ANNUAL REPORT 2022

DRIVING TECHNOLOGY FORWARD

COMPANY OVERVIEW

Our heart beats for the

digital automotive industry.

We want to design the

industry’s digital future and

provide our customers –

manufacturers and

dealerships – with the best

possible technology

and support.

Marco Marlia, CEO

1MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

CONTENTS

COMPANY OVERVIEW

01 Highlights

02 At a Glance

04 Our Strategic Roadmap

06 Our Investment Case

STRATEGIC REPORT

10 Chairman’s Statement

12 CEO’s Statement

14 Our Market

16 Our Business Model

18 Our Strategy

22 Our Platform

24 Our ESG Vision

29 Stakeholder Engagement and

S172 Statement

30 Financial and Operating Review

35 Financial and Non Financial KPIs

36 Principal Risks and Uncertainties

CORPORATE GOVERNANCE

42 Corporate Governance Report

43 Governance Overview

48 Non-Executive Directors’ Report

51 Board of Directors

52 Executive Management Team

54 Directors’ Report

58 Remuneration Committee Report

FINANCIAL STATEMENTS

70 Independent Auditor’s Report

77 Consolidated Statement of

Profit and Loss and Other

Comprehensive Income

78 Consolidated Statement

of Financial Position

79 Consolidated Statement

of Cash Flows

80 Consolidated Statement

of Changes in Equity

81 Notes Forming Part of the

Consolidated Financial Statements

119 MotorK Plc Statement

of Financial Position

120 MotorK Plc Statement

of Changes in Equity

121 Notes Forming Part of the MotorK Plc

Financial Statements

129 Group Alternative Performance

Measure

130 Company Information

Revenues

€38.5m

2021: €27.6m

Adjusted EBITDA

€0.2m

2021: €0.8m

Acquisitions completed in 2022

2021: 2

Annual recurring revenues

€26.9m

2021: €15.1m

Net cash

€19.2m

2021: €43.2m

Customers

3,200

2021: 2,000

HIGHLIGHTS

ABOUT THIS REPORT

This report is intended to inform

stakeholder groups that have an impact

on, or are impacted by, our business.

This includes customers, investors

and shareholders, regulators and

supervisors, employees, government

authorities and non-governmental

organisations. It aims to give our

stakeholders a balanced overview of our

activities and MotorK’s ability to create

and sustain value. We welcome reactions

and views, which can be emailed to

investors@motork.io. Additional

disclosures are available on

investors.motork.io.



STATEMENTS

This document 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 and are

expressly qualified in their entirety by

the cautionary statements included in

this Annual Report. Without prejudice to

its obligations under Dutch law and

English law in relation to disclosure and

ongoing 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 should be

construed as a profit forecast.



This document is the PDF/printed version

of MotorK’s 2022 Annual Report and has

been prepared for ease of use. The 2022

Annual Report in European Single

Electronic Reporting format (the ESEF

reporting package) is the official.

version. The ESEF reporting package

is available on the Company’s website.

In case of any discrepancies between

this PDF version and the ESEF reporting

package, the latter prevails.

1 ARR is defined as the yearly contract subscription value of the customer base at the end of the reporting

period. This is a non-GAAP measure considered relevant by management and it is considered a Group

alternative performance measure (below the “APM”). Reconciliation with the accounts is provided at page

129 of this Annual Report.

2 This is a non-GAAP measure considered relevant by management and it is considered a Group APM.

Reconciliation with the accounts is provided at page 129 of this Annual Report.

3 It is equivalent to the caption cash and cash equivalents reported in the Consolidated Statement of

Financial Position at page 78 of this Annual Report.

4 Including recently acquired companies.

2MotorK Annual Report 2022

COMPANY OVERVIEW

AT A GLANCE

WE ARE

Integrations

200+

automotive-specific features

Our platforms

Our open and scalable automotive retail

platform, SparK, enables dealers and

OEMs to move in step with changing

consumer behaviour by integrating

sales, marketing, and operations

activities into a single, cost-effective

outsourced solution.

SIMPLIFYING THE

DIGITAL LANDSCAPE

We are a leading and

fast-growing software as



for the automotive retail

industry in the Europe,

Middle East and Africa

(EMEA) region.

We empower car dealers and original

equipment manufacturers (OEMs) to

improve their customer experience

through a broad suite of fully integrated

digital products and services.



TECH MINDSET,

AUTOMOTIVE FOCUS

B2B SaaS

Platform

3MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Retail customer base

3,200

incl. recently acquired companies

Innovation is at the heart of our DNA

Read more on Page 19

Everything we do is aligned

to achieve our vision.

OUR APPROACH

5MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

STOCK

AUTOMATION

INFRASTRUCTURE

REPUTATION

CONTENT

ENGAGEMENT

ONLINE SALES

DATA & ANALYTICS

CRM

ADVERTISING

OUR PRODUCTS

Advertising

Intuitive marketing tool to run

automated and high conversion

campaigns

Advanced CRM

Top-notch auto CRM to centralise

operations and turn leads into deals

Engagement

Solution for managing review activities

and driving online reputation

E-Reputation

A unified customer service platform

for more connected conversations

AI Marketing

Predictive marketing instruments to

create customised campaigns for

clusters of users

OUR VISION IN ACTION

The launch of the SparK platform in 2022 was a milestone in our journey

to fulfilling our vision.

SparK is our modular platform comprising an innovative suite of solutions

enabling the integrated management of the entire customer journey.

Digital Showroom

Ready-to-use automotive website that

enables dealers to maximise traffic

acquisition

6Annual Report 2022

MotorK is well positioned to support

the key players in the automotive

industry in terms of scale, product

suite and regional exposure.

OUR INVESTMENT CASE

COMPANY OVERVIEW

OUR INVESTMENT CASE

R&D investments of revenues

37%

2021: 28%

API integrations

200+

DIFFERENTIATED SOLUTIONS

• First at-scale, one-stop-shop SaaS

platform for automotive retail

• Attractive features support

customers throughout

vehicle lifecycle

• Extensive app and solutions

partner ecosystem

• Open, scalable and

integrated technology

• Ongoing investment in innovation

and product launches

Find out more:

Pages 22-23

7MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Annual recurring revenue

€26.9m

+78% from 2021

Addressable market

€1.4bn

in EU4

+ UK

Average contract value

€17.8k

2021: €15.1m

Adjusted EBITDA

€0.2m

Acquisitions

since 2016

Market share

Net revenue retention

122.4%

2021: 99.8%



• Sizeable addressable market,

still largely underserved

• Well positioned in terms of scale,

product suite and regional

exposure in EMEA to leverage

consolidation opportunities in

a highly fragmented market

CLEAR STRATEGY FOR GROWTH

• Innovate: ongoing investment in

innovation to extend product

categories and embrace

industry trends

• Land & Expand: upselling

and cross-selling to loyal

and growing customer base

• Consolidate: selected acquisitions to

enter new markets and expanding

presence in existing markets to

consolidate market share and

strengthen position as

European leader

SOLID FINANCIAL PERFORMANCE

• Strong growth, both organic

and via acquisition

• Recurring revenues from SaaS model

• Profitable, with strong

margin potential

• Exceptional unit economics

driving organic growth

• Track record of successfully

integrating acquisitions

Find out more:

Page 70-130

Find out more:

Pages 14-15

Find out more:

Pages 18-21

1 ARR is defined as the yearly contract subscription value of the customer base at the end of the reporting period. This is a non-GAAP measure considered

relevant by management.

2 EU4: France, Germany, Italy and Spain.

3 ACV is defined as the annual average recurring revenue at the end of each period divided by the number of organic customers. This is a non-GAAP measure considered

relevant by management.

4 NRR is defined as the percentage of the recurring revenue retained from existing customers between January and December, including upsell, cross-sell down sell and churn.

This is a non-GAAP measure considered relevant by management.

5 Disclosure of the calculation is provided in the paragraph 10 of the Notes Forming Part of the Consolidated Financial Statements at page 98 and 99 of this Annual Report.

8MotorK Annual Report 2022

STRATEGIC

REPORT

9MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements



combination of automotive

SaaS products and digital

solutions for dealers to

master their digital lead

generation, management

and nurturing process.

10MotorK Annual Report 2022

“Once again we

have demonstrated

the resilience of

the MotorK business,

delivering another

strong year by

staying true to our

growth strategy.”

A SATISFYING YEAR OF

CONTINUED GROWTH

2022 was an important and successful

year for the Company, marking our first

full financial period as a listed business

on the EuroNext Amsterdam Stock

Exchange. This has enhanced our

standing with our stakeholders and

provided a platform for the growth plan

we set out at the time of our initial public

offering (IPO). As the mobility sector has

faced macroeconomic uncertainty

caused by the conflict in Europe and the

lingering effects of pandemic-related

supply-chain issues, we have remained

focused on deploying our capital into

driving organic and acquisitive growth,

including investment in innovation to

drive our technological leadership.

This approach enabled us to deliver

another strong year of progress

across our key business metrics. I am

particularly pleased that annual

recurring revenue (ARR), our most

important key performance indicator

(KPI), grew by 40% organically (or by

78% including acquisitions) to €26.9

million from €15.1 million in 2021 as the

momentum generated throughout the

year culminated in a record Q4 22

performance. Average annual contract

value (ACV), an indicator of the growth

in multi- and new-product adoption by

our customers, also grew strongly during

the period by 20% to €17.8k. As well as

increasing customer spend we have also

experienced reduced customer churn

and higher net revenue retention. You

can find more detailed financial

information on Page 70-130.

INDUSTRY DEVELOPMENTS

The market in which we operate is

fast-paced and dynamic, with digitisation

seen as a prime factor in enabling

mobility dealerships and enterprises to

track consumers who switch seamlessly

between online and physical touch points

as they move along the path to purchase

their next vehicle. Those who do not

embrace the changes through investment

in technology will miss opportunities to

engage with their customers.

On Page 14-16 we discuss changing

consumer behaviours and how we help

our customers stay in step with them,

creating revenue opportunities and

supporting consumer decision-making

processes. This continues after the

sale has taken place, cementing

the relationship between the two

parties and providing a foundation

for future purchases.

Our integrated, multifunctional and

highly flexible technology platform

SparK now offers our customers a

future-proofed and cost-effective way

to adapt to these changes in the market.

We can connect customers with

consumers across a variety of touch-

points (including websites, mobile sites

and social media platforms) to deliver a

broad range of services via a modular

SaaS subscription. You can find more

details on these services in the market

section of this Annual Report, but

we believe we now offer the most

comprehensive suite of digital solutions

in our market.

CORPORATE DEVELOPMENT

In tandem with driving the financial

performance of the Group, we have also

reshaped our business through merge

and acquisitions (M&A). During the year,

we acquired three businesses that took

our Company into new geographic areas

and provided new platforms for growth,

in line with our aim to complete two to

three acquisitions a year. The acquisition

of FranceProNet

, a digital agency for

the automotive retail industry,

strengthened our position in France.

The Carflow deal allows us to grow our

presence with over 400 dealership and

enterprise SaaS customers in Belgium,

the Netherlands and Luxembourg. The

acquisition of WebMobil24, a seller of

stock management and e-commerce

platforms to German mobility

dealerships, enables us to consolidate

our footprint in a key European market

and provides a rich base of prospective

customers for our one-stop-shop

SparK platform.

During the year, we disposed of our

non-core business to consumer (B2C) unit,

DriveK, in line with the guidance we gave

at the time of the IPO. We are now a pure

B2B SaaS business.



Our vision at MotorK is to be the most

trusted technology partner for mobility

Annual recurring revenue

€26.9m

2021: €15.1m

Organic ARR growth

+40%

STRATEGIC REPORT

CHAIRMAN’S STATEMENT

CHAIRMAN’S

STATEMENT

1 Acquisition of FranceProNet closed in February 2022 and was previously communicated in MotorK’s

2021 Annual Report.

2 ARR is defined as the yearly contract subscription value of the customer base at the end of the reporting

period. This is a non-GAAP measure considered relevant by management.

11MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

IN CONCLUSION

I am extremely proud of what the

MotorK family has achieved in such a

short period and against headwinds that

have intensified during the period. By

sticking with our growth strategy and

investing in our people, technology

and businesses we delivered strong,

resilient growth once again. Industry

demand for technology and digitisation

is accelerating and MotorK is well

positioned to capture the opportunities

this will create.

As ever, my final words are reserved

for our shareholders. On behalf of the

Board of Directors and the MotorK

senior executive team, I would like to

thank you for supporting us throughout

the year. As you will see in the following

pages, we are at the centre of shaping

our industry, our business is in great

shape and our strategy is clear.

Amir Rosentuler

Chairman

OUR PEOPLE

Our people are the lifeblood of our

Company – their energy drives our

innovation, growth and culture as a

business. We have continued to invest

in this talent, welcoming 151 new

colleagues into the MotorK family,

which now comprises 453 SparKers in

11 locations across Europe. My thanks

go out to everyone for their contributions

to our success over the last year.

It is critical that we align our interests with

those of our stakeholders in a transparent

fashion. So, in parallel with the

streamlining of our strategy highlighted

above, we have also worked hard to

ensure we are all united behind a set of

common values that embody our identity

as a business. These values frame how we

conduct ourselves with customers and

with each other, and clearly set out our

qualities as a Company.

In addition to supporting the culture

of the Company, these values are

important in attracting the best talent

to MotorK. We continue to look for

opportunities to bring in fresh talent at

all levels, as our business continues to

evolve and look forward to welcoming

new members into the MotorK family in

the year ahead and beyond.

distribution. As we have grown and

evolved as a business we have taken the

opportunity to refine our strategic

framework to this vision as we

consolidate our position in the market.

As set out on Page 20-21, our

streamlined strategy is focused on three

core elements:

• Innovate – we have a deep

understanding of our industry and act

as game-changers. But we do not

simply embrace change, we shape it.

• Land & Expand – the continual

innovation of our platform allows us

to bring greater benefits to our

customers. By doing more with them,

we can add greater value to their

activities, strengthening our bond

with them.

• Consolidate – our first two elements

drive our organic growth, but we

also aim to accelerate our business

through disciplined M&A. As well

as opening up new markets, we can

bring new technological capability

and customers into the Group.

This approach has been implemented

during the year and its effectiveness is

reflected in our financial results. As our

industry continues to evolve, we believe

that our strategy will deepen our

relationships with our customers and

drive further growth.

12MotorK Annual Report 2022

STRATEGIC REPORT

CEO ’ S STATEMENT

“In 2022, we demonstrated again

the resilience of the MotorK business:

in 2022, we grew our business by 40%

organically but also completed three

strategic acquisitions and introduced

the heart of our future business, the

SparK platform.”

Q&A WITH

MARCO MARLIA

13MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Q: For a start Marco, could you please

reflect on 2022?

A: 2022 was for me characterised by the

resilience of the MotorK business,

delivering another strong year by

staying true to our growth strategy

despite a macro-economically

challenging environment. In 2022, we

not only grew our business by 40%

organically but also completed three

strategic acquisitions and introduced

the heart of our future business: the

SparK platform. We reported a record

growth of our annual recurring

revenues, totalling €26.9 million,

compared with €15.1 million in the

prior year, reflecting a growth of 78%.

Furthermore, we have visibility of

additional committed ARR of

€5.2 million, including backlogs,

contractual price increases, and

enterprise deals providing solid

foundations for the coming year.

We were further able to expand our

loyal client base to over 3,200

customers. Our clients spent on

average annually

€17.8 thousand a

year on MotorK products, which

translates to an increase of 20%

year-on-year. Customer churn was

4.5% driving a robust net revenue

retention ratio of 122.4% over the

course of the year, exceeding pre-

pandemic levels. We as SparKers can

be very proud of such record results.

2022 was further a year of investments:

we continued to focus on innovation.

During this period, we launched our

new state-of-the-art software

platform, SparK, following several new

product launches, positioning MotorK

as the one-stop shop vendor for the

automotive retail industry. We

reinvested 37% of our revenues in R&D

and grew the team to 121. But we did

not just grow in R&D, we expanded our

overall team to 453 SparKers

compared with 273 in 2021.

Q: M&A is an important component



are the drivers for activities in 2023?

Are there any geographies that

you need to add to your presence?

A: We continue to invest in M&A targets

across Europe. Our disciplined

approach identifies targets across

multiple territories that would benefit

from becoming part of a larger group.

We evaluate the fit of such potential

targets based on three main

characteristics: the potential for us to

add market share, expansion of

our customer base for cross-sell

opportunities of our existing products,

and innovative product offerings which

complement our existing product

offerings. With the acquisitions of

Carflow and WebMobil24 we entered

new geographies or reinforced our

presence in already existing markets.

With the acquisition of FranceProNet

we have added a rich portfolio of clients

to the MotorK customer base which we

will now migrate to MotorK’s platform.

For 2023, we will continue to focus on

identifying such targets and enhancing

MotorK’s presence as a powerhouse for

the automotive retail industry.

Q: Why was it important to refresh the

Company’s mission and values

during the year?

A: The automotive retail industry has

consistently been affected by change

in recent times, with trends such as

mobility, electrification, and the

introduction of an alternative sales

model: the agent model, meaning

direct sales of OEMs to consumers,

causing drastic changes to the overall

landscape. It would not feel natural

for us to not reinvent ourselves as

partners of dealers and OEMs along

their journey towards mobility

providers. We praise ourselves

to be committed to continuous

innovation through R&D and product

development, we are on a mission to

shape the future of mobility and be

the most trusted technology partner

for the mobility distribution industry.

We have introduced in that course the

MotorK pillars: technology, mobility,

and people. Technology stands for us

being a natively digital company:

innovation is deeply rooted in our

DNA. Mobility: we speak the

language of mobility. We understand

the industry and its challenges and

lastly, people, as we design

technology to create value for

mobility players and customers.

Q: What do you mean by mobility



A: Mobility for MotorK means how

people and goods will move in the

future in an increasingly

interconnected and technologically

advanced world. Some several key

trends and developments are shaping

the future of mobility, including:

• Electric and autonomous vehicles:

The widespread adoption of

electric and autonomous vehicles is

expected to revolutionise the way

people and goods move around.

Electric vehicles are becoming

more affordable and have lower

operating costs than traditional

gas-powered vehicles.

• Shared mobility: The sharing

economy is already changing the

way people use transportation

and the role of our customers –

dealerships and OEMs in this

context.

• Mobility as a service: Mobility as a

service (MaaS) is a concept that

refers to the integration of various

transportation modes into a single,

seamless service. This could include

everything from public transit to

ride-sharing services to bike rentals,

all accessed through a single app

or platform.

Overall, the future of mobility is likely

to be characterised by greater

efficiency, sustainability and

connectivity. As new technologies

continue, new forms of transportation

are likely to emerge, as MotorK we

are excited to provide these

technologies and services to our

clients and reshape the business

model of dealerships.

Q: To wrap it up: what can we be

expecting from 2023?

A: 2023 has started for MotorK with

the Automotive I/O – bridging minds:

Europe’s largest event dedicated to

taking a look into the future mobility

ecosystem and beyond. Business and

industry experts as well as inspiring

speakers met on a stage to discuss the

mobility revolution, digital innovation,

technology, consumer trends, and

much more.

Product wise we continue to expand

our SparK platform with exciting

add-ons, both features and new tools,

to give our customers a competitive

edge. Lastly, for MotorK as an

organisation I believe MotorK has now

reached an appropriate size to seize

the vast and growing market

opportunities. No additional major

investments are required to pursue

sustainable growth at scale and

sustain operational leverage. We,

therefore, continue to focus on our

communicated strategy (see more

on Page 20-21) and MotorK’s path

towards long-term profitability.

1 ACV is defined as the annual average recurring revenue at the end of each period divided by the number of organic customers.

MotorK Annual Report 2022 14

STRATEGIC REPORT

OUR MARKET

TRENDS FOR 2023

AND BEYOND

The automotive sector has seen a

significant drop in sales of new vehicles,

and growth in the price of used cars. In

2022, 4.6%

less cars were sold compared

with the previous year

. Inventory issues

following the production shock on

account of the ongoing shortage of chips

and raw materials are likely to continue

to influence market dynamics medium-

term. Manufacturers are still suffering

from constrained supply of components,

and this is reflected in the availability of

finished products at the dealership.

A key theme for the sector is the

evolution of the go-to market, influenced

by interrelated elements including the

introduction of the agent model by some

OEMs seeking centralised management

of their distribution, and the

development of e-commerce fuelled by

digital “pure players” in the used car

segment, some of whom have been

experiencing financial difficulties. In the

next few months, we may begin to see

whether it will be pure-play digital firms

or traditional players who are more likely

to shape the sales and distribution

models of the global automotive sector.

€1.4bn

addressable market in EU4

+ UK

Market uncertainty, new business

models and challenges along

the digital transformation

journey: automotive retail

is at a turning point.



MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

FROM DEALERS TO

AGENTS: THE FUTURE

OF AUTOMOTIVE RETAIL

The role of dealers will be much

discussed as pilot projects for the

agency model – a sales model where

OEMs will sell cars directly to end-

consumers and dealers act solely as

agents – are launched in several

European countries. Promoted by

several OEMs, this new distribution

model could transform the system,

leading to an increase of sales controlled

directly by the manufacturers.

Factors that have driven this include

a desire to reduce costs through

optimisation of distribution, and to form a

direct relationship between manufacturer

and end users aimed at increasing loyalty

as well as providing an opportunity to

cross-sell additional products.



AND A NEW CUSTOMER

JOURNEY

A significant increase in e-commerce by

car manufacturers may be hindered by

two primary reasons: on the demand

side, it is unlikely that the average

consumer will feel confident to proceed

independently in buying a car entirely

online, particularly if there isn’t an

economic incentive to do so; on the

supply side, purely digital channels do

not yet effectively integrate tools to

promote ancillary items such as

warranties and other value-added

services, areas with some of the most

significant profit margins for dealers

and car manufacturers.

In the short to medium term, with many

dealers embracing digital solutions it is

likely that an assisted omnichannel

approach will prevail rather than

self-service e-commerce.

INDUSTRY STRUCTURE

Another important theme is the

structure of the car manufacturing

industry. For many years, the industry

consolidated as large groups acquired

brands. Electrification has prompted

new players to enter the market,

including startups, providing greater

choice of car brands but at the same

time less differentiation in individual

models. This may affect consumer

loyalty, the buying process and the

ability to attract new customers.

Competitive dynamics at dealership

level have also been changing. The

limited availability of new cars led to

dealers starting to shift their focus to

used cars and, in some cases, to promote

their own product lines, alongside but

independent from the official brand

offer. This is both a reaction to global

economic uncertainty and a reflection

of the evolution of the whole ecosystem.

Brand loyalty is increasingly at risk,

although after-sale programmes and

financing tools provide additional touch

points with customers and the

opportunity to develop long-term

relationships with them.

In a sector undergoing significant

change, digital tools are mission-critical

in automotive distribution.

Online buying experience

72%

of consumers expect to be able to

purchase next vehicle online

MotorK’s market share

“ Electrification has

prompted new players

to enter the market,

including startups,

providing greater

choice of car brands

but at the same time

less differentiation

in individual models.”

1 https://www.acea.auto/pc-registrations/passenger-car-registrations-4-6-in-2022-12-8-in-december/

 

3 Capgemini Invent: Automotive Agency Sales Model, 2020 (arithmetic average of ES, FR, UK, DE).

16MotorK Annual Report 2022

B2B SaaS

Platform

STRATEGIC REPORT

OUR BUSINESS MODEL

Recurring revenue as a % of total revenue

70%

2021: 54%

Net revenue retention

122.4%

2021: 99.8%

Organic ARR growth

40%

INNOVATION AS A GROWTH DRIVER

“MotorK operates an

SaaS model, hosting

Spark mobility technology

platform on the cloud and

allowing customers to

access our software via

the internet.”

A GROWING BASE OF

RECURRING REVENUES

2013:

Website

2016:

Suite

2022:

Platform

1 Definition of recurring revenue is disclosed in the Financial and Operating Review section at

page 30 of this Annual Report.

2 NRR is defined as the percentage of the recurring revenue retained from existing customers

between January and December, including upsell, cross-sell down sell and churn.

17MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

The MotorK SaaS model offers clear

benefits to customers. We invest in

developing the platform’s capabilities,

attracting the best developers across

the industry and bringing them into the

MotorK family. Last year alone, we spent

€14.3 million (or 37% of Group revenue)

on R&D and we remain committed to

high levels of investment. OEM and

dealership customers are now freed

from the cost of installing, maintaining

and upgrading software as well as the

complexities of software security and

hardware management. Instead, they

can specify the applications and

functionality they need through the

SparK platform and even integrate

most other third-party automotive

software packages into it through

SparK’s open APIs.

MotorK’s SaaS platform products are

typically offered to dealerships under

subscription agreements with terms of

between 12 and 36 months (with certain

agreements longer in duration). These

subscription agreements generate

recurring revenues recognised at the

point of delivery of the platforms and

MotorK operates an SaaS model,

hosting our SparK mobility technology

platform on the cloud and allowing

customers to access our software via the

internet. By simplifying and streamlining

access to our innovative software

applications on this flexible platform, we

help our mobility OEM and dealership

customers to digitise their marketing,

sales and other activities at a faster

pace. We enable them to operate more

efficiently and to adapt more rapidly to

changes in consumer behaviour in an

increasingly omnichannel market.

