trade payables and with the general increase of the business of the Group.
Other payables amounting to €5.1 million as at 31 December 2021 includes:
• contract liabilities of €1.3 million mainly related to the post-contract service support revenues as described in note 9
of these consolidated financial statements;
• liabilities towards employees for bonus’ to be paid in 2022 for €0.8 million;
• other liabilities towards employees and related social security charges of approximately €3 million.
Changes compared to last year amounting to €2.2 million are mainly related to liabilities towards employee increases due
to both the higher number of employees and to the fact that in 2020 no bonus were paid due to COVID-19.
€’000
2021
2020
Corporate tax liabilities
2,448
24
VAT liabilities
497
661
Total tax payable
2,945
685
Corporate tax liabilities includes mainly the tax provision booked in MotorK Israel Ltd already described in note 12 for €2.1
million.
VAT liabilities is mostly composed by VAT debt position of the subsidiaries in Germany, Spain and France.
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19. Current and non-current financial liabilities
Current and non-current financial liabilities include:
€’000
2021
2020
Bank loan
1,794
1,594
Convertible notes
–
4,650
Other financial liabilities
128
19
Total current financial liabilities
1,922
6,263
Current lease liabilities
790
802
Bank loan
4,200
24,832
Total non-current financial liabilities
4,200
24,832
Non-current lease liabilities
2,046
786
Bank loan
The following table sets forth the breakdown of bank loans by counterparty for the years ended 31 December 2021 and
2020:
2021
2020
€’000
Current
Non-current
Current
Non-current
Financial institution
BNL
–
–
333
–
Creval
594
–
302
581
Credimi
–
–
359
1,641
European Investment Bank
–
–
–
17,210
Illimity Bank
1,200
4,200
600
5,400
Total
1,794
4,200
1,594
24,832
Changes compared to last year are related to the repayment of the loan in place with European Investment Bank and
Credimi using part of the IPO proceeds. The capital allocation strategy of the Group is geared towards reducing borrowing
costs to enhance liquidity and enabling the necessary flexibility for MotorK to manage its operations, continue executing
strategic M&A and investing in R&D to maximise shareholder value.
At the end of January 2022 the loan with Illimity bank was refinanced, producing €1.8 million of additional liquidity with a
longer maturity date and a lower interest rate. The new financial loan amounting to €7.25 million, with a five-year duration
and a 0.290 bps margin on Euribor, provides the following financial covenants to be tested annually, starting from
December 2022: leverage ratio (net financial position / EBITDA) and gearing ratio (net financial position / net equity). At the
date of the subscription of the agreement covenants are respected. The loan is guaranteed by SACE SIMEST for 90% of the
value.
Convertible notes
In December 2019 a first tranche of convertible notes was issued to an investment fund, for an amount of €4.0 million,
convertible into shares starting from June 2021. A second tranche of the notes was issued in March 2020, for an amount of
€0.6 million to other investment funds, convertible into shares starting from September 2021. These loans have been
totally converted into equity during 2021. This conversion improves the financial structure of MotorK Group and confirms
that investors believe in the strategic view of MotorK management. The actual number of shares as a result of conversion
to shares is 1,242,628.
Other financial liabilities
Other financial liabilities includes mainly debt related to credit cards repaid early in 2022.
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The changes in financial liabilities, excluding lease liabilities, are shown below:
€’000
Total
Financial liabilities at 31 December 2019
24,575
Drawdowns of new loan and CEN
6,650
Repayments of loan
(342)
Change in factoring
(1,114)
Cash changes
5,194
Amortised cost for the period
1,326
Financial liabilities at 31 December 2020
31,095
Repayments of loan *
(20,432)
Change in other financial liabilities
109
Cash changes
(20,323)
Convertible equity note conversion
(4,650)
Financial liabilities at 31 December 2021
6,122
*This includes the repayments of principals for €18.2 million and interests already accrued as at 31 December 2020 for €2.2 million.
Changes compared to last year are already discussed above.
Finance lease liabilities are secured on the assets to which they relate and are related to the IFRS 16 application, starting
from 1 January 2019, on lease agreements in place for offices of the Group subsidiaries and for cars assigned to
employees.
The leases within the scope of IFRS 16 relate to properties and motor vehicles. In 2021 and 2020 the expense relating to
low value assets leases amounted to €0.8 million and €0.5 million, respectively.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term with
the discount rate determined by reference to the Group’s incremental external borrowing rate for the particular asset and
level of security. After the initial measurement lease liabilities are increased as a result of interest charged and reduced for
lease payments made.
The Group leases office buildings where payments are fixed until the contracts expire. The Group also leases motor
vehicles where payments can be increased if actual mileage is higher than the contracted rates. There is no other
variability in respect of payments and there is not considered to be any significant judgement in relation to the lease
terms.
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The following table provides details of lease liabilities:
€’000
Land and
buildings
Motor vehicles
Total
Lease liabilities
As at 1 January 2020
1,010
375
1,385
Cash items:
Lease payments
(585)
(338)
(923)
Non-cash items:
New leases in the year
740
317
1,057
Interest expense
47
22
69
As at 31 December 2020
1,212
376
1,588
Cash items:
Lease payments
(517)
(394)
(911)
Non-cash items:
New leases in the year
1,611
373
1,984
New leases through business combinations
201
14
215
Reduction for disposal of lease
(63)
(53)
(116)
Interest expense
49
27
76
As at 31 December 2021
2,493
343
2,836
The following table provides details of the Group’s lease liabilities:
€'000
As at 31 December
2021
2020
Repayables as follows:
Under 1 year
790
802
2-5 years
1,861
726
Greater than 5 years
185
60
Total
2,836
1,588
The increase compared to last year is mainly related to the renewal of the office rent of MotorK Italia Srl HQ in Milan
20. Employee benefits liabilities
Staff severance indemnity, mandatory pursuant to art. 2120 of the Italian civil code, is a deferred compensation and is
based on the years of service of the employee and on the compensation received during the period of service.
