Delivering integrated

mobility solutions

Annual Report and Accounts 2022

ReddeNorthgate plc

Underlying profit before tax £m

022

021

£151.3m

£93.2m

Underlying EPS (p)

022

021

31.0p

50.8p

Revenue £m

022

021

£1.2bn

£1.1bn

ROCE %

022

021

13.9%

9.5%

Our purpose

To keep customers mobile,

whether meeting their

regular needs or servicing

and supporting them when

unforeseen events occur.

Underpinned by our

employeeculture, delivering

forall our stakeholders.

Our vision

To be the leading supplier

ofmobility solutions and

automotive services to a

widerange of businesses

andcustomers.

About our non-GAAP measures andwhy we use them

Throughout this report, we refer to underlying

results and measures. The underlying measures

allow management and other stakeholders to

better compare the performance of the Group

between the current and prior year without the

effects of one-off or non-operational items.

Underlying measures exclude intangible

amortisation from acquisitions and certain

one-off items such as those arising from

restructuring activities and the tax impact

thereon. Specifically, we refer to disposal

profit(s). This is a non-GAAP measure used to

describe the adjustment in depreciation charge

made in the year for vehicles sold at an amount

different to their net book value at the date of

sale (net of attributable selling costs).

A reconciliation of GAAP (reported) to non-

GAAP (underlying) measures is included on

pages 26 and 27. A further explanation of

alternative performance measures and a

glossary of terms used in this report can be

found on pages 143 to 144.

Contents

Strategic Report

1 Our business at a glance

2 Equity proposition

3 Chairman’s statement

4 Chief Executive’s review

11 Our markets

14 Our business model

15 Our strategy

19 Key performance indicators

21 Financial review

26 GAAP reconciliation

28 Identifying and managing risk

30 Principal risks and uncertainties

35 Viability statement

36 ESG report

51 Non-financial information statement

Section 172 statement

Corporate Governance

54 Chairman’s introduction to governance

56 Board of Directors

58 Corporate governance

61 Report of the Nominations Committee

62 Report of the Audit Committee

67 Remuneration report

80 Report of the Directors

83 Statement of Directors’ responsibilities in respect

of the financial statements

84 Independent auditors’ report to the members of

Redde Northgate plc

Financial Statements

92 Consolidated income statement

93 Statements of comprehensive income

94 Balance sheets

96 Cash flow statements

97 Notes to the cash flow statements

98 Statements of changes in equity

99 Notes to the financial statements

Shareholder and Other Information

143 Glossary

145 Shareholder information

Introduction

Redde Northgate plc Annual Report and Accounts 2022

Legal services

Vehicle inspection app

EV charging

Fuel cards

Telematics including dash cams

Driver risk management

Assessment and training

SOLD

eAuction digital sales

We Buy You Rent

Ex-rental sales

about our markets on page 11

Our revenue composition

orthgate UK&I

Total Revenue

£1.2bn

re of vehicles

orthgate Spain

Sale

of vehicles

edde

laims and servces

36%

45%

21%

12%

43%

Our business at a glance

Strategic report

Vehicle ancillary

services

Accident

management

Vehicle

sales

Vehicle

rental

Fleet management, service

and maintenance

Vehicle

data

Vehicle hire Customer's

vehicle

Body shop

network

Vehicle

repairs

Redde N

orthgate

rental

Call centre

Liability

assessment

overy

FNOL

Repair

assessment

Repair

Replacement

vehicle hire

Veh

icle

return

Billing

Credit repair

Managed repair

Vehicle sales

& eAuctions

-fault solutions

Uninsured loss

recovery

Key metrics

Vehicle

repair

Redde Northgate is a leading

integrated mobility solutions provider

Vehicles managed

600,000

Sites

1 75

Employees

6,700

Vehicles owned

126,000

1 Redde Northgate plc Annual Report and Accounts 2022

Delivering growth

– Operating in growing markets and well

positioned to benefit from longer term

market dynamics:

– Our mobility solutions are aligned to

changing market dynamics including the

shift from vehicle ownership to usership,

convergence of mobility solutions, the

need for improved customer interfaces,

big data in automotive services and the

transition to EV and non-ICE vehicles.

– Strategy set to deliver growth:

– Focus, Drive and Broaden is delivering

strategic initiatives designed to achieve

sustainable compounding growth.

– Strong potential for further organic and

acquisition led growth including growth

into adjacent product and geographic

markets.

Experienced team

– Team with deep technical expertise

acrossthe vehicle lifecycle.

– Management’s acquisition and

integrationexpertise enabling cost

synergies and savings, alongside

plannedrevenue synergies.

– Commitment to drive cultural change

helping achieve growth objectives.

Purpose driven,

responsible business

– Our purpose is to keep customers mobile,

whether through meeting their regular

mobility needs or by servicing and

supporting them when unforeseen

eventsoccur.

– We are a responsible and sustainable

business which aims to embrace change

including the transition of our fleet from

ICE to lower emission alternatives.

– We aim to have a positive impact on the

communities in which we operate and

strive to maintain the highest standards

ofconduct in everything we do.

– We are building on our ESG strategy,

including a path towards net zero, and

arecommitted to the journey we are

embarking on.

Trusted partner

andmarket leading

customer offering

– We are well known and trusted in

ourmarkets.

– We have a unique proposition through

ourintegrated mobility solutions – our

integrated service offering adds value

tocustomers and delivers a broad range

of mobility solutions.

Disciplined approach

to capital allocation

– We are disciplined in our approach to drive

increasing returns.

– We actively seek out investment

opportunities aimed at delivering returns

substantially ahead of WACC.

– We remain open to disposal opportunities

where investment returns can be

maximised through a sale.

– Appropriate dividend distribution or other

returns to shareholders including share

buybacks.

Strong financial

profile

– We maintain a strong financial position

through our focus across cost and margin

optimisation and returns through scale

andefficiency.

– Diversified revenue streams from products

and services across the vehicle lifecycle.

– Conservative leverage targeted at net

debt/EBITDA of 1.0x to 2.0x in the

nearterm.

Equity proposition

Our compelling

investment case

Our highly disciplined approach

to investment, returns and

capital efficiency underpins

ourcompelling investment case

made up of these key attributes:

2 Redde Northgate plc Annual Report and Accounts 2022

Chairman’s statement

Overview

The Group demonstrated its significant potential during the year in market conditions where vehicle

and parts supply chains in particular remained heavily impacted by COVID related disruption and

the conflict in Ukraine. We have continued to focus on delivering outstanding customer service,

andour strong financial results and customer feedback reflect our success in proactively

managingthese macro headwinds for the benefit of a growing base ofblue-chip customers.

While the Group has benefitted from strong residual values that resulted in a high level ofdisposal

profits, our core operations have performed extremely well, with improved rentalmargins,

recovering activity levels and significant new customer wins. This bodes wellfor the coming year,

despite continued macroeconomic uncertainty.

Strategic progress

The business has been very focused on delivering against our strategic objectives andwe have

seen significant progress withinall three pillars. Our broadening service offering allows the Group

to offer an integrated proposition to our customers and this has been central to our success in

winning several large contracts which will contribute to revenue growth in the coming year.

Alongside the cost synergies achieved in the prior year, 10 months ahead of schedule and double

the original estimate, the benefits of greater integration and operational efficiencies have been

seen across the business, and helpusto improve our responsiveness and customer experience.

Supported by targeted acquisitions, we are positioning ourselves as the preferred partner with a

unique proposition across both fleet and service offerings to customers looking to consolidate

their supplychains.

The acquisition of ChargedEV has been a significant step in our understanding and capabilities for

EV solutions, and has enhanced our ability to advise customers and to supply and install charging

infrastructure. The response to the launch of our Drive to Zero customer offering this year has

demonstrated the value we can bring to customers in what is set to be a complex transition

journey for many.

The transition to non-ICE vehicles is a long term challenge for the entire industry, and isalso

central to our own sustainability programme and pathway to net zero. We will publish our first

sustainability report shortly after this report, and continue to seek opportunities to reduce our

environmental footprint, while managing growth within our businesses. We plan to define interim

targets and a broad set of KPIs inFY2023 to help us better manage our responsibilities to

stakeholders and the planet.

Financial strength

The financial strength of our business provides us with substantial purchasing power and valuable

economies of scale. The refinancing undertaken in the year has expanded our funding facilities

and lowered funding costs, with leverage remaining at the lower end of ourtarget range. This

financial strength and positive operational outlook gave the Board confidence to approve a £30m

buyback programme and to propose a final dividend of 15.0p which along with the interim

dividend of 6.0p represents a 36% increase for the full year.

Board and governance

In May 2022, we were very pleased to announce the appointment of Bindi Karia, who has a deep

background in technology and innovation and whose experience will be of great benefit to the

Group as we look to grow and invest in the digitalisation of mobility solutions. At the same time,

John Davies stepped down from the Board and I thank John for his significant contribution over

the last decade, to the Board since the Merger, and prior to that, the Redde plc Board.

The composition of the Board is reviewed regularly and I am committed to seeking opportunities

to further enhance the breadth and skills of the Board. We will continue to look to attract new

Board members who bring a diverse skillset and breadth of experience to our Board discussions.

Our people

The Board would like to thank all our Redde Northgate colleagues in the UK, Ireland and Spain for

their efforts and successes over the past year. There has been significant work to define and

embed a new corporate purpose and values across the Group, and I am particularly pleased to

have seen a high levelof employee engagement both in our employee survey and at the large

number ofengagement events and forums held throughout the year.

The launch of the new employee benefits platformalongside the SAYE schemes, greatertraining

options and a focus on internal career opportunities are all examples of the businesses coming

together and developing astrong and unified culture.

This is supported by a number of new senior hires, providing both bench strength and external

experience to our leadership team and corporate functions, and technology investments to

enhance communication across the Group. We are building a robust platform and organisational

capability which will stand the business in good stead for future growth.

Looking ahead with confidence

The business is well placed to continue to deliver value for shareholders and navigate the macro

challenges in global automotive supply chains in the year ahead. With the strong underlying

performance of the business delivered in the past year and new business wins, the Board expects

to see another year ofprogress in FY2023.

Avril Palmer-Baunack

Chairman

Avril Palmer-Baunack

Chairman

“

In a year of difficult market

conditions, we continued to

deliver outstanding customer

service, achieving results that

exceeded our expectations.

With this momentum, and

aswe deliver on our strategic

priorities, we are confident

indelivering further growth

forallour stakeholders.

3 Redde Northgate plc Annual Report and Accounts 2022

Martin Ward

CEO

“

The success of our unique

mobility solutions platform

is now yielding significant

new multi year business

wins which I am confident

will continue.

Chief Executive’s review

greater operational flexibility, with more planned integrations between group businesses

asexisting leases expire.

The business is now also operating with a greater number of centralised functions, including a

single fleet management team in each territory which brings both improved buying power and

greater flexibility within the fleet. This includes the ability to manage demand spikes throughout

the network more efficiently, increased utilisation rates and faster responsiveness to customer

needs. As part of thisimprovement programme, we are upgrading a number of technology

solutions in the coming year, which will deliver a common operating platform and a greater ability

to digitalise more of our operating processes. The online eAuction platforms for Van Monster in

the UK and Northgate Ocasión in Spain have transformed the vehicle disposal process, rapidly

becoming a major e-marketplaces. In the UK, this accounted for over 60% of Northgate vans

disposed of in FY2022.

DRIVE: Customer focus

A core rationale for the Merger was the development of a unique mobility solutions platform, able

to capitalise on key macro trends such as, the move to greater outsourcing, as businesses seek to

move away from ownership to utilisation models for their mobility needs, and a preference for

managed solutions from significant market providers. Within the accident management and repair

sector, national coverage and in-house repair capabilities are significant selling points as insurers

look for improved cost management, responsiveness and customer experience.

In the first half of the year, the platform capabilities enabled the Group to sign contracts with

threemajor brands including Tesco and Admiral (for additional services). These were joined in the

second half by a contract with Acromas Insurance which will incorporate policies from AA, RAC

and Saga. Winning these contracts was a direct result of the Group’s increased platform scale and

full-service offering andwill generate significant value from FY2023 onwards, with contracts won

in H2 adding a further estimated £100m of incremental lifetime contract revenues in addition to

the £200m previouslyannounced.

The benefits of scale and enhanced service offering has also been apparent across the rental

businesses, with managers of large corporate fleets valuing our geographic coverage and

in-house capabilities and expertise. A third of our customers with fleets above 25 vehicles now

take more than one service from us, representing around half of our UK vehicle fleet, typically

supported from multiple locations. In Spain, our significant market presence and unique offering

of both rental and in-house service capability is a powerful platform from which to drive

incremental B2B and B2C offerings, including higher margin digital channels.

Customers greatly value our multi-site, multi-service expertise in many aspects of fleet

management, and increasingly with a focus on long term planning for the move away from ICE

vehicles. Our workshop technicians in the UK are certified to IMI Level 3 to work on EVs, and a

programme of installing charging stations is being rolled out across our locations. Customer

satisfaction is the cornerstone of our business success and the ‘excellent’ satisfaction scores

achieved across our businesses from Trustpilot, alongside 2022 awards including ‘Rental

Company of the Year’ (Fleet News), and ‘Best Fleet Management’ & ‘Best Long-Term Rental’

(Business Van), reflect our focus on delivering value-added mobility solutions across our

customer base.

Group

The forming of the Group’s unique mobility solutions platform is bringing significant value to the

combined Group through both revenue and cost synergies, and the development of a large scale

platform offering a broad range of services to an increasingly diverse range of blue-chip customers.

Focus, Drive and Broaden strategic progress

The business has focused on continued delivery against the three pillars of its strategy and

proactive management of complex macroeconomic dynamics impacting all elements of the

automotive supply chain. Despite significant headwinds, particularly in vehicle and parts supply,

the business has made substantial progress in its strategic goals, and reinforced its position as the

provider of choice for a growing number of customers looking for a range of mobility solutions,

fleet services and accident management.