The modular SparK platform supports

the entire customer path to purchase

the full vehicle ownership lifecycle.

Currently, SparK offers around 200

automotive-specific features, providing

a clear competitive advantage over less

well-developed peers. In addition to

offering high levels of functionality, the

platform is also scalable, providing, a

solution for single showroom dealers up

to supporting the sales and marketing

functions of a regional network of

franchise dealerships for an automotive

OEM across EMEA.

produce 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. Average

annual contract values for this customer

group were €17.8k in FY22 (FY21:

€14.9k), with relatively short sales

cycles of around one to two months.

OEM customers sign much larger SaaS

contracts, with contract values starting

at €100,000 and potentially rising to

several million Euros. Due to the scale

and complexity of these deals typical

sales cycles are 9 to 12 months and both

new and renewed contracts are typically

signed on a two-year basis. Most costs

are incurred at the start of the contract

(e.g. installation, sales, etc.) and do not

repeat when a contract is renewed.

18MotorK Annual Report 2022

STRATEGIC REPORT

OUR STRATEGY

Since the Company was established in

2010, the automotive industry has been

radically transformed by the digital

revolution, particularly over the last few

years. A traditional business model that

had worked well for a long time now no

longer meets the needs of customers,

creating an experience gap between

supply and demand. With our

technology, we are playing a leading

role in the digital disruption of

automotive distribution.

The evolution of our industry has created

new opportunities for the Company

as our technology-enabled value

proposition has strengthened. In

order to keep us at the forefront of this

dynamic market we have aligned our

business to achieve our vision – to be

the most trusted technology partner

for mobility distribution.



APPROACH

We are on a mission to shape the

future of mobility and be the most

trusted technology partner for the

mobility distribution.

Geo footprint

countries

Company Overview Strategic Report Corporate Governance Financial Statements

Annual Report 2022 19

The foundation of what we do is built on three pillars:

Technology

As a natively digital company,

innovation is deeply rooted

in our DNA.

Leveraging our extensive R&D expertise, we are able to provide our clients

with state-of-the-art digital solutions to support their business, integrated

into a one-stop-shop platform. Uniquely in our industry, we also combine our

proprietary technology with the most reliable third-party solutions, thus

positioned as a fully-fledged tech partner for automotive (and mobility)

players.

Mobility

We speak the language of mobility:

we understand the industry and

its challenges.

Our colleagues have a deep knowledge of the automotive industry. From

senior managers to operational roles, we work with a common goal in mind: to

embrace the challenges within the industry and identify future-proof solutions

to change the mobility world for the better.

People

We design technology to create

value for mobility players

and customers.

Our colleagues, known as “SparKers“, have a strong desire and commitment to

make a positive impact with what we do and to create value. Working together,

we truly believe we can shape the future of mobility, putting our technology at

the service of our partners and their end customers.

These are the fundamental building blocks of the Company, defining what we do and the markets in which we operate. As we

have set about bringing these together, we have established clear values that guide and inform how we behave as a company.

They tell our people what we stand for as a business and give confidence to our customers that we set ourselves the highest

standards of business conduct and professional behaviour.

Customer obsessed

Our customers are at

the centre of what we

do. We deliver the best

customer experience to

build trust and help

them excel.

Forward thinking

We dare to be

different, always

thinking of the next

big thing. Fighting

the status quo is our

essence, excellence

is our measure.

Results driven

We never stand still,

we get things done.

In everything we do

we want to make

an impact.

Always ambitious

There is a spark in

each of us. We are

bold, we are fast.

We are creative,

we are adventurous.

We are a contagious

force of nature.

Empowering inclusion

We are guided by

integrity and fairness,

we pursue work-life

balance. We are

stronger because

of our differences,

making us a better

company.

Framed by our core values, our SaaS business model determines how we create value for our stakeholder groups (further details

on Page 29). By leveraging our skills, experience and industry knowledge, we focus on driving revenues through the sale of

subscriptions to dealerships and enterprises operating in the mobility space.

20MotorK Annual Report 2022

Innovate

STRATEGIC REPORT

OUR STRATEGY CONTINUED

• Extend product categories

• Maintain healthy R&D

investment levels

• Embrace future industry trends

Revenue allocated to R&D

37%

2021: 28%

Number of staff in R&D

121

We pride ourselves on being a forward-thinking company with innovation in

our DNA, so it is our responsibility to understand the requirements and the

possible ramifications of the industry and act as game-changers. We are not

satisfied with simply making sense of and reacting to the current scenario –

we want to shape the future of mobility.

MotorK has become an established leader in technology for the mobility

market. This position has been built on our focus on innovation. In 2022,

we introduced SparK, our highly versatile platform with functionality that

allows our customers to digitise their activities in a cost-effective manner.

Our platform enables us to deliver greater benefits to our customers,

allowing them to attract more consumers, engage prospects across multiple

digital channels, convert interest into sales and to grow their business. By

doing more with our customers we generate greater value for them and

strengthen our relationships as a result.

Further information on how we intend to extend our leadership through

additional SparK modules can be found on Page 22-23.

• Unlock value from our base

• Increase multi-product adoption



• Strengthen focus: enterprise

customers

Average contract value

€17.8 k

2021: €14.8k

Net revenue retention

122.4%

2021: 99.8%

Churn

4.5%

2021: 6.6%

Our expertise in understanding the needs of our customers and our

innovation of the technical tools and solutions they need to succeed are the

foundations of our strong relationships across the mobility market. We offer

dealerships and OEMs a simple way to engage with our software via the SaaS

model, via a single module if they wish. Relationships with customers start

with the purchase of the core offering of a module, which provides for a

limited number of users. As they become more confident in deploying the

platform in their business we are able to add value to their packages by

offering more functionality to suit their needs.

As a result of this effective go-to-market strategy approach, we have

continued to grow the ratio between ARR and number of customers, growing

our average contract value by 20% to €17.8k

. This translates into net revenue

retention, meaning revenues generated from existing customers grew to

122.4%, while we stabilised our churn rate at 4.5%.

OUR THREE

STRATEGIC ELEMENTS

Land & Expand

1 ACV is defined as the annual average recurring revenue at the end of each period divided by the

number of organic customers.

2 Defined as the percentage of the recurring revenue retained from existing customers between

January and December, including upsell, cross-sell down sell and churn.

21MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Consolidate

• 

• Enter new markets

• Consolidate European leadership

Acquisitions since 2016

Completed transactions in 2022

We complement our strong organic growth with strategic acquisitions across

Europe. Our disciplined approach identifies undervalued targets across

multiple territories that would benefit from becoming part of a larger group.

Our pipeline of prospects remains strong and we anticipate two to three

transactions in the current financial year.

Consistent with the successful approach we have employed since 2010,

we remain focused on identifying target companies that:

• offer potential for us to add market share or to enhance our attractive

recurring revenue model;

• offer potential for expanding our customer base or for cross-sell

opportunities for our existing products; and/or

• develop innovative products which are complementary to our

existing products.

During the year, we completed three acquisitions, bringing the total number

of M&A transactions since 2010 to eight.

• FranceProNet: a French digital agency specialising in web solutions for the

automotive sector, providing dealerships with web design and specialised

SEO tools.

• Carflow: an automotive retail SaaS solutions provider working with more

than 400 car dealer and manufacturer customers, offering a suite of digital

solutions focused on three areas: 1) automated online sales and conversion

processes; 2) lead generation and follow-up; and 3) omnichannel digital

showroom capability. The acquisition gives MotorK a presence in Belgium,

the Netherlands and Luxembourg for the first time.

• WebMobil24: a German software provider of stock management solutions

and e-commerce platforms to automotive dealers and OEMs. WebMobil24’s

large customer base represents an exciting opportunity to sell the SparK

platform and provide customers with an enriched one-stop-shop software

solution. The acquisition enhances MotorK’s presence in the key DACH

mobility markets and creates a platform for further organic and

acquisitive growth.

In line with MotorK’s ongoing focus on the B2B SaaS business, we disposed

of the non-core B2C business unit DriveK to GEDI Gruppo Editoriale and its

wholly owned subsidiary AutoXY during the year. This was highlighted as part

of our strategy at the time of the IPO and we are pleased to have completed

the transaction before the end of the 2022 financial year. The combination of

DriveK and AutoXY creates the largest European online new car marketplace

for consumers in Italy, France, Spain and Germany. In addition to receiving

cash as part of the consideration for DriveK, MotorK also retains a minority

20% stake in the new combined business.

22MotorK Annual Report 2022

STRATEGIC REPORT

OUR PLATFORM

9% of recent vehicle sales took place

entirely over the internet. Looking to

2030, dealers expect online sales to

trend upward significantly; 64% of

dealers said they believe completely

online sales will comprise between

20% to 40% of all sales.

The majority of auto dealerships

believe that the shift to more online

sales will have a positive effect on

dealer profitability, and that

maintaining the right balance between

online presence and on premise sales

will prove critical to offer the best

automotive retail omnichannel

experience. This trend combined with

the features consumers are demanding

leads to growing complexity.

The automotive digital buying

experience starts with the ability to

attract prospects using a variety of

marketing initiatives and tools, whether

the customer is only at the very early

stages of their intention to purchase or is

comparing a company’s offering with its

competitors’. At this stage, the end goal

is to attract the customer by increasing

awareness and simplifying access to the

dealership’s website.

Once a prospect has reached the

dealership’s website, it is key to provide a

seamless browsing experience and

highly engaging tools to minimise

abandon rates and maximise interaction

at each touch point of the browsing

experience. Equally creating customised

content and email sequences for each

prospective buyer is critical to improve

open rate and engagement.

Once the prospect has been engaged,

the dealership must be able to offer a

seamless e-commerce experience, as

well as a timely and personal

communication to prevent leads from

going cold and being attracted by

competitors, from the first contact and

follow-up to interaction during the

negotiation. Once the customer has

purchased, the dealership must make

sure customers are retained and even

become the dealership’s ambassadors.

Dealerships want to be able to deal with

a single provider for the whole lead

management process and beyond, to

have a “one stop shop” and advisor that is

100% specialised in the automotive retail

industry and offers integrated solutions.

The automotive industry is undergoing

extensive change: it’s not only the

evolution of the auto offering, with

electrification being the most significant

automotive trend for 2022. While

electric cars aren’t new, their popularity

has grown in recent years.

The evolution is even more prominent

in consumer demands, with new

expectations and behaviours altering

how OEMs and auto dealerships sell

and interact with consumers.

With digital transformation being

embraced by consumers and auto

dealerships, an omnichannel landscape

has developed. Consumers demand a

comfortable online pre-buying

experience when searching for their next

car, and the industry has already moved

to meet these demands. More and more

dealerships are seeking new and

inventive ways to engage with consumers

online and compete with the wider

buying options consumers have today.

Mainstream adoption of complete

online vehicle purchasing is approaching

a tipping point. Nearly half (46%) of car

dealers surveyed

reported that at least

SparK’s holistic

offering provides

tools to dealers and

enterprises to master

current market

challenges and

remain competitive.

OUR PLATFORM

23MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Web

• Digital showroom

• Automotive-specific content

Lead/CRM

• Advanced lead acquisition

and management

Live assistance

• Live chat and chat bots

• Co-browsing

• Predictive marketing

• Smart data

Stock

• Advanced stock management

360-degree photo app

E-reputation

• Management of online reviews

E-reputation analytics

Reserve and pay

• Vehicle reservation

and online checkout

This is the rationale for developing

the SparK platform. With its holistic

offering, SparK provides the tools to

dealerships to master current market

challenges and to remain competitive.

SparK 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.

SparK is an SaaS integrated modular

offering with a variety of products such

as user-friendly and easy to maintain

web solutions designed for the

automotive industry that offer optimal

SEO performance and enhanced

browsing speed, together with improved

web visitor engagement and interaction

leading to increased inbound organic

traffic, improved browsing experience

and higher lead generation.

Modules include a powerful knowledge

base for enriched and insightful

automotive stock data to instantly

publish vehicles on multiple portals with

the best media and data enabling

dealers to sell more vehicles sooner and

leading to improved stock turnaround.

The platform also provides a simple way

to instantly collect customer feedback

and improve e-reputation by

automatically requesting and addressing

customer reviews in order to generate

more positive reviews and improve

Google rating to both attract new

customers and retain existing customers.

Automotive retailers can also enjoy an

intuitive unified CRM tool designed to

manage relationships with customers

and optimise the sales process by

automating lead distribution and

follow-up activities and generating

ongoing marketing campaigns with

no manual intervention by building

automated workflows to boost lead

generation, nurturing and conversion,

as well as employee productivity.

Finally, dealerships can implement

targeted marketing campaigns to

existing customers by forecasting their

future servicing needs with the power of

AI, leading to after-sales service and

maintenance lead generation and

incremental revenue.

SparK is the easy way for automotive

retailers to offer their customers

an end-to-end seamless digital

buying experience.

1 Source: PwC 2022 Car Consumer and Dealer https://www.pwc.com/us/en/industries/industrial-products/library/automotive-consumer-and-dealer-trends.html

Over

200

integrations

24MotorK Annual Report 2022

STRATEGIC REPORT

OUR ESG VISION

At MotorK, we have always operated to

the highest standards of integrity and

ethical conduct. As we work towards

achieving our vision of being the most

trusted technology partner for mobility

distribution, we strive to be a supportive

employer, a good corporate citizen and

to make a positive contribution to our

local communities. We recognise the

importance of sustainability in our

business and the positive impact we can

make. Although we remain at a relatively

early stage in our ESG journey, we have

taken steps to formalise our commitment

and approach to sustainability.

We report our approach against five

pillars, outlined below.

Colleagues

• Engagement

• Equity, diversity and inclusion

• Training and development

• Health, safety and wellbeing

Customers

• Solutions to help customers improve

sales and work more efficiently

Communities

• Fundraising and volunteering

Planet

• Carbon emissions

• Waste

• Recycling

• Offsetting

• Business travel

Governance

• Behaving ethically and responsibly

• M&A

As greater stakeholder attention falls on

operating responsibly, we are working to

bring to the fore the values, behaviours

and characteristics of our business that

already make MotorK a great place to

work, a business that cares for our

colleagues, our communities and the

environment, and that also recognises

there is more to be done.

ENGAGING WITH OUR



Our culture encourages engagement,

which is reflected in strong participation

in our six-monthly employee surveys,

and we do our best to listen closely

and respond meaningfully to feedback.



stakeholders, including investors,

customers and suppliers.

“In our second year

of reporting on ESG,

we look at what

we have achieved

and redefine future

priorities, so we can

strive to enhance

our positive impact.”

Marco Marlia,

CEO and Co-Founder

RESPONSIBLE BUSINESS

25MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Relevant UN SDGs and targets How we contribute

Goal 3:

Good Health & Wellbeing – Ensure healthy

lives and promote wellbeing for all at all ages

We work to promote the wellbeing of all our colleagues, by

providing support when needed as well as offering wellbeing

activities such as yoga classes, which we are planning to

reinstate after a pause during the Covid pandemic.

Goal 4:

Quality education – Ensure inclusive and

equitable quality education and promote

lifelong learning opportunities for all

Relevant targets: 4.3, 4.4, 4.5, 4.7

Our investment in training and development supports all our

colleagues, ensuring their skills remain relevant to the evolving

needs of MotorK and to wider society.

Growth of our business also promotes job creation, both for

people at the beginning of their careers and for experienced

hires who bring new skills into the business, and we are working

to encourage greater diversity at all levels of our organisation.

Goal 5:

Achieve gender equality and

empower all women and girls

Relevant targets: 5.1, 5.5

Beyond our ‘business as usual’ approach to recruitment

and promotion based on equal opportunities and fair

remuneration, we are in discussions with external partners to

enhance our efforts to attract and retain women at MotorK.

Goal 8:

Promote sustained, inclusive and sustainable

economic growth, full and productive

employment, and decent work for all

Relevant targets: 8.2, 8.5, 8.6, 8.8

Our solutions enhance our customers’ productivity and sales

opportunities, contributing to economic growth, and MotorK’s

own growth creates rewarding and fulfilling employment for

people in the communities in which we operate.

Goal 9:

Build resilient infrastructure, promote

inclusive and sustainable industrialisation

and foster innovation

Relevant targets: 9.5

Our commitment to innovation is at the heart of MotorK’s vision,

mission and values, and is demonstrated by our Tech Team of

121 people and our investment of 37% of revenues in R&D.

Goal 12:

Ensure sustainable consumption and

production patterns

Relevant targets: 12.5, 12.6

We are looking to increase the adoption of sustainable

practices throughout MotorK and are working to improve

measurement and reporting of our impact and initiatives.



We support the UN Sustainable Development Goals (SDGs), a set of 17 global goals developed to define global

priorities and address major societal and environmental concerns. We have identified six priority SDGs and

specific targets that sit beneath those to which we are making a positive contribution.

26MotorK Annual Report 2022

STRATEGIC REPORT

OUR ESG VISION CONTINUED

COLLEAGUES

Our people are core to the success

of MotorK; we trust our SparKers and

work to support their dedication to

providing the best service for each

project and customer.

Engagement

As we continue to grow, we recognise

more than ever the importance of

listening to and acting upon our

colleagues’ views on the future direction

of the business.

We ran our six-monthly employee

engagement survey in June 2022 and

were pleased that 287 colleagues

responded in the most recent, a response

rate of 89%. The results provided

valuable insights into what we are doing

well, and key areas for improvement. In

response to the survey feedback last

year, some of the actions we took

included performing an official salary

review as well as focusing more on

career development.

We were delighted to achieve a

satisfaction score of 3.8/5 (2021: 3.7/5),

reflecting increases across all our

locations and teams. Our strengths

were “Direct Manager and me” (4/5),

“Teamwork”, “Work-life balance” and

“People Engagement” (3.9/5). Areas for

improvement include “Recognition” and

“Development & Promotion” (3.5/5). We

set up reports to examine the results of

the survey and share them with our

Department Leads, and have proposed

initiatives to improve employee

engagement. The survey results were

also reviewed by the Board and senior

leadership team, and key themes were

considered when determining initiatives

and metrics for 2023.

During the year, we refreshed our

values, vision and mission, to reflect the

Company’s evolution and to align with

the next phase of our ambitious growth.

The values reflect our culture and serve

to guide behaviours. As part of

performance evaluations, colleagues

rate themselves on how they live

MotorK’s values, with peers and

managers doing the same.

In October, almost 300 SparKers from

across the Company came together for

MotorKruise, a five-day Mediterranean

cruise focused on teambuilding,

knowledge sharing and celebration of

our results. After a two-year hiatus on

account of the pandemic, it was great to

be together again at a whole-company

offsite gathering.

Priorities

• Update recruitment and other

materials to reflect and embed

updated values

• Develop case studies to demonstrate

how colleagues live MotorK’s values,

and share these internally and

externally

Employee satisfaction score

3.8/5

Total employees

453

as of December 31 2022

Nationalities

Gender balance

Male (65%)

Female (35%)

Non-binary/Non-disclosed (0%)

27MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements



We are determined to nurture our

vibrant and inclusive culture by

embracing diverse perspectives and

empowering those of all backgrounds

and experience levels.

We are pleased to report an

improvement in our gender diversity,

with women now accounting for 35%

of our overall workforce, up from 30%

last year. We recognise the need to

encourage more women into a sector

that has traditionally tended to attract

men, and are in discussions with

specialist external consultants to

identify opportunities to highlight

MotorK, and the sector as a whole, as

an attractive career choice for women.

We seek to recruit people from diverse

backgrounds and are proud that our

colleagues span 28 nationalities. Our

working language is English, although

we do not wish this to be a barrier so

employ three English teachers who hold

regular sessions for employees, a

proportion of which take place during

working hours.

During the year, we added expertise in

equity, diversity and inclusion (ED&I)

to our recruitment team with a view to

ensuring that the whole of our recruitment

process is accessible to people of differing

abilities and impairments. We are in the

undergoing process to ensure one-third

female presence on the Board on

Directors in the next future.

Priorities

Continue work to enhance diversity in

senior roles and throughout MotorK:

• Develop partnerships with schools

and networks of candidates

• Work with external ED&I consultants

• Promote specific issues around

awareness days, e.g. Black History

Month, Pride

Training and development

Particularly in the context of strong

competition for talent, we are acutely

aware of the importance of attracting,

rewarding and retaining our talented

team members. We offer an attractive

mix of market-benchmarked pay,

generous Company benefits, and a

wealth of learning opportunities to ensure

our people feel rewarded and recognised

for the work they do, and supported to

further broaden their existing skill-sets

and progress within MotorK.

We offer a broad programme of training

modules, which we enhanced during the

year by investing in the Udemy platform.

We also introduced a three-month

management training programme to

develop our next generation of leaders

and managers by empowering them to

think strategically, engage with their

teams effectively, and instil an inclusive,

trusting and inspiring work environment.

In addition to our internal training and

development, we also support selected

colleagues by offering sabbaticals and

financial contributions to enable them to

pursue relevant external qualifications.

Executive coaching is available to senior

management, and we operate a

mentoring scheme throughout different

departments. We encourage movement

within the organisation, and support

colleagues looking to broaden their

experience. We take a particularly

proactive approach to this when

integrating acquisitions, to ensure we

retain and develop talent. During the

year, 15% of our people were promoted

internally or given the opportunity to be

seconded to a different department, in

recognition of their achievements and

supporting professional development

and career progression.

Beginning with the engineering team,



defining a competency matrix and

applying salary bands in order to enhance

transparency and coherence, set

expectations and outline career paths.

We implemented a calibration exercise

for our performance evaluation process,

as part of which a multi-departmental

team reviews those who have exceeded

and those who have not met expectations

to ensure consistency and fairness in how

they are assessed.

Priorities

• Roll out skills mapping and

competency matrix more widely

• Deliver professional training

programme to mid-level colleagues

• Establish a technology lab to nurture

innovation and train new graduates

Health, safety and wellbeing

We take the health, safety and wellbeing

of colleagues extremely seriously.

Having invited our colleagues to express

their preferences on working location as

part of our engagement survey, during

the reporting period we formalised

our approach to hybrid working by

consulting with each colleague to

formulate individual agreements, and

defined core working hours to balance

flexibility and work-life balance with the

needs of the business. We firmly believe

there is a role for physical offices, to

facilitate the development and exchange

of creative ideas, as well as for training,

development and social interaction.

We seek to support colleagues as much

as we can, for example allowing flexibility

around the school run, and offering gifts

during sick leave, for example.

New hires

151

without acquisitions

Internal moves

without acquisitions

Training hours

900

in 2022

28MotorK Annual Report 2022

STRATEGIC REPORT

OUR ESG VISION CONTINUED

COMMUNITY

As well as supporting our communities

by providing employment opportunities

and paying taxes, we encourage

colleagues across our offices to

participate in community involvement

and support worthy causes.

CUSTOMERS

We are proud to work with over 20

OEMs and 3,200 dealers, from single-

site operators to international

franchises. These valued customers

expect the highest levels of functionality

and service, and our diverse capabilities

allow us to satisfy our customers’ needs.

Increasingly, clients are seeking

integrated, modular solutions to meet

the needs of their customers, and, with

our SparK platform, MotorK is uniquely

positioned to meet their expectations.

At the heart of our culture is our

commitment to customer centricity,

building on our quality, reliability and

integration with our customers’

processes to develop longstanding

relationships. As one of our core values,

customer centricity is embedded in

everything we do.

Priorities

• Increase performance and

interoperability between our

products, delivering improved results

from the platform

• Undertake annual customer survey

• Provide more local support with the

reorganisation of product specialists

• Release new products to meet the

future needs of dealerships and OEMs

PLANET

Minimising our environmental impact is

a core element of operating responsibly.

We recognise that in order to reduce

our environmental impact, we first need

to understand the carbon footprint of

our operations, mainly through the

impact of our offices and business

travel. We intend to evaluate this during

2023 to identify focus areas and to

provide a baseline against which we

can monitor progress.

Several of our offices already source

energy from 100% renewable sources.

We use LED lights, donate electronic

materials where appropriate and recycle

or dispose of other items in accordance

with the Waste Electrical and Electronic

Equipment Directive.

We have introduced a hybrid working

policy, reducing the need to commute

and the associated emissions. Despite

the relaxation of government measures

to mitigate the Covid pandemic in the

countries in which we operate, we have

continued to prioritise online meetings

over business travel for internal

meetings where appropriate, although

this needs to be balanced with the value

of in-person contact. When travelling,

we encourage colleagues to use public

transport where practical.

We appreciate that initiatives to assess

and reduce our carbon emissions can

take time, so in the meantime we intend

to explore suitable opportunities to

offset our impact.

Priorities

• Develop and embed an

environmental policy

• Undertake environmental assessment

of all offices to create a baseline and

identify priority actions and goals

• Survey colleagues to understand

commuting behaviour

• Create a performance dashboard

to monitor and track performance

• Investigate programmes to offset

our impact

GOVERNANCE

We believe strong governance is core

to making progress across all areas

of our sustainability framework, and

recognise that, as we grow, we have a

responsibility to be more transparent

about our impact on society to ensure

we are balancing the needs of our

different stakeholders.