According to the national law, the deferred compensation to be paid when an employee leaves the entity is based on the
number of years of service of the employee and on the taxable remuneration earned by the employee during the service
period, i.e., the capital accumulated when the employment ends. The provisions are due in the event of retirement, death,
invalidity or resignation. During the periods analysed there were no special events, such as restructuring plans, reductions
or regulations.
Employee benefit plan costs increased by €0.2 million as at 31 December 2021 compared to 31 December 2020, due to the
increase in the number of employees. According to IAS 19, the liability was determined by an actuarial calculation. The
effect of the actuarial loss, amounting to €0.02 million for the year ended 31 December 2021 (€0.2 million for the year
ended 31 December 2020), has been recognised in OCI.
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The following table sets forth the maturity profile of the Defined Benefit Obligation:
Maturity profile of Defined Benefit Obligation
€’000
Years
Expected benefit payments during fiscal year ending 31 December 2022
131
Expected benefit payments during fiscal year ending 31 December 2023
84
Expected benefit payments during fiscal year ending 31 December 2024
105
Expected benefit payments during fiscal year ending 31 December 2025
125
Expected benefit payments during fiscal year ending 31 December 2026
145
Expected benefit payments during fiscal years ending 31 December 2027 through 31 December 2030
1,479
The amounts recognised in the statement of financial position are as follows:
€’000
2021
2020
Present value of obligation
(2,069)
(1,818)
Fair value of scheme assets
–
–
Employee benefit liability
(2,069)
(1,818)
The amounts included within the statement of comprehensive income are as follows:
€’000
2021
2020
Current service costs
557
507
Amount included in personnel costs
557
507
Interest on pension liabilities
13
16
Amount included in finance cost
13
16
The cumulative actuarial losses recognised in other comprehensive income as at 31 December 2021 is €0.02 million (€0.2
million as at 31 December 2020).
Analysis of the amount recognised in statement of total comprehensive income:
€’000
2021
2020
Experience loss on liabilities
(20)
(165)
Changes in assumptions
–
–
Net loss
(20)
(165)
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Changes in the present value of the employee benefit obligation are as follows:
€’000
2021
2020
Opening employee benefit obligation
1,818
1,584
Service cost – continuing operations
557
507
Service cost – discontinued operations
–
87
Interest cost
13
16
Actuarial losses
20
165
Benefit paid
(356)
(416)
Reclassification as liabilities directly associated with assets classified as held for
sale
–
(128)
Other movements
17
3
Closing employee benefit obligation
2,069
1,818
Expected payments for the year ending 31 December 2022 for the Group amount to €0.08 million.
One of the main assumptions is the discount rate, which should be based on the returns available on high quality
corporate bonds at the accounting date with a term corresponding to that of liabilities. The other assumptions should be
chosen to reflect a better estimate of future long-term experience. IAS 19 does not define “high quality”, but generally
means a security rating of AA.
The financial assumptions used for this report at the end of the fiscal year are:
• Discount rate: corporate bonds of appropriate duration and quality should be considered in order to determine a
discount rate appropriate for IAS purposes. The discount rates used for assessing current and previous assessments
were chosen based on the Willis Towers Watson (scheme actuaries) rate.
• Inflation: the assumed rate of price inflation was assessed by reference to the inflation of the target price set by the
European Central Bank over the medium term with a country-specific adjustment.
• Increase in remuneration: the hypothesis was selected in agreement with the Company.
Principal assumptions at the statement of financial position date (expressed as weighted averages) are as follows:
2021
2020
Discount rate
1.20%
0.70%
Rate of retail price inflation
2.00%
1.75%
Rate of increase in salaries
3.00%
2.75%
The amount for the current and previous periods are as follows:
€’000
2021
2020
Employee benefits obligation
(2,069)
(1,818)
Scheme assets
–
–
(Deficit)
(2,069)
(1,818)
Experience adjustments on scheme liabilities
(20)
(165)
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Sensitivity analysis of the value of employee benefits liabilities is shown below:
€’000
2021
2020
Base case
2,069
1,818
Discount rate +0.5%
(95)
(212)
Discount rate -0.5%
258
112
21. Deferred tax assets and liabilities
Deferred tax assets and liabilities are calculated in full on temporary differences under the liability method using the tax
rate of the country in which such differences arisen.
The movement of deferred tax assets is shown below:
€’000
2021
2020
As at 1 January
698
–
Release of losses carried forward (MotorK Italia)
(698)
698
As at 31 December
–
698
The decrease compared to last year is related to the write-off of the deferred tax assets booked in the consolidated
financial statements as at 31 December 2020. For further details please refer to note 12 of this section.
The movement of deferred tax liabilities is shown below:
€’000
2021
2020
As at 1 January
245
315
Business combination
441
–
Recognised in profit and loss
(27)
(70)
As at 31 December
659
245
Details of deferred tax liabilities are shown below:
€’000
2021
2020
Other
77
47
Customer relationship
582
198
Total
659
245
The increase compared to last year is mainly related to the deferred tax liabilities arising from the provisional fair value of
the intangible assets arising from the purchase price allocation exercise in relation to the consideration paid for the
acquisition of Dapda and Fidcar.