FOCUS: Operational progress

The business successfully achieved annualised savings of more than double the original Merger

synergies £10m target and by June 2021, significantly earlier than forecast. This reflected the

immense efforts within the business to deliver operational efficiencies and improvements,

including the integration of both services and branches within the combined Group. Over two

thirds of Auxillis branches now co-locate with Northgate operations, bringing benefits from

4 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

BROADEN: Acquisitions

Growth through acquisition is an important part of our overall strategy, allowing us to expand our

products, services, reach and skillset to enhance and broaden our customer offering. We took

asignificant strategic step in our EV transition through the acquisition in July 2021 of ChargedEV,

aspecialist in the supply and installation of EV charging equipment across the UK. This enabled

the Group to rapidly enhance its own EV capabilities and in November 2021 we launched our

Drive to Zero customer offering, supporting customers with fleet consulting and other technical

services as they plan their transition away from ICE. For many customers, vehicle range and

charging infrastructure requirements makes this a complex challenge and they look to us for

analytics and expert advice.

We continue to review a strong pipeline of bolt-on opportunities, and will acquire businesses

which will complement and enhance our value-added service offering, or add vehicle and

customer assets at scale to the business. In FY2022, these included the acquisition of a 2,000

vehicle fleet and customers from a Scottish rental business, and of GRG Resources, the specialist

call handling and roadside services to ‘blue light’ customers.

The acquisition of the Nationwide repair business in the prior year brought a significant in-house

accident repair capability, now with 65 body shops across the UK. Rebranded to FMG RS, the

business has been integrating the service offering which has significant revenue synergy potential

with other Group businesses. We are continuing an investment programme, with a planned

programme of site improvements and further alignment of FMG RS with Group standards

andpolicies.

Our people

The Group now has over 6,700 employees with some 175 service locations. We have placed

significant emphasis within the business on enhancing our employee engagement and ashared

understanding of Group strategy. We launched a new set of values and clearly communicated

these, and the 74% engagement score for our annual employee survey reflects the significant

efforts we have made to bring all businesses and people together, with strong progress on key

issues as well as opportunities for further improvement.

In the year we also enhanced our Human Resources capabilities and technology to ensure

ourrecruitment and retention is as effective as possible, in an industry which competes for

increasingly scarce skills. We have invested in additional apprenticeship places and in our training

academies, both technical workshop and online learning. We launched a major new employee

benefit platform as well as significant well-being and mental health support services. Together

with our SAYE scheme to promote the benefits of employee ownership, these efforts have

helpedbuild a business which we truly believe offers its people a strong culture and a great

placeto work.

EV transition and ESG strategy

Managing the transition away from ICE vehicles is a key strategic task for the business, critical

forourselves and our customers. We have multiple programmes underway to enhance our

capabilities and expertise in order to support customer transition strategies, including our Drive to

Zero programme launched in November 2021. This included installing over 6,000 charging points

in the year. This transition also forms a key part of our net zero planning, as Scope 3 emissions are

estimated to account for over 95% of our total carbon footprint.

5 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

Across the business we have energy saving and recycling programmes, and have enhanced our

data gathering capabilities to better understand the opportunities to reduce our footprint further.

We have progressed with our Group ESG strategy and will be publishing our first sustainability

report this summer, including our TCFD roadmap. In FY2023, we intend to set net zero and

broader ESG targets.

Trading performance

Revenue (excluding vehicle sales) was 24.3% higher than the prior year. Northgate UK&I and

Northgate Spain revenue (excluding vehicle sales and including intersegment revenue) was

£346.6m (2021: £311.6m) and £220.6m (2021: £205.5m) respectively. Redde revenue was £543.7m

(2021: £371.7m) reflecting recovery of volumes of accidents and incidents having stabilised at

around 90% of pre COVID-19 levels within Q4, but included a contribution from only one of the

new customer wins announced in the year, which went live in January 2022.

Total Group revenue, including vehicle sales, was 12.1% higher. Vehicle sales revenues were 34.8%

lower reflecting the post lockdown sale of a large number of FY2020 year end stock of vehicles

last year and the reduced volumes available this year due to restrictions in new vehicle supply.

The acquisition of 2,000 vehicles as part of an asset purchase early in the year helped with

vehicle supply, with purchases totalling 23,600 in the year compared to 24,000 in the prior year.

The leased fleet also increased by 7,000 vehicles.

Total disposal profits for the year were £50.1m, 24.6% higher than the prior year with the restriction

in vehicle supply continuing to support high residual values. These high residual values are more

than offsetting the lower volumes of vehicles being disposed of, which at 16,600 is 39.5% lower

than the prior year (2021: 27,400). As a result, the fleet average age across the Group increased by

2.8 months.

Within Northgate, the financial performance from both Northgate UK&I and Northgate Spain has

continued to improve, reflecting the benefits of cost saving programmes, strong utilisation and

tight controls over customer pricing whilst a constrained supply chain for new LCVs continues to

operate. Northgate UK&I rental margins improved to 15.3% (2021: 12.7%). Rental margins in

Northgate Spain have improved to 17.5% (2021: 15.0%). Redde benefitted from volume recovery

and greater activity across its product offerings and a first full year profit contribution from FMG

RS, helping the business achieve a 4.5ppt improvement in EBIT margin.

Underlying PBT of £151.3m (2021: £93.2m) reflects the EBIT performance outlined above.

StatutoryEBIT of £150.8m and statutory PBT of £132.7m were 80% and 98% higher than prior

yearrespectively.

Underlying EPS was 50.8p (2021: 31.0p), 63.9% higher than prior year with an average share count

of 246.0m (2021: 246.1m). Statutory EPS was 41.3p (2021: 26.6p).

Free cashflow of £12.3m was lower than the prior year (2021: £97.8m) as capex was significantly

reduced in 2021 during the COVID-19 period, whereas in the current year there has been £108.6m

investment in the fleet (growth capex) to meet rental demand.

Group ROCE was 13.9% compared to 9.5% in the prior year, reflecting the improved performance

and including the impact of disposal profits.

Debt and refinancing

In November 2021, the Group completed a comprehensive refinancing of its debt arrangements,

to optimise its debt portfolio. The refinancing resulted in a c.50bps reduction in the drawn interest

rate as at the date of the refinancing to 1.5%, a significant lengthening of our maturities and a

greater diversification of our sources of debt. This creates flexibility and a solid financing platform

to allow the Group to invest in the business as well as take advantage of opportunities in the

market as they arise for inorganic growth. At the year end 76% of the Group’s borrowings were

held as fixed rate instruments limiting exposure to movements in future interest rates.

The Group has continued to develop contract hire as a source of fleet funding across the UK

business. Whilst the successful refinancing in November 2021 reduced the Group’s cost of

borrowing, making it harder for contract hire to compete on interest rate cost, total credit lines of

£155m have been utilised as at 30 April 2022 (2021: £104m) funding 10,800 vehicles (2021: 5,500).

Net debt closed at £582.5m including IFRS 16, or £452.1m excluding IFRS 16, resulting in headroom

to bank facilities of £382m at the year end. Leverage was 1.4x, lower than the prior year (1.5x)

reflecting the benefit of the enlarged Group and improvement in profitability.

Dividend and Share buyback

In light of the strong trading performance and the Board’s confidence in the Group’s outlook, the

Board has declared a final dividend of 15.0p making a total of 21.0p for the full year, (2021: final

12.0p, total for year 15.4p), to be paid on 30 September 2022 to shareholders on the register on

2 September 2022.

The Group announced a share buyback programme in March 2022 with a maximum aggregate

consideration of £30m or 24 million shares. As at the end of the financial year, 1.83 million shares

had been repurchased at a total cost of £7.5m, (end June: £20.6m cost), with the repurchased

shares being held in treasury. The programme is expected to be completed by September 2022.

6 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

Divisional commentary

Northgate UK&I

Year ended 30 April

KPI

2022

(000)

2021

(000)

Change

Average VOH 50.2 47.3 6.1%

Closing VOH 49.2 49.2 –

Average utilisation% 92% 92% 0ppt

Year ended 30 April

PROFIT & LOSS (Underlying)

2022

£m

2021

£m

Change

Revenue – Vehiclehire

346.6 311.6 11.2%

Revenue – Vehiclesales 111.8 161.4 (30.7%)

Total revenue 458.4 473.0 (3.1%)

Rental profit 53.1 39.5 34.3%

Rental margin % 15.3% 12.7% 2.6ppt

Disposal profit 44.8 37.3 20.3%

EBIT 98.0 76.8 27.5%

EBIT margin %

21.4% 16.2% 5.2ppt

ROCE % 17.5% 13.4% 4.1ppt

Including intersegment revenue (see Note 5 to the financial statements).

Calculated as underlying EBIT divided bytotalrevenue.

Northgate UK&I performance for the year reflected the challenges faced across the industry

through the scarce supply of vehicles and other supply chain constraints. With restricted fleet

options, the business responded with a disciplined focus on supporting its key fleet customer

base, targeting higher value industry sectors with long term growth prospects, as well as

addressing cost inflation through carefully managed and well understood pricing increases.

Utilisation levels remained strong and the greater flexibility afforded by a larger group network

and footprint allowed for more efficient fleet management, and ability to capitalise on

opportunities such as the 2,000 vehicle acquisition at the start of the year from a Scottish

rentalbusiness.

Vehicle supply constraints drove residual values higher and the business made a conscious

decision to extend out its fleet age in many business segments, with quality vehicles retained in

order to support key customer needs. Although this brought with it greater servicing requirements

for some of the fleet, the demand for vehicle rental helped to deliver strong margin growth. The

year end fleet size of 54,200 resulted from 34% lower vehicle disposals at 10,400 but strong

residual values meant disposal profits were 20% higher than the prior year.

Incremental revenue and margin opportunities also came through growth in interest in value-added

fleet products supporting existing customers, particularly those with mid-sized fleets. This included

products such as telematics, accident management and a range of driver compliance services, and

increasingly the access to the Group’s in-house workshop and vehicle repair capabilities. We saw

nearly 30% growth in fleet customers taking additional services, including a 2.5x increase in our

accident management services, now covering around 6,000 Northgate vehicles. This reflects the

growing interest in the broader services platform offered by the business, and the value offered to

customers, from telematics and efficient fleet service scheduling to long term EV fleet planning.

Financial overview

Northgate UK&I performance has continued to improve year on year with underlying EBIT of

£98.0m (2021: £76.8m) driven by a strong rental business performance with rental profits growing

£13.6m to £53.1m and rental margins improving 2.6ppt to 15.3%. Disposal profits increased £7.5m to

£44.8m reflecting continued strong residual values.

Rental business

Hire revenue in the Northgate UK&I business increased 11.2% compared to the prior year to

£346.6m (2021: £311.6m), driven by average VOH, which increased 6.2%, and the impact of

customer support packages in the prior year which were £2.4m. Rate increases were applied in FY

2022 across our full range of rental products and continue to be well planned, communicated

and executed.

Closing VOH was flat year on year at 49,200 (2021: 49,200), with a greater focus on higher margin

rentals driving better returns.

Northgate UK&I’s minimum term proposition accounted for 36% (2021: 33%) of average VOH. The

average term of these contracts is approximately three years, providing both improved visibility of

future rental revenue and earnings, as well as lower transactional costs.

Rental margin for the year was 15.3% compared to 12.7% in the prior year. The business has

benefited from the cost savings arising from integration of the businesses post-Merger alongside

tight control over rental pricing in the year.

The net impact of the growth in hire revenue and higher rental margin was a 34.4% increase in

rental profits to £53.1m (2021: £39.5m).

Management of fleet and vehicle sales

The closing Northgate UK&I rental fleet was 54,200 compared to 54,000 at year end FY2021.

During the year, 10,000 vehicles were purchased (2021: 12,500) and 10,400 vehicles were

de-fleeted (2021: 11,400). The leased fleet increased by 600 vehicles. The average age of the

fleet at the end of the year was 4.4 months higher than at the end of FY2021. This was due to

managing the fleet to mitigate impacts of the restricted market supply reducing purchases.

A total of 10,400 vehicles were sold in Northgate UK&I during the year, 34% lower than the prior

year (2021: 15,700 vehicles). The lower number of vehicles sold reflects the fact that the prior year

period benefited from additional used vehicle stock due to the impact of the COVID-19 lockdown

at the end of FY2020 and the restricted market supply of new vehicles in the year.

Disposal profits of £44.8m (2021: £37.3m) increased 20% versus the prior year. The reduction in the

number of vehicles sold was offset by the significant increases in sales values resulting in an 82%

improvement in the average profit per unit (PPU) on disposals to £4,300 (2021: £2,360).

EBIT and ROCE

Underlying EBIT of £98.0m grew 28% over the prior year (2021: £76.8m) driven by both higher

rental and disposal profits as explained above.

The ROCE in Northgate UK&I was 17.5% (2021: 13.4%) reflecting the increase in EBIT.

7 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

Capex and cash flow

Year ended 30 April

2022

£m

2021

£m

Change

£m

Underlying EBITDA 180.6 164.2 16.4

Net replacement capex

(64.9) (66.2) 1.3

Lease principal repayments (8.6) (5.4) (3.2)

Steady state cash generation 107.1 92.6 14.5

Growth capex

(1.9) 18.8 (20.7)

Net replacement capex is total capex less growth capex. Growth capex represents the cash consumed in order

to grow the fleet or the cash generated if the fleet size is reduced in periods ofcontraction.

Underlying EBITDA increased 10.0% to £180.6m (2021: £164.2m).

Net replacement capex was £64.9m, £1.3m lower than the prior year as a result of a reduction in

vehicle sales as explained above.