Behaving ethically and responsibly

Refreshing our vision, mission and values

during the year was an opportunity

to engage our stakeholders, to set out

why we exist as a company and the

behaviours that will guide decision

making and enable us to achieve our

vision. The next step is to set out goals

and metrics to ensure progress, including

how we will act as a responsible business,

which we will share and report on

internally. Read about our vision,

mission and values on Page 18.

In addition to aligning with our values,



to our Code of Conduct, which sets the

highest standards of honesty, integrity

and ethical conduct and respect for the

dignity of others.

M&A

We complement our organic growth

with acquisitions, with cultural fit a

priority among our strict criteria for

evaluating acquisition candidates.

Before making an acquisition, we

undertake rigorous due diligence, and

all acquisitions are approved by the

Board prior to completion. We have

a proven integration process with

detailed integration plans tailored to

each company, developed with the

involvement of those responsible for

implementation. This is designed

to ensure a seamless integration of

our new colleagues so that they feel

part of the MotorK Group family and

adopt our policies and values from day

one. For the same reason, we assess

the employees of acquired companies

on their confidence in working in

English, offering language classes

as appropriate.

29MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

STAKEHOLDER ENGAGEMENT

AND S172 STATEMENT

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

in FY 2022

Employees

• Our services are delivered almost

entirely by our internal workforce,

with limited outsourcing.

• Employees represent our biggest

asset and their associated costs

have the greatest impact on our

profit and loss statement (P&L)

compared to other factors.

• We have a legal and ethical

responsibility for their wellbeing.

• Training and

development.

• Wellbeing.

• Internal communication

and participation.

• Group culture and

engagement.

• Regular employee satisfaction surveys.

• Regular Townhalls open to all employees.

• Access to training both for personal development and

work-related topics.

• Share options plan extended to all employees.

• Company cruise for all employees.

• Comprehensive objectives and key results system put in place

to align Company and personal goals.

• Formalisation of smart working policies in accordance with

current legislation.

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

partnerships.

• Careful selection of

trustworthy suppliers.

• Active participation in the main automotive industry events.

• From March 2023, hosting of a new annual event called

Automotive I/O, nurturing our thought leadership in the

industry.

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.

• Update on

IPO funding.

• Communication

with investors.

• Maintenance and development of the investors’ section on

our website.

• Analyst coverage.

• Met with several potential investors, both one-to-one and in

group meetings

• Quarterly KPIs communication to ensure full visibility of

Group performance.

Regarding how the Group engages with local communities and environment please make reference to the disclosure reported in

the ESG section.

KEY DECISIONS TAKEN IN THE YEAR AND IMPACT TO THE RELEVANT STAKEHOLDERS

The list of the main resolutions made by the Board of Directors of the Company are listed in the paragraph “Meetings of the

Board of Directors” in the Non-Executive Directors’ Report. Key decisions and relevant impact to the relevant stakeholders are

reported below:

• Approval of Company’s results of 2021 and H1 2022 statements ensure awareness and transparency, on the Company

information for key stakeholders with the effect of enhancing relationship, trust and comply with relevant regulations and

regulators requests;

• Selling of DriveK business from which the Group obtains new financial resources to dedicate to its core business operations

and finance the strategic growth to create value for its stakeholders.

• Approval of acquisition of new subsidiaries during the year with the aim of delivering value for the shareholders and for the

employees of the Group and to better serve our customers consistently with our growth strategy.

• Launch of Company share buy-back program aim at sustaining our share long-term incentive plan and having the effect to

sustain the share price and the value of the investments of our shareholders including the employees.

• Approval of the long-term share incentive plan in application of the Remuneration Policy with main goal of aligning the

workforce towards long term value creation goals of the Group.

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.

Throughout the course of the year, the

Board has acted in the way it considered,

in good faith, would be most likely to

promote the success of the Group for

the benefit of its members as a whole.

This section comprises our Section 172

statement, setting out how the Board

has, in performing its duty over the

course of the year, had regard to the

matters set out in Section 172(1)(a)

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. When

taking decisions of strategic importance,

the Board endeavours to balance the

interests of all its stakeholders in a way

that is compatible with the Group’s

long-term growth. The Board considers

its key stakeholders to be its employees,

customers, suppliers and investors,

given that these groups interact

significantly with the business model

and are impacted most in the course

of business operations. It is through

regular engagement with these

to (f) of the Companies Act 2006,

which are as follows:

a) The likely consequence of any decision

in the long-term;

b) The interests of the Company’s

employees;

c) The need to foster the Company’s

business relationship with suppliers,

customers and others;

d) The impact of the Company’s

operations on the community and

the environment;

e) The desirability of the Company

maintaining a reputation for high

standards of business conduct; and

f) The need to act fairly as between

members of the Company.

30MotorK Annual Report 2022

STRATEGIC REPORT

FINANCIAL AND OPERATING REVIEW

GROUP PERFORMANCE

OVERVIEW

During the financial year ended

31 December 2022, the Group added to

the excellent growth of the previous

years demonstrating the success of the

strategic initiatives put in place by

management. Revenue increased by

40% to €38.5 million compared with

€27.6 million in FY 2021 (of which 14%

organic). The performance was led

principally by the growth of SaaS

platform revenue, which increased by

73% compared with FY 2021, and was

also enhanced by €7.1 million by the

companies acquired during 2022.

During the year, we also remained true

to the other pillar of our strategy,

investment in innovation, with total R&D

expensed reaching 37% of our total

revenue, up from 28% in FY 2021. In

terms of profitability, Adjusted EBITDA

closed positive at €0.2 million.

In order to fund our growing business

and the required investments, we made

a conscious use of our cash: at the end

of FY 2022 we held liquidity for €19.2m,

enabling us to fund our business and the

future organic growth plans.

Further details of Group performance

are provided in the paragraphs on the

next page.

FINANCIAL AND

OPERATING REVIEW

Adjusted EBITDA

€0.2m

Revenue growth

40%

Revenue

€38.5m

We confirmed the excellent

growth track of the previous

years demonstrating the success

of the strategic initiatives put in

place by management.

31MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

RESULTS FOR THE YEAR

€’000 2022 2021

Revenues 38,547 27, 560

Cost for customers media services (7,028) (6,654)

Personnel costs (25,916) (17,553)

R&D capitalisation 8,707 3,490

Other costs (14,076) (6,008)

Adjusted EBITDA 234 835

Exceptional costs (3,545) (3,242)

Stock option plan cost (1,543) (9,714)

EBITDA (4,854) (12,121)

Depreciation and amortisation (8,013) (4,235)

EBIT (12,867) (16,356)

Finance costs (1,235) (4,818)

Finance income 231 11

Loss before tax (13,871) (21,163)

Corporate income tax (140) (2,765)

Loss – continued operations (14,011) (23,928)

Profit – discontinued operations 6,734 403

Loss for the period (7,277) (23,525)

Revenue

2022 Group revenue amounted to €38.5 million compared with €27.6 million in FY 2021, an increase of 40% year-on-year.

Revenue by product and service line

€’000 2022 2021

Year-on-year

change

SaaS platform revenue 28,158 16,304 73%

Digital marketing revenue 7,210 7,674 (6%)

Other revenue 3,179 3,582 (11%)

Total 38,547 27,560 40%

The increase compared with the previous period was led by the performance of SaaS platform revenue amounting to

€28.2 million, an increase of 73% compared with the previous period. The increase is led by organic growth (36% year-on-year)

confirming the success of the commercial launch of the Spark platform and by revenue acquired through M&A in 2021 and

2022, amounting to €7.2 million (of which €6 million SaaS revenue).

As a result of the SaaS platform performance, recurring revenue reached 70% of the total, up 16 p.p. from the prior year (when

this represented 54% of total revenue) and in line with management expectations for the year. Management believes this is an

important indicator of the resilience of our growth.

€’000 2022 2021

Year-on-year

change

Recurring revenue

27,084 14,820 83%

Contract start-up revenue 1,074 1,484 (28%)

SaaS platform revenue 28,158 16,304 73%

Recurring revenue as % of total revenue 70% 54% 16%

SaaS platform revenue as % of total revenue 73% 59% 14%

1 It includes revenue from SaaS platform contracts split into two different performance obligations as provided by IFRS 15: revenue related to the delivery of the

access to the platform and revenue related to post-contract support activities.

The principal geographical market continues to be Italy, representing 67% of Group revenues in FY 2022. The proportion of

revenues from Italy reduced by 13 p.p compared with the previous year due to acquisitions made in France, Spain and Germany.

With the acquisition of FusionIT in FY 2022, the Group entered a new geographic market for the first time since the IPO,

establishing a presence in Belgium, the Netherlands and Luxembourg and forming a basis for future expansion in the

European market.

32MotorK Annual Report 2022

STRATEGIC REPORT

FINANCIAL AND OPERATING REVIEW CONTINUED

€’000 2022 2021

Year-on-year

change

Italy 26,014 67% 22,255 81% 17%

Spain 4,428 12% 1,495 5% 196%

France 5,267 14% 1,838 7% 187%

Germany 1,282 3% 1,972 7% (35%)

Benelux 1,556 4% – – –

Total 38,547 100% 27,560 100% 40%

Opex

Costs, net of development costs capitalised, amounted to €38.3 million in 2022, an increase of 43% compared with the previous

period and in line with the accelerated growth strategy pursued by the Group. The increase compared with FY 2021 is due

mainly to the increase of personnel costs and other operating costs.

The increase of personnel costs to €25.9 million from €17.5 million in FY 2021 is related to the increase in the average number of

FTEs during the year and also by the acquisitions made in December 2021 and during 2022.

€’000 2022 2021

Salaries and other personnel costs 19,973 13,882

Social security costs 5,943 3,671

Total personnel costs 25,916 17,553

The increase in other operating costs to €14.1 million in FY 2022 (compared with €6 million in FY 2021) is related to the change of

consolidation area of the Group due to the M&A put in place in 2021 and 2022 for €3 million and to an organic increase incurred

to sustain further the growth of the Group and to meet the requirements of being a listed Group for €5 million.

R&D investments represent a significant item for the Group, with a marked increase compared with the previous period:

€’000 2022 2021

Year-on-year

change

Total R&D expenses 14,293 7,850 82%

– of which capitalised (8,707) (3,490) 149%

– of which expensed in the income statement 5,586 4,360 28%

Total R&D expenses as a percentage of Group total revenue 37% 28% 9%

Adjusted EBITDA

Adjusted EBITDA for the year was €0.2 million compared with €0.8 million in the previous period, confirming the ability of the

Group to remain profitable during a period of accelerated growth. 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 €3.5 million

(compared with €3.2 million in FY 2021) include exceptional costs incurred for M&A and one-off projects completed during the

year of €1.1 million (€2.6 million during FY 2021), severance payment indemnities and related costs for employees who left the

Group and have not been replaced of €0.6 million (€0.4 million during the FY 2021) and €1.8 million for contingent

considerations related to the acquisitions made during 2021 and 2022 that are automatically forfeited if key employees

terminate and are considered under IFRS 3 as remuneration for post-combination services and consequently recorded in the

profit and loss of the Group.

Stock option plan costs amounted to €1.5 million compared with €9.7 million in FY 2021. The reduction is due mainly to the

vesting of some non-repeatable stock options grants to key employees on the day of the IPO during 2021, mentioned in

the 2021 Annual Report. Full reconciliation of the calculation of EBITDA Adjusted with the Consolidated Statement of Profit and

Loss and Other Comprehensive Income is provided at page 129 of this Annual Report. Please refer to the paragraph “critical

accounting estimates and judgements” at page 93 of this Annual Report for the explanation of the criteria used to identify such

items as exceptional/not recurring costs.

Finance costs

Finance costs for the period were €1.2 million (€4.8 million in FY 2021). The decrease compared with the previous period is

mainly due to the repayment between November 2021 and January 2022 of the financial loans in place on the day of the IPO.

Taxation

Corporate income tax was a negative figure of €0.1 million (a negative €2.8 million in FY 2021) and includes mainly the tax

provision of €0.4 million in France and €0.1 million in Portugal, partially offset by a €0.3 million R&D grant obtained in Italy in

2022. Deferred tax assets on tax losses to carry forward for an amount of roughly €10.6 million have not been recognised due

to the uncertainty in the timing in which such loss will be utilised.

33MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Profit – discontinued operations

Profit for discontinued operations was €6.7 million (€0.4 million in FY 2021) and includes a capital gain of €7.8 million related to

the sale of DriveK, previously classified as available for sale, net of the results of the discontinued business until the date of

the sale.

Loss for the year

Loss for the year was €7.3 million compared with a loss of €23.5 million for the previous period. The reduction compared with the

previous year is related mainly to the €7.8 million capital gain from the selling of the DriveK business unit and to the reduction of

stock option plan costs of €8 million related to the one-off effects in FY 2021 related to IPO.

GROUP CAPITAL STRUCTURE AND FINANCIAL POSITION

€’000 2022 2021

Tangible assets 5,000 3,076

Intangible assets 36,757 17,953

Investments in associated companies 3,538 –

Fixed assets 45,295 21,029

Contract assets 20,734 13,580

Net working capital (2,805) (3,761)

Net assets available for sale – 3,278

Deferred tax liabilities (1,471) (659)

Employees benefit liabilities (1,895) (2,069)

Provisions (4,538) (1,406)

Total invested capital 55,320 29,992

Cash and cash equivalents 19,223 43,257

Financial assets 194 106

Financial liabilities (12,931) (8,958)

Net cash position 6,486 34,405

 61,806 64,397

Fixed assets

Fixed assets were €45.3 million as at 31 December 2022, compared with €21 million as at 31 December 2021. The increase

of €24.3 million was related mainly to goodwill and other intangible assets arising from the allocation of the €15.5 million

consideration paid for the acquisition of companies completed by the Group in December 2022 and €2.5 million of development

costs net of depreciation. The €3.5 million increase in investments in associate companies represents the investment in 20% of

AutoXY S.p.A., the business combination related to the sale of the DriveK business unit.

Contract assets

Contract assets were €20.7 million as at 31 December 2022, compared with €13.6 million as at 31 December 2021. Contract

assets represent the right to bill (net of invoices already issued) related to the SaaS platform 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 with 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 nil as at 31 December 2022, compared with €3.3 million as at 31 December 2021 following

the completion of the sale of the DriveK business unit, classified as held for sale as per IFRS 5 during FY 2021.

Net cash position

Net cash position was a net cash position of €6.5 million as at 31 December 2022, compared with a net cash position of

€34.4 million as at 31 December 2021. Cash and cash equivalents amounted to €19.2 million compared with €43.3 million as of

December 2021. Changes compared with the previous years are explained below in the Group cash movements for the year

table. Financial liabilities amounted to €12.9 million compared with €8.9 million as of December 2021. The increase is due mainly

to the application of IFS 16 to office lease agreements entered into during the year.



Net equity was €61.8 million as at 31 December 2022, compared with €64.4 million of the previous period. Change compared

with the previous year is mainly due to the net result of the year net of 7.3 million net of capital increase occurred during the year

related to the issuance of shares related to the consideration paid in shares for the acquisition made in 2022.

34MotorK Annual Report 2022

STRATEGIC REPORT

FINANCIAL AND OPERATING REVIEW CONTINUED

GROUP CASH MOVEMENTS FOR THE YEAR

€’000 2022 2021

Cash and cash equivalents at the beginning of the period 43,257 11,824

Adjusted EBITDA from continuing operations 234 835

Decrease/(increase) in working capital 618 763

Decrease/(increase) in contract assets (7,154) (3,376)

Operating free cash flow (6,302) (1,778)

Taxes paid (150) (127)

Cash flow from investing activities – tangible assets (315) (132)

Cash flow from investing activities – R&D (8,760) (3,552)

Free cash flow (15,527) (5,589)

Exceptional items (1,773) (2,681)

Free cash flow from discontinued operations 3,051 774

Cash flow from investing activities – M&A (8,467) (5,350)

Cash flow from financing activities (647) (25,791)

Cash flow from equity movements (694) 70,065

Others (23) 5

Net increase/(decrease) in cash and cash equivalents (24,034) 31,433

Cash and equivalents at the end of the period 19,223 43,257

Operating free cash flow

Operating free cash flow was negative €6.3 million in FY 2022, compared with €1.8 million in FY 2021. Operative cash burn

compared with the previous period was due mainly to the increase in contract assets, which drew cash of €7.1 million in 2022

compared with €3.4 million in 2021.

Free cash flow

Free cash flow was negative €15.5 million in FY 2022, compared with €5.6 million in FY 2021. Cash burn compared with the

previous period was due to operating free cash flow and the €5.2 million increase in R&D investments compared with FY 2021.

Cash flow from investing activities – M&A

Cash flow from investing activities amounted to negative €8.5 million and represents the consideration paid for the acquisition

of the entities forming the FranceProNet business (FranceProNet SAS and SFD SAS – France), the CarFlow business (FusionIT

NV– Belgium) and WebMobil24 business (ICO international GmbH – Germany) net of the cash acquired.

Cash flow from financing activities and equity movements

The cash flow from financing activities is negative for €0.6 million and is mainly related to fresh liquidity obtain during the year for

€2.1 million net of bank loan repaid for €0.5 million, interest paid for €1 million and lease repayment for €1.1 million. Cash flow from

equity movements is negative for €0.7 million due to the buy-back programme put in place by the Group during the year 2022.

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 dividends to its shareholders in the foreseeable future.



END OF THE FINANCIAL YEAR

On 14 February 2023, in line with the M&A strategy pursued by the Group, MotorK Italia S.r.l. issued to Smart Mobility Services

Spain S.L. a convertible equity loan, convertible at the sole discretion of MotorK, for an amount of €150,000.00 with a due date

of 31 December 2023.

OUTLOOK

The international context of the first months of FY 2023 continues to appear challenging. Inflation rates in the area where the Group

operates are still significant and the increase of interest rates applied by international central banks seems not to be over. Despite the

difficulties of the context, MotorK Group has a strong net cash position ensuring flexibility for future investments. The Group will

pursue its stated strategy of growing revenues both organically through the expansion of the business with the current customer and

with customers acquisition and with possible M&A transaction. In order to sustain the growth, it will keep investing in R&D and, when

necessary, in the staff. Management believes that the current financial resources are sufficient to fund its current operations and the

growth and is committed to obtaining external financial resources to fund extraordinary expansion. The conflict between Russia and

Ukraine appears still far from the solution. Despite the fact that the Group does not operate directly in such geographical area, the

persistence of the conflict may cause long term issues in terms of supply-chain constraints for the economy in general with possible

impact on MotorK customers. 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 guidance of ARR and cash EBITDA mentioned in this Annual Report.

35MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

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

€26.9m

vs €15.1m 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.

This represents the yearly

subscription contract value of

the Group’s customer base at

the end of the reporting

period.

The Group expects ARR

for FY 2023 to be in the

range of €39-43 million.

Revenue growth

40%

vs 43% last year

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 expects

revenue to increase in FY

2023 in order to meet

the target of ARR

mentioned above.

Recurring revenue as % of

total revenue

70%

vs 54% last year

This 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.

Recurring revenue includes

revenues from SaaS contracts

(including both revenue from

the delivery of the access to

the platform and revenue

related to post-contract

support activities).

Target of 70% of FY

2022 has been reached

by the Group. Further

growth is expected in

2023 to meet the target

of ARR mentioned

above.

Organic revenue growth

14%

vs 41% last year

Due to the number of

acquisitions, the Group

makes this measure to

help 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 expects

revenue to increase in FY

2023 in order to meet

the target of ARR

mentioned above.

Adjusted EBITDA

€0.2m

vs €0.8m 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. Disclosure

of the calculation is provided

in the paragraph 10 of the

Notes Forming Part of the

Consolidated Financial

Statements at page 98 and 99

of this Annual Report.

The Group targets for

FY 2023 a negative

Cash EBITDA (adjusted

EBITDA less change of

contract assets and

R&D capitalization)

of approximately

€6 to 8 million.

Adjusted EBITDA margin

vs 3% 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 expects

EBITDA margin to

increase in FY 2023 in

order to meet the target

of ARR and Cash

EBITDA mentioned

above.

Number of employees

453

vs 273 last year

This is a indicator helpful to

measure the growh of the

Group.

Number of employees at the

end of the year.

The Group expects to

have an adequate

numbers of employees

to ensure our growth

targets reported above.

Data shown are related to FY 2022 (compared with the previous year period where needed).

1 It is considered a Group APM.

2 In calculating such KPI, revenues of FY 2021 do not include revenue of the companies acquired during the year 2021 (Dapda, Dapda Media, Fidcar and Liotey).

Revenues of FY 2022 do not include revenue of the companies acquired during the year 2022 and revenue of FY 2022 related to Dapda, Dapda Media, Fidcar

and Liotey.

3 Not including the employees of companies acquired in December 2021.

s

36MotorK Annual Report 2022

STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES



AND UNCERTAINTIES



INTERNAL CONTROL

In order to pursue our growth strategy,

we recognise the importance of

balancing entrepreneurial spirit and

a conscious approach to risk-taking.

As a listed company, we are working

to improve our risk awareness and to

emphasise the importance of risk

management and internal controls.

We strongly believe that controlled

risks will result in long-term value for

our stakeholders.



Our risk governance model is based on

the presence of three different levels of

risk management: the Board of Directors,

the Audit Committee, and Senior

Executive 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 accomplishment

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 cybersecurity, and tax.

Management

Group management is responsible for

enacting guidelines, projects and

activities under the Board of Directors’

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.



Our risk model has been structured to

identify and manage risks that could

endanger the achievement of strategic

objectives in the short and long term. To

facilitate the risk identification process,

we have defined five risk categories:

a) compliance risks;

b) operational risks;

c) financial risks;

d) strategic risks; and

e) external risks.

Evaluation of our risks identified five

Top risks that exceed the Group’s risk

appetite

and require priority mitigation

actions. The Top risks are set out below,

together with a description of the causes

and consequences of each risk and of

the actions taken to mitigate such risks.

Management has also assessed climate

risk and possible related impacts,

concluding that this is not significant due

to the business of the Group, its main

suppliers and the current stage of its

organization. For further details please

refer to the disclosure reported in the

ESG section.

1 The risk appetite is the maximum acceptable level of risk, as established by MotorK.

Our risk governance

model is based on

three different

levels: the Board of

Directors, the Audit

Committee, and the

Senior Executive

Management.

37MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements



Risk Causes of risk  Mitigation

Crisis event

• Absent/ineffective Crisis

Management Plan;

• Absent/ineffective

Business Continuity Plan

and disaster recovery;

• Lack of employee training

about what to do in case of

a crisis or disruptive event;

• No tests and simulations

of plans;

• Lack of a formalised

process for the continuous

improvement of plans;

• Failure to identify and train

the spokesperson in charge

of all communications in

case of crisis.

• Reputational damage;

• Economic damage (in

terms of lower revenues);

• Interruption of MotorK

products and services;

• Legal consequences;

• Delay/interruption of

business processes;

• Decrease in share value.

A Disaster Recovery Plan is in

place. The Plan defines:

i) the criteria to activate it;

ii) roles and responsibilities for

deciding which aspects of the

plan should be implemented;

iii) the process to quickly and

efficiently notify key disaster

recovery resources, staff,

customers, vendors and third

parties in the event of a disaster.

Spokespeople have been defined:

i) Chief Executive Officer;

ii) Executive Chairman; and

iii) Chief Strategy Officer.

Failure to meet

strategic growth

targets

• Failure to meet our targets

of organic growth.

• Failure to achieve synergies

connected with the

integration of the acquired

business.

• Economic damage (in

terms of lower revenues

and of lower cash

generation/higher

cash consumption).

• Decrease in share value.

• Ongoing monthly or more

frequent monitoring of

operational and financial KPIs

to address timely deviations

between results and budgets.

• MotorK Group has established

a dedicated team focused on

postmerger integration

activities to ensure synergies

are met.

• Ongoing monitoring of

postmerger integration KPIs.



Risk Causes of risk  Mitigation

Interruption of



systems and

products due to

a cyber-attack

• Lack of/ineffective security

measures;

• Lack of/ineffective staff

training in terms of

cyber security;

• Unauthorised/incorrect

use of devices by

employees.

• Unavailability of

products and services;

• Operational business

interruption;

• Economic damage in

terms of extra costs for

incident response,

forensic activities, data

and system recovery

costs and/or cyber

extortion;

• Economic damage in

terms of lower revenues

due to business

interruption;

• Reputational damage.

Cyber insurance is in place.

• When a new company is

acquired, its product

infrastructure is totally separate

from MotorK’s, so a vulnerability

in its infrastructure cannot

affect the continuity of

MotorK products.

38MotorK Annual Report 2022

STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Risk Causes of risk  Mitigation

Denial of service

attack

• Lack of/ineffective security

measures;

• Lack of/ineffective staff

training in terms of cyber

security (e.g. due to

phishing attack);

• Unauthorised/incorrect

use of devices by

employees.

• Unavailability of

products and services;

• Economic damage in

terms of extra costs for

incident response,

forensic activities and

data and system

recovery costs;

• Economic damage in

terms of lower revenues

due to business

interruption;

• Reputational damage.

Cyber insurance is in place.

• Contractual conditions with

customers are in place for any

interruption of products and

services due to events not

attributable to the wilful

misconduct or gross negligence

of MotorK.

Data breach

• Cyber-attack.