22. Other non-current liabilities and provisions
Other non-current liabilities and provisions include:
€’000
2021
2020
Other non-current liabilities
–
816
Current provisions
366
–
Non-current provisions
1,040
–
Total
1,406
816
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The financial statement caption other non-current liabilities as at 31 December 2021 amounts to zero (€0.8 million as at 31
December 2020). The difference compared to last year is due to the release of the provision accrued as at 31 December
2020 as the risk associated is no longer determined by management to be probable. The movement of other non-current
liabilities is shown below:
€’000
2021
Other non-current liabilities as at 1 January
816
Release of the period
(816)
Accrual for the period
–
Other non-current liabilities as at 31 December
–
Provisions classified within current liabilities amounts to €0.4 million (nil as at 31 December 2020) and includes the
provision for certain risk related to litigations in place with some employees who left MotorK and whose level of risk is
assessed as probable by management. Provisions classified within non-current liabilities amounts to €1 million (nil as at
31 December 2020) is related to the estimated provisional deferred consideration to be paid for the acquisition of Dapda.
The movement of current and non-current provisions is shown below:
€’000
2021
Current provisions as at 1 January
–
Release of the period
–
Accrual for the period
366
Current provisions as at 31 December
366
€’000
2021
Non-current provisions as at 1 January
–
Release of the period
–
Accrual for the period
1,040
Non-current provisions as at 31 December
1,040
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23. Shareholders equity
Share capital
The share capital is composed as follows:
2021
2020
Value
(€’000)
Number
Value per share
(€)
Value
(€’000)
Number
Value per share
(€)
Ordinary shares
403
40,328,959
0.01
174
17,352,000
0.01
Deferred shares
–
–
–
2
196,500
0.01
Preferred A-1 shares
–
–
–
28
2,779,100
0.01
Preferred A-2 shares
–
–
–
69
6,923,346
0.01
Total
403
40,328,959
0.01
273
27,250,946
0.01
During the financial year 2021 share capital changed due to the following items:
• conversion into ordinary shares of deferred shares, preferred A-1 shares and preferred A-2 shares before the IPO;
• conversion of the convertible equity notes into 1,242,628 shares in June and September 2021;
• issue of 120,000 shares before the IPO following the exercise of stock options by the Chairman of the Group;
• issue of 11,500,000 shares related to the IPO capital increase in November 2021;
• issue of 215,385 shares related to the acquisition of Fidcar in December 2021. Further details on the transaction are
included in note 24.
Share-based payments
The Group operates an equity-settled share-based remuneration scheme for employees which comprises the Group
Employee Share Option Plan.
During the year ended 31 December 2021, 2,126,641 (1,026,365 in 2020) options were granted to employees. These options
all vest on a straight-line basis over four years, have an exercise price of €0.34, and have a life of 10 years. The earliest date
on which the option may be exercised shall be immediately prior to the date on which an exit, consisting in a share sale, an
asset sale or a listing, occurs.
2021
2020
Weighted
average
exercise price
(€ cents)
Number
of which
exercised
Weighted
average
exercise price
(€ cents)
Number
of which
exercised
Outstanding at 1
January
34
1,685,959
–
34
1,401,374
–
Subdivision of shares
Granted during the
year
34
2,126,641
120,000
34
1,026,365
–
Lapsed during the
year (*)
34
(611,017)
–
34
(741,780)
–
Outstanding at 31
December
34
3,201,583
120,000
34
1,685,959
–
of which
vested
2,339,706
1,002,699
unvested
861,877
683,260
(*) The options lapsed when the beneficiary left the Company.
The exercise price of options outstanding at 31 December 2021 and 2020 was €0.34.
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The following information is relevant in the determination of the fair value of options granted during the year under the
equity-settled share-based remuneration scheme operated by the Group:
2021
2020
Option pricing model used
Black-Scholes
Black-Scholes
Weighted average share price at grant date (€)
6.5
3.74
Exercise price (€)
0.337
0.337
Weighted average contractual life (years)
10
10
Volatility
32%
32%
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any
expected changes to future volatility due to publicly available information. Historic volatility is estimated looking at the
five-year, 50-day median volatility of a sample of comparable companies operating in the software industry listed on the
European stock market (Euronext).
The share-based remuneration expense comprises:
€’000
2021
2020
Equity-settled scheme
9,714
134
24. Discontinued operations
During the year, management of the Group has reviewed the strategic view of MotorK, focusing on the DealerK business
unit, which has already demonstrated scalability by building on investments made over recent years in R&D, hiring and
acquisitions. An important step in this regard is the decision to sell to a third-party the business unit DriveK. This operation
offers the chance to focus all the strength on one business unit, maximise the value of the Company and complete the
technological transformation. In this regard the Board of Directors of the Company have taken proper action, engaging
advisors and making relevant decisions to complete the transaction in 2021. Due to the commitment of the Board of
Directors and in accordance with IFRS 5 management has decided to classify the DriveK business unit as discontinued in
the consolidated financial statements ended 31 December 2020.
During the year, MotorK management received non-binding offers for the sale of the DriveK business unit, however, the
shortage of automobile chips due to high demand in other sectors of the economy such as computer equipment has
slowed down the sales process. As at the date of these consolidated financial statements the Board of Directors of the
Company and MotorK top management are still committed to selling the DriveK business unit and there are conversations
being had with potential buyers. The sale is forecasted to be completed in 2022 with a price higher than net book value.
Due to the aforementioned reasons and, in accordance with IFRS 5, the results of operations have been reclassified in a
separate caption for each comparable period and assets and liabilities have been classified within assets and liabilities
available for sale. The cash flows attributable to discontinued operations are disclosed separately in this note.
Financial information relating to the discontinued operation is set out below.