Steady state cash generation increased by £14.5m to £107.1m (2021: £92.6m) reflecting the higher

underlying EBITDA and the lower net replacement capex. Growth capex was £1.9m reflecting the

fact that growth in the owned fleet was restricted due to the vehicle supply constraints

experienced throughout the year.

Northgate Spain

Year ended 30 April

KPI

2022

(000)

2021

(000)

Change

Average VOH 50.4 46.0 9.7%

Closing VOH 52.2 46.8 11.4%

Average utilisation% 92% 92% 0ppt

Year ended 30 April

PROFIT & LOSS (Underlying)

2022

£m

2021

£m

Change

Revenue – Vehiclehire 220.6 205.5 7.3%

Revenue – Vehiclesales 38.1 68.4 (44.2%)

Total revenue 258.7 273.9 (5.5%)

Rental profit 38.6 30.8 25.5%

Rental margin % 17.5% 15.0% 2.5ppt

Disposal profit 5.3 2.9 79.8%

EBIT 43.9 33.7 30.2%

EBIT margin %

17.0% 12.3% 4.7ppt

ROCE % 10.0% 7.5% 2.5ppt

Calculated as underlying EBIT divided bytotalrevenue.

Northgate Spain delivered a strong performance for the year, with both recovery in demand

post-COVID and supply chain constraints requiring careful management of fleet opportunities.

The business was able to maintain its market share in flexible contracts, and focused on targeting

higher value customers and pass-through of cost increases, reflecting its substantial market

position. Additionally, the business was able to extend its flexi-hire offering to B2C customers,

which represents a growth platform for the future.

The fleet customer base is diverse, with the top 10 fleets accounting for around 15% of revenues,

and an average fleet size of just below 1,000 vehicles, with the construction, support services and

retail sectors accounting for 64% of VOH.

Strong demand drove high vehicle utilisation and allowed for careful management of pricing

improvements across both minimum and flex contract offerings. There was also a focus on

reducing exposure to lower margin opportunities and poorer credit customers. Fleet totalled

57,600 at the end of the year, and a reduction of disposal volumes enabled greater fleet rotation

to high margin opportunities, and was supported by continued strength in residual values.

Northgate Spain’s in-house network of 28 workshops (with 13 incorporating body shops), is unique

in the market and delivered significant benefits to customers, given the dislocation in the

automotive supply chain impacting service scheduling, together with growing take up of value-

added services. Alongside improvements to workshop efficiency and productivity, and

investment in energy efficiency such as 750KW of solar panels, the business expanded its

Northgate Open Workshop offering, leveraging its existing assets, and broadening the potential

customer base to third parties.

Financial overview

Northgate Spain had a strong year with EBIT increasing £10.2m, or 30.2%, driven by strong rental

margins of 17.5% with carefully managed rental pricing over the year.

Rental business

Hire revenue in the Northgate Spain business increased 7.3% (12.8% in local currency) compared to

the prior year to £220.6m (2021: £205.5m), driven by average VOH which increased 9.7%.

Closing VOH increased 11.4% to 52,200.

Northgate Spain’s minimum term proposition accounted for around 35% (2021: 35%) of average

VOH. The average term of these contracts is approximately three years, providing both improved

visibility of future rental revenue and earnings.

The rental margin was 2.5ppt higher at 17.5% from pricing increases, higher utilisation, fewer

repairs and fewer bad debts and with no COVID-19 customer support costs in the year

(2021: £1.0m).

The impact of the higher hire revenue and rental margin was a 25.5% increase in rental profits to

£38.6m (2021: £30.8m).

Management of fleet and vehicle sales

The closing Northgate Spain rental fleet amounted to 57,600 compared to 51,800 vehicles at the

prior year end. During the year 10,900 vehicles were purchased (2021: 11,500) and 5,100 vehicles

were de-fleeted (2021: 11,200 vehicles). The average age of the fleet at the end of the year was

4.6 months higher than at the same time last year. This was due to managing the fleet to mitigate

impacts of the restricted market supply reducing purchases.

8 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

A total of 6,100 vehicles were sold in Northgate Spain during the year, 47.4% lower than prior year,

reflecting the restricted market supply of new vehicles in the year.

Disposal profits of £5.3m (2021: £2.9m) increased 79.8% including a £4.0m headwind relating to

previous depreciation rate changes. The reduction in the number of vehicles sold was offset by

the significant increases in sales values resulting in a more than threefold improvement in the

average profit per unit (PPU) on disposals to £870 (2021: £254).

EBIT and ROCE

Underlying EBIT of £43.9m increased 30.2% over the prior year (2021: £33.7m) driven by both

higher rental and disposal profits as explained above. The ROCE in Northgate Spain was 10.0%

(2021: 7.5%) reflecting the increase in EBIT.

Capex and cash flow

Year ended 30 April

2022

£m

2021

£m

Change

£m

Underlying EBITDA 133.1 121.6 11.5

Net replacement capex

(42.7) (73.8) 31.1

Lease principal repayments (2.5) (2.8) 0.3

Steady state cash generation 87.9 45.0 42.9

Growth capex

(59.0) 0.3 (59.3)

Net replacement capex is total capex less growth capex. Growth capex represents the cash consumed in order

to grow the fleet or the cash generated if the fleet size is reduced in periods of contraction.

Underlying EBITDA increased £11.5m to £133.1m (2021: £121.6m).

Net replacement capex in the year was £42.7m, £31.1m lower than the prior year, as a result of the

ageing out of the fleet in response to the shortage of new vehicle supply.

Steady state cash generation increased by £42.9m to £87.9m (2021: £45.0m) reflecting higher

EBITDA and lower net replacement capex in the year. Growth capex was £59.0m reflecting

investment in the fleet to meet demand.

Redde

Year ended 30 April

PROFIT & LOSS (Underlying)

2022

£m

2021

£m

Change

Revenue – Claims and services

543.7 371.7 46.3%

Gross profit 127.7 70.2 81.8%

Gross margin % 23.5% 18.9% 4.6ppt

Operating profit 31.8 3.4 846.0%

Income from associates 3.9 4.4 (11.4%)

EBIT 35.6 7.7 361.5%

EBIT margin %

6.6% 2.1% 4.5ppt

ROCE % 16.6% 6.0% 10.6ppt

Including intersegment revenue (see Note 5 to the financial statements).

Calculated as underlying EBIT divided bytotalrevenue.

The Redde group of businesses delivered a strong divisional performance, helped by a post-

COVID recovery in traffic volumes, growth in demand for our vehicle repair services, and

supported by multiple new insurer customer wins which are due to come on stream in FY2023,

including broader mobility solutions covering both non-fault and first party hire.

Traffic levels grew throughout the year, returning to near pre-pandemic levels by Q4, but

structural changes in commuting patterns suggest that activity levels have stabilised, with future

growth generated by additional volume, product and contract wins. The Redde fleet totalled

14,500 vehicles at year end, of which over 11% were EV or hybrid cars.

The business added additional major contracts to the three customer wins announced in the first

half of the year, with Acromas Insurance (Saga), signing a multi year contract for vehicle repair

solutions to support their claims services and policyholders. These contracts will increasingly

contribute to group revenues throughout FY2023. We have long term contract relationships with

insurers who in total represent over 50% of UK registered vehicles, equating to over 20 million

policy holders.

A growing number of customers utilised the benefits from the 65 in-house facilities of FMG Repair

Services (FMG RS), which undertook repairs on over 85,000 vehicles in the year, around 60% of

the total repairs managed by the Group. This capability is being increasingly integrated into insurer

and other solutions, with customers attracted to the greater operational efficiency and visibility it

offers at a time when there has been significant variability in workshop responsiveness from the

independent sector with considerable delays in parts supply.

Divisional investment in the year included enhancements to body shop and workshop

capabilities, integration of further Auxillis locations with Northgate teams, and a focus on

employee recruitment and training. This included growing the number of EV qualified technicians

and body shop team training to ensure compliance with Group policies. The FMG RS training

academy had 27 apprentices join during the year, and expects more in FY2023.

Financial overview

During the year, volumes increased and settled around 90% of pre-COVID 19 levels in H2. The full

year EBIT has increased more than fourfold over the prior year to £35.6m, reflecting the

operational gearing within the business.

Revenue and profit

Revenue for the year increased 46.3% to £543.7m (2021: £371.7m). The main drivers of revenue,

traffic volumes and thereby road traffic accidents, have been increasing since April 2021 and

havenow reached approximately 90% of pre-COVID-19 levels and have now stabilised around

these levels. The hire length has extended in the year due to the impact of macro challenges in

supply chains forparts.

Gross margin of 23.5% has improved 4.6ppt (2021: 18.9%) as volumes have increased and the

utilisation of the fleet has improved to more normal levels.

EBIT for the year increased 361.5% to £35.6m (2021: £7.7m). The prior year included an operating

loss in FMG RS and in this year FMG RS contributed a small profit.

9 Redde Northgate plc Annual Report and Accounts 2022

Chief Executive’s review continued

Management of fleet

The total fleet in Redde closed the year at 14,500 vehicles, from 6,500 at 30 April 2021 with the

latter reflecting a lower fleet size due to the impact of COVID-19.

The average fleet age was 11 months reflecting the lower fleet holding period than in the

Northgate businesses due to the different usage of the vehicles and business economics.

The Redde fleet operates a hybrid solution of ownership, contract hire and, during peak periods,

cross-hiring from daily rental companies.

Capex and cash flow

Year ended 30 April

2022

£m

2021

£m

Change

£m

Underlying EBITDA 62.6 25.0 37.6

Net replacement capex 1.0 32.5 (31.5)

Lease principal repayments (32.6) (46.6) 14.0

Steady state cash generation 31.0 10.9 20.1

Growth capex (47.6) – (47.6)

Statutory debtordays 159 179 (20)

Underlying EBITDA increased £37.6m to £62.6m (2021: £25.0m) reflecting the recovery of

trafficvolumes.

Net replacement capex was a net inflow of £1.0m in the year (2021: £32.5m inflow) with the prior

year being affected by the disposal proceeds of vehicles funded by HP (leases) compared to the

timing of lease principal payments.

Steady state cash generation increased £20.1m to £31.0m (2021: £10.9m).

Growth capex increased to £47.6m (2021: £nil) reflecting a growth in the fleet to meet the increase

in demand for our services and the change from hire purchase to ownership for a proportion of

the fleet.

Debtor days were 159 days at the end of the year, a decrease from 179 days at the end of 2021.

This measure is based upon net trade receivables and contract assets, other receivables and

accrued income as a proportion of the related underlying sales revenue for the past 12 months

multiplied by 365 days.

Martin Ward

Chief Executive Officer

10 Redde Northgate plc Annual Report and Accounts 2022

Our markets

Vehicle hire

Description

LCVs are hired principally by enterprises for

commercial transport on a variety of terms

including flexible or minimum term rentals,

primarily as a means of using vehicles flexibly

without incurring the capital cost of vehicle

ownership or being committed to longer term

lease obligations.

Market size

In the UK, Ireland and Spain (the combined

Group’s existing geographic markets)

approximately 9 million LCVs were in operation

in2020, of which approximately 1 million were

operated on hire or leased terms.

Market drivers

We believe that the LCV hire market in the UKand

Spain will maintain a growth rate of approximately

3% per annum by fleet size in the next year.

The principal drivers in the recent evolution ofthe

LCV hire market include:

– increased demand for “last mile” delivery

associated with the continuing growth of

internet and mobile commerce;

– enhanced environmental regulation,

including emissions based taxes and tolls

such as the London Ultra Low Emission

Zone,driving the need for a more modern

fleet with cleaner engines, which results

inmore frequent fleet turnover, further

disincentivising vehicle ownership

bybusinesses;

– limited new vehicle supply created by

production shortfallsas a result of the

COVID-19 pandemic; and

– balance sheet management by businesses

seeking to reduce their capital employed

indepreciating assets.

Integrated

mobility

solutions

Vehicle hire

LCV hire

Replacement vehicle

Car hire

Vehicle sales

We Buy You Rent

Retail disposal

eAuction disposal

Vehicle ancillary services

Legal services

Vehicle inspection

Vehicle charging

Fuel card

Vehicle data

Telemetrics

Driver risk

management

Vehicle repair

Credit repair

Managed repair

Fleet management,

service and

maintenance

Telemetrics

Driver risk

management

Accident management

FNOL

Recovery

Liability

assessment

SOLD

11 Redde Northgate plc Annual Report and Accounts 2022

Our markets continued

The LCV hire market is highly fragmented,

withlocal, regional, national (operating in

nationwide chains or from central or regional

depots) and international market participants

principally competing on price, vehicle

availability, quality and features, hire terms

andbrand recognition. In the UK, Republic

ofIreland and Spain, Redde Northgate is one

of the largest participants in LCV hire by supply

of vehicles.

Vehicle repair

Description

Redde Northgate provides accident repair

services to insurance and fleet customers as

wellas credit repair to customers who have

beeninvolved in a non-fault traffic accident.

Market size

The size of the UK vehicle body repair market

wasreported to be £5 billion in 2019 with

4.3 million private car body repairs carried

outinthe sameperiod.

Market drivers

There are estimated to be over 3,000 car

bodyrepair locations in the UK with the primary

purpose of repairing accident damaged vehicles

on behalf of insurance, accident management

andfleet companies.

Vehicle repair costs are expected to see short

term increase in excess of 10% due to the ever

greater complexity of repairs inclusive of

modern technologies and pending labour

rateincreases,

Vehicle data

Description

Redde Northgate is evolving its fleet solutions

tooffer customers a comprehensive range of

additional services alongside their vehicle hire,

including telematics. Fleet telematics relates to the

monitoring and tracking of a fleet of commercial

vehicles, typically to optimise their use.

Market size

The estimated size of the fleet telematics market

has been estimated to be approximately £350m

inannual revenue with around 30% of B2B

vehicles estimated to have some form

offleettelematics hardware installed.