• Lack of/ineffective security

measures.

• Lack of/ineffective staff

training in terms of

cyber security.

• Misbehaviour of

employees.

• Unauthorised/incorrect

use of devices by

employees.

• Economic damage, in

terms of extra costs for

litigations, incident

response, forensic

activities and data and

system recovery costs.

• Reputational damage.

Cyber insurance is in place.

• Presence of disaster recovery

procedures where roles and

responsibilities to manage an

incident are identified and a

Data Protection Officer has

been appointed.

• Definition and implementation

of a training plan for Data

Processors;

• Definition and implementation

of a Data Breach procedure and

breach notification

management;

• Implementation of security

measures to prevent violations

(antivirus, firewalls, backups,

penetration test).



Risk Causes of risk  Mitigation

Unlawful acts

by internal staff

resulting in

criminal liability

of the Company,

under the Italian

Leg. Dec.

231/2001

• Lack of/ineffectiveness of

Organisation and

Management Model ex

231/2001.

• Ineffective/incomplete

monitoring and control.

• Lack of/incorrect

communication to the

Organismo di Vigilanza

any changes/updates in

the role of senior resources.

• Failure to update the

231-risk matrix in relation

to changes in the company

and/or in the products/

services provided.

• Lack of/ineffective

staff training.

• Pecuniary and inhibitory

penalties.

• Reputational damage.

• Economic damage in

terms of extra costs and

lower revenues.

The Company engaged an external

law firm to carry out an assessment

of corrective and preventive

mitigation controls already in

place (e.g. Code of Ethics,

Whistleblowing Policy, Group

Organisational Chart, formalised

Power of Attorney, formalised

Transfer Pricing Policy).

2 The “Organismo di Vigilanza” is the Supervisory Board pursuant to the Legislative Decree 231/2001.

 CONTINUED

39MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

INTERNAL CONTROL

SYSTEM GOVERNANCE

The Internal Control System (ICS) is

designed to manage the risk of failure to

achieve our business objectives and can

provide reasonable assurance against

material misstatement or loss.

Our ICS Governance Model is based on

the presence of three lines of defence:

Management (First Line), the Risk and

Compliance function (Second Line) and

the Chief Financial Officer (Third Line),

who actively take accountability and

monitor risk and control management.

Management (first line of defence)

Group management is responsible for

enacting guidelines and implementing

adequate, effective and efficient control

measures, to support the organisation in

the achievement of its goals and to

preserve value.

Risk management and compliance

(second line of defence)

Our Risk Management and Compliance

function provides expertise, support,

and challenge on risk and internal

controls related matters (the hiring of a

Risk and Compliance Manager has been

budgeted for the beginning of 2023).

Chief Financial Officer

(third line of defence)

Based on the principles of the Dutch

Corporate Governance Code

, the set-up

of an internal audit function is not a

mandatory requirement. Therefore,

MotorK has empowered the Chief

Financial Officer to perform assurance

and monitoring activities over the ICS

and advise on risk and control matters.

As also foreseen by the Code, and in

case of absence of an internal audit

function, the Supervisory Board assesses

annually whether adequate alternative

measures have been taken to preside

over the third line of defence.

INTERNAL CONTROL

SYSTEM MODEL

MotorK is committed to ensuring

compliance with the following general

principles of control:

• Segregation of Duties: separation of

responsibilities between those who

perform, control and authorise a

specific business activity.

• Policies and Procedures: existence of

guidelines, principles of conduct and

formalised operating procedures.

• Power of Attorney: formal definition

within the Company of authorisation

and signatory powers consistent with

assigned organisational and

management responsibilities.

• Traceability: documenting and

archiving of documentation by the

competent corporate functions to

ensure an adequate level of

traceability of the activities and

controls carried out.

• Conflict of Interest: guarantee that

there are no situations of privileged

relations and conflict of interest,

current or even potential, between a

third party and Group companies

during the execution of company

operations.

• Information Systems: CRM,

enterprise resource planning (ERP)

and Reporting systems ensure proper

automated controls to guarantee

completeness and accuracy of

transactions and data.

• Integration: defined integration

plans for information systems and

control procedures of acquired

entities, to guarantee integrity

of consolidated financial data.





INTERNAL CONTROL

We are working on the enhancement

and continuous improvement of our

risk management and internal control

system, in order to ensure we work to

the highest standards. During 2022,

the following main initiatives were

carried out:

• Enterprise Risk Assessment aimed

at:

– defining the entire spectrum

of risks to which the Company

is exposed;

– defining the associated

risk appetite;

– identifying measures to

mitigate risks;

– prioritising risks; and

– identifying possible areas for

improvement and defining related

action plans.

• for MotorK Italia S.r.l, Risk

Assessment in accordance with

the Legislative Decree 231/2001

aimed at:

– identifying relevant offences

under the Italian Legislative

Decree 231/01;

– identifying and prioritising

risk areas;

– identifying and analysing the

related internal controls; and

– identifying possible areas for

improvement and defining

related action plans.

• Formalisation of policies

and procedures for most

relevant processes;

• Formalisation of Risk and Control

Matrices (RCMs) for most relevant

processes, summarising risks,

controls, and related attributes

(frequency, nature of control,

control objectives).

In the year 2023 the management will

be working to strengthen the internal

control system through the adoption

of new tools and procedures and the

implementation of the improvements

plan consequent to the enterprise risk

assessment performed during 2022.

Impacts of risks on the

performance of the year

Management does not believe that

the aforementioned risks has had a

measurable impact on our performance

during the year.

BOARD APPROVAL

The Strategic Report was approved by

the Board of Directors on 30 March 2023

and signed on its behalf by:

Marco Marlia

30 March 2023

3 The “Dutch Corporate Governance Code” defines principles and best practices regarding the implementation of a robust and clear system of good governance

for Dutch listed companies. It regulates for the Internal Audit Function at: “Principle 1.3 internal audit function”, paragraph “1.3.6 Absence of an Internal

Audit Department”.

40MotorK Annual Report 2022

CORPORATE

GOVERNANCE

41MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

We believe 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.

42MotorK Annual Report 2022

GOVERNANCE

CORPORATE GOVERNANCE REPORT

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 corporate governance

report for the period ended

31 December 2022. 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

governance processes in place relative to

the Group’s size, and with 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 to its corporate governance

policy. The Company complies with

relevant best practice provisions of the

Dutch Governance Code in a manner

consistent with and proportionate 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 45-47 for more details.

During the financial year ended

31 December 2022, the following

changes were made to the Group’s key

corporate governance arrangements

and the following policies were applied:

• I was appointed as Executive

Chairman in June 2022 (information

on my background can be found on

Page 51);

• Laurel Charmaine Bowden was

appointed as a member of the Audit

Committee, replacing me;

• the terms of reference for the

functioning of the Remuneration

Committee, the Audit Committee and

the Selection and Nomination

Committee were applied; and

• a diversity policy including specific

targets was established to promote

diversity within the Board.

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.

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

CORPORATE

GOVERNANCE REPORT

Company Overview Strategic Report Corporate Governance Financial Statements

43Annual Report 2022

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 10

members, including the Chairman and

the CEO, each of whom oversees a

specific aspect of the business. Details

of the Executive Management Team

can be found on Page 52-53.

The regulations regarding the

appointment and dismissal of directors

and supervisory directors and

amendments to the Articles of

Association are included in the section

containing governance documents on

the Company website.

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 that 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) 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 49.

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

MotorK plc is a public limited company

incorporated and registered in England

and Wales. It acts as a holding company

for its subsidiaries, details of which are

set out on Page 81-83. MotorK’s shares

are listed on the Euronext Amsterdam.

MotorK has a two-tier governance

structure comprising 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

two Executive and three Non-Executive

Directors. The Board of Directors

considers that 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

GOVERNANCE

OVERVIEW

44MotorK Annual Report 2022

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

during the year ended 31 December

2022 of each of the below-mentioned

committees can be found on Page 49-50.

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 Laurel Charmaine

Bowden, who replaced Amir Rosentuler

as a member in June 2022. 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.

The Company appointed an external

advisor that supported the Audit

Committee activities.

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 yearly, 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.

Other General Meetings, other than

an Annual General Meeting (AGM),

may be called with no less than 14 clear

days’ notice, according to a special

resolution passed at the 2022 Annual

General Meeting.

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 29.

INTERNAL CONTROLS



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 meets as

required with the external auditor on

matters identified in the course of the

statutory audit.

Furthermore, the Company was

supported in its development of the

internal control and risk management

systems during the 2022 financial year

by an external advisor.

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.

GOVERNANCE

CORPORATE OVERVIEW CONTINUED

45MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

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 several

experts providing (i) support to the

Board of Directors in relation to the

development of the internal control and

risk management systems; and (ii)

regular advice to the Audit Committee in

relation to the activities within its

competencies.

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.

46MotorK Annual Report 2022

GOVERNANCE

CORPORATE OVERVIEW CONTINUED

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.

A number of the options granted

under the Enterprise, Management

Incentives (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. Starting from

the approval of the New long term

incentive stock option share based

Plan the Group has not granted new

option under the EMI Plan.

Best practice provision 5.1.4 which

provides that all the members of

the Remuneration Committee are

non-executive.

Not all the members of the

Remuneration Committee are

non-executive, since the Chairman

has been appointed as an

Executive Chairman in June 2022.

The Board weighted on one side the

level of experience and contribution

that the Chairman is taking to the

benefit of the Remuneration Committee

and, on the other side, the potential risk

of having an Executive Director as

member of the committee, and decided

that the latter were negligible in the

case while the former were tangible.

The Board will reconsider this decision

in case of future significant changes

of the board composition.

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.

Annually, the Non-Executive Directors are

expected to meet in order to discuss their

own functioning, the functioning of the

Board of Directors and its Committees

and the functioning of the Executive

Directors pursuant to best practice

provisions 2.2.6 and 2.2.7 of the Dutch

Corporate Governance Code.

Relevant activities are scheduled in

the first half of 2023.

Due to the extreme workload

they were not able to perform

such activities.

47MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements



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; and

• 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 2022, as well as the

profit for the financial year 2022 of

the Company and the companies

included in the consolidation; and

• the Annual Report provides a true

representation of the situation on

31 December 2022, and the course of

business at the Company and at

companies included in the

consolidation for the financial year

2022 and the Annual Report includes

a description of the material risks the

Company faces.



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 Page 8.

DIVERSITY POLICY

We have adopted a diversity policy

for the Board of Directors, which 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 prevented

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.



The Company currently has no anti-

takeover measures in place.

48MotorK Annual Report 2022

INTRODUCTION

This is the report of the Non-Executive

Directors of the Company over the

financial year 2022, as referred to in best

practice provision 2.3.11 of the Dutch

Governance Code.

With a view to maintaining supervision of

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 Directors.

Details of the current composition of

the Board of Directors, including the

Non-Executive Directors, are set out in

the section “Board of Directors” on

Page 51.

SUPERVISION BY THE



Pursuant to the Dutch Governance Code,

it is the responsibility of the Non-

Executive Directors to supervise the

policies carried out by the Executive

Directors 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. 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.

In this respect, the Group strategy has

been adopted in view and ahead of the

IPO in 2021 and has not been

substantially changed since. The

Non-Executive Directors have therefore

focused on overseeing that the yearly

budget and the main transactions and

strategic decision be in line with the

above stated strategy. This has been

achieved through regular updates with

This report referred to in

best practice provision

2.3.11 of the Dutch

Governance Code.



DIRECTORS’ REPORT

GOVERNANCE



49MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

the Executive Directors and the

executive team, occurred mostly in the

occasion of the Board meetings or in

dedicated sessions. The Non-Executive

Directors have also 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.

There were four meetings of the Board

of Directors during the year 2022.

An overview of the attendance of the

individual Directors per meeting of the

Board of Directors and its Committees

is set out on the table on the right.

Moreover, certain items were submitted

and resolved by the Board of Directors

through specific written resolutions,



During those meetings and/or in the

written resolutions, the key topics were

related to:

• approval of the 2021 Company’s

accounts and reports;

• approval of FusionIT acquisition and

allotment of shares related to M&A;

• hive down of the MotorK Spain

subsidiary from the Company to

MotorK Italia S.r.l.;

• Company’s buy-back programme for

a maximum aggregate amount of

€3 million;

• reduction of capital by cancelling

share premium of an amount equal to

€4 million;

Director

Board of

Directors

Audit

Committee

Remuneration

Committee

Selection and

Nomination

Committee

Amir Rosentuler 4/4 2/2

7/7 1/1

Marco Marlia 4/4 – – –

Måns Hultman 4/4 – 7/7 –

Laurel Charmaine Bowden 3/4 1/2

– –

Mauro Pretolani 4/4 4/4 – 1/1

1 Until his resignation on 19 June 2022.

2 Since her appointment on 19 June 2022.

• contribution in-kind of the Company’s

shareholding in the subsidiaries

DAPDA, DAPDA Media, Fidcar,

FranceProNet, Liotey and SFD to

MotorK Italy S.r.l.;

• appointment of Amir Rosentuler as

Executive Chairman of the Company;

• appointment of Laurel Charmaine

Bowden as member of Company’s

Audit Committee replacing

Amir Rosentuler;

• approval of the Company’s H1 2022

Report, Q3 2022 Results and Adjusted

FY 2022 Guidance;

• change of the registered address of

the Company and appointment of

a new company secretary;

• acknowledgement of the results of

a risk assessment;

• approval of the Long Term Incentive

Plan of the Company and the relevant

subplans; and

• acknowledgement of the draft

2023 budget.

INDEPENDENCE OF THE



The independence requirements

relating to Non-Executive Directors

are set out in best practice provisions

2.1.7, 2.1.8, and 2.1.9 of the Dutch

Governance Code. 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. In the opinion of the Non-Executive

Directors,two out of three Non-

Executive Directors are considered to

be independent in this sense currently.

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

Annually, the Non-Executive Directors

are expected to meet in order to discuss

their own functioning, the functioning

of the Board of Directors and its

Committees, and the functioning of the

Executive Directors, pursuant to best

practice provisions 2.2.6 and 2.2.7 of the

Dutch Corporate Governance Code.

Due to the extreme workload, the

Non-Executive Directors were not

able to perform the aforementioned

evaluation during 2022. They will hold

such an evaluation in the first half

of 2023.

COMMITTEES

Audit Committee

A description of the Audit Committee’s

role, responsibilities and composition is

set out on Page 44. During the year

ended 31 December 2022, the Audit

Committee has selected and

recommend to the Board of Directors

advisors that have supported the

Company development path of the

internal control and risk management

system in 2022; furthermore, the Audit

Committee has been supported by an

external advisor on a permanent basis

during the execution of its duties. In

particular, the Audit Committee

supported and recommended to the

Board of Directors the approval of the

Company’s Annual Report and financial

statements for the financial year ended

31 December 2021 and H1 2022 Report.

The Audit Committee also took note of

the external auditors’ activities for 2021

and the results of the impairment test.

50MotorK Annual Report 2022

GOVERNANCE

 CONTINUED

During the year ended 31 December

2022 the Audit Committee focused also

on the results of the activities performed

for the formalization of the Risk and

Control Matrices (RCMs) for most

relevant processes, summarizing risks,

controls, and related attributes

(frequency, nature of control, control

objectives). The Audit Committee took

note of the results and will monitor the

follow-up activities during the year 2023.

Remuneration Committee

A description of the Remuneration

Committee’s role, responsibilities and

composition is set out on Page 44. The

Remuneration Committee worked on

an long-term incentive plan (LTIP)

(and short-term incentive plan (STIP)

together with external advisors and

recommended the Board of Directors

to adopt the same, together with

French and Israeli subplans.

Furthermore, the Remuneration

Committee recommended to the

Board of Directors the approval and

adoption of the 2021 Remuneration

Report and a Remuneration Policy on

which the Committee worked with

external advisors.

In addition, the Remuneration

Committee approved the engagement

of an advisor for the drafting of the

Directors’ Service Agreements.

Selection and Nomination

Committee

A description of the Selection and

Nomination Committee’s role,

responsibilities and composition is set

out on Page 44. During 2022, the

Selection and Nomination Committee

discussed, amongst others, the

reappointment of the Group’s CEO,

Marco Marlia (he was re-elected on

28 April 2022) and the reappointment of

the Company’s director Laurel Charlaine

Bowden (she will retire in 2023 and has

offered herself for re-election). 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. The plans will be aimed

at retaining the balance in the requisite

expertise, experience and diversity.

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 is 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 relevant subject

matter experts throughout the

Company.

51MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Amir Rosentuler

Executive Chairman

(appointed 11 June 2022)

Marco Marlia

CEO & Co-founder

(appointed 10 October 2014)

Måns Hultman

Non-Executive Director/

Independent Director

(appointed 22 August 2016)

Mr. Rosentuler, 56, Israeli, joined the

Group in 2020. He 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, he 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.

Mr. Marlia, 44 , Italian, co-founded the

Group in 2010. He is a serial entrepreneur

experienced in running digital companies,

having 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 in Italy, and he is author of

books including “Il Metodo DealerK” and

“Wikis: Tools for Information Work and

Collaboration”. Mr. Marlia also earned

a bachelor’s degree in Institutions and

Financial Markets from Bocconi University.

Mr. Hultman, 56, Swedish, 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 a 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.

Laurel Charmaine Bowden

Non-Executive Director

(appointed 14 January 2019)

Mauro Pretolani

Non-Executive Director/

Independent Director

(appointed 22 August 2016)

Ms. Bowden, 58, Brit, 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.

Mr. Pretolani , 57, Italian, is senior partner

at Fondo Italiano d’investimento SGR,

a venture capital fund active mainly

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.

Mr. Pretolani earned a bachelor’s degree

in Business and Economics from Sapienza

Universita di Roma and an MBA from

Harvard Business School.

BOARD OF DIRECTORS

52MotorK Annual Report 2022

GOVERNANCE



EXECUTIVE MANAGEMENT TEAM

In addition to the CEO, the following individuals comprise the Executive Management Team:

Andrea Servo

Global Chief Financial Officer



VP of Corporate Development & IR

Prior to joining the Group in 2021, 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 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.

Mr. Jacquet 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. 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. Mr. Jacquet holds

a Master of Science (MS) degree from Télécom Paris, as well as a

Master of Finance & Strategy from Sciences Po Paris.

Joe Sanchez

Chief Revenue Officer

Yair Pinyan



Joe Sanchez joined the Group in April 2022. Mr. Sanchez has 30

years of experience in 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, e-commerce, and marketing organisations. He has led teams

acquiring and managing billions of dollars in revenue through

various channels. Most recently, Joe spent three years at a private

equity backed SaaS company providing software platforms to

mid-market businesses where he served as the Chief Sales Officer.

Joe was educated in the USA, where he earned a BSFS Degree in

International Economics from Georgetown University School of

Foreign Service in Washington, DC.

Yair is Senior Vice President, Head of R&D at MotorK. As leader

of the Engineering, IT Operations and Quality Assurance teams,

he’s a business enabler in charge of the company’s technology

development, making sure MotorK’s R&D efforts are geared

towards steady innovation.

Yair boasts extensive knowledge of advanced technologies to solve

complex problems and has worked in R&D organisations for over 20

years. He most recently held the role of Vice President of Research

& Development at BKS (Britannica Knowledge Systems), where he

successfully transferred an on-prem product into a SaaS solution,

while managing a remote team of 70 engineers. Previous

experience includes leadership roles at Orbotech Ltd, Correlor

Technologies Ltd., Microsoft and Gteko Technologies Ltd.

Yair holds a Bachelor Degree in Economics and Computer Science

from Bar Ilan University, in Israel, as well as an Executive MBA from

Quantic School of Business and Technology in Washington, D.C.

Nir Erlich terminated his office as Chief Innovation & Product Officer in the Company in January 2023, Tommaso Carboni terminated his

office as Head of Global Sales & Country Manager, Italy in November 2022, and Luisa Corvino terminated her office as Chief Human

Resources Officer in February 2023.

53MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

Jean Pierre Diernaz

Chief Strategy Officer and Country Manager, France

Asaf Polturak

Chief of Staff

Mr. Diernaz 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 opportunities and

challenges of digital transformation. After more than 10 years

at Ford, where he was advertising and marketing services

manager, he joined Nissan in 2005 and was responsible for

general marketing communications for Europe. In May 2010,

he was appointed marketing director EMEA of Infiniti, Nissan

Group’s premium brand. In 2014, he became managing director

of the electric cars business unit for Europe. Mr. Diernaz then

became vice president marketing & digital Europe, responsible

for product launches, pricing strategy, communications and

digitalisation. Mr. Diernaz earned an MBA from ISG (Paris) and

completed the Executive Leadership Program at IESE (Spain).

Mr. Polturak joined the Group in 2020. Mr. Polturak has over 10

years of experience across consultancy, private equity and hedge

funds. Before joining the Group, 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.

Daria Grazzi

Chief Human Resources Officer (appointed in April 2023)

Phillippe Schulz

Chief Customer Officer (appointed in March 2023)

Daria Grazzi, is a long-run professional in the area of people

management, with a rich and varied experience in all aspects of

human resources. She has over 20 years of professional experience

in several industries such as retail and FMCG and industries. In the

past five years transitioned to the technology industry with a focus

on digital companies, in particular, start-ups and scale-ups. Her

main focus and expertise lie in: change management, M&A

processes, and Start-Up as well as expertise in labour legislation

and litigation.

Ms. Gazzi holds a bachelor’s in Law and a master’s degree in

General Management.

Philippe is the Chief Customer Officer, responsible for all entities

having interactions with MotorK Customers in the context of

implementing MotorK solutions and keeping those optimized;

as such, he leads all operational departments, from support to

education and professional services.

Having spent all his career in the software industry for the past

30 years, to include 20 years in focusing around management of

services departments, Philippe has deep expertise of best practices

in this industry. In his immediate previous position, he was Vice

President of professional services for a software company

specialized around CX management, where he was managing

its services divisions across USA, EMEA and APAC. Prior to that

position Philippe has occupied several management positions

while always focusing on the optimization of the interactions

with Customers.

He owns a Master’s in Economics and Social Administration and

graduated from the Institute of Business Administration in the

University of Sophia Antipolis.

54MotorK Annual Report 2022

RESULTS AND DIVIDEND

The consolidated statement of profit

and loss, and other comprehensive

income for the year ended 31 December

2022 is set out from Page 77 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 2022.

DIRECTORS AND CHANGES

TO THE BOARD OF

DIRECTORS AND EXECUTIVE

MANAGEMENT TEAM

The Directors of the Company during the

year ended 31 December 2022 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 2022

are set out on Page 51.

In addition to the CEO, the members of

the Executive Management Team of the

Company during the year ended

31 December 2022 were Andrea Servo,

Etienne Jacquet, Nir Erlich, Jean Pierre

Diernaz, Luigia Corvino Asaf Polturak,

Joe Sanchez, the Company’s Chief

Revenue Officer since April 2022 and

Yair Pinyan, the Senior Vice President,

Head of R&D since June 2022.

Philippe Schulz and Daria Grazzi join the

Group in March 2023 respectively as

Chief Customer Officer and Chief

Human Resources Officer.

Tommaso Carboni terminated his office

as Head of Global Sales & Country

Manager, Italy on November 2022.

Nir Erlich and Luigia Corvino resigned

respectively on 31 January 2023 and

3 February 2023. Their roles will be

covered on an interim basis by the CEO

until replacements are appointed.

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.

The Directors present the

Annual Report together with

the audited consolidated

financial statements and the

audited financial statements.

DIRECTORS’ REPORT

GOVERNANCE

DIRECTORS’ REPORT

55MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

POLITICAL DONATIONS

The Group did not make any political

donations in the financial period.

There are no restrictions as to

voting rights.

FUTURE DEVELOPMENTS

Particulars of any important events

affecting the Company that 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

Page 8 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 on Page 81-83.

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 23 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.

An eventual significant change of the

capital structure might trigger the

change of control clause included in our

financial arrangement with Illimity Bank

to the effect that in case of change of

control of MotorK Plc as defined in the

financial arrangement the total

outstanding financial liability becomes

immediately due and payable.

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 2022 were

as follows:

Director Position Appointed Ordinary shares

Amir Rosentuler Executive Chairman 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 2022:

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%

1 Aggregated Zobito ownership through various vehicles.

Lucerne Capital Management GP, LLC exceed the three % threshold in the first quarter of 2023 totalling its shareholding to 3.01%.

56MotorK Annual Report 2022



MANAGEMENT AND

FINANCIAL INSTRUMENTS

The Group implements a careful

approach to financial risk management.

During 2022, the Group entered into

transactions involving derivative

instruments only related to put option

(and reciprocal call option for the

counterpart) on the sale of 20% equity

investments in AutoXY S.p.A. related to

the business combination of the DriveK

business unit sale. Details of what the

Board of Directors considers to be the

main financial risks facing the Company

are set out under the “Risk identification”

paragraph within the Principal Risks and

Uncertainties section on Page 36.

Risk appetite

MotorK recognises that the

management of risk requires level of

commerciality to enable the business to

meet its joint strategic objectives of

protecting stakeholder interests whilst

creating stakeholder value. The Board

therefore takes responsibility for

determining the nature and extent of the

principal risks it is willing to take in

achieving its strategic objectives.

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.