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Financial performance and cash flow information
The financial performance and cash flow information presented are for the years ended 31 December 2021 and 2020:
€’000
2021
2020
Revenue
6,325
5,946
Costs for marketing and call centre services
3,853
3,307
Personnel costs
1,529
2,136
R&D capitalisation
(177)
(574)
Other operating costs
717
503
Amortisation and depreciation
–
532
Total costs
5,922
5,904
Operating profit
403
42
Finance expense
–
–
Profit before tax
403
42
Corporate income tax
–
–
Profit after income tax of discontinued operation
403
42
€’000
2021
2020
Net cash flows from/(used in) operating activities
951
2,857
Net cash from/(used in) investing activities
(177)
42
Net cash from/(used in) financing activities
–
–
Net increase in cash generated by the business
774
2,899
Assets and liabilities of disposal group as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as at 31
December 2021 and 31 December 2020:
€’000
31 December 2021
31 December 2020
Intangible assets
1,925
1,748
Trade and other receivables
2,238
3,195
Total assets classified as held for sale
4,163
4,943
Trade and other payables
767
1,166
Employees benefits
118
128
Total liabilities classified as held for sale
885
1,294
Net assets classified as held for sale
3,278
3,649
25. Business combinations
The acquisitions described below were completed by the Company in December 2021 and were made in the context of the
Group’s growth strategy. Please see below for more details. In accordance with IFRS 3, management has decided to
allocate the consideration paid to provisional fair value in the light of the fact that the acquisitions were made in
December 2021.
Fidcar SAS and Liotey Sarl
On 3 December 2021 the Company completed the acquisition of 100% of Fidcar SAS and Liotey Sarl (together, “Fidcar”),
innovative solution providers for automotive retail based in France. Fidcar Group develop innovative e-reputation and
predictive marketing solutions that capture data related to the customer journey and then analyse it with proprietary AI to
determine the retail preferences and habits of customers. This information can then be leveraged to strengthen
customers’ digital marketing efforts and broaden social media presence. Through completion of this business
combination, MotorK will integrate Fidcar’s technology into its SaaS platform and offer these additional solutions to its
customers to help them leverage customer data to drive acquisition and retention.
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The initial consideration paid for Fidcar SAS amounts to €1.5 million (of which €1.4 million through the issue of shares and
€0.1 million in cash). In addition to the initial consideration paid, the sale and purchase agreement regulating the transfer
of shares to MotorK Plc provides with an earn out of €0.6 million related to certain performance of the acquired company
(i) December 2021 cumulative revenue over a certain target; ii) entering into new contract resulting in annual revenue over
a target amount). Such earn out is conditioned to the fact that the previous shareholders of Fidcar (now employees of the
Group) will remain for a certain period as employees of the Group. As provided by IFRS 3 paragraph 55 a) such earn-out is
considered as personnel remuneration and accrued on the Group profit and loss on a straight-line basis over the period of
the conditions. Since the acquisition date, the subsidiary contributed for €0.05 million to the Group consolidated result for
the year and €0.1 million to Group revenue in the consolidated financial statements closed as at 31 December 2021.
The initial consideration paid for Liotey Sarl amounts to €0.4 million in cash. No deferred and contingent considerations
are provided in addition to the initial consideration paid. Since the acquisition date, the subsidiary contributed for
negative €14 thousand to the Group consolidated result for the year and €2 thousand to Group revenue in the
consolidated financial statements closed as at 31 December 2021.
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:
Fidcar SAS
(€’000)
Book value at acquisition date
Adjustment
Restated fair value
Customer-related intangible assets
201
201
Trademark
70
70
Software
54
70
124
Property, plant and equipment
6
6
Receivables
158
158
Cash at bank and in hand
33
33
Payables
(137)
(137)
Deferred tax
(91)
(91)
Total net assets (A)
114
250
364
Fair value of consideration
Cash
66
Deferred consideration
–
Equity
1,400
Total consideration (B)
1,466
Goodwill (B)-(A)
1,102
Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is not deductible for tax
purposes. It mostly represents potential synergies, such as cross-selling opportunities between Fidcar and the Group.
Liotey Sarl
(€’000)
Book value at acquisition date
Adjustment
Restated fair value
Property, plant and equipment
9
9
Receivables
16
16
Cash at bank and in hand
70
70
Payables
(46)
(46)
Total net assets (A)
49
–
49
Fair value of consideration
Cash
400
Deferred consideration
–
Equity
–
Total consideration (B)
400
Goodwill (B)-(A)
351
Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is not deductible for tax
purposes. It mostly represents potential synergies, such as cross-selling opportunities between Liotey and the Group.
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PDA DAPDA, SL and DAPDA Media, SL
On 13 December 2021 the Company completed the acquisition of 100% of PDA DAPDA, SL and DAPDA Media, SL (together,
“Dapda”), a Spanish leader in providing digital tools to automotive retailers.
Founded in 2005, Dapda provides innovative solutions and services to help a broad range of automotive retailers in Spain
digitise their operations and generate and manage leads. The acquisition of Dapda will further diversify MotorK’s customer
base and increase its scale in Spain, a core market for MotorK. MotorK also plans to offer and roll out services from its
integrated SaaS platform to Dapda customers across Iberia.
The initial consideration paid for PDA DAPDA, SL amounts to €4.5 million in cash. In addition to the initial consideration
paid, the sale and purchase agreement regulating the transfer of shares to MotorK Plc provides with a deferred
consideration of €1 million (of which a portion equal to 4/5 to be paid through the issue of share and the remaining part to
be paid in cash) and with an earn out payments in case of certain performance of the company acquired (i) customer
migration to MotorK products; ii) meet the recurring revenue target; iii) meet the customer churn target). Such earn out is
conditioned to the fact that the previous shareholders will remain as employees of the Group for a certain period. As
provided by IFRS 3 paragraph 55 a) such earn-out is considered as personnel remuneration and accrued on the Group
profit and loss on a straight-line basis over the period of the conditions. Since the acquisition date, the subsidiary
contributed for negative €0.04 million to the Group consolidated result for the year and €0.1 million to Group revenue in
the consolidated financial statements closed as at 31 December 2021.