Market drivers

The market is driven by penetration and price,

with LCVs andHGVs estimated to have higher

penetration of third party telematics than other

vehicle types. The fleet telematics market is

forecast to grow with a compound annual

growthrate of 20% to2025.

Accident management

Description

Accident management is provided to motor

insurers, company fleets and local public

authorities with services including first

notification of loss, roadside recovery,

liabilityassessment, third party intervention,

replacement vehicle hireincluding credit

hire,vehicle repair and claimshandling.

Credit hire

Credit hire providers supply replacement

vehicle hire to non-fault customers who have

been involved in traffic accidents, normally at

no direct cost to the individual, by seeking

compensation from the at fault party’s insurers.

Market size

In the UK, the latest available market data

shows that in 2019 accident management

companies handled an estimated £2 billion

inclaims. This figure was lower in

subsequentyears due to the impact

oftheCOVID-19 pandemic.

Credit hire

The size of the credit hire market has been

estimated to be approximately £700m.

Market drivers

Redde Northgate’s accident and incident

management business focuses on growing

itscustomer base, including theon-boarding

ofinsurers, brokers and fleet customers for

theprovision of accident management

services, reducing costs for its customers.

Credit hire

The credit hire market is largely

consolidatedand is directly impacted

byroadtraffic volumes and subsequent

accident frequencies.

12 Redde Northgate plc Annual Report and Accounts 2022

Our markets continued

Servicing and maintenance

Description

Redde Northgate provides vehicle servicing and

maintenance to its customers utilising its network

of workshops across its territories and a team of

skilled technicians.

Market size

The estimated size of the UK car servicing

andaftercare market is £9 billion with over

30 million workshop visits made per year.

The equivalent market data is not available

forSpain but is estimated to be 90% of the size

ofthe UK market.

Market drivers

The automotive servicing market is large

andhighly fragmented with over 30,000 garages

in the UK, an estimated two thirds ofwhich are

small independents.

Vehicles are becoming more complex, equipped

with an increasing number of intelligent features,

which requires investment in training and

technology to service and maintain.

Legal services

Description

Redde Northgate assists its customers

withlegal services covering personal injury

services as well as employers’ liability, wills

and probate, family law, clinical negligence

and public liability legal advice.

Market size

The size of the UK personal injury market

wasestimated to be £4 billion in 2020.

Market drivers

In response to the government reforms of

RTAsoft tissue injury compensation, Redde

Northgate has invested in IT systems to provide

a customer portal that will integrate with

theMinistry of Justice portals and provide

efficiencies to deal with low value claims.

While non-RTA cases, including Redde

Northgate’s employers’ liability and medical

negligence practice, take longer to settle

thanRTA claims and require greater cash

investment as they progress, they are not

affected by the RTA soft tissue injury

compensation regulations.

Vehicle sales

SOLD

Description

Many participants in the LCV hire market also

engage in substantial sales in the secondary

market of their fleets as a means of releasing

capital for fleet renewal and as a revenue

stream in its own right, as does Redde

Northgate through its Van Monster,

VanMonster Remarketing and

NorthgateOcasiónbrands.

Market size

In the UK, the overall used vehicle sales

market splits into three key segments: used

carauctions; online marketplaces; and dealer

sales. Dealer sales have been estimated to

equate to £50 billion in annual revenue, of

which approximately £10 billion is business

tobusiness sales, including approximately

£6 billion in LCV sales, which are driven by

approximately. 900,000 used van sales

peryear.

Market drivers

The online auction segment of the market is

largely consolidated in the UK but, in contrast,

dealers’ sales are fragmented with more than

9,000 dealers and more than 100franchises

holding lessthan 25% of the used cars market.

Given that this market segment is fragmented,

there are opportunities to further consolidate

the market, making it more efficient

andtransparent.

Increasingly participants in used LCV sales

purchase online, Redde Northgate provides

thisvia its eAuction platform Van Monster

Remarketing. Online activity has increased

asaresult ofthe COVID-19 pandemic.

13 Redde Northgate plc Annual Report and Accounts 2022

A market leading proposition to keep

our customers mobile.

Driven by our purpose to keep customers

mobile, whether meeting their regular

needs or servicing and supporting them

when unforeseen events occur, we

strive to be the leading supplier of

mobility solutions and automotive

services to awide range of customers.

The Group operates across the UK,

Ireland and Spain, providing integrated

mobility solutions to businesses and

personal customers. These solutions

comprise vehicle rental services,

accident and incident management

services, repair services, vehicle

disposal services and other ancillary

services to keep customers mobile.

Our market leading proposition is

focused on placing the customer at the

centre of our business, offering a broad

range of services that can be flexed and

tailored to the needs of each customer.

Many of our customers benefit from

taking multiple services together,

thussimplifying their procurement

and operational processes. Our

systems, expertise and product

offering enable us to access growing

markets and position ourselves for

sustainable growth.

Our proposition

Opportunity

Advantage

Strategy

Outcome

There are significant structural and

regulatory drivers within our areas of

focus together with options for further

inorganic growth.

Our markets

The markets we operate in provide

opportunities to grow organically and

meet customer needs through an

integrated solution.

Page 11 Our markets

Inorganic growth

The Group continues to evaluate

anactive pipeline of acquisitions

toextend products and services

orgeographical reach and increase

supply for the fleet.

Page 4 Chief Executive’s review

Our relationships

The key relationships with our suppliers,

customers and local communities

support our business model.

Page 36 ESG report

The world we live in

We recognise the need for our business

to support the communities where we

operate and safeguard the environment

we live in. Sustainability underpins our

business model.

Page 36 ESG report

We have developed our strategic

framework in accordance with our

vision and purpose, underpinning

ourability to create long term value

for our stakeholders.

The Group enjoys a number

ofcompetitive strengths that can

beleveraged to drive continual

valuecreation.

Unrivalled customer experience

Our infrastructure, people and

broadened product offering allow

foramarket leading end-to-end

mobility solution, with customer

serviceat the heart of all we do.

Scale

We leverage our scale to access the

best supplier terms and manage the mix

and age of assets efficiently to minimise

holding cost. Our range of disposal

channels, including our in-house retail

network and eAuction platform, enable

us to minimise holding cost through

optimising disposal values.

Expertise

We maximise operational efficiency

through maintaining high levels of asset

utilisation. The scale of our network and

expertise of our people allow us to

service customers in the most effective

way including the efficiency and speed

of handling repairs and managing

insurance claims.

Our in-house workshops enable us to

service repairs more efficiently and offer

a wider range of solutions to customers.

We capture and share a broad range

ofvalue based outputs for the benefit

of our social environment as well as

multiple stakeholders.

Customers

By offering a range of flexible mobility

solutions, our customers remain on the

move and focus on what is important

tothem.

Suppliers

We partner and maintain close working

relationships with our suppliers, which

allows us to operate efficiently and makes

a positive contribution to their business.

Employees

We are proud of the continual development

opportunities we offer our people as our

business grows. We encourage employees

to share in the Group’s success through our

share schemes.

Environment

The Group takes its societal impact and

environmental responsibilities seriously

and has initiatives to improve its

operations and reduce carbon emissions.

Investors

Our business model is underpinned by

ourcapital allocation policy to ensure

that capital is allocated efficiently and

provides regular returns to shareholders

without putting the financial position of

the Group under undue risk.

Responsible value creation to support a sustainable world

Focus

Completing the integration

ofthe Group, accessing cost

synergies and developing the

widened customer proposition

Drive

Diversifying our current

offering intocomplementary

markets andexploring

growthin further markets

andgeographies

Broaden

Developing our

offeringfurtherinto new

marketsandgeographic

growth opportunities

Our business model – generating long term value

Resilience: We have considered a progressive range of material risks and opportunities to ensure that our business is fit for the short, medium and long term.

Our sustainability framework is integrated into our business model. Further detail will be contained within our separate sustainability report which will be published shortly after this report.

Experience Impact Transition Governance

We are committed to empowering our

employees and giving them the righttools to

deliver industry leading customer experience.

We are committed to minimising our impact on

the environment and positively influencing our

surrounding communities and supporting

innovation in our industry.

We are committed to driving the transition

tonon-ICE vehicles and to embrace the

opportunity to tackle climate change.

We are committed to maintaining highlevels

of integrity, transparency andhonesty, and

have a firm commitment togood governance.

www.reddenorthgate.com

14 Redde Northgate plc Annual Report and Accounts 2022

The progression of our strategy

Following the Merger, we set our vision and purpose and our strategic framework of Focus, Drive and Broaden to help us achieve that vision.

During the year, we have continued to make significant progress across all three areas of the framework. As the Focus, Drive, Broaden strategy

matures, our strategy will be developed further as we transition away from post-Merger integration to longer term value creation of the

combinedGroup.

How we have deliveredOur key initiativesOur strategic objectives Future priorities

Successfully execute integration

To bring together Redde and Northgate to operate

asa single Group, through a planned, disciplined

androbust process to create the integrated mobility

solutions platform

Implement cost synergies

To achieve one of the key strategic rationales

forthe Merger, and deliver a more efficient

combined Group

Focus

Building the strongest

foundations

Drive

Creating an unrivalled

customer experience

Broaden

Expanding into new

opportunities

– An industry leading, integrated business

– An efficient, dynamic Redde Northgate

– A culture where people can be their best

– Leverage the scale of the Group

– Products & services that exceed

expectations

– A sustainable & responsible business

– Explore opportunities in new markets and

new geographies

– Expand into complementary markets

– New Board and leadership team

– Branch integration allowing for operational efficiencies.

– Group functions for Fleet, HR, IT and Finance and

atransition to a single Group HR system

– Synergy target increase achieved 10 months

aheadof plan with the synergies now embedded

into the Group

– Investment in IT architecture, building a single IT

infrastructure to support the operations of the Group.

– Significant savings achieved as a result of supplier

rationalisation and contract renegotiation

– Digitalisation – new online claims portal, new

Traffic Officer app for Highways England and new

small claims system called Pilot. Improvements

made to eAuction platform

– EV strategy developed – infrastructure

investment, training programmes

andnewEVproducts launched

– Launch of new products and the Product Ideas

Hub – encouraging innovation within the business

– Significant contract wins in the FY2022 with

lifetime contract revenues in excess of £300m

– Repairs service transformed with acquisition of

Nationwide, forming FMG RS, and bringing

in-house capability to deliver repairs and enabling

integration into seamless customer journeys

– Launch of B2C and workshop commercialisation

inNorthgate Spain, providing new services to

existing and newcustomers

– Acquisition of ChargedEV significant to supporting

the evolution of our own EV fleet and that of our

customers’ fleets.

– Delivering on revenue synergies and Redde

recovery driving further EPS growth

– Maintaining a strong balance sheet

– Rollout of route to market and integrated mobility

solutions strategies

– Further product and service developments

– Further infrastructure delivery and further

development of EV service proposition

– Drive innovation further cementing position

inmarketplace

– Increase market share in all markets

– Future acquisitions

At the front of this report

Read our vision and purpose

Leverage mobility solutions platform

toenable revenue growth on basis

ofbroaderoffering

To widen the strategic benefit of the Merger,

bringing revenue synergies from the combination

ofmobility solutions for customers

Finesse products and services

To make our products and services meet and

exceed the expectations of our customers and to

bring them together as integrated mobility solutions

Service diversification into

complementarymarkets

To ensure that our products and services

encompass the full vehicle lifecycle and deliver

seamless customer journeys

Explore further market and geographic

growth opportunities

To deliver further growth through expansion into

product or geographic adjacencies that further

support the customer proposition and deliver

returnssubstantially ahead of WACC

Our strategy

15 Redde Northgate plc Annual Report and Accounts 2022

Strategy in action

Focus

I help keep customers

andtheir drivers safe

onthe road.

Our extensive safety

checks mean that

customers have peace

ofmind when it comes

tothe safety of their

peopleon the road.

Wekeep our customers

on the move and their

businesses running.

Joe Arthur

Motor Vehicle Technician

“

As a Motor Vehicle Technician for the

Northgate Stockton branch, the work that

Idohelps deliver our Group strategy.

One of our strategic objectives is Focus,

whichis all about delivering excellence in our

core operations, and I’m playing my part by

helping our customers and their drivers to stay

safe onthe road.

Keeping customers mobile is our purpose,

andas a Motor Vehicle Technician, I do just

thatthrough comprehensive safety checks

andfollowing our routine maintenance

schedules to ensure that we maintain a safe

and compliant fleet. By doing so, it means

thatwe continue to keep our customers

happy,keep them moving and keep their

businesses running.

Motor Vehicle

Technician

16 Redde Northgate plc Annual Report and Accounts 2022

I’m helping our Group and

our customers go green.

As part of Project

Spark, we’re helping

our customers and

our business be

more sustainable and

responsible by growing

our electric fleet, rolling

out charging capabilities

to our branch network

and building a team of EV

consultants to help our

customers navigate their

own journey to green!

As Product Integration Manager, I am

responsible for coordinating activities across

Project Spark.

Project Spark is a great example of where we

arehelping our business to be more

sustainable and responsible as it is all about

supporting our customers and our business

onthe journey to gogreen.

There’s been some great progress made as

part of the project, from recruiting EV

consultants, training our technicians on electric

and hybrid vehicles, providing All Star charge

cards to customers, to beginning the roll-out

ofEV charging infrastructure in branches with

the helpand expertise of ChargedEV.

In Northgate, we’ve also grown our EV fleet.

Byreplacing some of our own diesel and

petrolservice vehicles with EVs, we’ve

seenareduction in emissions, making

thoseback-and-forth trips that bit greener.

It’s important that our customers understand

the benefits of EVs and whether it’s right for

them and their fleet, which is why we’re here

toprovide customers solutions for their needs,

support through webinars and lots more.

And that’s how, as part of Project Spark,

I’mhelping deliver the Drive element

ofourstrategy.