Regarding currency risk, liquidity risk,

credit risk and uncertainties in the

possibilities to attract financing please

refer to the disclosure reported in the

consolidated financial statements in this

Annual Report.

Regarding significant estimates related

to such risks please refer to the

disclosure of the consolidated financial

statements in this Annual Report.

Risks of possible non compliance

with laws and regulations

The company is exposed to risk of non

compliance with laws and regulations on

a number of areas including taxes,

financial supervision rules and

competition rules.

As relates taxes the Group is generally

making net operating income tax losses

which mitigates the risk of incurring fines

and penalties due to non compliance.

More in general the Group is assisted by

tax professional firms to ensure tax

compliance in all the countries where the

Group operates.

As a listed company we are subject to

financial supervision by the Dutch

authority (AFM). Our legal department

overseas the compliance with the

regulatory framework, assisted by law

firms and using appropriate tools to

manage specific processes like the

whistleblowing and internal dealing.

The market where we operate its highly

fragmented and management believes

that the infringement of competition

rules is inherently low. In case of

extraordinary situations like M&A

management runs appropriate

assessment during the due diligence

phase.



EMISSIONS

Due to the nature of MotorK’s 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 employees.

During 2022, MotorK continued to offer

employees the option of working

remotely. Due to this, GHG emissions,

energy consumption and energy

efficiency data relating to the Group’s

operations, our offices and staff travel

are not significant for the year ended

31 December 2022 and not reported in

the 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 looks forward to

establishing 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 29.



DISCRIMINATION

AND HARASSMENT

The Company seeks to foster a diverse,

inclusive work environment where all

ideas, perspectives, and backgrounds

are considered. Employees are hired on

the basis of objective criteria (such as

knowledge, expertise, proven qualities,

performance and behaviour). No

employee 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”) and also in

accordance with UK adopted IFRS.

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 apply them consistently;

• make judgements and estimates that

are reasonable and prudent;

GOVERNANCE

DIRECTORS’ REPORT CONTINUED

57MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

• 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

Directors’ Report and other information

included in the Annual Report &

Financial Statements are prepared in

accordance with applicable law in the

United Kingdom and the Netherlands.

As at the date of this report, the

Directors, whose names and functions

are listed in the Board of Directors

Report on Page 54, 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 preparing the financial statements,

management has applied going concern

principle based on its assessment of the

Company’s ability to continue as a going

concern. In making such an assessment,

management has considered the strong

cash position of the Group, the

expectation of the Company’s future

performance and the excellent results

in terms of growth during 2022.

Management has prepared a Business

Plan covering the period 2023-2027

showing that the company has the

resources to cover its financial need for

the foreseeable future. As per the

Business Plan, during FY 2023 and 2024

it is forecasted to burn a certain amount

of cash so that cash and cash

equivalents at year end 31 December

2024 will land in a positive territory with

2024 showing a stabilization towards

cash flow breakeven. Sensitivity analysis

over a potential reduction of recurring

revenue respectively of 10% and 20%

have been prepared by management,

showing that the Group has enough

resources to cover its financial need,

even in such conservative scenario, for

the foreseeable future.

Doing the going concern assessment

management has also considered the

potential impacts of the conflict

between Russia and Ukraine, the

increase of inflation rate, the increase of

commodities prices and of cost of living

in the markets where the Group

operates. Such elements have been

taken into account and reflected in the

aforementioned Business Plan. Due to

the nature of MotorK, key digital

suppliers of our customers, management

concluded that such elements does not

have a significant impact on going

concern assessment.

Signed by

Marco Marlia

Chief Executive Officer

30 March 2023

and

Andrea Servo

Chief Financial Officer

30 March 2023

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.

POST BALANCE SHEET EVENTS

On 14 February 2023, in line with the

M&A strategy pursued by the Group,

MotorK Italia S.r.l. subscribed a

convertible equity loan issued by Smart

Mobility Services Spain S.L., convertible

at the sole discretion of MotorK, for an

amount of €150,000.00 with a due date

of 31 December 2023.

RESEARCH AND

DEVELOPMENT

During the year ended 31 December

2022 the Group has incurred R&D

expenses for an amount of €14.3 million

(€7.8 million is 2021) of which €8.7 million

capitalized (€3.5 million in 2021).

APPROVAL BY THE BOARD

OF DIRECTORS

The report of the Directors was

approved by the Board of Directors

on 30 March 2023 and signed on its

behalf by:

Marco Marlia

Director

30 March 2023

58MotorK Annual Report 2022

SECTION 1: 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 has been approved further

to a shareholder vote (by way of

ordinary resolution) at the 2022 AGM.

3. The Annual Report on Remuneration

(the “Report”), which sets out the

remuneration outcomes for 2022 and

how, subject to shareholder approval,

the Committee applied 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 other

member is Amir Rosentuler.

I am pleased to present the

Directors’ Remuneration Report

on behalf of the Board

During 2022, the Committee worked

to develop the Policy in line with 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; and

“In 2022 we worked to develop

the Policy with the aim of

ensuring competitiveness,

alignment, incentivisation

and proportionality.”

Måns Hultman

Chair of the Remuneration Committee

REMUNERATION

COMMITTEE REPORT

GOVERNANCE

REMUNERATION COMMITTEE REPORT

59MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

• adhere to principles of good

corporate governance and

appropriate risk management whilst

ensuring compliance with competitive

market trends and statutory

requirements in 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 2021 IPO 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 that 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 report is clear and

informative.

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 of Executive Directors

and the Executive Management Team

and is responsible for governing the

remuneration policy for the broader

employee population.

Procedure

The following summarises the Policy,

which codifies our existing principles as

previously communicated to potential

investors pre-listing. This Policy was

approved by the Company’s

shareholders at the AGM on April 28,

2022. The Policy applies to payments

made after that date and is available

on the Company’s website.

It is intended that the Policy will apply

for three years starting from its approval

at the 2022 AGM. In light of the

Committee’s efforts to review the Policy

to ensure it allows the Committee to

offer an appropriate and balanced

remuneration package that 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 considered appropriate.

When reviewing the Policy, the

Committee uses scenario analyses to

recognise 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 of 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 a

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 aforementioned

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.

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. The

charts are based on the remuneration

and on the share value at the time the

Policy was adopted.

60MotorK Annual Report 2022

GOVERNANCE

REMUNERATION COMMITTEE REPORT CONTINUED

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).

• Long-term incentive (conditional equity-based award that

vests based on performance).

€0

€200

€400

€600

€800

€1,000

€1,200

€1,400

€1,600

Thousands

Illustration of the application of the policy – CEO

Minimum Target

(without share

price increase)

Maximum

(without share

price increase)

Target, incl. LTI fair

value at grant date

Maximum, incl 50%

share price increase

Fixed pay STI

€200

€350

€750

€800

€1,518

47%

40%

13%

75%

25%27%57%

43% 20%

53%

100%

LTI

€0

€200

€400

€600

€800

€1,000

€1,200

Thousands

Minimum Target

(without share

price increase)

Maximum

(without share

price increase)

Target, incl. LTI fair

value at grant date

Maximum, incl. 50%

share price increase

Fixed pay STI

€324

€648

€324

€905

64%

36%100%50%100%

50%

100%

LTI Total Remuneration

Illustration of the application of the policy – Executive Chairman

Illustration of the application of the policy – CEO

Illustration of the application of the policy – Executive Chairman

61MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

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 market practice

and MotorK’s performance and 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 Executives 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

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 incentive

scheme (every six months or annually).

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.

Performance

measures

Subject to the achievement of certain targets relating to financial (including, but not

limited to, revenues or adjusted EBITDA achievements) or operational (including,

but not limited to, customer satisfaction, geographical expansion, M&A execution)

KPIs, depending on the role.

62MotorK Annual Report 2022

GOVERNANCE

REMUNERATION COMMITTEE REPORT CONTINUED

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,

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 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

is 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 will have discretion to set measures and weightings for awards

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.

63MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

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 Total Shareholder Return

(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 retains discretion to set 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.

Executive Directors are appointed at the AGM for the duration of four years. The terms of service may be terminated by

the Executive Director with a notice period of six months and by the Company with a notice period of 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 of

up to one year’s base salary.

Leaver arrangements

The Company takes into account the terms of service 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,



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 or she is employed

to a third party, circumstances in which the Group company by which he or she is employed ceases to be controlled by the

Company, or such other reason as the Committee may in its discretion decide.

STIP

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.

LTIP

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 two-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 four years and their appointments are subject to termination on 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.

64MotorK Annual Report 2022

GOVERNANCE

REMUNERATION COMMITTEE REPORT CONTINUED

(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.

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).

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.

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 six 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.

(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.

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 applied

consistently 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.

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:

Director Date of appointment Expected expiry date of current term

Amir Rosentuler

(Chairman) 11 June 2021 End of the AGM to be held in 2025

Måns Hultman

(Non-Executive) 22 August 2016 End of the AGM to be held in 2024

Laurel Charmaine Bowden

(Non-Executive) 14 January 2019 End of the AGM to be held in 2023

Mauro Pretolani

(Non-Executive) 22 August 2016 End of the AGM to be held in 2024

65MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

SECTION 3: DIRECTORS’ REMUNERATION REPORT

Directors’ emoluments and compensation (audited)

Set out below are the Directors’ emoluments for the year ended 31 December 2022 and the year ended 31 December 2021:

including the fees related to their roles and responsibilities within the Audit Committee, Remuneration Committee and Selection

and Nomination Committee. Directors’ emoluments reported below may not be totally paid as of 31 December 2022.

Name of Director

Salary

and fees

(Euro)

Taxable

benefits

(Euro)

Pension-

benefits

(Euro)

Total

fixed

remuneration

Annual

bonus

(Euro)

Stock

options

granted

(Euro)

Total

variable

remuneration

Total

2022

(Euro)

Amir Rosentuler 356,423

– 57,110

413,533 – – – 413,533

Marco Marlia 200,000 4,369 24,526 228,985 75,000 133,994

208,994 437,889

Laurel Charmaine Bowden 2,500 – – 2,500 – – – 2,500

Måns Hultman 37,500 – – 37,500 – – – 37,50 0

Mauro Pretolani 42,500 – – 42,500 – – – 42,500

1 It includes the remuneration of ILS 1,205,222 translated with the average exchange rate 2022 3.53 EURO/ILS paid by MotorK Israel and the fees related to its roles

and responsibilities within Audit Committee, Remuneration Committee and Selection and Nomination Committee for €15,000.

2 (ILS 201,600) translated with the average exchange rate 2022 3.53 EURO/ILS.

3 174,018 shares evaluated with FV determined on the basis of Black-Scholes method of €0.77.

Name of Director

Salary

and fees

(Euro)

Taxable

benefits

(Euro)

Pension-

benefits

(Euro)

Total

fixed

remuneration

Annual

bonus

(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

1 (ILS 451,022) paid by MotorK Israel Ltd between 11 June 2021 and 31 December 2021.

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

2022

Bonus for

2021

Marco Marlia 75,000 25,000

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 2022.

Pension

During the year ended 31 December 2022, Marco Marlia received pension contributions of €24,526 and Amir Rosentuler

received pension contributions of €57,110.

Payments to past Directors

No payments were made to past Directors during the year ended 31 December 2022.

Payments for loss of office

No payments for loss of office were made during the year ended 31 December 2022.

66MotorK Annual Report 2022

GOVERNANCE

REMUNERATION COMMITTEE REPORT CONTINUED

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 €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 537,965 unvested options in issue pursuant to the Original Share Option Plan and the EMI Share Option Plan, equating

to approximately 1.3% of the issued share capital as at 31 December 2022.

Omnibus Long Term Incentive Plan

In October 2022, a new share-based Long Term Incentive Plan (the “Omnibus LTIP”) was adopted by the Board of Directors

further to the approval by the shareholders of the Remuneration Policy. The Omnibus LTIP envisages various types of share-

based incentives that can be granted to employees (including Executive Directors) of the Company and its subsidiaries. The

terms of the Omnibus LTIP are in line with the remuneration policy.

Further to adoption of the Omnibus LTIP, between December 2022 and January 2023, the Board of Directors awarded

performance stock options to Executive Directors, executive management and to all other eligible employees. The exercise

price was set at the share market value at grant, ranging between €1.21 and €1.895. The options will vest over a three-year

period and the shares awarded further to exercise of the options will be subject to a five-year holding period starting from the

grant date.

Within the frame of the grants to Executive Directors and executive management, the Board of Directors has made use of some

discretion within the limits allowed by the remuneration policy. The most notable concerned aspects were the exercise schedule,

that is set in three equal instalments over the three-year vesting period instead of in full at the end of it, and the performance

conditions, that are 100% linked to ARR growth of at least 25% in 2023. The value of the grants to the Executive Directors, based on

the market values at the grant date, were below the salary limits set in the Remuneration Policy in respect of long-term incentives.

Following these grants, the Company has a total of 991,523 unvested options in issue pursuant to the Omnibus LTIP, equating to

approximately 2.46% of the issued share capital as at 31 December 2022.

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 of

shares at

31 December

2022

Number of

shares at

31 December

2021

Unvested

share options

31 December

2022

Vested,

unexercised

share options

31 December

2022

Options

exercised in

the Period

2022

Amir Rosentuler 120,000 120,000 – 1,263,979 –

Marco Marlia 5,481,580 5,481,580 174,018 – –

Laurel Charmaine Bowden – – – – –

Måns Hultman – – – – –

Mauro Pretolani 138,40 0 138,40 0 – 135,000 –

67MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

The option awards held by each Director during the financial year ended 31 December 2022 and 2021 are as follows:

Name of Director

Number at

1 January

2022

Issued

in the

period

2022

Exercised

in the

period

2022

Number at

31 December

2022

Exercise

price (€)

Vesting

period/date

Marco Marlia – 174,018 – 174,018 1.64

three years starting

from November 2022

Name of Director

Number at

1 January

2021

Issued

in the

period

2021

Exercised

in the

period

2021

Number at

31 December

2021

Exercise

price (€)

Vesting

period/date

Amir Rosentuler – 1,383,979 120,000 1,263,979 0.01 November 2021

1 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.

Total Shareholder Return 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 years ended 31 December 2021 and 2022.



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 2021 and 2022 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 98% N.A. N.A.

Marco Marlia – 28% 200%

Laurel Charmaine Bowden N.A. N.A. N.A.

Måns Hultman 650% N.A. N.A.

Mauro Pretolani 750% N.A. N.A.

Average all employees 12% -61% 1%

The internal pay ratio is calculated based on the average 2022 remuneration of all Group employees vis-à-vis the 2022

remuneration of the CEO. The internal pay ratio for the year 2022 was 4.24 (4.74 in 2021) for the Chief Executive Officer,

Marco Marlia.

Relative importance of spend on pay

The chart below shows the difference in actual expenditure between 2021 and 2022 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

+€8.3 million +€2 million

93% +7.3%

2022: €17.2 million 2022: €29.9 million

(2021: €8.9 million) (2021: €27.8 million)

1 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 2022 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.

68MotorK Annual Report 2022

GOVERNANCE

REMUNERATION COMMITTEE REPORT CONTINUED

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 in case the targets

assigned are 100% achieved.

LTIP

The Committee will make awards to the executives within the MotorK Plc Omnibus Long Term Incentive Plan (the “Plan”)

adopted by the Board on 18 October 2022. Currently, the Committee plans to utilise two performance conditions – the first for

75% of the grant will be based on an ARR achievement, and the second for the remaining 25% of the grant will be based on

Adjusted EBITDA. The Committee reserves the right to change such performance conditions as long as the revised conditions

meet the requirements of the Plan.

Non-Executive Directors’ remuneration

The Board has reviewed the Non-Executive Directors’ fee structure and has agreed a specific rate card based on the roles and

responsibilities of the directors (see table below – annualised amounts, to be paid out proportionately to the actual length of

tenure in the year) to take effect from the listing of the Company on 5 November 2021. Please refer to the table below for

Directors’ emoluments in FY 2022.

Role

Laurel

Charmaine

Bowden

(Euro unit)

Måns

Hultman

(Euro unit)

Mauro

Pretolani

(Euro unit)

Chairman – – –

Non-Executive Director basic fee – 30,000 30,000

Additional Fees: 2,500 7, 50 0 12,500

Chairman of the Audit Committee – – 7,50 0

Chairman of the Remuneration Committee – 7,50 0 –

Chairman of the Selection and Nomination Committee – – –

Member of the Audit Committee 2,500 – –

Member of the Remuneration Committee – – –

Member of the Selection and Nomination Committee – – 5,000

Total 2,500 37,500 42,500

The remuneration report was approved by the Board on 30 March 2023 and signed on its behalf by:

Måns Hultman

Chair of the Remuneration Committee and Director

69MotorK Annual Report 2022

Company Overview Strategic Report Corporate Governance Financial Statements

FINANCIAL

STATEMENTS

70MotorK Annual Report 2022

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 2022 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 2022 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 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 their preparation of the Group financial statements is applicable

law and UK adopted international accounting standards. The financial reporting framework that has been applied to 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 ADOPTED BY THE EUROPEAN UNION

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 adopted by the European Union).

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 2022 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. The non-audit services prohibited by that

standard were not provided to the Group or the Parent Company.

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 including the potential impact of the reduction of recurring revenues

and its impact on year end cash.

• Testing around the cash raised as part of the sale of discontinued operations and 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.

• A comparison of the historic and forecast cash usage relative to the existing and forecast funds available.

• Consideration of the Director’s sensitivity analysis along with performing further sensitivities on the revenue, personnel costs

trajectory, capitalisation of costs and their affect on the forecast covenant measurements.

• 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.

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

71MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

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

99% (2021: 98%) of Group profit before tax

99% (2021: 98%) of Group revenue

99% (2021: 97%) of Group total assets

Key audit matters Revenue recognition 2022

2021

Materiality Group financial statements as a whole

€770,000 (2021: €550,000) based on 2% (2021: 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 19 (2021: 16) reporting components, 2 (2021: 2) were identified as significant and material with full scope audit

procedures being performed for group purposes and 13 (2021: 6) were identified as non-significant but material where specific

balances and risks were identified as being in scope for audit purposes. We conducted reviews of financial information

(including enquiry) at a further 4 (2021: 8) not-significant or immaterial components.

Members of the group audit team completed all audits except for 1 full scope audit which was audited by a local overseas 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 controlled and directed the work of the component audit team. This included providing detailed audit

instructions and setting of component materiality. The group audit team visited the component team and management’s offices

and reviewed the working papers of the component auditors. The group audit team also held video calls in order to attend

component planning and completion calls together with open dialogue maintained throughout the audit.

1 These are areas which have been subject to a full scope audit by the group engagement team and specified audit procedures performed by the group engagement

team and the component auditor teams.

72MotorK Annual Report 2022

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. These matters were addressed in the context of our audit of the

financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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 a software company the Annual Rateable

Revenue (ARR) is a Key Performance Indicator

(KPI) of interest to investors; hence there could

be an incentive to manipulate this figure. This

ARR KPI is derived from December 2022

monthly annualised live contracts. There is a

risk that either this calculation is manipulated

or else contract commencing in 2023 are

recognised earlier than they should be in the

worn financial year. We therefore considered

this to be a key audit matter.

We have

• We obtained a sample of contracts to check 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 and the performance

obligations had been fulfilled;

• Tested the percentage of revenue identified as

maintenance revenue back to support and

benchmarked against market expectations;

• A sample of new contracts signed around year end

were selected and the evidence obtained to test

when their go-live SaaS performance obligation

had been met and hence when their revenue should

have been recognised.

• Samples of recurring contracts were also selected

to check they matched the brought-forward

invoicing pattern where still within the prior year

contract or else was been supported by a new

executed contract.

• We selected and obtained support for non-

standard journals to revenue.

• Challenges were raised to management over the

point when the licence revenue “performance

obligation” had been delivered.

• We agreed a sample of accrued, deferred income

and credit notes to supporting documentation to

check recorded in the correct period.

• We tested the ARR disclosure to check it was

sufficiently well explained, defined and reconciled.

We tested the computational accuracy of the ARR.

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 misstatements, and the

particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

OPINION ON THE FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

73MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

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

2022 2021 2022 2021

Materiality €770,000 €550,000 €420,000 €285,000

Basis for

determining

materiality

2% of group revenue 2% of group revenue Based on group

allocated materiality

Based on group

allocated materiality

Rationale for the

benchmark

applied

We considered revenue to a key performance

measure for users to evaluate the financial

performance of this business in its growth phase.

Calculated based on Group materiality given the

assessment of aggregation risk for the Group

Performance

materiality

€501,000 €358,000 €273,000 €214,000

Basis for

determining

performance

materiality

Performance materiality was set at 65% (2021:

65%) 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 65% (2021: 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

For the purposes of our Group audit opinion, we set materiality for the one significant component of the Group, apart from the

Parent Company whose materiality is set out above, at 90% (2021: 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 €732k (2021: €523k).

In the audit of each component, we further applied performance materiality levels of 65% (2021: 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 €31,000 (2021:

€21,000). 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.

74MotorK Annual Report 2022

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 and the part of the Directors’ remuneration report to be

audited 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.



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 electronic

reporting format is regulated that the annual financial report of MotorK 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 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 XHTML instance document and XHTML 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.

OPINION ON THE FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

75MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors’ responsibility statement, the Directors are responsible for the preparation of the

financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors

determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’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:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Group and the industry in which it operates;

• Discussion with management and those charged with governance including Audit Committee; and

• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations.

We considered the significant laws and regulations to be accounting standards, Euronext, Companies Act 2006, Euronext and

certain requirements from tax legislation.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the

amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such

laws and regulations to Companies Act 2006 and tax legislation.

Our procedures in respect of the above included:

• Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;

• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;

• Review of financial statement disclosures and agreeing to supporting documentation; and

• Review of legal expenditure accounts to understand the nature of expenditure incurred.

76MotorK Annual Report 2022

OPINION ON THE FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment

procedures included:

• Enquiry with management and those charged with governance including Audit committee regarding any known or suspected

instances of fraud;

• Obtaining an understanding of the Group’s policies and procedures relating to:

 Detecting and responding to the risks of fraud; and

 Internal controls established to mitigate risks related to fraud.

• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material

misstatement due to fraud; and

• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted

by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue and management override.

Our procedures in respect of the above included:

• Procedures as set out in the key audit matters sections above;

• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting

documentation;

• Involvement of forensic specialists in the audit during planning phase to assist with the consideration of possible fraud risks;

• Assessing significant estimates made by management for discount rate used as part of business acquisition; and

• 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

including component engagement team who were all deemed to have appropriate competence and capabilities and remained

alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. For component engagement

team, we also reviewed the result of their work performed in this regard.

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.

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.

Owen Pettifor (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

Gatwick, UK

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).



77MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

AND OTHER COMPREHENSIVE INCOME

€’000 Note

For the year

ended

31 December

2022

For the year

ended

31 December

2021

Revenue 9 3 8 , 5 47 2 7, 5 6 0

Cost for customers media services 10 7, 0 2 8 6, 654

Personnel costs 10 29 ,864 27, 8 2 8

R&D capitalisation 10 (8 ,707) (3, 49 0)

Other operating costs 10 15 , 2 16 8 ,689

Amortisation and depreciation 10 8 , 0 13 4 , 235

Total costs 10 5 1, 4 14 4 3 ,9 16

Operating loss (1 2,86 7) (16 , 3 5 6)

Finance expense 11 (1, 2 3 5) (4 , 8 18)

Finance income 11 231 11

Loss before tax (1 3 , 8 7 1) (2 1 ,1 6 3)

Corporate income tax 12 (14 0) (2,7 65)

Loss from continuing operations (14 , 0 11) (23 ,92 8)

Profit after income tax of discontinued operation 24 6, 734 403

Loss for the period (7, 2 7 7) (23,525)

Attributable to:

Owners of the parent (7 ,277) (23 , 525)

Other comprehensive income/(loss):

Actuarial losses arising from remeasurement of liabilities for employee benefits that will

not be subsequently remeasured to the income statement 20 679 (20)

Gains/(losses) on exchange differences from translation of financial statements of

foreign entities that will be reclassified subsequently to the income statement 28 12 6 (11 0)

Total comprehensive loss (6 , 47 2) (23 , 6 5 5)

Attributable to:

Owners of the parent (6 , 47 2) (2 3 , 65 5)

Total comprehensive income/(loss) for the period attributable to owners of the parent

arises from:

Continuing operations (13 , 2 0 6) (24, 0 5 8)

Discontinued operations 24 6, 734 403

Basic and diluted EPS

Loss for the period 26 (0 .1 8) (0 .7 9)

Loss from continuing operations 26 (0 . 35) (0. 8 0)

Profit from discontinued operations 26 0 .17 0 .01

78MotorK Annual Report 2022

€’000 Note

As at

31 December

2022

As at

31 December

2021

Intangible assets 13 3 6 ,757 17, 9 5 3

Property, plant and equipment 14 5, 000 3 , 0 76

Investments in associate companies 15 3, 53 8 –

Non-current assets – security deposits 15 19 4 10 6

Non-current contract assets 16 7, 2 9 4 5 , 0 59

Non-current assets 52 ,7 83 2 6 ,1 9 4

Trade and other receivables 16 13 , 0 5 8 7, 4 4 1

Contract assets 16 13 , 4 4 0 8 , 521

Cash and cash equivalents 17 1 9 , 223 43 , 257

Assets classified as held for sale 24 – 4 ,16 3

Current assets 4 5,7 21 63,382

Total assets 98, 504 8 9, 57 6

Trade and other payables 18 12 , 0 2 1 8 , 257

Tax payable 18 3,84 2 2, 945

Current financial liabilities 19 676 1,9 2 2

Current lease liabilities 19 972 790

Provisions 22 551 36 6

Liabilities directly associated with assets classified as held for sale 24 – 885

Current liabilities 1 8,062 1 5 ,1 6 5

Employees benefit liability 20 1, 8 9 5 2 ,0 69

Deferred tax liabilities 21 1, 4 7 1 6 59

Non-current financial liabilities 19 7, 6 1 8 4,20 0

Non-current lease liabilities 19 3,665 2,0 4 6

Provisions 22 3, 987 1 ,040

Non-current liabilities 18 , 6 36 1 0 , 0 14

Total liabilities 36,698 25, 1 79

Share capital 23 4 03 4 03

Share premium* 23 6 8 ,75 4 72 ,75 4

Merger reserve* 23 3, 627 1, 39 7

Earn-out reserve 23 798 –

Accumulated losses 23 (11 , 7 7 6) (1 0 ,1 5 7)

Total equity 61, 8 0 6 64,3 97

Total liabilities and equity 98, 504 8 9, 57 6

*The prior year accounts had incorrectly presented €1,397 thousand within Share Premium which should be within Merger

Reserve from shares issued as part of total consideration by MotorK plc – parent company for acquisitions made during the

year. Under the Companies Act 2006, the Group/MotorK plc cannot apply the premiums on the shares issued at a premium by

MotorK plc

to obtain 100% of voting rights in the acquirees. This has been restated in the current year presentation of the comparative.