The initial consideration paid for DAPDA Media, SL amounts to €1 million in cash. No deferred and contingent
considerations are provided in addition to the initial consideration paid. Since the acquisition date, the subsidiary
contributed for €0.01 million to the Group consolidated result for the year and €0.1 million to Group revenue in the
consolidated financial statements closed as at 31 December 2021.
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:
PDA DAPDA, SL
(€’000)
Book value at acquisition date
Adjustment
Restated fair value
Customer-related intangible assets
1,402
1,402
Property, plant and equipment
88
88
Receivables
522
522
Cash at bank and in hand
309
309
Payables
(280)
(280)
Deferred tax
(350)
(350)
Total net assets (A)
639
1,052
1,691
Fair value of consideration
Cash
4,502
Deferred consideration
1,004
Equity
–
Total consideration (B)
5,506
Goodwill (B)-(A)
3,815
Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is not deductible for tax
purposes. It mostly represents potential synergies, such as cross-selling and up-selling opportunities between PDA DAPDA
and the Group.
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Deferred consideration is related to revenue performance of the subsidiary in the next years. Management has estimated
the value based on probability to reach the target. The value of undiscounted deferred consideration amounts to €1.3
million.
DAPDA Media, SL
(€’000)
Book value at acquisition date
Adjustment
Restated fair value
Development costs
95
95
Property, plant and equipment
8
8
Receivables
174
174
Cash at bank and in hand
164
164
Payables
(153)
(153)
Total net assets (A)
288
–
288
Fair value of consideration
Cash
957
Deferred consideration
–
Equity
–
Total consideration (B)
957
Goodwill (B)-(A)
669
Goodwill is the excess of the purchase price over the fair value of the net assets acquired and is not deductible for tax
purposes. It mostly represents potential synergies, such as cross-selling and up-selling opportunities between DAPDA
Media and the Group.
Acquisition of FranceProNet SAS
On 1 February 2022 MotorK Group completed the acquisition of FranceProNet SAS (“FranceProNet”), a top-tier French
digital agency specialising in web solutions for the automotive sector. FranceProNet is a trusted partner to dealers seeking
to unlock the full potential of digitalisation, providing them with web design and a highly specialised SEO-first approach
refined over nearly 20 years, while also integrating training, digital marketing and lead generation services.
The initial consideration paid for FranceProNet in February 2022 amounts to €3.9 million (of which €1 million through the
issue of shares and €2.9 million in cash). In addition to the initial consideration paid, the sale and purchase agreement
regulating the transfer of shares to MotorK Plc provides with an earn out of €0.6 million related to certain performance of
the acquired company. The excess of the purchase price over the fair value of the estimated net assets acquired of €0.8
million represents provisional goodwill for the potential synergies, such as cross-selling opportunities between
FranceProNet and the Group. Management will perform the purchase price allocation exercise during the year 2022.
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118
26. Earnings per share
The following table shows earnings per share, calculated by dividing the result for the year by the weighted average
number of ordinary shares outstanding during the year.
For the year ended 31 December
2021
2020
Loss for the period (in thousands)
(23,525)
(5,367)
Loss from continuing operations (in thousands)
(23,928)
(5,409)
Profit from discontinued operations (in thousands)
403
42
Weighted average number of shares
29,872,528
27,250,946
Earnings per share
(0.79)
(0.20)
Earnings per share from continuing operations
(0.80)
(0.20)
Earnings per share from discontinued operations
0.01
–
It should be noted that share-based payments are instruments that could potentially dilute basic earnings per share in the
future (for more information on these instruments reference is made to note 23). However, considering that in periods
analysed a loss from continuing operations was registered, potential ordinary shares were not dilutive as the potential
conversion would decrease the loss per share, in accordance with IAS 33.
27. Post balance sheet events
Loan reimbursement and refinancing
As previously communicated to the market in the first months of 2022 the Group has completed the reorganization of its
financial structure repaying the loan in place with Creval for €0.4 million and refinancing the loan with Illimity Banks by
obtaining fresh liquidity for €1.8 million with a longer maturity date and reducing borrowing costs. The new loan in place
with Illimity Bank is guaranteed by SACE SIMEST for 90% of its principal amount and new financial covenants are in place
to be tested annually, starting from December 2022: leverage ratio (net financial position / EBITDA) and gearing ratio (net
financial position / net equity).
Acquisition of FranceProNet SAS
On 1 February 2022 MotorK Group completed the acquisition of FranceProNet SAS (“FranceProNet”), a top-tier French
digital agency specialising in web solutions for the automotive sector. FranceProNet is a trusted partner to dealers seeking
to unlock the full potential of digitalisation, providing them with web design and a highly specialised SEO-first approach
refined over nearly 20 years, while also integrating training, digital marketing and lead generation services.
The integration of such a company in MotorK Group will leverage the technological expertise and extensive local market
knowledge to further reinforce the strategy of the Group.
28. Translation of foreign companies’ financial statements
The exchange rates used to translate non-Euro zone company’s financial statements are as follows:
2021
Average exchange rate (*)
31 dec 2021
year-end exchange rate
Israeli Shekel
3.7682
3.5159
(*) starting from the incorporation date
The table above reports only the exchange rate applied in 2021 as MotorK Israel Ltd has been incorporated in 2021.
29. Related party transactions
Compensation of key management personnel of the Group
Full details of the compensation of key management personnel are given in the Directors’ remuneration report on pages
56 to 67.
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119
MotorK Plc Statement of Financial Position
€’000
Note
2021
2020
Property, plant and equipment
–
–
Investments
4
53,600
10,271
Non-current assets – security deposits
4
4
Non-current assets
53,604
10,275
Trade and other receivables
5
9,539
175
Cash and cash equivalents
6
24,575
71
Current assets
34,114
246
Total assets
87,718
10,521
Trade and other payables
7
9,761
9,783
Current liabilities
9,761
9,783
Provisions
7
1,040
Non-current liabilities
1,040
–
Total liabilities
10,801
9,783
Share capital
8
403
273
Share premium reserve
8
74,151
12,166
Retained earnings
8
2,363
(11,701)
Total equity
76,917
738
Total liabilities and equity
87,718
10,521
The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006 and has not
prepared its own statement of comprehensive income in these financial statements. The loss after tax of the Parent
Company for the year was €9.7 million (2020: loss of €2.8 million).