Product Integration

Manager

Hayley Smith

Product Integration Manager

“

Drive

Strategy in action continued

17 Redde Northgate plc Annual Report and Accounts 2022

As Operational Support Manager, I help

customers get their incident managed and

theirvehicle repaired all in one place. This is

supported by FMG Connect, our brand new

online communication platform that gives

ourfleet customers instant access to incident

management services whether that be by

tablet,mobile, desktop or telephone after

reporting their claim.

FMG Connect provides greater autonomy,

choiceand efficiency for our customers who

prefer self-serve options, whilst the 24/7

service centre team is still available at the

endof the phone for support.

Welcoming FMG RS into the Groupand

integrating our incident management solution

has broadened our offering to customers,

which FMG Connect enhances and

complements by allowing customers online

access to manage their claim, request and

receive updates, with theability to book in

vehicle repairs, replacement vehicles, add

additional incident details and much more.

It’s important that we get customers’ vehicles

back on the road as quickly and efficiently as

possible, and that’s how I’m helping deliver our

strategy by building futureproof solutions to

drive efficient resolutions to incidents.

Operational Support

Manager

Broaden

I help customers get their

incident managed and

repaired in one place.

Welcoming FMG RS into

our Group and integrating

with our incident

management solution has

broadened our offering

to our customers, getting

their vehicles back on

the road as quickly and

efficiently as possible.

Luke MacRae

Operational Support Manager

“

Strategy in action continued

18 Redde Northgate plc Annual Report and Accounts 2022

Key performance indicators

Revenue ROCE Earnings

Group revenue (excluding vehicle sales) is

animportant measure on how we monitor

achievement of Group strategy.

In a capital intensive business, ROCE is an

important measure of performance. ROCE

measures how efficiently the Group allocates

capital to deliver returns for our shareholders.

Underlying PBT and EPS are key measures of profitability. They are also key remuneration

metrics. Underlying PBT and EPS are stated excluding exceptional costs in order to better

compare performance year on year.

Performance

Revenue (excluding vehicle sales) (£m)

471.2

517.6

585.6

879.7

1,093.6

2018

2019

2020

2021

2022

1,093.6m

+24.3%

ROCE (%)

7.5

7.7

7.0

9.5

13.9

2018

2019

2020

2021

2022

13.9%

+4.4ppt

Underlying profit before tax (£m)

57.0

61.1

59.0

93.2

151.3

2018

2019

2020

2021

2022

£151.3m

+62.3%

Underlying earnings per share (p)

34.8

38.7

30.8

31.0

50.8

2018

2019

2020

2021

2022

50.8p

+64.0%

Target

Our target is to grow the underlying revenue

ofthe Group from our products and services

across our integrated mobility solutions.

We aim to maintain ROCE above our weighted

average cost of capital.

Our target is to grow the underlying PBT of

theGroup. The earnings profile in the coming

years will be impacted by changes to

depreciation rates.

Our target is to grow the underlying earnings

per share of the Group. The earnings profile in

the coming years will be impacted by changes

to depreciation rates.

Strategic link

Monitoring the revenue of the Group measures

the success of our strategy, particularly our

Drive and Broaden initiatives.

Monitoring ROCE allows the Group to

identifythe efficiency of the business

modeland allocate resources to the

bestgrowth opportunities.

Monitoring the PBT of the Group measures the

success of all of our strategic objectives.

Monitoring EPS allows the Board to better

planhow to allocate capital, including returns

to shareholders.

Risk factor

Remuneration link

75% of executive Director annual bonus is

based on PBT targets.

50% of executive Director long term incentive

awards are measured against PBT targets.

50% of executive Director long term incentive

awards are measured against EPS targets.

Core financial KPIs

We use our KPIs to assess and monitor the performance of the Group and to measure progress

against how we execute our strategy. Specifically, our Core financial KPIs measure progress

ofourstrategic priorities in delivering profitability, revenue and returns.

Key to principal

risk factors

Economic

environment

Legal and

compliance

Market risk

IT systems

Vehicle holding

costs

Recovery of

contract assets

The employee

environment

Access to

capital

19 Redde Northgate plc Annual Report and Accounts 2022

Key performance indicators continued

Performance

Average vehicles on hire (000)

83.1

93.2

100.6

2018

2019

2020

2021

2022

100.6

+7.4

Utilisation

89%

90%

92%

2018

2019

2020

2021

2022

92%

+2.0ppt

Underlying EBIT margin (%)

9.7

10.2

9.6

9.9

13.5

2018

2019

2020

2021

2022

13.5%

+3.6ppt

Target Strategic link Risk factor Remuneration link

Our target is to grow the underlying revenue

ofthe Group from our products and services

across our integrated mobility solutions.

Operational performance is integral to the

achievement of our strategy. The KPIs

usedbythe Board and management

ensureperformance is reviewed and

managedeffectively.

25% of executive Director annual

bonusisbased on strategic

objectivesincluding other non-financial

operational measures.

Operational

We use operational KPIs to measure the progress of our strategic priorities in delivering our

strategy and in driving operational and commercial excellence.

Due to the nature and make up of the enlarged Group, we have a wide ranging set of operational

metrics for individual businesses and operations which the Board uses to review and manage

performance. The key operational KPIs are included within the CEO’s review from page 4.

Threeof the main Group operational metrics are highlighted here:

Key to principal

risk factors

Economic

environment

Legal and

compliance

Market risk

IT systems

Vehicle holding

costs

Recovery of

contract assets

The employee

environment

Access to

capital

Delivering for our stakeholders (non- financial KPIs)

We use non-financial KPIs to measure the progress of our strategic priorities in delivering our ESG agenda and to monitorperformance on how

we are delivering for the Group’s stakeholders.

about of ESG journey on pages 36 to 50.

20 Redde Northgate plc Annual Report and Accounts 2022

We now operate from

astrengthened financial

position following the

refinancing which

took place in the year,

diversifying our debt

arrangements and

lengthening our maturities.

The Group has a solid

financing platform to

invest in the business as

well as take advantage of

opportunities for inorganic

growth as they arise.

Financial review

Wehave delivered a robust set of financial results in the year, demonstrating our flexibility

and operationalagility to respond to changingmarket conditions.

The Group is well positioned to take advantage of future growth opportunities asthey arise.

Highlights

– Revenue increased 12.1% to £1,243.6m

– Continued strong cash flow with free cash flow of £12.3m

– Net debt increased by 9.9% to £582.5m including establishing new contract hire arrangements

for the commercial fleet

– Borrowing facility headroom has increased 25.2% to £382m

Group revenue and EBIT

Year ended 30 April

2022

£m

2021

£m

Change

£m

Change

Revenue – Vehicle hire 563.3 515.6 47.7 9.3%

Revenue – Vehicle sales 149.9 229.8 (79.9) (34.8%)

Revenue – Claims and services 530.3 364.1 166.2 45.6%

Total revenue 1,243.6 1,109.5 134.1 12.1%

Rental profit 91.7 70.3 21.5 30.5%

Disposal profit 50.1 40.2 9.9 24.6%

Claims and services profit 31.8 3.4 28.4 846.1%

Corporate costs (9.6) (8.4) (1.2) (14.3%)

Underlying operating profit 164.0 105.5 58.6 55.5%

Income from associates 3.9 4.4 (0.5) (11.4%)

Underlying EBIT 167.9 109.8 58.1 52.9%

Underlying EBIT margin 13.5% 9.9% 3.6ppt

Statutory EBIT 150.8 83.8 67.0 80.0%

Revenue

Total Group revenue, including vehicle sales, of £1,243.6m was 12.1% higher than prior year (13.4%

at constant exchange rates). Revenue excluding vehicle sales of £1,093.6m (2021: £879.7m), was

24.3% higher (25.7% at constant exchange rates) than prior year reflecting a 9.3% increase in

vehicle hire revenue and a 45.6% increase in claims and services revenue.

Hire revenues increased mainly due to higher VOH and pricing across the Group. Claims and

services revenue has increased by 45.6%, reflecting a recovery in volumes coming out of the

COVID-19 period.

Group vehicle sales revenue decreased by 34.8% due to a 39.5% reduction in number of vehicles

sold being partially offset by stronger residual values.

EBIT

Underlying EBIT of £167.9m was 52.9% higher, reflecting strong performance in rental, recovery

inRedde post COVID-19 and ongoing strength of residual values in vehicle disposals.

Statutory EBIT of £150.8m was 80.0% higher, reflecting higher underlying EBIT as well as a £8.9m

reduction in exceptional items and amortisation of acquired intangibles. The £8.9m reduction in

these items included a reversal in the year of a previous impairment and lower costs from

restructuring and integration activity which were incurred in the prior year following the Merger

and acquisition of Nationwide.

Philip Vincent

CFO

“

21 Redde Northgate plc Annual Report and Accounts 2022

Financial review continued

Group PBT and EPS

Year ended 30 April

2022

£m

2021

£m

Change

£m

Change

Underlying EBIT 167.9 109.8 58.1 52.9%

Net underlying finance costs (16.6) (16.6) – 0.0%

Underlying profit before taxation 151.3 93.2 58.1 62.3%

Statutory profit before taxation 132.7 67.2 65.5 97.5%

Underlying effective tax rate 17.4% 18.2% (0.8ppt)

Underlying EPS (p) 50.8 31.0 19.8 64.0%

Statutory EPS (p) 41.3 26.6 14.7 54.9%

Profit before taxation

Underlying PBT was 62.3% higher than prior year and statutory PBT was 97.5% higher, reflecting

the higher EBIT across the Group.

Taxation

The Group’s underlying tax charge was £26.3m (2021: £17.0m) and the underlying effective tax rate

was 17.4% (2021: 18.2%). The statutory effective tax rate was 23.5% (2021: 2.4%), with the prior year

rate benefitting from a £10.0m exceptional release of uncertain tax provisions following resolution

of a previous tax position.

Earnings per share

Underlying EPS of 50.8p was 19.8p higher than prior year, reflecting increased profits in the year.

Statutory EPS of 41.3p was 54.9% higher, reflecting the movement in underlying EPS and the

impact of higher exceptional costs in the prior year.

Depreciation rate changes

When a vehicle is acquired, it is recognised as a fixed asset at its cost net of any discount or

rebate receivable. The cost is then depreciated evenly over its rental life, matching its pattern

of usage down to the expected future residual value at the point at which the vehicle is

expected to be sold net of directly attributable selling costs.

Accounting standards require a review of residual values during a vehicle’s useful economic

life at least annually, with changes to depreciation rates being required if the expectation of

future values changes significantly.

Matching of future market values to net book value (NBV) on the estimated disposal date

requires significant judgement for the following reasons:

– Used vehicle prices are subject to short term volatility which makes it challenging to

estimate future residual values;

– The exact disposal age is not known at the point at which rates are set and therefore the

book value at disposal date is not certain;

– Mileage and condition are the key factors in influencing the market value of a vehicle. This

can vary significantly through a vehicle’s life depending upon how the vehicle is used.

Due to the above uncertainties, a difference normally arises between the NBV of a vehicle

and its actual market value at the date of disposal. Where those differences are within

anacceptable range these are adjusted against the depreciation charge in the income

statement. Where these differences are outside of the acceptable range, changes must

bemade to depreciation rate estimates to better reflect market conditions and the usage

ofvehicles.

The full year on year impact of previous depreciation rate changes in FY2022 EBIT is a

headwind of £4.0m in Northgate Spain and £1.4m in Northgate UK&I as previously outlined.

Residual values have increased significantly over the previous two financial years due to the

disruption of new vehicle supply which has increased demand for used vehicles. Up to this

point, no changes have been made to depreciation rates on existing fleet vehicles as the

extent and longevity of this buoyancy in residual values has been uncertain. However, it has

continued for longer than anticipated and uncertainty remains over how long it will take for

supply of new and used vehicles to return to a more normal level.

For this reason, there are a number of vehicles on our fleet where the depreciated book

value is below or very close to the expected residual value at disposal. In line with the

requirements of accounting standards, a decision has been made to reduce depreciation

rates from 1 May 2022 on certain vehicles remaining on the fleet which were purchased

before FY2021.

The impact on the statutory income statement over the remaining holding period of those

vehicles is expected to be as follows:

£m FY2023 FY2024 FY2025 FY2026 FY2027 Total

Reduced depreciation 54.6 30.9 8.2 0.3 – 94.1

Reduced disposal profits (7.8) (40.4) (38.0) (7.0) (0.9) (94.1)

Impact on statutory EBIT 46.8 (9.4) (29.8) (6.7) (0.9) –

The impact of the changing depreciation rates on this component of the fleet will re-phase

statutory EBIT over the next 5 years but will have no impact on underlying results and no

overall impact on statutory profit over the life of the fleet. The changes are non-cash items.

The actual phasing of the adjustment may change if these vehicles are held for a longer or

shorter period than anticipated in the above analysis.

The disposal profits of vehicles purchased in FY2021 and FY2022 are expected to be broadly

in line with original expectations. Depreciation rates on vehicles purchased in FY2023 will be

set based on management’s best estimates of future residual values when those vehicles are

sold, with holding periods ranging from 12 to 60 months.

Vehicles purchased in FY2023 will be set based on management’s best estimates of future

residual values when those vehicles are sold, with holding periods ranging from 12 to

60 months.

22 Redde Northgate plc Annual Report and Accounts 2022

Financial review continued

Business combinations

In the current year £0.1m was recognised as a gain on bargain purchase in the income statement

in relation to the acquisition of GRG Public Resources Limited in March 2022. A further £0.3m has

been recognised as a gain on bargain purchase in respect to the previous Nationwide acquisition

reflecting the write back of contingent consideration that was not payable.

Interest

Underlying finance charges remained static at £16.6m (2021: £16.6m). The net cash interest charge

for the year was £14.7m (2021: £15.0m) representing decreased borrowing. Non-cash interest was

£1.9m (2021: £1.6m).

