Annual Report and Accounts and AGM Notice

RNS Number : 7432V

Auction Technology Group PLC

15 December 2021

Auction Technology Group plc

(the "Company" or "ATG")

Publication of 2021 Annual Report and Accounts and

Notice of 2022 Annual General Meeting

Following the release on 2 December 2021 of its preliminary results for the year ended 30 September 2021, the Company announces that it is today publishing its 2021 Annual Report and Accounts. The Company also announces that its Annual General Meeting ("AGM") will be held at 10.00 a.m. on Tuesday 25 January 2022 at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL.

At the present time, it is expected that UK Government rules and advice relating to the COVID-19 pandemic will permit a physical meeting to be held, but this may be subject to change at short notice. Any change affecting the holding of the AGM will be posted on the Company's website (www.auctiontechnologygroup.com) and by way of announcement to the London Stock Exchange. Shareholders are advised to regularly check the Company's website for updates in relation to the AGM and to carefully consider the Government advice in effect at the time of the AGM. Due to the ongoing uncertainty in respect of the COVID-19 pandemic we strongly encourage shareholders to appoint the chair of the meeting as their proxy, irrespective of whether or not they plan to attend in person.

In accordance with Listing Rule 9.6.1 of the UK Financial Conduct Authority ("FCA") a copy of the Annual Report and Accounts, the Notice of AGM and Proxy Form have been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Copies of the Annual Report, Notice of AGM and Proxy Form will also be shortly available to view on the Company's website at www.auctiontechnologygroup.com/investors/.

Compliance with DTR 6.3.5R

The information included in the final results announcement released on 2 December 2021, together with the information in the Appendix to this announcement which is extracted from the 2021 Annual Report and Accounts, constitute the materials required by the FCA's Disclosure Guidance and Transparency Rule 6.3.5R. This announcement is not a substitute for reading the 2021 Annual Report and Accounts in its entirety.

Enquiries

Tulchan Communications (Public relations advisor to ATG)	+44 (0) 207 353 4200 [email protected]
Tom Murray, Sunni Chauhan, Matt Low, Laura Marshall
ATG
For investor enquiries For media enquiries	[email protected] [email protected]

APPENDIX

Statement of Directors' Responsibilities

Page 87 of the Annual Report contains the following statement regarding responsibility for the financial statements and the management report included in the Annual Report.

The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the parent Company Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 101 "Reduced Disclosure Framework". Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing the parent Company financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable, relevant, reliable and prudent;

· state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the parent Company financial statements; and

· prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

In preparing the Group Consolidated Financial Statements, International Accounting Standard 1 requires the Directors to:

· properly select and apply accounting policies;

· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

· make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the annual financial report

We confirm that to the best of our knowledge:

· the Financial Statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

· the Annual Report and the Consolidated Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

This responsibility statement was approved by the Board of Directors on 1 December 2021 and is signed on its behalf by:

John-Paul Savant Tom Hargreaves

Chief Executive Officer Chief Financial Officer

Principal Risks and Uncertainties

Pages 52 to 55 of the Annual Report contain the following statement on principal risks and uncertainties faced by the Group.

Identifying, monitoring and managing the Group's principal risks

The Board has carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. This included an assessment of the likelihood and impact of each risk identified, and the mitigating actions being taken. Risk levels were modified to reflect the current view of the relative significance of each risk.

The principal risks and uncertainties identified are detailed in this section. Additional risks and uncertainties to the Group, including those that are not currently known or that the Group currently deems immaterial, may individually or cumulatively also have a material effect on the Group's business, results of operations and/or financial condition.

Whilst we operate in an evolving environment with several clear risks, we take a proactive and robust approach to identifying any new risks, and evaluating and mitigating all known risks through a regular review process. Climate change is not currently considered to be a principal risk for the Group given the nature of our business. The Board will continue to monitor the environmental impact of our business on the environment and the potential impact of climate change.

COVID-19

The COVID-19 pandemic caused unprecedented levels of disruption globally, with periods of national and local lockdowns in each of the territories we operate. However, the Group has continued to trade strongly and has experienced accelerated growth during the COVID-19 pandemic, in part due to acceleration of the shift from offline to online auctions. As restrictions have started to ease, we have not seen a significant change in behaviour of auctioneers and bidders returning to the use of physical auctions away from online however, there is a risk this could happen therefore reducing the number of auctioneers and/or bidders using the marketplaces or platform. The pandemic may also have longer-term impacts on other stakeholders such as employees, customers, suppliers and the wider economy which in turn may impact the Group.

The safety of our employees has been a priority, with staff supported in their need to work from home according to their personal circumstances. Intra-company communication has continued at regular intervals using accessible technology with regular town hall streaming of communications to all staff including real time Q&A sessions. We have ensured our supplier payments have continued to be made in accordance with supplier payment terms.