Marco Marlia
Chief Executive Officer
5 April 2022
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120
MotorK Plc Statement of Changes in Equity
€’000
Share capital
Share
premium
Retained
earnings
Total
attributable
to equity
holders of
parent
1 January 2020
273
12,166
(9,081)
3,358
________
________
________
________
Comprehensive income for the period
Loss for period
–
–
(2,754)
(2,754)
________
________
________
________
Total comprehensive income for the period
–
–
(2,754)
(2,754)
Contributions by and distributions to
owners
Share-based payment
–
–
134
134
________
________
________
________
Total contributions by and distributions to
owners
–
–
134
134
________
________
________
________
31 December 2020
273
12,166
(11,701)
738
Comprehensive income for the period
Loss for period
–
–
(9,739)
(9,739)
________
________
________
________
Total comprehensive income for the period
–
–
(9,739)
(9,739)
Contributions by and distributions to
owners
IPO issue of shares
115
74,635
–
74,750
Convertible equity notes issue of shares
12
4,638
–
4,650
Other issue of shares
3
1,397
–
1,400
Share-based payment
–
–
9,714
9,714
Earn out reserve
–
–
89
89
Reserve IPO costs
–
(4,685)
–
(4,685)
Capital reduction
–
(14,000)
14,000
–
________
________
________
________
Total contributions by and distributions to
owners
130
61,985
23,803
85,918
________
________
________
________
31 December 2021
403
74,151
2,363
76,917
Share capital represents the nominal value of share capital subscribed for.
Share premium represents amounts subscribed for share capital in excess of nominal value less related costs of share
issues.
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Notes Forming Part of the MotorK Plc Financial
Statements
1. General information
MotorK Plc (the “Company” or the “Parent Company”) is a company incorporated in UK with registered office is Kemp
House, 152 City Road, London, EC1V 2NX.
The Company and its subsidiaries (the “Group” or “MotorK Group”) is a leading software as a service (“SaaS”) provider for
the automotive retail industry in the EMEA region.
The Group offers a cloud-based holistic SaaS platform (named “SparK”) to support the full vehicle lifecycle and the entire
customer journey. SparK can be used to manage the digital presence of a small single showroom dealer as well as support
the sales and marketing functions of a regional network of franchise dealerships for an automotive OEM across EMEA.
On 13 October 2021 for the purposes of re-registering as a public company in the light of the listing the Company has
reduce its capital for an amount of €14 million.
On 5 November 2021 the Company, after the re-registering as a public company, listed 11,500,000 shares (approximately
28% of the issued share capital) on Euronext Amsterdam. As of 31 December 2021, the main shareholders of the Parent
Company are Marco Marlia, original founder and CEO of the Group who hold approximately 13.6% of the share capital, and
83 North, who directly holds approximately 20% of the share capital.
2. Accounting policies
Basis of preparation of financial statements
The Parent Company financial statements of MotorK Plc (the “Company”) have been prepared in accordance with
Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101
Reduced Disclosure Framework and as required by the Companies Act 2006.
The financial statements are prepared under the historical cost convention as modified for financial instruments that are
measured at fair value.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS
101. Therefore, these financial statements do not include:
• certain comparative information as otherwise required by EU endorsed IFRS;
• certain disclosures regarding the Company's capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with other wholly owned members of the Group headed by MotorK Plc.
In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted as equivalent disclosures
are included in the consolidated financial statements of MotorK Plc. These financial statements do not include certain
disclosures in respect of:
• business combinations;
• financial instruments (other than certain disclosures required as a result of recording financial instruments at fair
value);
• fair value measurement (other than certain disclosures required as a result of recording financial instruments at fair
value); and
• impairment of assets.
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122
Investments
Equity investments in subsidiaries are entered at the consideration paid to acquire the company or at the value subscribed
for the incorporation. Management periodically review the value of the investments to detect any possible impairment
indicators. Should such indicators arise an impairment test is carried out to evaluate if book value is higher than the
greater between fair value and value in use. Value in use is determined with a discounted cash flow method analysis.
Financial assets
The Group’s financial assets are classified on the basis of the business model adopted to manage them and the
characteristics of the related cash flows.
a) Financial assets valued at amortised cost
Financial assets which have been verified to meet the following requirements are classified in this category:
(i) the asset is held within a business model whose objective is possession of the asset to collect contractual financial
flows; and
(ii) the contractual terms of the asset include cash flows represented solely by payments of principal and interest on the
principal amount to be repaid.
These are mainly receivables from customers, loans and other receivables.
Trade receivables that do not contain a significant financial component are recognised at the price defined for the related
transaction (determined in accordance with the provisions of IFRS 15 – Revenues from customer contracts).
Other receivables and loans are initially recognised in the financial statements at their fair value increased by any directly
attributable accessory costs to the transactions that generated them. At the time of subsequent measurement, financial
assets were shown at amortised cost, with the exception of loans that do not contain a significant financial component,
using the effective interest rate. The effects of this measurement are recognised as a financial income component.
The Group values receivables by adopting an expected loss impairment model.
For trade receivables the Group adopts a simplified approach which does not require periodic changes to the credit risk to
be reported, but rather an expected credit loss (“ECL”) calculated on the entire ECL lifetime to be recorded.