Exceptional items

During the year EBIT included exceptional credits of £2.7m (2021: £6.5m costs) with a £3.5m credit

arising from restructuring expenses (2021: £2.8m cost) and the gain on bargain purchase credit of

£0.4m (2021: £1.5m) offset by FMG RS set up and integration costs of £1.2m (2021: £5.7m). The prior

year also included acquisition expenses of £1.1m and a legal settlement credit of £1.6m.

Finance costs included £1.5m (2021: £nil) of costs in relation to cancelling loan notes as part of the

refinancing of facilities during the year.

A total of £2.1m (2021: £9.6m) of the above exceptional items were cash costs and £3.3m

(2021:£3.0m) of credits were non-cash.

Further detail on exceptional items is included in Note 29.

Amortisation of acquired intangibles is not an exceptional item as it is recurring. However, it is

excluded from underlying results in order to provide a better comparison of performance of the

Group. The total charge for the year was £19.8m (2021: £19.5m).

Dividend and capital allocation

Subject to approval, the final dividend proposed of 15.0p per share (2021:12.0p) will be paid on

30 September 2022 to shareholders on the register as at close of business on 2 September 2022.

Including the interim dividend paid of 6.0p (2021: 3.4p), the total dividend relating totheyear

would be 21.0p (2021: 15.4p). Thedividend is covered 2.4x by underlyingearnings.

The Group’s objective is to employ a disciplined approach to investment, returns and capital

efficiency to deliver sustainable compounding growth. Capital will be allocated within the

business in accordance with the framework outlined below:

– Dividend: appropriate dividend distribution.

– Core business growth: organic capital investment to grow the core business at returns

substantially ahead of WACC.

– Disposal: potential disposal of non-core assets where investment returns can be maximised

through sale.

– Inorganic: bolt-on acquisitions into product orgeographic adjacencies at returns substantially

ahead of WACC.

The Group plans to maintain a balance sheet within a target leverage range of 1.0x to 2.0x net

debt to EBITDA, and during periods of significant growth net debt would be expected to be

towards the higher end of this range. This is consistent with the Group’s objective of maintaining

abalance sheet that is efficient in terms of providing long term returns to shareholders and

safeguards the Group’s financial position through economic cycles.

Share buyback programme

The Group continues to see exciting opportunities to deploy capital organically and has a good

M&A pipeline. Even after taking into consideration capital to fund organic growth, payment of

dividends in line with the Company’s dividend policy and acquisitions within the M&A pipeline,

theCompany has substantial headroom under its facilities and target leverage of 1-2x.

As a result, during March 2022 the Group commenced a share buyback programme of

theCompany’s ordinary shares for up to a maximum aggregate consideration of £30m.

Asat30 April 2022, 1,825,991 shares were purchased for a total consideration of £7.5m.

Group cash flow

Steady state cash generation

Year ended 30 April

2022

£m

2021

£m

Change

£m

Underlying EBIT 167.9 109.8 58.1

Depreciation and amortisation 198.8 192.5 6.3

Underlying EBITDA 366.7 302.3 64.4

Net replacement capex (106.7) (107.5) 0.8

Lease principal payments

(43.7) (54.8) 11.1

Steady state cash generation 216.4 140.1 76.3

Lease principal payments are included so that steady state cash generation includes all maintenance capex

irrespective of funding method.

Steady state cash generation remained strong at £216.4m (2021: £140.1m), driven by underlying

EBIT performance.

23 Redde Northgate plc Annual Report and Accounts 2022

Financial review continued

Free cash flow

Year ended 30 April

2022

£m

2021

£m

Change

£m

Steady state cash generation 216.4 140.1 76.3

Exceptional costs (excluding non-cash

items) (0.7) (5.0) 4.3

Working capital and non-cash items (33.5) (16.9) (16.6)

Growth capex (108.6) 19.1 (127.7)

Taxation (27.4) (12.7) (14.7)

Net operating cash 46.2 124.6 (78.4)

Distributions from associates 4.1 4.3 (0.2)

Interest and other financing (37.5) (20.4) (17.1)

Acquisition ofbusiness (0.5) (10.8) 10.3

Free cash flow 12.3 97.8 (85.5)

Dividends paid (43.9) (24.9) (19.0)

Lease principal payments

43.7 54.8 (11.1)

Net cash generated 12.0 127.6 (115.6)

Lease principal payments are added back to reflect the movement on net debt.

Free cash flow decreased by £85.5m to £12.3m (2021: £97.8m) driven by growth capex compared

to a contraction that resulted in an inflow of £19.1m in prior year. Growth capex of £108.6m reflects

a net increase in owned fleet (excluding transfers from leasing) of 7,600 since prior year.

If the impact of growth capex in the year is removed from free cash flow, the underlying free cash

flow of the Group was £120.9m (2021: £78.7m).

Net debt

Net debt reconciles as follows:

Year ended 30 April

2022

£m

2021

£m

Opening net debt 530.3 575.9

Net cash (generated) (12.0) (127.6)

Other non-cash items 76.8 80.3

Exchange differences (12.6) 1.8

Closing net debt 582.5 530.3

Closing net debt increased by £52.2m in the year. Net cash generation of £12.0m was offset by

non-cash items and exchange differences which increased debt by £64.2m. Other non-cash items

consist of £80.1m of new leases acquired being offset by £3.3m of other items. Foreign exchange

differences reduced net debt by £12.6m.

Borrowing facilities

As at 30 April 2022 the Group had headroom on facilities of £382m, with £426m drawn (net of

available cash balances) against total facilities of £808m as detailed below:

Facility

£m

Drawn

£m

Headroom

£m Maturity

Borrowing

cost

UK bank facilities 480 99 381 Nov-25 2.5%

Loan notes 315 315 ‑ Nov 27 – Nov 31 1.3%

Other loans 13 12 1 Nov 22 2.6%

808 426 382 1.9%

The other loans drawn consist of £12m of local borrowings in Spain which were renewed for a

further year in November 2021 and £0.5m of preference shares.

In November 2021, the Group completed a refinancing, repaying the existing loan notes and

replacing them with €375m of new loan notes with maturities spread across 6, 8 and 10 years.

TheUK bank facilities were replaced with new facilities maturing in November 2025. The

combined impact of these changes resulted in an overall increase of £104m at that date.

The above drawn amounts reconcile to net debt as follows:

Drawn

£m

Borrowing facilities 426.2

Unamortised finance fees (7.9)

Leases arising following adoption ofIFRS 16 130.4

Leases arising under HP obligations 33.8

Net debt 582.5

The overall cost of borrowings at 30 April 2022 is 1.9% (2021: 2.0%).

The margin charged on bank debt is dependent upon the Group’s net debt to EBITDA ratio,

ranging from a minimum of 1.45% to a maximum of 3.25%. The net debt to EBITDA ratio

at30 April2022 corresponded to a margin of 1.95% (2021: 1.85%).

The split of net debt by currency was asfollows:

Year ended 30 April

2022

£m

2021

£m

Euro 374 367

Sterling 217 167

Borrowings and lease obligations before unamortised

arrangement fees 591 534

Unamortised financefees (8) (4)

Net debt 583 530

24 Redde Northgate plc Annual Report and Accounts 2022

Financial review continued

There are three financial covenants under the Group’s facilities as follows:

Threshold April 2022 Headroom April 2021

Interest cover 3x 14.4x £130m (EBIT) 8.2x

Loan to value 70% 41% £323m (Net debt) 41%

Debt leverage 3x 1.4x £185m (EBITDA) 1.5x

The covenant calculations have been prepared in accordance with the requirements of the

facilities to which they relate.

Following the refinancing in November 2021, the debt leverage covenant improved to 3.0x,

increasing headroom by a further £14m. The other covenants remained unchanged.

Balance sheet

Net assets at 30 April 2022 were £946.8m (2021: £908.1m), equivalent to net assets per share of

388p (2021: 369p). Net tangible assets at 30 April 2022 were £680.5m (2021: £622.8m), equivalent

to a net tangible asset value of 279p per share (2021: 253p per share).

The calculations above are based on the number of shares in issue at 30 April 2022 of

246,091,423 (2021: 246,091,423) less treasury shares of 1,825,991 (2021: nil).

Gearing at 30 April 2022 was 85.6% (2021: 85.2%) and ROCE was 13.9% (2021: 9.5%).

Treasury

The function of the Group’s treasury operations is to mitigate financial risk, to ensure sufficient

liquidity is available to meet foreseeable requirements, to secure finance at minimum cost and to

invest cash assets securely and profitably. Treasury operations manage the Group’s funding,

liquidity and exposure to interest rate risks within a framework of policies and guidelines

authorised by the Board of Directors.

The Group uses derivative financial instruments for risk management purposes only. Consistent

with Group policy, Group Treasury does not engage in speculative activity and it is Group policy to

avoid using more complex financial instruments.

Credit risk

The policy followed in managing credit risk permits only minimal exposures with banks and

otherinstitutions meeting required standards as assessed normally by reference to major credit

agencies. Group credit exposure for material deposits is limited to banks which maintain an

Arating. Individual aggregate credit exposures are also limited accordingly.

Liquidity and funding

The Group has sufficient funding facilities to meet its normal funding requirements in the medium

term as discussed above. Covenants attached to those facilities as outlined above are not

restrictive to the Group’s operations.

Capital management

The Group’s objective is to maintain a balance sheet structure that is efficient in terms of

providinglong term returns to shareholders and safeguards the Group’s financial position

througheconomic cycles.

Operating subsidiaries are financed by a combination of retained earnings and borrowings.

The Group can choose to adjust its capital structure by varying the amount of dividends paid to

shareholders, by issuing new shares or by adjusting the level of capital expenditure.

Interest rate management

The Group’s bank facilities, other loan agreements and lease obligations incorporate variable

interest rates. The Group seeks to ensure that the exposure to future changes in interest rates is

managed to an acceptable level by having in place an appropriate balance of fixed rate and

floating rate financial instruments at any time. The proportion of gross borrowings (including

leases arising under HP obligations) hedged into fixed rates was 76% at 30 April 2022 (2021: 28%).

Foreign exchange risk

The Group’s reporting currency is Sterling and 77% of its revenue is generated in Sterling during

the year (2021: 73%). The Group’s principal currency translation exposure is to the Euro, as the

results of operations, assets and liabilities of its Spanish and Irish businesses must be translated

into Sterling to produce the Group’s consolidated financial statements.

The average and year end exchange rates used to translate the Group’s overseas operations were

as follows:

April 2022

£:€

April 2021

£:€

Average 1.18 1.12

Year end 1.19 1.15

Going concern

Having considered the Group’s current trading, cash flow generation and debt maturity including

severe but plausible stress testing scenarios (as detailed further in the Viability statement on page

35), the Directors have concluded that it is appropriate to prepare theGroup financial statements

on a going concern basis.

Philip Vincent

Chief Financial Officer

25 Redde Northgate plc Annual Report and Accounts 2022

GAAP reconciliation

Income statement reconciliation

Year ended 30 April

Footnote

below

Statutory

2022

£m

Adjustments

2022

£m

Underlying

2022

£m

Statutory

2021

£m

Adjustments

2021

£m

Underlying

2021

£m

Revenue (a) 1,243.6 (149.9) 1,093.6 1,109.5 (229.8) 879.7

Cost of sales (a) (897.3) 149.9 (747.4) (857.0) 229.8 (627.2)

Gross profit 346.2 – 346.2 252.5 – 252.5

Administrative expenses (b) (199.7) 17.5 (182.2) (174.6) 27.5 (147.1)

Operating profit 146.5 17.5 164.0 77.9 27.5 105.5

Income from associates 3.9 – 3.9 4.4 – 4.4

Gain on bargain purchase (c) 0.4 (0.4) – 1.5 (1.5) –

EBIT 150.8 17.1 167.9 83.8 26.0 109.8

Interest income – – – 0.2 – 0.2

Finance costs (d) (18.1) 1.5 (16.6) (16.8) – (16.8)

Profit before taxation 132.7 18.6 151.3 67.2 26.0 93.2

Taxation (e) (31.1) 4.9 (26.3) (1.6) (15.4) (17.0)

Profit for the year 101.5 23.5 125.0 65.6 10.6 76.2

Shares for EPS calculation 246.0m 246.0m 246.1m 246.1m

Basic EPS 41.3p 50.8p 26.6p 31.0p

Adjustments comprise:

Footnote

Revenue: sale of vehicles (a) (149.9) (229.8)

Cost of sales: revenue sale of vehicles net down (a) 149.9 229.8

Gross profit – –

Exceptional items (Note 29) (2.3) 8.0

Amortisation of acquired intangible assets (Note 14) 19.8 19.5

Administrative expenses (b) 17.5 27.5

Gain on bargain purchase (c) (0.4) (1.5)

Adjustments to EBIT 17.1 26.0

Exceptional finance costs (Note 29) (d) 1.5 –

Adjustments to PBT 18.6 26.0

Tax on exceptional items (Notes 9 and 29) 0.2 (1.3)

Tax on brand royalty charges and amortisation of acquired intangible

assets and tax rate change on acquired intangible assets 4.7 (4.1)

Tax credit in relation to the release of uncertain tax provisions – (10.0)

Tax adjustments (e) 4.9 (15.4)

Adjustments to profit 23.5 10.6

26 Redde Northgate plc Annual Report and Accounts 2022

Cash Flow Reconciliation

Year ended 30 April

2022

£m

2021

£m

Underlying EBIT 167.9 109.8

Add back:

Depreciation of property, plant and equipment 197.2 191.6

Loss on disposal of assets 0.6 0.2

Intangible amortisation included in underlying operating

profit (Note 6) 1.0 0.7

Underlying EBITDA 366.7 302.3

Net replacement capex (106.7) (107.5)

Lease principal payments (under IFRS 16 and HP) (43.7) (54.8)

Steady state cash generation 216.4 140.1

Exceptional items (excluding non-cash items) (0.7) (5.0)

Working capital and non-cash items (33.5) (16.9)

Growth capex (108.6) 19.1

Taxation (27.4) (12.7)

Net operating cash 46.2 124.6

Distributions from associates 4.1 4.3

Interest and other financing costs (37.5) (20.4)

Acquisition of business net of cash acquired (0.5) (10.8)

Free cash flow 12.3 97.8

Dividends paid (43.9) (24.9)

Lease principal payments 43.7 54.8

Net cash generated 12.0 127.6

Reconciliation to cash flow statement:

Net increase (decrease) in cash and cash equivalents 8.8 (9.7)

Add back:

Receipt of bank loans and other borrowings (318.1) (27.2)

Repayments of bank loans and other borrowings 277.6 109.7

Principal element of lease payments under IFRS 16 28.0 17.0

Principal element of lease payments under HP obligations 15.7 37.8

Net cash generated 12.0 127.6

Cash Flow Reconciliation

Year ended 30 April

2022

£m

2021

£m

Reconciliation of capital expenditure

Purchases of vehicles for hire 292.9 303.5

Proceeds from disposals of vehicles for hire (128.8) (188.6)

Proceeds from disposal of vehicles for credit hire and other

property, plant and equipment (2.7) (35.9)

Purchases of other property plant and equipment 52.4 7.5

Purchases of intangible assets 1.4 1.8

Net capital expenditure 215.2 88.3

Net replacement capex

106.7 107.5

Growth capex

108.6 (19.1)

Net capital expenditure 215.2 88.3

Net capital expenditure other than that defined as growth capex.