1. IT infrastructure - stability and business continuity of auction platforms
Description of risk	Mitigating action/controls
An inability to maintain a consistently high-quality experience, including network or server failure for the Group's auction house and bidder customers across its marketplaces or platform, could affect the Group's reputation, increase its operational costs and cause losses.	The Group maintains a scalable and resilient IT infrastructure with real-time monitoring and alerting. Processes are in place to ensure that dedicated technical and client operations teams are mobilised to minimise client impact.
2. IT infrastructure - inability to keep pace with innovation and changes
Description of risk	Mitigating action/controls
If the Group fails to keep pace with innovation and changes in technology this could result in fewer auction houses and/or bidders using the marketplaces or platform and therefore a loss of revenue.	The Group has a dedicated team of product managers responsible for keeping pace with changes in customer expectations and technology, and defining the roadmap of features for the platform and marketplaces. New functionality is tested with a subset of the user base, to gather real-time usage data and feedback, to then optimise the user experience.
3. Data security/data loss
Description of risk	Mitigating action/controls
A key asset to our business is our data. Like many technology businesses, the risk of security breaches and/or targeted attacks and other disruptions is ever present. Whilst we design security into the way we operate, we are acutely aware that any compromise to our systems could disrupt the Group's business, compromise sensitive and confidential information, affect the Group's reputation, increase its operational costs and cause potential financial losses in the form of penalties.	The Group has an internal governance framework for data protection and security policies and procedures in place along with robust IT and security controls. Annual penetration tests are performed on all proprietary systems along with security recommendations from third-party security providers which are reviewed each month. The Group appointed an experienced Data Protection Officer during the year to oversee all data protection matters and work with stakeholders across the Group to review, develop and improve our data practices and procedures. Further details are set out in the governance section of the ESG report on page 40.
4. Competition
Description of risk	Mitigating action/controls
The Group's business model may come under significant pressure should a significant number of auction houses choose to take bidder generation, technology development and customer service (amongst other things) in-house and so bypass the marketplaces or platform, including as a result of auction houses who use the Group's white label offering attempting to maintain their own platforms rather than using the Group's platform.	The combination of our leadership, people, agile way of working and strong industry knowledge and networks helps to ensure that we stay up-to-date with the competitive landscape within which we operate. We are constantly innovating with our technology and engaging our customers for feedback. We also undertake regular horizon-scanning activities to understand competitive threats and opportunities.
5. Failure to deliver expected benefits from acquisitions and/or integrate the business into the Group effectively
Description of risk	Mitigating action/controls
The Group has in the past made and in the future may undertake further acquisitions and investments, which may prove unsuccessful or divert its resources, result in operating difficulties, and otherwise disrupt the Group's operations.	Clear plans and route maps are prepared to successfully integrate newly acquired businesses into the Group. It is important that we retain key expertise in our newly acquired businesses. Post the acquisitions completing we continue to review operational structures to ensure they are optimised globally. Performance of the acquired businesses is reviewed against the initial investment cases prepared to ensure their performance is in line with original expectation.
6. Attracting and retaining skills/capabilities and succession planning
Description of risk	Mitigating action/controls
Our business depends on hiring and retaining first class talent in the highly competitive tech industry. Inability to attract and retain critical skills and capabilities could hinder our ability to deliver on our strategic objectives.	During the year the Group has recruited a number of senior hires, including a new Chief Marketing Officer. Following the IPO, the Nomination Committee has been established to help review succession planning for the Board and senior management. A variety of techniques are applied to attract, retain and motivate our staff, with particular attention to those in key roles. These techniques include the regular review of remuneration packages, share incentive schemes, training, regular communication with staff, annual employee surveys and a thorough performance review process. Further details on our people can be found in the ESG section on page 40.
7. Regulatory compliance
Description of risk	Mitigating action/controls
The Group operates in a constantly changing and complex regulatory environment, increasingly so following its listing on the LSE during the year. There is a risk that the Group, or its subsidiaries, fail to comply with these requirements or to respond to changes in regulations, including the Financial Conduct Authority's rules and guidance, GDPR, or specific legislation in the territories in which the Group operates including the Competition and Markets Authority in the UK. This could lead to reputational damage, financial or criminal penalties and impact on our ability to do business.	Compliance for the Group is overseen by the Audit Committee and the Board is ultimately responsible. They are supported by our legal, company secretary, finance, operations and technology teams. We ensure that all our people are appropriately trained in compliance, relative to their roles. We have developed a detailed governance framework to monitor our legal and regulatory risks, and to ensure that we comply with the principles, rules and guidance applicable to our regulated activities. These are regularly reported upwards to the Audit Committee and Board.
8. Governance and internal control
Description of risk	Mitigating action/controls
As a newly listed Group, establishing and maintaining corporate governance standards, and an effective and efficient risk management and internal control system, proportionate to the needs of the Group, is a key part of our short and long-term success. Any failure and/or weakness in this area (financial and non-financial) could have an impact on the operations of the Group.	During the IPO process a complete review of the Group's policies and procedures was conducted to ensure they were appropriate for a listed Group. At the same time the Audit Committee was established to monitor these and review progress against the implementation of controls, as detailed in the Financial Position and Prospects Procedures. The Board has ultimate responsibility for ensuring compliance with the Corporate Governance Code. For further information on activities undertaken by the Board and Committees during the year see pages 59 to 74.
9. Economic and geo-political uncertainty
Description of risk	Mitigating action/controls
Group performance could be adversely impacted by factors beyond our control such as the economic conditions and political uncertainty in key markets. The macroeconomic climate including the continued uncertainty following Brexit on the UK economy and the US political landscape has impacted the second-hand goods markets both directly and indirectly. More details on the impact in FY21 can found in the Market Overview section on page 26.	This risk is mitigated by keeping abreast of macroeconomic developments and ensuring that the Group responds swiftly to any as they materialise. The Group has demonstrated through the ongoing pandemic, and last year in particular, that it has a strong business model and its diversified revenue streams and geographical markets help to mitigate the impact of political or economic instability in any particular country or region.

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