The restatement does not impact total net assets and profit for the relevant years.

The financial statements on pages 77 to 80 were approved and authorised for issue by the Board of Directors on 30 March 2023

and were signed on its behalf by:

Marco Marlia

Chief Executive Officer

30 March 2023

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS

79MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

€’000

For the year

ended

31 December

2022

For the year

ended

31 December

2021

Loss for the period from continuing operations (14 , 0 11) (23 ,92 8)

Profit for the period from discontinued operations 6, 734 403

Adjustments for:

Depreciation of property, plant and equipment 1, 2 0 0 94 4

Amortisation of intangible fixed assets 6 , 8 13 3 ,291

Gain from discontinued operations (7 ,7 67) –

Finance income (2 3 1) (11)

Finance expense 1, 2 3 5 4 , 8 18

Income tax expense 14 0 2,7 65

Share-based payment expense 1, 5 43 9, 7 14

Earn-out accrual 1, 8 7 9 89

Other non monetary movements 12 6 3 62

Cash outflow from operating activities before changes in net working capital (2 , 3 3 9) (1, 5 5 3)

(Increase)/decrease in trade and other receivables and contract assets (9,12 7) (3,227)

Increase/(decrease) in trade and other payables 1, 8 6 5 1, 0 5 8

Increase in provisions and employee benefits 588 218

Cash outflow from operations (9, 0 13) (3 , 5 0 4)

Income taxes paid (15 0) (12 7)

Net cash flows from operating activities (9,1 6 3) (3 , 6 3 1)

Investing activities

Cash outflow on acquisition of subsidiaries (net of cash acquired)

(8 , 4 67) (5 , 3 5 0)

Purchase of intangible assets (8, 7 60) (3 , 7 2 9)

Purchases of property, plant and equipment (315) (13 5)

Non-current assets – security deposits (74) 174

Proceeds from disposal of assets available for sale 4 , 0 11 –

Net cash (used in) investing activities (1 3,605) (9 ,040)

Financing activities

Proceeds for issue of shares – 74 , 7 5 0

Buy-back programme (69 4)

IPO cost paid – (4 , 6 8 5)

Bank loans repaid (5 2 1) (18 , 2 3 5)

New bank and other loans 2 ,15 0 –

Capital element of lease liabilities repaid (927) (83 6)

Interest paid on bank and other loans (1 ,13 0) (6 , 8 14)

Interest paid on lease liabilities (14 4) (76)

Net cash from financing activities (1, 2 6 6) 4 4 ,10 4

Net increase in cash and cash equivalents (2 4 , 0 3 4) 31, 4 3 3

Cash and cash equivalents at beginning of period 43,257 11 , 8 2 4

Cash and cash equivalents at end of period 19, 2 2 3 4 3,257

1 It includes contingent consideration paid in cash during FY2022 related to acquisition made in FY2021 for €0.1 million.

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.

CONSOLIDATED STATEMENT OF CASH FLOWS

80MotorK Annual Report 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

€’000

capital

premium*

Merger

reserve*

Earn-out

reserve

Retained

earnings

Total

attributable

to equity

holders of

parent

1 January 2021 273 12 ,16 6 – – (1 0 , 3 0 5) 2 ,13 4

Comprehensive income for the year

Loss for the period (23 , 525) (2 3 , 5 25)

Other comprehensive income

Translation reserve (11 0) (11 0)

Defined benefit pension scheme (20) (2 0)

Total comprehensive income for the year (23 , 6 5 5) (23 , 6 5 5)

Contributions by and distributions to owners

IPO issue of shares 115 74 , 6 3 5 74 , 7 5 0

Convertible equity notes issue of shares 12 4, 638 4,65 0

Other issue of shares 3 1, 3 9 7 1, 4 0 0

Share-based payment 9, 7 14 9, 7 14

Shares to be issued 89 89

Reserve IPO costs (4 , 6 8 5) (4 , 6 8 5)

Capital reduction (1 4 , 000) 1 4 , 000 –

Total contributions by and distributions to owners 13 0 60, 5 8 8 1, 39 7 – 23 ,8 03 8 5,9 18

31 December 2021 4 03 7 2 ,75 4 1, 3 97 – (10, 157) 64,3 97

Comprehensive income for the year

Loss for the period (7,277) (7,277)

Other comprehensive income

Translation reserve 12 6 12 6

Defined benefit pension scheme 67 9 67 9

Total comprehensive income for the year – – – – (6 , 47 2) (6 , 4 7 2)

Contributions by and distributions to owners

Issue of shares 4 2,23 0 2,234

Share-based payment 1, 5 43 1, 5 43

Shares to be issued 798 7 98

Buy back programme

(4) (69 0) (69 4)

Capital reduction (4 ,000) 4, 000 0

Total contributions by and distributions to owners – (4,000) 2, 230 798 4, 853 3 ,8 81

31 December 2022 4 03 6 8 ,75 4 3, 6 27 7 98 (11, 7 7 6) 61 , 8 0 6

1 MotorK bought its own shares and cancelled them.

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.

*The prior year accounts had incorrectly presented €1,397 thousand within Share Premium which should be within Merger Reserve

from shares issued as part of total consideration by MotorK plc – parent company for acquisitions made during the year. Under the

Companies Act 2006, the Group/MotorK plc cannot apply the premiums on the shares issued at a premium by MotorK plc to

obtain 100% of voting rights in the acquirees. This has been restated in the current year presentation of the comparative.

The restatement does not impact total net assets and profit for the relevant years.

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS CONTINUED

81MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS

1. GENERAL INFORMATION

MotorK Plc (the “Company” or the “Parent Company”) is a company incorporated in UK with registered office is 5th Floor One

New Change, London, England, EC4M 9AF, listed from November 2021 on Euronext Amsterdam.

The Company and its subsidiaries (the “Group” or “MotorK Group”) is a leading 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.

As of 31 December 2022, the main shareholders of the Parent Company are Marco Marlia, original founder and CEO of the

Group who hold approximately 13.7% of the share capital, Marco de Michele and Fabio Gurgone both own 13.18%, and 83 North,

who directly holds approximately 20% of the share capital.

These consolidated financial statements as of and for the year ended 31 December 2022 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 by nature; and

• 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.

The financial statements are prepared in Euro (which is also the functional currency), rounded to the nearest thousand. They

are prepared on the historical cost basis with the exception of certain items which are measured at fair value as disclosed in the

accounting policies below. The preparation of the financial statements requires management to make judgements, estimates

and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised

in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future

periods if the revision affects current and future periods.

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 UK adopted IFRS accounting standards.

82MotorK Annual Report 2022

2. SUMMARY OF THE ACCOUNTING STANDARD USED CONTINUED

Below, we report the list of companies included in consolidated financial statements prepared by the Parent Company,

MotorK Plc, as at 31 December 2022, indicating the share capital held by the Group. MotorK Italia Srl. is directly controlled by

MotorK Plc. All the other subsidiaries are indirectly controlled.

Name

Country of

incorporation and

principal place

of business

Proportion of ownership interest at

2022 2021 2020

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%

MotorK Israel Ltd Israel 100% 100% –

DealerK Technology Solutions, Unipessoal Lda Portugal 100% 100% –

DriveK Italia S.r.l. Italy 100% 100% –

FusionIT Belgium 100% – –

FranceProNet SaS France 100% – –

SFD SaS France 100% – –

ICO International GmbH Germany 100% – –

AutoXY SpA Italy 20% – –

3W Net Sarl

France – – 100%

Fidcar SAS France – 100% –

Liotey Sarl France – 100% –

PDA DAPDA SL Spain – 100% –

DAPDA Media SL Spain – 100% –

DriveK France SAS France – 100% –

DriveK Solution SL Spain – 100% –

1 Merged into MotorK France starting from 1 June 2021.

During the financial year 2022, the consolidation area changed as a result of the following operations:

• On 1 February 2022, MotorK Group completed the acquisition of FranceProNet SAS and SFD SAS (together, “FranceProNet”),

top-tier French digital agencies specialised 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.

• On 31 May 2022, MotorK Group completed the acquisition of FusionIT (also known as “Carflow”) an automotive retail solutions

provider that serves more than 400 car dealers and major automotive OEMs in Belgium, the Netherlands and Luxembourg.

The acquisition of Carflow is consistent with MotorK’s strategy to expand its operations into new markets. MotorK management

believes that the deal will enhance the value for shareholders through the creation of a new commercial hub into the Benelux

region and new attractive revenue cross-sell opportunities.

• On 28 July 2022, MotorK Group completed the acquisition of ICO International GmbH (also known as “Webmobil24”) a German

software provider of stock management solutions and e-commerce platforms to automotive dealers and OEMs. Over the past

20 years, Webmobil24 has established itself as a key player in the German automotive digital landscape thanks to its innovative

offering which covers the entire spectrum of vehicle inventory management needs, leveraging the expansion of MotorK Group

into the German market. This acquisition marked another decisive step in the development of MotorK’s European footprint.

• Merger of Fidcar SAS and Liotey Sarl into MotorK France and with accounting and tax effects effective from January 2021

aiming at simply the legal entities structure and organisations in France.

• Merger of PDA DAPDA SL and DAPDA Media SL into MotorK Spain Gestiones Comerciales with accounting and tax effects

effective from January 2021 aiming at simply the legal entities structure and organisations in Spain.

• On 15 December 2022, MotorK Group has completed the selling of the DriveK business unit (classified as held for sale in the

Annual Report prepared for the year ended 31 December 2021) to Gedi Gruppo Editoriale S.p.A (the “Buyer”).

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

83MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

2. SUMMARY OF THE ACCOUNTING STANDARD USED CONTINUED

The transaction involved the contribution in-kind of the DriveK business unit (including the equity investments in DriveK France SAS

and DriveK Solution SL) into Auto XY SpA (entity 100% controlled by Gedi Gruppo Editoriale S.p.A. ). The consideration received by

MotorK Group was paid by the Buyer was partially in cash and partially through the transfer of the 20% of shares in AutoXY SpA.

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.

The registered offices of the companies disclosed above is as follows:

MotorK Italia Srl Via Ludovico D’Aragona, 9 – 20132 Milan, Italy

MotorK Spain Gestioness Comerciales Calle Muntaner 305 Planta PR Puerta 2 – 08021 – Barcelona, Spain

MotorK Deutschland GmbH Destouchesstr. 68 – 80796 – München, Germany

MotorK France Sarl 168, avenue Charles De Gaulle 9220 Neuilly-sur-Seine – Paris, France

For Business Srl Via Ludovico D’Aragona, 9 – 20132 Milan, Italy

MotorK Israel Ltd 3 Arik Einstein St Herzliya, Israel

DealerK Technology Solutions, Unipessoal Lda Avenida de República n50, 10 – 1069 – 211 Lisbon, Portugal

DriveK Italia S.r.l. Via Ludovico D’Aragona, 9 – 20132 Milan, Italy

FusionIT Mechelsesteenweg 203 box 2, 2018 Antwerp, Belgium

ICO International GmbH Berner Straße 107 – 60437 Frankfurt am Main, Germany

FranceProNet SaS 61 Rue Pierre Cazeneuve – 31200 Toulouse, France

SFD SaS 61 Rue Pierre Cazeneuve – 31200 Toulouse, France

AutoXY SpA via Maremonti n. 41– Lecce, Italy

2.3 Basis for consolidation

The criteria used by the Group to define the consolidation area and the relative consolidation principles are shown below. The

financial statements of foreign companies are translated into euros using the functional currency concept, under which asset

and liability items are translated at the closing rate. With the exception of income and expenses recognised directly in equity,

equity is translated at historical rates. The resulting foreign exchange differences are recognised in other comprehensive

income until disposal of the subsidiary concerned, and are presented as a separate item in equity.

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.

Subsidiaries owned 100% (directly or indirectly) 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 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.

84MotorK Annual Report 2022

2. SUMMARY OF THE ACCOUNTING STANDARD USED CONTINUED

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 non-controlling 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; and

• 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

In preparing the financial statements, management has applied going concern assumption based on its assessment of the

Company’s ability to continue as a going concern. In making such assessment, management has considered the strong cash

position of the Group, the expectation of the Company’s future performance and the excellent results in terms of growth of

the year 2022.

Management has prepared a Business Plan covering the period 2023-2027 showing that the company has the resources to cover

its financial need for the foreseeable future. As per the Business Plan, during FY 2023 and 2024 it is forecasted to burn a certain

amount of cash so that cash and cash equivalents at year end 31 December 2024 will land in a positive territory with 2024 showing

a stabilization towards cash flow breakeven. Sensitivity analysis over a potential reduction of recurring revenue of respectively

10% and 20% have been prepared by management, showing that the Group has enough resources to cover its financial need,

even in such conservative scenario, for the foreseeable future.

Doing the going concern assessment management has also considered the potential impacts of the conflict between Russia and

Ukraine, the increase of inflation rate, the increase of commodities prices and of cost of living in the markets where the Group

operates. Such elements have been taken into account and reflected in the aforementioned Business Plan. Due to the nature of

MotorK, key digital suppliers of our customers, management concluded that such elements does not have a significant impact

on going concern assessment.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

85MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

4. ACCOUNTING STANDARDS IN FORCE FROM 1 JANUARY 2022 AND INTERPRETATIONS

APPLICABLE AT A FUTURE DATE

4.1 New standards and amendments effective from January 1, 2022

The following new standards and amendments effective from January 1, 2022, were adopted by the Group for the

preparation of these Consolidated Financial Statements.

In May 2020, the International Accounting Standards Board (IASB) issued amendments to IFRS 3 – Business combinations

to update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting

requirements for business combinations. There was no effect from the adoption of these amendments.

In May 2020, the IASB issued amendments to IAS 16 – Property, Plant and Equipment. The amendments prohibit a company

from deducting from the cost of property, plant and equipment amounts received from selling items produced while the

company is preparing the asset for its intended use. Instead, a company should recognise such sales proceeds and the related

cost in the income statement. There was no effect from the adoption of these amendments.

In May 2020, the IASB issued amendments to IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, which specify

which costs a company includes when assessing whether a contract will be loss-making. There was no effect from the adoption

of these amendments.

In May 2020, the IASB issued Annual Improvements to IFRSs 2018 – 2020 Cycle. The improvements have amended four standards:

i) IFRS 1 – First-time Adoption of International Financial Reporting Standards in relation to allowing a subsidiary to measure

cumulative translation differences using amounts reported by its parent, ii) IFRS 9 – Financial Instruments in relation to which fees

an entity includes when applying the ‘10%’ test for derecognition of financial liabilities, iii) IAS 41 – Agriculture in relation to the

exclusion of taxation cash flows when measuring the fair value of a biological asset, and iv) IFRS 16 – Leases in relation to an

illustrative example of reimbursement for leasehold improvements. There was no effect from the adoption of these amendments.

4.2 New standards, amendments and interpretations not yet effective

The standards, amendments and interpretations issued by the IASB that will have mandatory application in 2023 or subsequent

years are listed below:

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.

The new standard and amendments are effective on or after January 1 2023. The Group does not expect any material impact

from the adoption of these amendments.

In February 2021, the IASB issued amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2:

Disclosure of Accounting policies which require companies to disclose their material accounting policy information rather than

their significant accounting policies and provide guidance on how to apply the concept of materiality to accounting policy

disclosures. These amendments are effective on or after January 1 2023. The Group does not expect any material impact from

the adoption of these amendments.

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. These amendments are effective on or after January 1 2023. The Group does not expect any material

impact from the adoption of these amendments.

In May 2021, the IASB issued amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities Arising From

a Single Transaction that clarify how companies account for deferred tax on transactions such as leases and decommissioning

obligations. These amendments are effective on or after January 1, 2023. The Group does not expect any material impact from

the adoption of these amendments.

86MotorK Annual Report 2022

4. ACCOUNTING STANDARDS IN FORCE FROM 1 JANUARY 2022 AND INTERPRETATIONS

APPLICABLE AT A FUTURE DATE

In December 2021, the IASB issued an amendments to IFRS 17 – Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 –

Comparative Information, which provides a transition option relating to comparative information about financial assets

presented on initial application of IFRS 17. The amendment is aimed at helping entities to avoid temporary accounting

mismatches between financial assets and insurance contract liabilities, and therefore improve the usefulness of comparative

information for users of financial statements. The amendment is effective on or after January 1 2023. The Group does not

expect any material impact from the adoption of this amendment.

In September 2022, the IASB issued amendments to IFRS 16 – Leases: Liability in a sale and leaseback to improve the

requirements for sale and leaseback transactions, which specify the measurement of the liability arising in a sale and leaseback

transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right-of-use it

retains. These amendments are effective on or after January 1 2024. The Group does not expect any material impact from the

adoption of these amendments.

In October 2022, the IASB issued amendments to IAS 1 – Presentation of Financial Statements: Non-current Liabilities with

Covenants, that clarify how conditions with which an entity must comply within 12 months after the reporting period affect the

classification of a liability. These amendments are effective on or after January 1 2024. The Group does not expect any material

impact from the adoption of these amendments.

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. These

amendments are effective on or after January 1, 2024. The Group does not expect any material impact from the adoption

of these amendments.

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).

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 7/8/10/12/15 years Estimated discounted cash flow

Trademark 5/6 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).

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. Development costs incurred on an existing

assets are capitalized only in case such costs increment the functionality of the asset.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

87MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

5. ACCOUNTING POLICIES CONTINUED

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

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.

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.

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5. ACCOUNTING POLICIES CONTINUED

Impairment of property, plant and machinery, right of use assets 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,

right of use assets 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 indefinite 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.

Foreign currency

The Group’s consolidated financial statements are presented in euros, which is also the parent company’s functional currency.

For each entity, the Group determines the functional currency and items included in the financial statements of each entity are

measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign

operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates

at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are

translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of

monetary items that are designated as part of the hedge of the Group’s net investment in a foreign operation. These are

recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss.

Tax charges and credits attributable to exchange differences on those monetary items are also recognised in OCI.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates

at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the

exchange rates at the date when the fair value is determined.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the

gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is

recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). In determining the spot exchange

rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary

asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group

initially recognises the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are

multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt

of advance consideration.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

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Company Overview Strategic Report Governance Financial Statements

5. ACCOUNTING POLICIES CONTINUED

Group companies

On consolidation, the assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing at

the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the

transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign

operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss. Any goodwill

arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities

arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of

exchange at the reporting date.

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 that 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 receivables from customers, loans other receivables and cash and cash equivalent.

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 recognised 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

recognised immediately within financial expenses.

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.

90MotorK Annual Report 2022

5. ACCOUNTING POLICIES CONTINUED

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, trade payables, provisions and other 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.

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.

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 2022, there were no special events, such as restructuring plans, reductions or regulations during the reference period.

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.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

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Company Overview Strategic Report Governance Financial Statements

5. ACCOUNTING POLICIES CONTINUED

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 and discontinued operations

The Group classifies assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a

sale transaction rather than through continuing use. Assets and disposal groups classified as held for sale are measured at the

lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the

disposal of an asset (disposal group), excluding finance costs and income tax expense. The criteria for held for sale

classification is regarded as met only when the sale is highly probable, and the asset or disposal group is available for

immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant

changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to

sell the asset and the sale expected to be completed within one year from the date of the classification. Property, plant and

equipment and intangible assets are not depreciated or amortised once classified as held for sale. Assets and liabilities

classified as held for sale are presented separately as current items in the statement of financial position. Discontinued

operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after

tax from discontinued operations in the statement of profit or loss. Additional disclosures are provided in Note 24. All other

notes to the financial statements include amounts for continuing operations, unless indicated otherwise.

Revenue from contract with customers

The Group is a software as a service (SaaS) provider for the automotive retail industry empowering car dealers and original

equipment manufacturers (OEMs) to improve their customer experience through a broad suite of fully integrated digital

products and services.

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at

an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

Revenues from cloud-based SaaS platforms

Cloud-based SaaS platforms contracts are long term contracts providing a fixed recurring fee invoiced periodically depending

on the payment cadence agreed in the contract (monthly, quarterly, annually). Following the assessment made by top

management two separate performance obligations were identified in the contracts:

• The selling of the “right to use IP” to the client for which the performance obligation is satisfied point in time (when access to

the product is granted to the customers).

• The post-contract customer support related to costs incurred to maintain the platform live for which the revenues are

recorded overtime on the duration of the contracts.

In determining the transaction price, the Group considers the effects of variable consideration, discounts, existence of a

significant financing component, non-cash consideration, and consideration payable to the customer (if any). None of these

elements have a significant impact on the transaction price.

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5. ACCOUNTING POLICIES CONTINUED

Revenues from “lead generation” services are recognised point in time in the moment in which the leads are generated for our

customers. Such revenue are not related to cloud-based SaaS platforms contracts. The identification of such performance

obligation is not a key judgment.

Digital marketing revenue are recognised point in time in the month where the marketing campaign has been provided

to the customer and therefore the service is rendered. The identification of such performance obligation is not a key judgment.

Other revenue mainly refers to training activities, which is recognised when the training has been delivered and recognised

point in time.

Contract balance

a) Contract assets

A contract asset is initially recognised when the right of the use IP is transferred to the customers point in time. After initial

recognition on a monthly, quarterly or annual basis (depending on the contracts conditions) the amount recognised as contract

assets is reclassified to trade receivables when the invoice is issued. Contract assets are subject to impairment assessment.

Refer to accounting policies on impairment of financial assets.

b) Contract liabilities

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the

Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the

contract (i.e., transfers control of the related goods or services to the customer).

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 selling of the DriveK business completed in December 2022 (and classified as a discontinued operation in the

previous years), 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.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

93MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

7. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and

assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,

and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that

require a material adjustment to the carrying amount of assets or liabilities affected in future periods. 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.

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the

most significant effect on the amounts recognised in the consolidated financial statements:

Calculation of Adjusted EBITDA

Due to its nature not strictly inherent to the business performance of the Group, management has identified as exceptional

costs for the definition of Adjusted EBITDA the following elements:

• external costs related to M&A as one-off transactions and, as a consequence, costs not strictly inherent to the performance

of the business;

• external costs incurred for one-off projects that will not be repeated in the future;

• severance indemnity costs paid to employees who left the company and that the Group will not incur in the future

(one-off costs);

• contingent considerations related to the acquisition made that are automatically forfeited if key employees terminate as

one-off transaction related to M&A acquisition.

• stock option plan costs as non-cash transactions.

Development costs

The Group capitalizes costs for product development projects. Initial capitalization of costs is based on management’s

judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a

defined milestone according to an established project management model. In determining the amounts to be capitalized,

management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied

and the expected period of benefits. Further disclosure is provided in Note 13.

In making judgment and assumptions we have considered climate-related matters and concluded that such matters have no

material impact on our business and the assumptions impact on the financial statements.

ESTIMATES AND ASSUMPTIONS

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a

significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,

are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial

statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to

market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the

assumptions when they occur.

Revenue recognition of SaaS platform contracts

Revenues related to the SaaS platform contracts value are split into two separate performance obligations: i) revenue

recognized point in time in the moment in which the access to the platform is granted to the customer and ii) revenue related to

post-contract support activities. The allocation of the contract consideration on the two different performance obligations is

considered by management a critical accounting estimates as it based on available historical data and future assumptions. The

most significant portion of the consideration is allocated to the performance obligation related to the access to the platform.