Growth capex represents the cash consumed in order to grow the total owned fleet or the cash generated if

the owned fleet size is reduced in periods of contraction.

Northgate UK&I

2022

£000

Northgate

Spain

2022

£000

Group

Sub-total

2022

£000

Underlying operating profit

97,957 43,888 141,845

Exclud e:

Adjustments to depreciation charge in

relation to vehicles sold in the year (44,841) (5,267) (50,108)

Rental profit 53,116 38,621 91,737

Divided by: Revenue: hire of vehicles

342,733 220,555 563,288

Rental margin 15.3% 17.5% 16.3%

Northgate UK&I

2021

£000

Northgate

Spain

2021

£000

Group

Sub-total

2021

£000

Underlying operating profit

76,800 33,700 110,500

Exclud e:

Adjustments to depreciation charge in

relation to vehicles sold in the year (37,285) (2,929) (40,214)

Rental profit 39,515 30,771 70,286

Divided by: Revenue: hire of vehicles

310,066 205,500 515,566

Rental margin 12.7% 15.0% 13.6%

See Note 5 for reconciliation of segment underlying operating profit to Group underlying operating profit.

Revenue: hire of vehicles including intersegment revenue (see Note 5 of the financial statements).

GAAP reconciliation continued

27 Redde Northgate plc Annual Report and Accounts 2022

Our risk management strategy supports

our ability to respond to the changing

needs of our stakeholders and the

dynamics of the markets we operate in.

The purpose of our risk management

strategy is to identify risks which could

affect us achieving our strategic objectives

and mitigate these to an acceptable level.

Risk focus

The risks facing the Group continue to be wide

ranging, with both external and internal factors

providing a high level of uncertainty across

theyear.

The Group Risk Committee meets formally on a

quarterly basis, with significant progress made

throughout the year, resetting the risk appetite

for the enlarged Group and harmonising the risk

management process across the businesses.

In the year, new vehicle availability was

considered as an increasing risk to the Group as

it constrains our growth ambitions and running

an older fleet provides challenges to our

operational model and commercial proposition.

The Group Risk Committee has paid due

consideration to this risk, how it impacts the

business and the actions to mitigate the risk

soas to protect the interests of its stakeholders.

A description of the Board’s decisions made

during the year is included within the Section

172 statement on pages 52 and 53.

As we transitioned away from the shorter term

impacts of COVID-19 lockdowns in the second

half of the year, focus centred around other

economic factors, particularly inflationary

pressures and how that impacts our business

model, suppliers, employees and customers.

We are confident in the Group’s ability to

achieve growth and provide returns to

shareholders, remaining mindful of external

factors which may influence how this is

delivered. Throughout the COVID-19 period

and beyond, we continue to demonstrate how

our asset base and services are flexible in

periods of economic uncertainty.

Identifying and managing risks

The Board oversees the ongoing process

foridentifying, evaluating and managing the

significant risks the Group faces. The Board is

also responsible for ensuring the process has

been in place for the year under review, and up

to the date of approval of this Annual Report,

and that it accords with risk management

guidance. The Board has performed a robust

assessment of the principal and emerging risks

facing the Group.

The Board has overall responsibility for risk

management with a focus on determining the

nature and extent of exposure to the principal

and emerging risks the business is willing to

take in achieving its strategic objectives. The

amount of risk is assessed in the context of our

business model and the external environment

in which we operate.

The Audit Committee takes responsibility for

overseeing the effectiveness of internal control

systems which are embedded into our risk

management processes on behalf of the

Board, and assesses the work of Group

InternalAudit.

The Group Risk Committee (overseen by the

Group Head of Internal Audit and comprising

executive Directors, and senior management

across the business) is responsible for

managing the principal risks in order to

achieveour performance goals within

thecontext of risk appetite.

Whilst ultimate responsibility for oversight

ofrisk management rests with the Board, the

effective day to day management of risk is

embedded within our operational business

units and forms an integral part of how we

work. This bottom up approach allows potential

risks to be identified at an early stage and

escalated as appropriate, with mitigations put

in place to manage suchrisks. Each business

unit maintains a comprehensive risk register.

Changes to the register are reviewed quarterly

by the Group Risk Committee, with significant

and emerging risks escalated to the Board.

Risk management process Oversight and governance process

The Group ensures that there are robust

processes in place in order to achieve

effective risk management. This involves

the identification, evaluation, control and

continuous monitoring of risk posed to

the business. These processes ensure

that we have appropriate measures to

manage our exposure to risk in order to

operate within the Group’s risk appetite.

There is a formal governance

structure underpinning ourapproach

to risk management. Key roles and

responsibilities within the structure

areasfollows:

Top down

Bottom up

The Board

Has overall responsibility for risk

management and reviews risk appetite

andmonitoring activity of the Group

RiskCommittee

Audit Committee

Reviews internal controls, sets the

objectives of and monitors the activities

ofGroup InternalAudit.

Group Internal Audit

Monitors risk management approach across

the Group, supports the Board and Audit

Committee in evaluating risk exposure and

identifying emerging risks. Oversees the

operation of the Group Risk Committee.

Group Risk Committee

Facilitates the identification of principal

risksand emerging risks facing the Group’s

businesses on a business led bottom up

basis and a Board led top down basis.

Ensures that risks are allocated to

appropriate risk owners and monitors the

operation ofcontrols in place to manage

risk to an acceptable level within the

context of riskappetite.

Regional executive teams

Identify, analyse, manage and report

onriskto Group Internal Audit via the

GroupRisk Committee and allocate

management of risks.

Monitor

and report

Identify

Respond

Evaluate

Identifying and managing risk

28 Redde Northgate plc Annual Report and Accounts 2022

Public

Financial

Operational disruption

Customer

Supplier

Business partner

Employee

Health and safety

Legal and regulatory

Environment

Strategic

Operational

Change/Project

Underlying

Key

Appetite categories Underlying impact category Impact categories

Identifying and managing risk continued

Identifying and managing risks

The Board maintains a focus on effective risk

management, which flows all the way through

the organisation. The risk appetite is set at

different tolerances depending on the impact

categories as mentioned previously, for

example the Group’s willingness to accept

strategic riskis higher than the tolerance of risk

in areasof health and safety. The culture of the

organisation ensures all activities, from day to

day operations to high level strategic decisions,

are performed in line with this approach.

The Board’s assessment of our principal risks is

based on the perceived impact on the Group’s

ability to achieve its strategic objectives and

the likelihood of their occurrence taking into

account controls that have been put into place

to mitigate any impact.

Principal risks

Recognising that all business activity involves

elements of risk, the Board maintains a policy

of continuously identifying and reviewing risks

that represent a threat to the business, or that

may cause future financial results to differ

materially from expected results. Our approach

is not intended to eliminate risk entirely, but to

manage our risk exposures across the

business, whilst at the same time making

themost of our opportunities.

The Directors have carried out a robust

assessment of the principal and emerging

risksfacing the Company, including those

thatwould threaten its business model, future

performance, solvency or liquidity. For each

risk we state what it means for us and what we

are doing to manage it.

The Board is dedicated to ensuring

theGroupoperates in a responsible and

sustainable manner, and throughout the

yearwe have developed and approved

ourESG strategy and our maiden sustainability

report will be available on our website shortly

after this report is published. The Group Risk

Committee does not consider ESG or climate

as an isolated principal risk, but instead, having

taken external advice, regards the integral

parts of our ESG framework to be embedded

into our existing principal risks. Further

information on our ESG strategy can be

foundon pages 36 to 50.

The risks specified are not intended to

representan exhaustive list of all potential

risksand uncertainties. The risk factors outlined

should be considered in conjunction with the

Group’s system for managing risk, described

onpage 28 and in the Corporate Governance

Report from page 58.

Emerging risks

In addition to the principal risks, the Board also

considers what emerging risks may also impact

the Group. The Group considers an emerging

risk to be one that is not currently having

amaterial impact on the business but has

thepotential to impact future strategy

oroperations. The Group’s approach to

managing emerging risk exposure is to:

– identify potential emerging risks, using horizon

scanning techniques; published external

research and peer/competitor review;

– assess these risks taking into account our

industry sector and market position, and our

strategy, to determine relevance;

– consider the potential impact of each risk on

the Group’s strategy, finances, operations and

reputation, taking into account the likelihood

of the risk occurring and the speed with

which it may manifest; and

– regularly monitor these risks and develop

actions to address them where appropriate.

In the prior year, the Board considered

climate-related matters, including the

recommendations from the TCFD as emerging

risks. Our assessment around this area has

developed significantly within the year but it is

still considered to be an emerging risk to the

Group and will be continually monitored. As

those risks become prevalent, they will be

integrated into the assessment of principal

risks and the overall risk management

framework of the Group.

Risk appetite

The UK Corporate Governance Code requires

companies to determine their risk appetite.

Thisis an expression of the amount and types

of risk that the Company is willing to take

inorder to achieve its strategic and

operationalobjectives.

In the year, the Board and the Group Risk

Committee reviewed and approved the risk

appetite for the enlarged Group. In doing

sotheCommittee considered the Group’s

appetiteto risk in relation to the categories

asdetailed below:

The underlying risk appetite is set considering the four areas of legal and regulatory, health

and safety, environment and public, for which four separate risk appetite statements are in

place. For each of the remaining appetite categories, an assessment of the Group’s acceptable

level of risk is made against each of the impact categories.

29 Redde Northgate plc Annual Report and Accounts 2022

Risk trend

Type of risk Risk Risk level Change

Strategic risks Economic environment

Inflationary pressures, shortages in vehicle availability and the conflict in Ukraine have a

consequential affect to economic activity and may impact demand for hire vehicles or the Group’s

ability to fulfil that demand, This has been partially offset by the easing of COVID-19 restrictions.

Market risk

Loss of a major customer could diminish returns and changes in regulation could alter how our

customers utilise our services. The Group continue to secure significant new business wins and

the diversification of the customer base away from reliance on a particular customer or sector

continues to mitigate this risk.

Operational risks Vehicle holding costs

Global supply chain disruptions in new vehicle registrations has created high residual values for

used vehicles and therefore reduced holding costs in the short term. There is a risk of future price

volatility in new and used vehicle prices as the markets continue to be disrupted.

The employee environment

Constraints in the labour market and ability to access talent continues to put pressure on the

Group’s operating model and commercial proposition.

Legal and compliance

There has been no significant changes to laws and regulations which impact the Group’s

operations. Our ESG strategy provides resilience to our operations, particularly concerning

climate-related issues where legislation is likely to increase in the future.

IT systems

The Group continues to develop our IT environment post-Merger allowing for operational and

commercial agility across the enlarged Group. We continue to invest in and integrate IT platforms

as the Group grows organically and inorganically.

Financial risks Recovery of contract assets

As COVID-19 restrictions eased during the year, court capacities have improved leading to more

cases being settled. Insurers have also re-established resource for resolving and settling existing

claims. The balance outstanding in relation to contract assets has increased in the year due to

volume from COVID recovery. However, the overall statutory debtor days in relation to this

balance reduced by 20 days.

Access to capital

Comprehensive refinancing of debt arrangements took place in during the year; optimising the

Group’s debt portfolio, increasing headroom, significantly lengthening our maturities, diversifying

our pools of liquidity and securing competitive interest rates.

Risk level

Evaluation is defined as management’s

assessment of whether the risk factor has:

Increased Decreased Not changed

Principal risks and uncertainties

30 Redde Northgate plc Annual Report and Accounts 2022

Principal risks and uncertainties continued

Strategic risks

Economic environment

The demand for our products

and services could be affected

by a change in economic

activity in the countries the

Group operates, including the

post COVID-19 recovery period,

conflict between Russia and

Ukraine including impacts on

supply chains, and global

inflationary pressures.

Risk description

Adverse changes in economic conditions

could result in declines and changes in

the business activity of customers or

increase our cost base. Changes to driving

patterns and vehicle usage could result in

lower numbers of accidents and therefore

reduced credit hire business, credit

repairvolumes and demand for our

legalservices.

An adverse change in macroeconomic

conditions could also increase the risk of

customer failure, increasing the risk of

non-recovery of receivables. Additionally,

inflationary pressures impacting general

economic activity may reduce demand

forhire vehicles.

Controls and mitigating activities

– The business model supports high levels of utilisation and vehicles

returned from customers are redeployed within the fleet.