In particular, the policy implemented by the Group involves the stratification of receivables, which are broken down by
homogeneous risk categories. Different write-down percentages are applied to these categories, which reflect the
likelihood of them being recovered. These are based on historical percentages and on any forward-looking data, which
may impact the reasonable likelihood of them being recovered. Trade receivables are written down in full if they are not
reasonably likely to be recovered (e.g. overdue past a certain point, bankruptcy and/or start of legal action).
Write-downs carried out in accordance with IFRS 9 are recognised in the consolidated income statement net of any
positive effects related to releases or restorations of value and are represented under operating costs.
b) Financial assets at fair value recognized through the consolidated income statement (“FVPL”)
Financial assets that are not classified in any of the previous categories (i.e. residual category) are classified in this
category. These are mainly derivative instruments. All derivative financial instruments are measured at fair value.
Derivative financial instruments qualify for hedge accounting only when at the inception of the hedge there is formal
designation and documentation of the hedging relationship, the hedge is expected to be highly effective, its effectiveness
can be reliably measured and it is highly effective throughout the financial reporting periods for which it is designated. If
hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial
instruments are recognized immediately within financial expenses.
Assets belonging to this category are recorded at fair value upon initial recognition.
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123
Ancillary costs incurred on recognition of the asset are immediately recognised in the consolidated income statement. On
subsequent measurement, FVPL financial assets are measured at fair value.
Gains and losses arising from changes in fair value are recognised in the consolidated income statement in the period in
which they are recognised under “Gains (losses) from assets measured at fair value”.
Purchases and disposals of financial assets are accounted for at the settlement date.
Financial assets are derecognised when the related contractual rights expire, or when the Group transfers all the risks and
benefits of ownership of the financial asset.
Cash and cash balances
Cash and cash equivalents include cash, bank current accounts, deposits repayable on request and other short-term and
highly liquid financial investments that are readily convertible into cash, or convertible into cash within 90 days of the
original acquisition date, and are subject to a low risk of changes in value.
Financial liabilities
Financial liabilities include financial payables, payables for leases and trade payables.
Amounts due to banks and other lenders are initially recognised at fair value net of directly attributable transaction costs
and are subsequently measured at amortised cost using the effective interest rate method. If there is a change in the
expected cash flows, the value of the liabilities is recalculated to reflect this change based on the current value of the new
expected cash flows and the initially determined internal rate of return.
Trade payables are obligations to pay for goods or services acquired from suppliers in the ordinary course of business.
Trade payables are classified as current liabilities if they are paid within one year of the balance sheet date. Otherwise,
these payables are classified as non-current liabilities.
Trade and other payables are initially recognised at fair value and subsequently measured using the amortised cost
method.
Financial liabilities are eliminated from the financial statements when the obligation underlying the liability is
extinguished, cancelled or fulfilled.
With reference to the derecognition of a financial liability, new records must be created for its extinction and the
recognition of a new liability if the contractual terms are substantially different. The terms are considerably different if the
actualised value of the financial flow under the new terms, including any fee paid net of the fee received and actualised
using the original interest rate, are at least 10% different from the actualised value of the remaining financial flows of the
original financial liability. If the exchange of debt instruments or the change in the terms are recognised as an extinction,
any costs or fees paid are recorded as income or losses associated with the extinction. If the exchange or modification are
not recognised as extinction, any costs or fees sustained will adjust the accounting value of the liability and will be
amortised over the remaining term of the liability in question.
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year
to which they relate.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this
is when declared by the Directors. In the case of final dividends, this is when approved by the shareholders at the Annual
General Meeting.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of
financial position differs from its tax base, except for differences arising on:
• The initial recognition of goodwill;
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• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit; and
• Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal
of the difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available
against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Share-based payments
The Company provides share-based payment arrangements to certain employees.
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged
to the consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken
into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the
cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Non-
vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all
other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition
is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive
income over the remaining vesting period.
3. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period are discussed below.
Judgements
• Share based payments – Determining the fair value of share-based payments at the balance sheet date represents a
significant accounting estimate. There is inherent judgement in the key inputs into the valuation, such as the
valuation of the Company and the risk-free rate applied.
Estimates and assumptions
• Impairment of investments – Estimate of future cash flows and recoverability of investment.
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4. Investments
€’000
2021
2020
Cost
At 1 January
10,271
11,474
Additions
43,329
–
Disposals
–
(1,203)
_______
_______
At 31 December
53,600
10,271
_______
_______
Impairment provisions
At 1 January
–
–
Movement in year
–
–
At 31 December
-
–
_______
_______
Net book value
53,600
10,271
The investments held by MotorK Plc are the following:
• 100% of the share capital of MotorK Italia Srl, increased by €35 million during the fiscal year 2021 following the capital
increase deliberated in December 2021. The capital increase is due to the Italian company reimbursing the most
significant part of the financial liabilities in place to rebalance the financial structure of the Group, reducing
borrowings costs and ensuring flexibility to the Company to purse its growth strategy.
• 100% of the share capital of Fidcar SAS and Liotey Sarl, innovative providers for automotive retail based in France,
acquired by the Company in December 2021 for €1.4 million and €0.4 million, respectively;
• 100% of the share capital of PDA DAPDA, SL and DAPDA Media, SL, a Spanish leader in providing digital tools to
automotive retailers., acquired by the Company in December 2021 for €5.6 million and €1 million, respectively.
5. Trade and other receivable
€’000
2021
2020
Trade debtors
–
24
Amounts owed from Group undertakings
9,022
–
Prepayments
444
151
Other receivables
73
–
Total trade and other receivables
9,539
175
Receivables towards Group companies is related only to the recharge of certain costs occurred by MotorK Plc during the
year to MotorK Israel. For further details please refer to note 11 Related parties.