Revenue related to post-contract support activities are estimated on the basis of historical trends of basic maintenance,

bug-fixing and hosting costs. A different estimation of the allocation of the customer consideration on the two performance

obligations may have an impact in terms of higher or lower revenue to be deferred into the next years and consequently on the

revenue booked during the year 2022.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the

higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on

available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less

incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived

94MotorK Annual Report 2022

7. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS CONTINUED

from the business plan for the next five years and do not include restructuring activities that the Group is not yet committed to or

significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount

is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for

extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives

recognised by the Group. The key assumptions used to determine the recoverable amount for the different CGUs, including a

sensitivity analysis, are disclosed and further explained in Note 13.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model,

which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate

inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield

and making assumptions about them. For the measurement of the fair value of equity-settled transactions with employees at

the grant date, the Group uses the Black and Scholes Model. The assumptions and models used for estimating fair value for

share-based payment transactions are disclosed in Note 23.

8. FINANCIAL INSTRUMENTS – RISK MANAGEMENT

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 and

retained earnings totalling €61.8 million (€64.4 million as at 31 December 2021).

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. Financial covenants on the loan in place with Illimity

Banks are in place. Such covenants are monitored on a regular basis by management. As at 31 December 2022 financial

covenants are met.

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.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading

to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its

financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial

instruments. 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, contract assets, cash and cash equivalent and other 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. Bad debt provision is calculated in accordance with IFRS 9

on the basis of the historical credit loss for each cluster of customers. The historical credit loss calculated by management is then

applied to each cluster to define the bad debt provision accrual.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

95MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

8. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses.

The provision rates are based on days past due for groupings of various customer segments with similar loss patterns.

The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable

information that is available at the reporting date about past events, current conditions and forecasts of future economic

conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement

activity. The Group did not provide detailed information on how the forecast economic conditions have been incorporated

in the determination of ECL because the impact is not significant. In determining the ECL, MotorK has identified the clusters

based on shared credit risk characteristics and days passed due and then an expected loss rates, considered reasonable by

management, has been applied to determine the bad debt provision.

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department. Counterparty

banks are assessed prior to opening bank accounts and on an ongoing basis to ensure exposure to credit risk is at an acceptable

level. Investments of surplus funds are made only with counterparties with a high level of standing with the aim of minimizing the

concentration of risks and therefore mitigate potential financial loss. Cash and cash equivalents are deposited into ordinary

banks accounts with top rated banks.

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 and is similar to the carrying value.

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 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

Gross trade receivables as at 31 December 2022 7,556 1,985 514 1,825 11,880

Allowance for doubtful receivables – – – (533) (533)

Trade receivables as at 31 December 2022 7,556 1,985 514 1,292 11,347

Foreign exchange risk

Exchange rate fluctuation risk is not considered significant. Although the Parent Company is based in UK, the most significant

transactions of the Group are made in Euros, the currency used for the preparation of the consolidated financial statements.

The only subsidiary based outside Europe is MotorK Israel Ltd whose transactions are not material for Group purposes (mainly

intercompany recharges).

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 2022, these projections

indicated that MotorK Group is expected to have sufficient liquid resources to meet its obligations under all reasonably

expected circumstances.

96MotorK Annual Report 2022

8. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED

It is worth mentioning that part of the capital received by the Group following the listing on Euronext Amsterdam was used

to reimburse the financial liabilities in place at the date of the IPO. During 2021, the Group reimburse loans for a total amount of

€18.2 million. During January 2022, the Group completed the reorganisation of its financial structure repaying the loan in place with

Creval for €0.5 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 and obtaining a new loan from SACE SIMEST for €0.3 million. Following such operations, as of

31 December 2022, the financial position is a net cash short and long-term position of €6.4 million.

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 2022 and 2021:

€’000

As at

31 December

2022

Within 1 year 2-5 years Over 5 years Contract value Carrying amount

Financial liabilities 1,046 8,404 – 9,450 8,294

Lease liabilities 1,245 3,194 1,035 5,474 4,637

Trade and other payables 8,391 – – 8,391 8,391

€’000

As at

31 December

2021

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* 5,476 – – 5,476 5,476

*The prior year disclosure had incorrectly presented €11,202 thousand which included non-contractual (i.e., statutory taxes)

liabilities. This has been restated in the current year presentation of the comparative. As such the original €11,202 thousand

should have been corrected to be €5,476 thousand where the difference of € 5,726 thousand is the other non-contractual

amounts subsumed within “Other payables including tax and social security payments” and “Tax Payable”.

Interest rate risk

As at 31 December 2022, the exposure to interest rate risk is not considered significant taking into account that there is only one

financial loan with variable interest rates in place amounting to €7.5million. An increase of Euribor of 1% has an impact on the

profit and loss of the Group of roughly €75,000 not significant for Group purposes.

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.

On the 20% of investments into AutoXY S.p.A. owned by MotorK Italia S.r.l. (Investments in associated companies) has been

granted a reciprocal put and call option. Relevant disclosure is included in the note 24. Discontinued operations.

Financial assets

The following tables shows financial assets by category, as defined by IFRS 9, as at 31 December 2022 and 2021:

€’000 2022 2021

Financial assets at amortised cost

Non-current assets – security deposit 194 106

Trade receivables 11,347 5,720

Other receivables 59 355

Cash and cash equivalents 19,223 43,257

Trade and other receivables classified as held for sale – 2,238

Total 30,823 51,676

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

97MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

8. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUED

The carrying value of financial assets 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 2022 and 2021:

€’000 2022 2021

Financial liabilities at amortised cost

Trade and other payables* 8,391 5,476

Current financial liabilities 676 1,922

Current lease liabilities 972 790

Trade payables classified as held for sale – 430

Non-current financial liabilities 7,618 4,200

Other non-current liabilities – –

Non-current lease liabilities 3,665 2,046

Total 21,322 14,864

*The prior year disclosure had incorrectly presented omitted accruals and other payables for €3,632 thousand. This has been

restated in the current year presentation of the comparative. The carrying value of financial liabilities approximates fair value.

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.

9. REVENUE

Group revenue for the year ended 31 December 2022 amounted to €38.5 million, up 40% year-on-year (€ 27.6 million as at

31 December 2021).

Disaggregation of revenue

The Group has disaggregated revenue into various categories in the following tables. Please refer to the Financial and

Operating Review section for further revenue disaggreagation helpful to understand the performance of the Group.

For the year ended 31 December 2022

€’000

SaaS

platform

Digital

marketing

Other

revenues Total

Primary geographic market

Italy 16,930 6,673 2,409 26,012

Spain 3,732 537 160 4,429

France 4,674 – 594 5,268

Germany 1,281 – 1 1,282

Benelux 1,541 – 15 1,556

Total 28,158 7,210 3,179 38,547

98MotorK Annual Report 2022

9. REVENUE CONTINUED

For the year ended 31 December 2021

€’000

SaaS

platform

Digital

marketing

Other

revenues Total

Primary geographic market

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

Revenues related to SaaS platform contracts amounts to €28.1 million as at 31 December 2022, compared with €16.3 million as

at 31 December 2021. The increase compared with last year is related both by organic growth 36% year-on-year and by the

acquisitions completed during the. 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.

• “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 access to 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 €7.2 million as at 31 December 2022, compared with €7.7 million as at 31 December

2021, are related to services for the dealer in order to acquire enhanced online traffic. Slight reduction compared to the previous

year is mainly related to the reduction of marketing campaign of dealers during FY 2022.

Other revenues amounting to €3.2 million as at 31 December 2021, compared with €3.6 million as at 31 December 2021, mainly

include revenues for training activities .

10. GROUP OPERATING LOSS

Group operating loss is stated after charging/(crediting) the following:

€’000 2022 2021

Cost for customers media services 7,028 6,654

Personnel costs 29,864 27,828

R&D capitalisation (8,707) (3,490)

Other operating costs 15,216 8,689

Amortisation and depreciation 8,013 4,235

Total costs 51,414 43,916

Personnel costs, excluding Directors’ remuneration, are shown in the following table:

€’000 2022 2021

Wages and salaries 19,215 13,325

Social security costs 5,943 3,671

Employee benefit pension cost 758 557

Severance indemnity 526 435

Earn-out payments costs 1,879 126

Stock option plan cost 1,543 9,714

Total 29,864 27,828

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

99MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

10. GROUP OPERATING LOSS CONTINUED

The increase of the caption wages and salaries compared with last year is mainly due to the increase of the average number of

employees (363 in FY2022 compared to 267 in FY 2021). Wages and salaries include the directors’ emoluments paid in 2022 (full

details are given in the Directors’ remuneration report on pages 58-68). For the disclosure related to the highest paid Director

please refer to the Directors’ remuneration report.

Stock option plan cost includes the accrual of the stock option costs as required by IFRS 2. Further details are provided in

note 23. The decrease compared with the last year is mainly related to the 2021 one-off vesting of a certain amount of stock

options at the day of IPO. Severance indemnity, earn-out payments and stock option plan cost are considered exceptionals for

the purpose of definition of Adjusted EBITDA as not strictly inherent to business performance of the Group.

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 and in the year 2022. 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:

• consultant fees for legal, fiscal and administrative HR consultants and R&D activities of approximately €6 million;

• software costs for €2.3 million;

• server costs for €1.3 million;

• travel costs for €0.7 million;

• events for €0.4 million;

• insurance costs for €0.4 million;

• exceptional costs for €1.1 million; and

• other costs not included in the above categories for €3 million.

Exceptional costs are related to costs incurred for M&A and one-off projects completed during the year and as a consequence

not strictly inherent to business performance of the Group.

Adjusted EBITDA is then calculated as follows: operating loss plus amortisation, depreciation, exceptional costs, severance

indemnity, stock option plan cost and earn-out payments costs (as disclosed above).

The increase compared with last year is mainly related to the change of perimeter due to the acquisition made for €3 million and

the increase of consultant fee sustain to boost the growth of the Group and to be compliant with the requirements of being a

listed Group.

The fees of the Group’s auditor for services provided are analysed below:

€’000 2022 2021

Audit of the Group’s financial statements 183 143

Other

– 353

1 includes in 2021 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 €6.8 million for the year ended 31 December 2022 (€3.3 million for the

year ended 31 December 2021) mainly related to development costs capitalised; and

• depreciation of tangible assets for approximately €1.2 million for the year ended 31 December 2022 (€0.9 million for the year

ended 31 December 2021).

100MotorK Annual Report 2022

11. FINANCE INCOME AND EXPENSE

Finance income and expense are shown in the following tables:

€’000 2022 2021

Interest received on bank deposits 8 –

Gain on foreign exchange 223 11

Total finance income 231 11

€’000 2022 2021

Bank loans 481 549

Loss on foreign exchange 228 102

Other loans 14 1,645

Net interest expense on defined benefit pension scheme 25 13

Loss on derivative contracts – 2,327

Other finance expense 487 182

Total finance expense 1,235 4,818

Bank loans include the interest paid during the year for the loan in place. Other loans included in FY 2021 the interest accrued

and paid for the loan entered into with European Investment Bank. Such loan has been fully repaid at the end of 2021.

12. CORPORATE INCOME TAX

Corporate income taxes are shown in the following table:

€’000 2022 2021

Current tax on profits for the period – –

R&D tax grants 306 150

Foreign subsidiaries income taxes (621) (2,236)

Adjustment relating to prior periods 2 (9)

Total current tax (313) (2,095)

Origination and reversal of temporary differences 173 (670)

Total deferred tax 173 (670)

Corporate income tax (140) (2,765)

The caption R&D tax grants is related to tax grants recognised by Italian tax authorities in relation to R&D expenses incurred

during the year.

Foreign subsidiaries income taxes include the accrual for corporate income taxes to be paid mainly in France, Portugal,

Germany and Israel.

Group has estimated trading losses carried forwarded in the UK for an amount of approximately €25 million and in Italy for an

amount of approximately €21 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 €10.6 million have not been recognised due to the

uncertainty in the timing in which such loss will be utilised.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

101MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

12. CORPORATE INCOME TAX CONTINUED

The income taxes for the year are reconciled with the theoretical tax burden in the following table:

€’000 2022 2021

Loss before tax (discontinued and continuing operations) (7,137) (20,760)

Tax using the Company’s domestic tax rate of 19.0% (1,356) (3,944)

R&D expenditure credit (306) –

Other expenditure credit 0 (150)

Foreign subsidiaries income taxes 621 2,236

Unrecognised deferred tax assets 3,115 4,626

Capital Gain DriveK business combination

(1,872) –

Other movements (62) (3)

Total tax (credit) 140 2,765

1 Contribution in-kind made by MotorK Italia S.r.l. to AutoXY S.p.A. in the context of the business combination related to the selling of the DriveK business unit

is neutral from a fiscal perspective in accordance with Italian tax legislation. As a consequence, loss before tax from a fiscal perspective is higher of roughly

€1.8 million compared to the loss booked in the consolidated financial statements profit and loss statements.

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 2021 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

Additions – internally generated – – 8,707 – 8,707

Additions – – 53 – 53

Acquired through business combinations 2,774 994 879 10,285 14,932

Reclassification from assets available for sale – 3,422 3,422

As at 31 December 2022 5,897 1,064 27,617 18,165 52,743

Accumulated amortisation and impairment

As at 1 January 2021 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

Charge for the year 466 115 6,232 6,814

Reclassification from assets available for sale 1,497 1,497

As at 31 December 2022 942 116 14,928 15,987

Net book value

As at 1 January 2021 1,163 – 6,756 1,943 9,862

As at 31 December 2021 2,647 69 7,357 7,880 17,953

As at 31 December 2022 4,955 948 12,689 18,165 36,757

102MotorK Annual Report 2022

13. INTANGIBLE ASSETS CONTINUED

Customer relationship

The customer relationship amounts to €4.9 million as at 31 December 2022 (€2.6 million as at 31 December 2020). The increase

is related to the fair value of customer relationship arising from the allocation of the consideration paid for the acquisition made

during FY 2022 of FranceProNet for €1.4 million, FusionIT for €0.8 million and ICO International for €0.6 million net of the

amortisation of the year. 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 €0.9 million as at 31 December 2022 (€0.1 million as at 31 December 2021) and this is related to the

fair value allocated using the Relief-from-Royalty method to part of the consideration paid for the acquisition of FranceProNet for

€0.2 million, FusionIT for €0.5million and ICO International for €0.3 million net of the amortisation of the year.

Development costs

Development costs amounting to €12.7 million as at 31 December 2022 (€7.3 million as at 31 December 2021) 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. The main projects where the R&D team was involved during the year are the following:

• Leadspark and Leadspark 2 development: creation of the new version of the CRM with new features and with an improvement in

terms of user experience;

• Webspark and Webspark (R)evolution: enhancement of Webspark Sales to improve website performance and its adaptability to

the Platform.

Due to the results of the year development costs were subject to an impairment test taking into account past economic and

financial performance and future expectations inferable from the business plan 2023–2027. The results of the impairment test did not

reveal any impairment loss.

Goodwill

Goodwill booked in the consolidated financial statements as at 31 December 2022 amounts to €18.1 million (€7.9 million as at

31 December 2021). The increase compared with last year is related to the fair value allocated to residual goodwill generate by the

acquisition made during the FY 2022 for €10.3 million.

The increase of the year is related to the goodwill arisen from the PPA made during the year reported below:

• FranceProNet €1.3 million.

• SFD €1.1 million.

• FusionIT €5.5 million.

• ICO International €2.4 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 DriveK business unit was classified as a

discontinued operation and sold during FY 2022).

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 2022, goodwill was subjected to an impairment test taking into account past economic and financial

performance and future expectations inferable from the business plan 2023–2027. Beyond that period, operating cash flows are

assumed to grow at 1.9% annually. The risk adjusted pre-tax rate (“WACC”) used to discount the CGU cash flow forecasts is 20.5%.

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 2022 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 29.3%.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

103MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

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 2021 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

Additions 60 30 – 225 2,437 2,752

Acquired through business combinations – 40 26 16 433 515

Disposals – – – (9) (341) (350)

As at 31 December 2022 409 193 27 608 7,969 9,206

Accumulated depreciation

As at 1 January 2021 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

Charge for the year 42 13 5 102 1,038 1,200

Depreciation on disposals – – – (7) (200) (207)

As at 31 December 2022 327 88 6 293 3,492 4,206

Net book value

As at 1 January 2021 72 11 – 59 1,551 1,693

As at 31 December 2021 64 48 – 178 2,786 3,076

As at 31 December 2022 82 105 21 315 4,477 5,000

Right-of-use assets amounting to €4.5 million as at 31 December 2022 (€2.8 million as at 31 December 2021) 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 increase in the year net of depreciation of €1.7 million is related mainly to the new lease agreement stipulated in France

for the new offices.

Right-of-use by underlying asset mainly refers to (i) automobiles for €0.6 million as of 31 December 2022 (€0.3 million as of

31 December 2021), and to (ii) office rental for €3.9 million as of 31 December 2022 (€2.4 million as of 31 December 2021).

15. INVESTMENTS IN ASSOCIATED COMPANIES AND NON-CURRENT ASSETS – SECURITY DEPOSIT

Investments in associated companies amounts to €3.5 million and it represents the investment in the 20% of AutoXY S.p.A.

arisen from the business combination related to the sale of the DriveK Business Unit. Details are provided below in note 24.

As the transition was completed at fair value in the month of December 2022, management has considered the investments

valued at fair value and therefore no impairment test has been prepared.

Non-current assets – security deposit amounts to €0.1 million as at 31 December 2022 (€0.1 million as at 31 December 2021)

includes deposits made by the Group mainly for the rental of the offices of the subsidiaries.

104MotorK Annual Report 2022

16. CONTRACT ASSETS AND TRADE AND OTHER RECEIVABLES

Contract assets and trade and other receivables are shown in the following table:

€’000 2022 2021

Non-current contract assets 7,294 5,059

Contract assets – current portion 13,440 8,521

Total contract assets 20,734 13,580

Trade receivables 11,347 5,720

Prepayments 889 634

Other receivables 86 355

Tax receivables 736 732

Total trade and other receivables 13,058 7,441

Contract assets

As already mentioned in note 9, the financial statement line item contract assets is related to the application of IFRS 15 on

SaaS platform revenue agreements and represents accrued income as at the reference date.

Revenues related to SaaS platform are related to multi-year contracts (12, 24 or 36 months) are recognised in the moment in

which the access to the platform are granted to the customers 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 SaaS platform revenue.

Movements in the contract assets during FY 2022 are as follows:

• Contract assets as at 31 December 2021: €13,580 thousand

• SaaS revenue (please refer to the Financial Review section for further details) recognized during FY 2022: €27,084 thousand

• Contract assets billed during the FY 2022: €19,930 thousand

• Contract assets as at 31 December 2022: € 20,734 thousand.

Contract assets movements during FY 2021 are as follows:

• Contract assets as at 31 December 2020: €10,204 thousand

• SaaS revenue (please refer to the Financial Review section for further details) recognized during FY 2021: €14,820 thousand

• Contract assets billed during the FY 2021: €11,444 thousand

• Contract assets as at 31 December 2021: € 13,580 thousand.

Trade and other receivables

Trade receivables as at 31 December 2022 amounted to €11.3 million with the year-on-year increase due to the higher revenues

generated in the fourth quarter of 2022 compared with 2021.

As at 31 December 2022, trade receivables of €3.8 million (€1.6 million as at 31 December 2021) 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 2022 2021

As at 1 January 247 268

Increase during the year

180

Receivables written off during the year as uncollectable

(31)

(62)

Increase related to business combinations

–

Impairment allowance for trade receivables classified previously as held for sale 119 (29)

As at 31 December 533 247

Tax receivables includes mainly the tax grants granted by the capital increase in MotorK Italy for €0.4 million.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

105MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

17. CASH AND CASH EQUIVALENTS

The caption cash and cash equivalents amounting to €19.2 million (€43.2 million as at 31 December 2021) is related to cash

available in bank accounts of the Group subsidiaries. The amount includes €0.3 million of cash deposited onto prepaid cards

used by employees as petty cash as at 31 December 2022 (€0.1 million as at 31 December 2021).

For details of changes during the analysed periods please refer to the consolidated statement of cash flow.

Cash and cash equivalents are deposited with top rated banks.

18. TRADE AND OTHER PAYABLES AND TAX PAYABLE

Trade and other payables include:

€’000 2022 2021

Trade payables 2,694 1,844

Accruals 2,465 1,329

Total trade payables 5,159 3,173

Other payables including tax and social security payments 6,862 5,084

Total current trade and other payables 12,021 8,257

The carrying value of trade and other payables measured at amortised cost approximates fair value.

Trade payables amount to €2.7 million as at 31 December 2022 compared with €1.8 million as at 31 December 2021.

Accruals includes invoices to be received for service rendered in 2022. The increase compared to the data as at 31 December

2021 is lined up with the increase of trade payables and with the general increase of the business of the Group.

Other payables amounting to €6.9 million as at 31 December 2022 includes:

• contract liabilities of €2 million (€1.5 million last year). This is mainly related to the transaction price allocated to the remaining

performance obligations (unsatisfied or partially unsatisfied) as at 31 December related to the post contract support activities.

Changes during the FY2022 are the following: increase for €1.5 million and release to profit and loss for €1 million. Changes during

the FY2021 are the following: increase for €1 million and release to profit and loss for €0.4 million;

• liabilities towards employees for bonus’ to be paid in 2022 for €0.5 million (€0.8 million last year);

• emoluments to be paid to the directors for €0.1 million;

• other liabilities towards employees and related social security charges of approximately €3.9 million (€3 million last year).

Increase of the year is mainly related to the increase of average of FTE within the Group; and

• other minor liabilities for €0.4 million.

€’000 2022 2021

Corporate tax liabilities 3,041 2,448

VAT liabilities 801 497

Total tax payable 3,842 2,945

Corporate tax liabilities includes mainly the tax provision booked in MotorK Israel Ltd during FY 2021 that will be paid in 2023

for €2.1 million and the tax provision for the taxes to be paid mainly in France, Portugal and Germany.

VAT liabilities is mostly composed by VAT debt position of the subsidiaries in Italy, Germany, Spain and France.

106MotorK Annual Report 2022

19. CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

Current and non-current financial liabilities include:

€’000 2022 2021

Bank loan 65 1,794

Convertible notes – –

Other financial liabilities 611 128

Total current financial liabilities 676 1,922

Current lease liabilities 972 790

Bank loan 7,534 4,200

Other financial liabilities 84 –

Total non-current financial liabilities 7,618 4,200

Non-current lease liabilities 3,665 2,046

Bank loan

The following table sets forth the breakdown of bank loans by counterparty for the years ended 31 December 2022 and 2021:

€’000

2022

2021

Current Non-current Current Non-current

Financial institution – – – –

Creval – – 594 –

Illimity Bank – 7,202 1,200 4,200

Sace – 300 – –

Belfius 47 26 – –

ING Direct 18 – – –

CIC Sud Ouest – 6 – –

Total 65 7,534 1,794 4,200

Main changes of the year are reported below:

• 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 €7.2 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 this financial

statements covenants are respected. In the context of the support provided during the COVID-19 and post COVID-19 period

by the Italian government, Illimity Banks is guaranteed by SACE SIMEST for 90% of the loan value in case the Group will not

be able to fulfill its obligations.

• Repayment in January 2022 of the loan entered into with Creval for €0.6 million.

• Entered into a financial loan with SACE SIMEST for €0.3 million in September 2022 to sustain the digitalisation process of the

Group with a with a six-year duration and a 0.081% interest rate. No financial covenants in place.

Other financial liabilities with Belfius, ING Direct and CIC Sud Ouest are related to minor financing in place in the Company

acquired during the year 2022.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

107MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

19. CURRENT AND NON-CURRENT FINANCIAL LIABILITIES CONTINUED

Other financial liabilities

Other financial liabilities includes mainly debt related to credit cards repaid early in 2022 for €0.2 million and €0.4 million of

deferred consideration to be paid for the acquisition of ICO International.

The changes in financial liabilities, excluding lease liabilities, are shown below:

€’000 Total

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

Drawdowns of new loan and CEN (594)

New bank loan 2,101

New bank loan obtained through business combinations 98

Change in other financial liabilities 567

Cash changes 2,172

Financial liabilities at 31 December 2022 8,294

1 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 with 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 2022, the expense relating to low value assets

leases (mainly laptops) amounted to €0.1 million (€0.1 million in 2021).

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.

108MotorK Annual Report 2022

The following table provides details of lease liabilities:

€’000

Land and

buildings

Motor

vehicles Total

Lease liabilities

As at 1 January 2021 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

Cash items:

Lease payments (763) (308) (1,071)

Non-cash items:

New leases in the year 1,921 516 2,437

New leases through business combinations 388 43 433

Reduction for disposal of lease (130) (11) (141)

Interest expense 119 24 143

As at 31 December 2022 4,028 609 4,637

The following table provides details of the Group’s lease liabilities:

€’000

As at 31 December

2022 2021

Repayables as follows:

Under 1 year 972 790

2-5 years 2,718 1,861

Greater than 5 years 947 185

Total 4,637 2,836

The increase compared with last year is mainly related to the new lease agreement related to the office in France.

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. No other significant

pension provisions other than staff severance indemnity booked in the Italian subsidiaries of the Group are included within

such caption.

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 2022 compared with 31 December 2021, 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 profit, amounting to €0.7 million for the year ended 31 December 2022 (loss of €0.02 million for the year ended

31 December 2021), has been recognised in other comprehensive income (OCI).

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

109MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

20. EMPLOYEE BENEFITS LIABILITIES CONTINUED

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 2023 77

Expected benefit payments during fiscal year ending 31 December 2024 102

Expected benefit payments during fiscal year ending 31 December 2025 126

Expected benefit payments during fiscal year ending 31 December 2026 150

Expected benefit payments during fiscal year ending 31 December 2027 173

Expected benefit payments during fiscal years ending 31 December 2028 through 31 December 2032 1,267

The amounts recognised in the statement of financial position are as follows:

€’000 2022 2021

Present value of obligation (1,895) (2,069)

Fair value of scheme assets – –

Employee benefit liability (1,895) (2,069)

The amounts included within the statement of comprehensive income are as follows:

€’000 2022 2021

Current service costs 758 557

Amount included in personnel costs 758 557

Interest on pension liabilities 25 13

Amount included in finance cost 25 13

Analysis of the amount recognised in statement of total comprehensive income:

€’000 2022 2021

Experience gain/(loss) on liabilities 679 (20)

Net gain/(loss) 679 (20)

Changes in the present value of the employee benefit obligation are as follows:

€’000 2022 2021

Opening employee benefit obligation 2,069 1,818

Service cost – continuing operations 758 557

Service cost – discontinued operations – –

Interest cost 25 13

Actuarial gain/(loss) (679) 20

Benefit paid (314) (356)

Reclassification as liabilities directly associated with assets classified as held for sale – –

Other movements 36 17

Closing employee benefit obligation 1,895 2,069

Expected payments for the year ended 31 December 2023 for the Group amount to €0.07 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.

110MotorK Annual Report 2022

20. EMPLOYEE BENEFITS LIABILITIES CONTINUED

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:

2022 2021

Discount rate 3.70% 1.20%

Rate of retail price inflation 2.25% 2.00%

Rate of increase in salaries 3.25% 3.00%

The amount for the current and previous periods are as follows:

€’000 2022 2021

Employee benefits obligation (1,895) (2,069)

Scheme assets – –

(Deficit) (1,895) (2,069)

Experience adjustments on scheme liabilities 679 (20)

Sensitivity analysis of the value of employee benefits liabilities is shown below:

€’000 2022 2021

Base case 1,895 2,069

Discount rate +0.5% (122) (95)

Discount rate -0.5% 138 258

An increase of rates of salary increases of 0.5% will have an increase in the value of the employee benefits liabilities of

€47 thousand while a decrease of rates of salary increase of 0.5% will have a decrease of € 88 thousand. The same impact for an

increase of decrease of price inflation of +/- 0.5%

21. DEFERRED TAX LIABILITIES

Deferred tax 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 liabilities is shown below:

€’000 2022 2021

As at 1 January 659 245

Business combination 986 441

Recognised in profit and loss (174) (27)

As at 31 December 1,471 659

Details of deferred tax liabilities are shown below:

€’000 2022 2021

Other 274 77

Customer relationship 1,197 582

Total 1,471 659

The increase compared with last year is mainly related to the deferred tax liabilities arising from the fair value of the intangible

assets arising from the purchase price allocation exercise in relation to the consideration paid for the acquisition of

FranceProNet, FusionIT and ICO International.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

111MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

22. OTHER NON-CURRENT LIABILITIES AND PROVISIONS

Other non-current liabilities and provisions include:

€’000 2022 2021

Current provisions 551 366

Non-current provisions 3,987 1,040

Total 4,538 1,406

Provisions classified within current liabilities amounts to €0.5 million (€0.4 as at 31 December 2021) 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 and the current portion of earn-out provision to be paid in 2023. Provisions classified within non-current liabilities

amounts to €4 million (€1 million as at 31 December 2021) is related to the estimated earn-out to be paid in relation with the

acquisition made in 2022 and 2021. The movement of current and non-current provisions is shown below:

€’000 2022 2021

Current provisions as at 1 January 366 –

Release of the period (336) –

Accrual for the period 521 366

Current provisions as at 31 December 551 366

€’000 2022 2021

Non-current provisions as at 1 January 1,040 –

Release of the period (133) –

Business combination 2,430 –

Accrual for the period 438 1,040

Accrued interests 212 –

Non-current provisions as at 31 December 3,987 1,040

23. SHAREHOLDERS EQUITY

Share capital

The share capital is composed as follows:

2022 2021

Value

(€’000) Number

Value per

(€)

Value

(€’000) Number

Value per

(€)

Ordinary shares 403 40,310,252 0.01 403 40,328,959 0.01

Deferred shares – – – – – –

Preferred A-1 shares – – – – – –

Preferred A-2 shares – – – – – –

Total 403 40,310,252 0.01 403 40,328,959 0.01

During the financial year 2022 share capital changed due to the following items:

• issue of 423,301 shares mainly related to acquisitions made in 2022 and earn-out payment of 2021 acquisitions; and

• cancellation of 442,008 shares related to the buy-back programme in place during the year 2022. On 18 July 2022, the AGM of

MotorK Plc has authorised to buy back its own ordinary shares by way of off-market purchases on Euronext Amsterdam and

via block trades up to a maximum aggregate value of €3,000,000. This authorisation is limited to the maximum of 4,032,895

ordinary shares, representing approximately 10 per cent. of the Company’s issued ordinary share capital as at the date of the

last AGM of the Company. The authorisation will expire following the conclusion of the AGM of the Company to be held in 2023.

112MotorK Annual Report 2022

23. SHAREHOLDERS EQUITY CONTINUED

On 18 July 2022 AGM approves a capital reduction by way of the cancellation of an amount equal to €4,000,000 standing to the

credit of the Group’s share premium account to create additional distributable reserves, including in respect of the Programme.

Such capital reduction imply a reduction of Share Premium and a increase of Retained Earnings without effect on number of

shares of the Company. On 13 October 2021 the Shareholders Meeting approves a capital reduction by way of the cancellation of

an amount equal to €14,000,000 standing to the credit of the Group’s share premium account to create additional distributable

reserves. Such capital reduction imply a reduction of Share Premium and a increase of Retained Earnings without effect on

number of shares of the Company and it was necessary for the re registration of the Company as a public limited company

(“PLC”) in the context of the IPO.

Earn-out reserve represents contingent consideration to be paid in shares to be issued on the basis of the earn-out mechanism

in place with the previous shareholders of the Company acquired in December 2021. Such shares will be issued between the end

of December 2023 and the end of December 2024.

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 2022, 1,358,371 (2,126,641 in 2021) options were granted to employees. These options are related

to two different option plan. The one in place during FY 2021 (The “Old Share Option Plan”) providing a straight-line basis vesting over

four years, with an exercise price of €0.34 and with a life of 10 years and a new Employee Share Option Plan (the “New Share Option

Plan”) issued in 2022 providing a straight-line basis vesting over three or four years and subject to performance conditions defined on

the basis of Group performance decided year over year (for more details regarding performance conditions please refer to the

disclosure done in the Remuneration Committee Report of this Annual Report), with an exercise price of €1.645 and with a life of ten

years. The 345,353 options granted into FY 2022 related to the Old Share Option Plan were granted into the first six months of the year.

The 1,013,018 options granted into FY 2022 related to the New Share Option Plan were granted in November 2022.

Old Share Option Plan

2022 2021

Weighted

average

exercise price

(€ cents) Number

of which

exercised

Weighted

average

exercise price

(€ cents) Number

of which

exercised

Outstanding at 1 January 34 3,201,583 – 34 1,685,959 –

Subdivision of shares

Granted during the year 34 345,353 – 34 2,126,641 120,000

Lapsed during the year

34 (322,551) – 34 (611,017) –

Outstanding at 31 December 34 3,224,385 – 34 3,201,583 120,000

of which

vested

2,337,0 87 1,125,691

unvested

887,298 2,075,892

1 The options lapsed when the beneficiary left the Company.

The exercise price of options outstanding at 31 December 2021 and 2020 was €0.34.

New Share Option Plan

2022 2021

Weighted

average

exercise price

(€) Number

of which

exercised

Weighted

average

exercise price

(€) Number

of which

exercised

Outstanding at 1 January 1.645 – – – – –

Subdivision of shares

Granted during the year 1.645 1,013,018 – – – –

Lapsed during the year

– – – – – –

Outstanding at 31 December 1.645 1,013,018 – – – –

of which

vested

– –

unvested

1,013,018 _

1 The options lapsed when the beneficiary left the Company.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

113MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

23. SHAREHOLDERS EQUITY CONTINUED

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:

2022

(Old Share

Option Plan)

2022

(New Share

Option Plan) 2021

Option pricing model used Black-Scholes Black-Scholes Black-Scholes

Weighted average share price at grant date (€) 4.78 0.765 6.1

Exercise price (€) 0.337 1.645 0.337

Weighted average contractual life (years) 10 10 10

Volatility 31.2% 31.2% 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 2022 2021

Equity-settled scheme 1,543 9,714

24. DISCONTINUED OPERATIONS

During FY 2022 the Group has completed the sale of the DriveK business unit classified as held for sale in the consolidated

financial statements ended 31 December 2021.

The transaction completed on 15 December 2022 involved the contribution in kind of the DriveK business into Auto XY S.p.A,

company fully owned by Gedi Gruppo Editoriale S.p.A. After that 31,94% of the new combined entity was sold by MotorK Italia

S.r.l to Gedi Gruppo Editorial S.pA. so that, after the transaction, MotorK Italia S.r.l. owned 20% of the combined entity. The

transaction has generated a gain on sale of €7.8 million and a cash inflow of € 4 million.

On the 20% of investments into AutoXY S.p.A. owned by MotorK Italia S.r.l. has been granted a reciprocal put and call to be

exercised no later than 30 June 2026 calculated on certain EBITDA and Net Financial Positions targets of the Combined Entity.

No impairment indicators arisen between 15 December 2022 and the year ended and as a consequence no impairment test has

been prepared by management.

The results of the DriveK business unit is presented below.

€’000

For the year

ended

31 December

2022

For the year

ended

31 December

2021

Revenue from customers 5,506 6,325

Capital gain 7,767 –

Costs for marketing and call centre services 3,561 3,853

Personnel costs 1,863 1,529

R&D capitalisation – (177)

Other operating costs 1,115 717

Amortisation and depreciation – –

Total costs 6,539 5,922

Operating profit 6,734 403

Finance expense – –

Profit before tax 6,734 403

Corporate income tax – –

Profit after income tax of discontinued operation 6,734 403

114MotorK Annual Report 2022

24. DISCONTINUED OPERATIONS CONTINUED

Revenue from customers includes the revenue generated by the business during the year from January 2022 until 15 December

2022 (the date in which the business has been sold). Capital gain includes the capital gain generated by the selling of the

business unit as disclosed above.

Costs for marketing and call centre services includes the costs incurred by the Group to run the business in the year 2022 until the

date in which such business has been sold.

Personnel costs includes the costs for employees incurred during the year. Other operating costs includes the fees paid to the

advisor supporting the transaction with Gedi Gruppo Editoriale S.p.A.

The Group has opted to present the earnings per share from discontinued operations on the face of the statement of profit and

loss.

As the business unit DriveK was sold on 15 December 2022 the assets and liabilities of DriveK business unit classified as held for

sale as at 31 December 2022 are nil. For comparative purpose only we present the value of assets and liabilities of the DriveK

business unit as at 31 December 2021:

€’000

As at

31 December

2022

As at

31 December

2021

Intangible assets – 1,925

Trade and other receivables – 2,238

Total assets classified as held for sale – 4,163

Trade and other payables – 767

Employees benefits – 118

Total liabilities classified as held for sale – 885

Net assets classified as held for sale – 3,278

The net cash flows incurred by the DriveK business unit are, as follows:

€’000

For the year

ended

31 December

2022

For the year

ended

31 December

2021

Net cash flows from/(used in) operating activities (960) 951

Net cash from/(used in) investing activities 4,011 (177)

Net cash from/(used in) financing activities – –

Net increase in cash generated by the business 3,051 774

Net cash flows from/(used in) operating activities represents the cashflow used during the course of business until 15 December

2022.

Net cash from/(used in) investing activities is related to €5.6 million cashed in before the end of the year 2022 for the selling of

the 31,94% of the combined entity net of €4 million of cash contributed into kind in AutoXY SpA.

25. BUSINESS COMBINATIONS

The acquisitions completed during the year 2022 were made in the context of the Group’s growth strategy to expand its

customer based in Europe and its suite of products. Please see below for more details.

FranceProNet SaS and SFD SaS

On 1 February 2022, MotorK Group completed the acquisition of 100% of the voting equity interests of FranceProNet SAS and

SFD SAS (“ together FranceProNet Group”), 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.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

115MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

25. BUSINESS COMBINATIONS CONTINUED

The initial consideration paid for FranceProNet Group in February 2022 amounts to €4.4 million (of which €1 million through the issue of

shares and €3.4 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 contingent consideration of €0.5 million related to certain performance of the acquired company.

Management has performed the purchase price allocation during the year 2022 and the excess of the purchase price over the fair value

of the estimated net assets acquired of €3.6 million has been allocated for €1.4 million to customer relationship, €0.2 million to

trademark net of €0.4 million of deferred tax liabilities. The difference of €2.4 million has been allocated to goodwill.

Since the acquisition date, FranceProNet SAS contributed for €0.4 million to the Group consolidated result for the year and

€0.9 million to Group revenue in the consolidated financial statements closed as at 31 December 2022.

Since the acquisition date, SFD SaS contributed for €0.005 million to the Group consolidated result for the year and €0.6 million

to Group revenue in the consolidated financial statements closed as at 31 December 2022.

If the acquisition of FranceProNet Group had occurred on 1 January 2022 Group revenue would have increased by an estimated €0.4 million

and Group profit before tax would have increased by an estimated €0.4 million. In determining these amounts, management has assumed that

the fair value adjustments that arose on the date of acquisition would have been the same as if the acquisition had occurred on 1 January 2022.

The Group has incurred € 0.1 million of costs in relation to the acquisition of FranceProNet Group in the period. These costs have been

included in the Group’s consolidated statement of profit and loss and other comprehensive income caption other operating costs.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:

FranceProNet SAS

(€’000)

Book value at

acquisition

date Adjustment

Restated

fair value

Customer-related intangible assets 1,407 1,407

Trademark 216 216

Property, plant and equipment 13 – 13

Receivables 393 – 393

Cash at bank and in hand 1,055 – 1,055

Payables (501) – (501)

Deferred tax (406) (406)

Total net assets (A) 960 1,217 2,177

Fair value of consideration

Cash 2,308

Contingent consideration 361

Equity 667

Total consideration (B) 3,336

Goodwill (B)-(A) 1,159

SFD SAS

(€’000)

Book value at

acquisition

date Adjustment

Restated

fair value

Software 13 – 13

Property, plant and equipment 23 – 23

Receivables 615 – 615

Cash at bank and in hand 296 – 296

Payables (634) – (634)

Total net assets (A) 313 313

Fair value of consideration

Cash 1,049

Contingent consideration 177

Equity 300

Total consideration (B) 1,526

Goodwill (B)-(A) 1,213

116MotorK Annual Report 2022

25. BUSINESS COMBINATIONS CONTINUED

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 FranceProNet and the Group.

FusionIT

On 31 May 2022, MotorK Group completed the acquisition of 100% of the voting equity interests of FusionIT (also known as

“Carflow”) an automotive retail solutions provider that serves more than 400 car dealers and major automotive OEMs in Belgium,

the Netherlands and Luxembourg. In line with the strategy of the Group to expand its customer base FusionIT gives the possibility

for MotorK to enter into a new strategic market within Europe.

The initial consideration paid for FusionIT amounts to €5 million (of which €1 million is through the issue of shares and €4 million

is in cash). In addition to the initial consideration, the sale and purchase agreement regulating to the transfer of shares to

MotorK Italia Srl provides with a contingent consideration of €1.8 million related to certain performance conditions of the

acquired company: (i) customer migration to MotorK products; ii) keep a certain level of churn rate on existing customer base;

iii) generate a certain amount of new business. As provided by IFRS 3 paragraph 55 a) the earn-out conditioned to the fact that

the previous shareholders will remain as employees of the Group for a certain period 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 a loss of €0.2 million to the Group consolidated result for the year and

€1.5 million to Group revenue in the consolidated financial statements closed as at 31 December 2022.

If the acquisition had occurred on 1 January 2022 Group revenue would have increased by an estimated €1 million and Group loss

before tax would have increased by an estimated €0.5 million. In determining these amounts, management has assumed that the fair

value adjustments that arose on the date of acquisition would have been the same as if the acquisition had occurred on 1 January 2022.

The Group has incurred €0.06 million of costs in relation to the acquisition of FusionIT in the period. These costs have been included in

the Group’s consolidated statement of profit and loss and other comprehensive income caption other operating costs.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:

FusionIT

(€’000)

Book value at

acquisition

date Adjustment

Restated

fair value

Customer-related intangible assets – 781 781

Trademark – 485 485

Software 960 (494) 466

Property, plant and equipment 35 – 35

Receivables 243 – 243

Cash at bank and in hand 619 – 619

Payables (950) – (950)

Unfavourable contract – (120) (120)

Deferred tax – (316) (316)

Total net assets (A) 907 336 1,243

Fair value of consideration

Cash 4,000

Contingent consideration 1,773

Equity 1,000

Total consideration (B) 6,773

Goodwill (B)-(A) 5,530

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 FusionIT and the Group.

ICO International GmbH

On 28 July 2022, MotorK Group completed the acquisition of 100% of the voting equity interests of ICO International GmbH (also

known as “Webmobil24”) a German software provider of stock management solutions and e-commerce platforms to automotive

dealers and OEMs. Over the past 20 years, Webmobil24 has established itself as a key player in the German automotive digital

landscape thanks to its innovative offering which covers the entire spectrum of vehicle inventory management needs, leveraging

the expansion of MotorK Group into the German market. This acquisition marked another decisive step in the development of

MotorK’s European footprint.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

117MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

25. BUSINESS COMBINATIONS CONTINUED

The initial consideration paid for ICO International amounts to €3 million in cash. In addition to the initial consideration, the sale

and purchase agreement regulating to the transfer of shares to MotorK Italia Srl provides with a deferred consideration of

€0.2 million to be paid during FY 2023 and a contingent consideration of €0.2 million related to certain recurring revenue target.

Since the acquisition date, the subsidiary contributed a loss of €0.1 million to the Group consolidated result for the year and

€0.7 million to Group revenue in the consolidated financial statements closed as at 31 December 2022.

If the acquisition had occurred on 1 January 2022 Group revenue would have increased by an estimated €0.8 million and Group

profit before tax would have increased by an estimated €0.03 million. In determining these amounts, management has assumed

that the fair value adjustments that arose on the date of acquisition would have been the same as if the acquisition had occurred

on 1 January 2022.

The Group has incurred €0.07 million of costs in relation to the acquisition of ICO International Gmbh in the period. These costs

have been included in the Group’s consolidated statement of profit and loss and other comprehensive income caption other

operating costs.

ICO International GmbH Continued

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:

ICO International

(€’000)

Book value at

acquisition

date Adjustment

Restated

fair value

Customer-related intangible assets 586 586

Trademark 293 293

Software 1,479 (1,079) 400

Property, plant and equipment 10 – 10

Receivables 166 – 166

Cash at bank and in hand 15 – 15

Payables (170) – (170)

Deferred tax (263) (263)

Total net assets (A) 1,500 (463) 1,037

Fair value of consideration

Cash 2,975

Deferred and contingent consideration 425

Equity –

Total consideration (B) 3,400

Goodwill (B)-(A) 2,363

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 ICO International and

the Group .

118MotorK Annual Report 2022

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

2022 2021

Loss for the period (in thousands) (7,277) (23,525)

Loss from continuing operations (in thousands) (14,011) (23,928)

Profit from discontinued operations (in thousands) 6,734 403

Weighted average number of shares 40,506,379 29,872,528

Earnings per share (0.18) (0.79)

Earnings per share from continuing operations (0.35) (0.80)

Earnings per share from discontinued operations 0.17 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

On 14 February 2023, in line with the M&A strategy pursued by the Group, MotorK Italia S.r.l. subscribed a convertible equity

loan issued by Smart Mobility Services Spain S.L., convertible at the sole discretion of MotorK, for an amount of €150,000.00

with a due date of 31 December 2023.

28. TRANSLATION OF FOREIGN COMPANIES’ FINANCIAL STATEMENTS

The exchange rates used to translate non-Euro zone company’s financial statements are as follows:

2022

Average

exchange

rate

31 Dec 2022

year-end

exchange

rate

Israeli Shekel 3.5360 3.7554

2021

Average

exchange

rate

31 Dec 2021

year-end

exchange

rate

Israeli Shekel 3.7682 3.5159

1 Starting from the incorporation date.

The effect of the translation of MotorK Israel Ltd reporting package amount to Euro 126 thousand as reported in the Other

comprehensive income/(loss) section.

29. RELATED PARTY TRANSACTIONS

Compensation of key management personnel of the Group

Full details of the compensation and of number of shares of MotorK Plc of key management personnel are given in the Directors’

remuneration report on pages 58-68. Key management personnel are the member of the board of directors of MotorK Plc.

Please refer to the Directors’ remuneration report also for information regarding directors’ shareholding in the Group.

NOTES FORMING PART OF THE CONSOLIDATED

FINANCIAL STATEMENTS CONTINUED

FINANCIAL STATEMENTS

NOTES

119MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

MOTORK PLC STATEMENT OF FINANCIAL POSITION

€’000 Note 2022 2021

Investments 4 58,483 53,600

Non-current assets – security deposits 4 4

Financial assets 5 20,478 –

Non-current assets 78,965 53,604

Trade and other receivables 6 600 9,539

Cash and cash equivalents 7 976 24,575

Current assets 1,576 34,114

Total assets 80,541 87,718

Trade and other payables 8 2,110 9,761

Current liabilities 2,110 9,761

Provisions 8 2,016 1,040

Non-current liabilities 2,016 1,040

Total liabilities 4,126 10,801

Share capital 9 403 403

Share premium* 9 68,754 72,754

Merger reserve* 9 3,627 1,397

Earn-out reserve 9 798 –

Retained earnings 9 2,833 2,363

Total equity 76,415 76,917

Total liabilities and equity 80,541 87,718

*The prior year accounts had incorrectly presented €1,397 thousand within Share Premium which should be within Merger

Reserve from shares issued as part of total consideration by MotorK plc – parent company for acquisitions made during the

year. Under the Companies Act 2006, the Group/MotorK plc cannot apply the premiums on the shares issued at a premium by

MotorK plc

to obtain 100% of voting rights in the acquirees. This has been restated in the current year presentation of the comparative.

The restatement does not impact total net assets and profit for the relevant years.

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 €4.3 million (2021: loss of €9.7 million).

The financial statements on pages 119 and 120 were approved and authorised for issue by the Board of Directors on 30 March

2023 and were signed on its behalf by:

Marco Marlia

Chief Executive Officer

30 March 2023

120MotorK Annual Report 2022

MOTORK PLC STATEMENT OF CHANGES IN EQUITY

€’000

capital

premium*

Merger

reserve*

Earn-out

reserve

Retained

earnings

Total

attributable

to equity

holders of

parent

1 January 2021 273 12,166 – – (11,701) 738

Comprehensive income for the period

Loss for period – – – – (9,739) (9,739)

Total comprehensive loss 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 60,588 1,397 0 23,803 85,918

31 December 2021 403 72,754 1,397 0 2,363 76,917

Comprehensive income for the period

Loss for period – – – 0 (4,383) (4,383)

Total comprehensive loss for the period – – – – (4,383) (4,383)

Contributions by and distributions to owners

Issue of shares 4 – 2,230 – 2,234

Share-based payment – – 1,543 1,543

Earn-out reserve – – 798 798

Buy-back programme

(4) – (690) (694)

Capital reduction – (4,000) 4,000 –

Total contributions by and distributions to owners – (4,000) 2,230 798 4,853 3,881

31 December 2022 403 68,754 3,627 798 2,833 76,415

1 MotorK bought its own shares and cancelled them.

*The prior year accounts had incorrectly presented €1,397 thousand within Share Premium which should be within Merger

Reserve from shares issued as part of total consideration by MotorK plc – parent company for acquisitions made during the

year. Under the Companies Act 2006, the Group/MotorK plc cannot apply the premiums on the shares issued at a premium by

MotorK plc

to obtain 100% of voting rights in the acquirees. This has been restated in the current year presentation of the comparative.

The restatement does not impact total net assets and profit for the relevant years.

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.

FINANCIAL STATEMENTS

NOTES

121MotorK Annual Report 2022

Company Overview Strategic Report Governance Financial Statements

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 5th Floor One

New Change, London, England, EC4M 9AF listed from November 2021 on Euronext Amsterdam.

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.

As of 31 December 2022, 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, which directly holds approximately 20% of the

share capital. The Parent Company has not employees as at 31 December 2022.

These financial statements as of and for the years ended 31 December 2022 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. 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 UK adopted international accounting standards;

• 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.

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.

122MotorK Annual Report 2022

2. ACCOUNTING POLICIES CONTINUED

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 that 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 financial loans, other receivables and cash and cash equivalent.