6. Cash and cash equivalent
The caption cash and cash equivalent amounting to €24.6 million (2020: €0.07 million) is related to cash available in bank
accounts of MotorK Plc. The increase is related to the IPO proceeds net of cash used for M&A and capital increase in
MotorK Italy.
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126
7. Trade and other payables and provisions
Current
2021
€’000
2020
€’000
Other loans
–
4,650
Trade payables
199
152
Amounts owed to Group undertakings
9,037
4,962
Other taxation and social security
–
9
Other payables
21
–
Accruals
504
10
Total current liabilities
9,761
9,783
Non-current
2021
€’000
2020
€’000
Provisions
1,040
–
Other creditors
–
–
Total non-current liabilities
1,040
–
2021
€’000
2020
€’000
Non-current other creditors are repayable as follows:
1-2 years
–
4,650
2-5 years
1,040
–
1,040
4,650
For details of the payables towards Group companies please refer to note 11.
The €4.65 million convertible loan as at 31 December 2020 was converted into equity during the 2021. The actual number
of shares as a result of conversion to shares is 1,242,628.
Provisions amounts to €1 million (nil as at 31 December 2020) and includes the estimated provisional deferred
consideration to be paid for the acquisition of Dapda.
8. Share capital
Share capital
€'000
2021
2020
Value
(€’000)
Number
Value per share
Value
(€-000)
Number
Value per share
Ordinary shares
403
40,328,959
0.01
174
17,352,000
0.01
Deferred shares
–
–
–
2
196,500
0.01
Preferred A-1 shares
–
–
–
28
2,779,100
0.01
Preferred A-2 shares
–
–
–
69
6,923,346
0.01
Total
403
40,328,959
0.01
273
27,250,946
0.01
During the financial year 2021 share capital changed due to the following items:
• conversion into ordinary shares of deferred shares, preferred A-1 shares and preferred A-2 shares before the IPO;
• conversion of the convertible equity notes into 1,242,628 shares in June and September 2021;
• issue of 120,000 shares before the IPO following the exercise of stock options by the Chairman of the Group;
• issue of 11,500,000 shares related to the IPO capital increase in November 2021;
• issue of 215,385 shares related to the acquisition of Fidcar in December 2021. Further details on the transaction are
included in note 24 to the consolidated financial statements.
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Annual Report 2021
127
9. Share-based payments
Share-based payments
The Group operates an equity-settled share-based remuneration scheme for employees which comprises the Group
Employee Share Option Plan.
During the year ended 31 December 2021, 2,126,641 (1,026,365 in 2020) options were granted to employees. These options
all vest on a straight-line basis over four years, have an exercise price of €0.34, and have a life of 10 years. The earliest date
on which the option may be exercised shall be immediately prior to the date on which an exit, consisting in a share sale, an
asset sale or a listing, occurs.
2021
2020
Weighted
average
exercise price
(€ cents)
Number
of which
exercised
Weighted
average
exercise price
(€ cents)
Number
of which
exercised
Outstanding at 1
January
34
1,685,959
–
34
1,401,374
–
Subdivision of shares
Granted during the year
34
2,126,641
120,000
34
1,026,365
–
Lapsed during the year
(*)
34
(611,017)
–
34
(741,780)
–
Outstanding at 31
December
34
3,201,583
120,000
34
1,685,959
–
of which
vested
2,339,706
1,002,699
unvested
861,877
683,260
(*) The options lapsed when the beneficiary left the Company.
The exercise price of options outstanding at 31 December 2021 and 2020 was €0.34.
The following information is relevant in the determination of the fair value of options granted during the year under the
equity-settled share-based remuneration scheme operated by the Group:
2021
2020
Option pricing model used
Black-Scholes
Black-Scholes
Weighted average share price at grant date (€)
6.5
3.74
Exercise price (€)
0.337
0.337
Weighted average contractual life (years)
10
10
Volatility
32%
32%
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any
expected changes to future volatility due to publicly available information. Historic volatility is estimated looking at the
five-year, 50-day median volatility of a sample of comparable companies operating in the software industry listed on the
European stock market (Euronext).
The share-based remuneration expense comprises:
€’000
2021
2020
Equity-settled scheme
9,714
134
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Annual Report 2021
128
10. Deferred tax
The Company has estimated trading losses totalling approximately €21 million (2020: €11.3 million). A deferred tax asset of
approximately €1.8 million has not been recognised on the 2021 loss due to the uncertainty as to when the loss will be
utilised.
11. Related party transactions
Compensation of key management personnel of the Group
Full details of the compensation of key management personnel are given in the Directors’ remuneration report on pages
56 to 67.
Transactions with related parties are related to receivables and payables booked towards companies of the Group,
namely:
€’000
2021
2020
Trade and other
receivables
Trade and other
payables
Trade and other
receivables
Trade and other
payables
MotorK Italia Srl
–
5,162
–
4,962
MotorK Israel Ltd
9,022
3,875
–
–
Total
9,022
9,037
–
4,962
Strategic Report Corporate Governance Financial Statements Supplementary Information
Annual Report 2021
129
Company Information
Directors
Amir Rosentuler (Chairman / Independent Director)
Marco Marlia (Chief Executive Officer)
Laurel Charmaine Bowden (Non-Executive Director)
Måns Hultman (Non-Executive Director / Independent Director)
Mauro Pretolani (Non-Executive Director / Independent Director)
Company Secretary
OHS Secretaries Limited
Registered Office
Kemp House
152 City Road
London
EC1V 2NX
United Kingdom
Company number
09259000
Independent Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Orrick, Herrington & Sutcliffe (UK) LLP
107 Cheapside
London
EC2V 6DN
United Kingdom
Company Website
www.motork.io
Strategic Report Corporate Governance Financial Statements Supplementary Information
Annual Report 2021
130
Strategic Report Corporate Governance Financial Statements Supplementary Information
Annual Report 2021
131