– Flexibility over asset management means that in the event of

adownturnthe Group can generate cash and reduce debt by

reducingvehicle purchases or accelerating disposals.

– The cost base related to management of insurance claims and

services is flexible and can be scaled back in response to a

downturn in revenue.

– The Group maintains close relationships with key suppliers to

ensure continuity of supply, such as negotiations considering

the global restriction of vehicle availability, and has diversified

supplier base in order to further mitigate this. In the event of

short term supply interruption, the fleet can be aged.

– Pricing structures remain under review in context of cost inflation.

– Credit risk of new and existing customers is continually

assessed and actions taken where necessary. The Group has a

diversified customer base without overreliance on an individual

or group of customers across any sector.

– Transactional foreign exchange exposure is minimised through

sourcing supplies in the same currency as the revenue is generated.

Developments in the year

– Shortages of vehicle availability has constrained growth but we have

aged out the fleet in order to protect existing revenue streams (used

vehicle markets continue to experience buoyant residual values due

toshortages of new vehicles).

– COVID-19 restrictions have eased in the year across allbusinesses.

– Volumes of insurance claims and services have grown tonear pre

COVID-19 levels towards the end of the year as restrictions eased

inthe UK.

– Inflation increases during the year affects our supply chain in

variousways.

– The conflict between Russia and Ukraine has not had a direct impact

on our business as no customers or suppliers are located in that

region, but it has had animpact on global markets which has fed

though to general inflation and supply chain issues mentioned above.

Market risk

The loss of a major customer

orkey insurance referral partner

would adversely impact the

Group’s revenues. Without any

adjustment to pricing, service

orcost base, this will result in

lower returns.

There is a risk that demand for

the Group’s products could

materially diminish if it fails

torespond to behavioural,

structural, legal or

technological changes in the

markets in which it operates.

Risk description

The markets in which the Group operates

are fragmented, with low barriers to entry,

meaning that price competition is high.

TheGroup could fail to attract and retain

customers if pricing is uncompetitive or

itfails to adequately differentiate its

serviceoffer. Significant increases in the

commission rates paid to insurance referral

partners could threaten the viability of the

returns model of that part of the Group.

Loss of a major existing customer or

insurance referral partner could materially

diminish returns if the cost base is not

managed appropriately.

Changes to usage of fleet such as

regulations around operation of ICE vehicles

and low emission zones will change the

demand for existing products and services.

Other structural changes to the rental and

insurance markets could eliminate the

viability of the business model.

Controls and mitigating activities

– Minimising the concentration of business customers.

– Maintaining contracts and long term relationships with

insurance partners.

– Comprehensive suite of products and services decreases risk

ofcompetition and increases barriers to compete.

– Continual benchmarking of pricing and service offer

withcompetitors.

– Pricing controls over target levels of returns and

discountauthorities.

– Diversification of service offering to customers.

– Continued evolution of the fleet towards non-ICE vehicles

withsupportinginfrastructure.

Developments in the year

– Continued development of customer proposition, providing an

integrated mobility solution.

– Significant new contract wins with lifetime revenues of over £300m.

– Our competitive position in the flexible rental solution and

complementary service markets has continued to support VOH

andrental margins.

– Acquisition of ChargedEV in the year supports EV transition and

widens customer proposition.

– Our ESG strategy supports transition of the fleet to non-ICE vehicles

tomeet the changing demand of the markets in which we operate.

Risk level

Evaluation is defined as management’s

assessment of whether the risk factor has:

Increased Decreased Not changed

31 Redde Northgate plc Annual Report and Accounts 2022

Principal risks and uncertainties continued

Operational risks

Vehicle holding costs

An increase in holding costs,

ifnotrecovered through hire

rateincreases or operational

efficiencies, would adversely

affect profitability, shareholder

returns and cash generation.

Risk description

The holding cost of vehicles is dependent

upon the purchase price negotiated

andthe expected residual value at the

date of disposal. The operational cost

offleet is dependent upon efficient

fleetmanagement and maintenance

ofthe fleet.

Global supply chain constraints have

continued to support high used vehicle

prices throughout the year but present

risks around future volatility in pricing

ofnew and used vehicles.

Controls and mitigating activities

– Maintaining strong relationships with suppliers and negotiating

pricing directly with manufacturers on an annual basis.

– Managing the number and mix of suppliers to optimise buying

terms and to efficiently maintain the fleet in-life. Increasing the

sources of supply beyond traditional direct OEM relationships.

– Holding a proportion of the fleet on a leasing basis with fixed

implicit residual values.

– Optimising the holding period of vehicles to minimise overall

holding costs to the extent that this is possible in a period of

short vehicle supply.

– Balancing high levels of utilisation with availability of fleet

forcustomers.

– Using in-house workshops to efficiently manage in-life

maintenance and total holding cost.

– Diversification of sales channels in order to maximise residual

value including in-house eAuction sales.

– Ageing of the fleet, if necessary, to mitigate short term pricing

disruption in used vehicle markets or short term pricing pressure

in new vehicle markets as a result of constrained supply.

– Although the Group is exposed to fluctuations in the used vehicle

market, we aim to optimise the value of our fleet. Our fleet can act

flexibly and responsively to market instabilities, Should the market

experience a short term decline in residual values, we can age our

existing fleet until the market improves or, in the light of vehicle

supply restrictions, age our fleet to extend rental availability.

Developments in the year

– Shortages of vehicle availability have been experienced in the year

due to global supply chainissues.

– Residual values in the used vehicle market continue to remain high

due to shortage in supply of new vehicles.

– We have slowed down our normal vehicle replacement cycle in

response to this shortage of new vehicles in order to maximise rental

availability. Fleet ageing continues to be carefully monitored to ensure

that we are able to operate efficiently and continue to deliver the same

levels of customer service.

– Establishing supply from alternative vehicle sales outlets to facilitate

additional availability.

The employee environment

Failure to safeguard

employeesand retain,

developand motivate the

righttalent willimpede

thesuccessful operation

ofthebusiness model and

delivery of theGroup’s

strategicobjectives.

Risk description

Not safeguarding employees’ health and

welfare and failure to invest in our workforce will

lead to high levels of staff turnover, which will

affect customer service, operational efficiency

and overall delivery of the Group’s strategy.

Management is working to effectively

integrate andharmonise one set of vision

and values asthe Group continues to grow

organically andinorganically so that

everyone is aligned to the strategic

goalsofthe Group.

Despite mitigations reducing the risk in

recent months, the constraint of the labour

market isat the forefront of management

discussion asinability to access talent puts

pressure onthe Group’s operating model

and commercial proposition.

Controls and mitigating activities

– Employee engagement with Group management through the

Employee Engagement Forum and employee surveys.

– Internal communications establish vision and values which are

aligned to Group strategy and undertake regular

communication of strategic progress through various platforms.

– Ongoing benchmarking of reward and benefits against the

comparable market.

– Regular performance reviews including personal development

and tailored training.

– Regular engagement with employees and access to health and

wellbeing initiatives.

– Group health and safety initiatives to promote an ongoing safe

working environment.

Developments in the year

– Access to people resource with the appropriate skill set for the Group

has been an increasing challenge throughout the year.

– First full year of the Employee Engagement Forum, established

post-Merger, giving all employees a voice into the executive

leadership team and the Board.

– Roll out of Focus, Drive and Broaden initiatives across the Group.

– Northgate Spain rated within top 10% of largest job search portal.

– New UK reward hub and benefit platform launched

– Growth of in-house recruitment team, dedicated to engaging talent

who share the same values as the Group.

– Extension of Academy hub to wider Group providing a common

platform to facilitate training,

– Continuing to support flexible working, giving employees more flexibility

to work from home, whilst balancing the needs of the business.

Risk level

Evaluation is defined as management’s

assessment of whether the risk factor has:

Increased Decreased Not changed

32 Redde Northgate plc Annual Report and Accounts 2022

Principal risks and uncertainties continued

Operational risks continued

Legal and compliance

Certain activities and

arrangements within the Group

areregulated, therefore ongoing

compliance with regulations

isrequired to ensure continuity

ofbusiness.

Historical legal cases relating

tothe provision of credit hire and

insurance related services have

provided a precedent framework

which has remained broadly stable

for several years. Legal challenges

or changes in legislation could

undermine this framework with

consequences for the markets

inwhich the Group operates.

Risk description

Inadequate operation of systems to

monitor and ensure compliance with

regulation could expose the Group to

fines and penalties or operating licences

could be suspended. Failure to comply

with laws and regulations would put

thereputation of the business at risk,

adversely impacting our ability to attract

customers and maintain productive and

sustainable relationships with our

partners andsuppliers.

Changes to the legislation underlying

one or more of the Group’s core markets

could impact revenue and profitability,

particularly within the credit hire,

insurance and legal services businesses

of the Group.

Controls and mitigating activities

– In-house legal and compliance team continuously monitoring regulatory

and legal compliance.

– Horizon scanning and monitoring of legal and regulatory developments.

– Policies and procedures and compliance monitoring programmes.

– Training in relation to relevant legislation, regulatory responsibilities and

Company policies and procedures.

– External advisors are retained where necessary.

Developments in the year

– No significant changes to laws and regulations impacting

operations in the year.

– No significant instances of non-compliance or legal

issues across the Group during the year.

– Development and approval of the Group’s ESG strategy

provides resilience to our operations and, in particular,

sets out our path to fight climate-related issues, an area

where legislation is deemed likely to increase.

IT systems

Failure of existing systems,

oralackof development in

newsystems, could result in a

lossof commercial agility and/or

harm theefficiency and continuity

of our operations.

Incorrectly handling data, or

unsuccessfully defending against

data theft, cyber-attacks and

thelike, would cause significant

reputational harm and affect

relationships with all

stakeholdersnegatively.

Risk description

The Group’s business is dependent on

the safe and efficient processing of a

large number of complex transactions

and interactions. The effective

performance and availability of core

systems is central to the operation

ofthebusiness.

IT systems can be at risk from failed

processes, systems or infrastructure

andfrom error, fraud or cyber-crime.

The Merger and subsequent acquisitions

have increased the complexity and

diversity of operations, IT systems

andinfrastructure.

Controls and mitigating activities

– Ongoing monitoring of the continuity of IT systems with access to support

where required.

– Back-up and recovery procedures for key systems including disaster

recovery plans.

– Operation of information security and data protection protocols to ensure

that data is held securely, and is adequately protected from cyber-attacks

or other unauthorised access.

– Changes to key IT systems are considered as part of wider Group change

programmes and are implemented in phases where possible with

appropriate governance structures put in place to oversee progress

against project objectives.

Developments in the year

– Progress made over the integration and replacement of

core IT infrastructure and systems of the Group following

the Merger.

– Further investments in core systems are planned in order

to support the growth of the Group.

Risk level

Evaluation is defined as management’s

assessment of whether the risk factor has:

Increased Decreased Not changed

33 Redde Northgate plc Annual Report and Accounts 2022

Principal risks and uncertainties continued

Financial risks

Recovery of contract assets

Our credit hire and repair business

involves the provision of goods

andservices on credit. The Group

receives payment for the goods

and services it has provided after

aclaim has been pursued against

the party at fault (and the relevant

third party insurer). This can mean

that the Group can endure a long

period before some payments

arereceived.

Risk description

While a significant level of claims

aresubject to protocol arrangements

resulting in prompt settlement of claims

there is a risk that the Group will not be

able to improve or maintain the pace

ofsettlement of claims. In addition,

thirdparty insurers may seek to delay

payments in an attempt to achieve

morefavourable settlement terms for

outstanding claims or, ultimately, to force

the Group and other credit hire providers

out of the market.

If the Group is unable to maintain existing

settlement periods, if there are further

delays in the receipt of payments or

ifsettlement terms with insurers

worsen,itsbusiness, financial

conditionandoperating results

couldbeadverselyimpacted.

Controls and mitigating activities

– The Group manages this risk by standardising terms (protocol

agreements) where possible, ensuring that services are only provided

tocustomers after a full risk assessment process and agreement to

anappropriate contract. In addition, any payment delays are monitored

and appropriate action taken to facilitate prompt settlement.

Developments in the year

– As COVID-19 restrictions eased during the year, court

capacities have consequently improved leading to more

cases being settled. Insurers have also re-established

resource to settle existing claims.

– The balance outstanding in relation to contract assets has

increased in the year due to volume from COVID recovery.

However, the overall statutory debtor days in relation to

this balance reduced by 20 days..

Access to capital

The Group needs access to

sufficient capital to maintain

andgrow the fleet and

fundshortterm working

capitalrequirements.

Investors increasingly require

businesses to demonstrate

thatthey act in a responsible

andsustainable manner

priortogranting access

tofinancingfacilities.

Risk description

Failure to maintain or extend access

tocredit and fleet finance facilities or

non-compliance with debt covenants

could affect the Group’s ability to

achieve its strategic objectives or

continue as a going concern.

Controls and mitigating activities

– Bank, loan note and fleet funding facilities are in place across a range of

funding sources which provide adequate headroom and maturities in

order to support the strategy of theGroup.

– Facilities are diversified across a range of lenders and close relationships

are maintained with key funders of the Group to ensure continuity

offunding.

– The Group continually monitors cash flow forecasts to ensure adequate

headroom on facilities and ongoing compliance with debt covenants.

– The Group maintains leverage within stated policy and the business

model allows cash to be generated through economic cycles.

The impact of access to capital on the Group’s viability is considered in the

viability statement on page 35.

Developments in the year

– Comprehensive refinancing of debt arrangement

optimising the Group’s debt portfolio.

– Significant lengthening of maturities spread up

to10years.

– Greater diversification in terms of sources of debt

andaccess to new pools of liquidity.

– New debt raised at competitive interest rates.

– Further contract hire credit lines have been negotiated.

Risk level

Evaluation is defined as management’s

assessment of whether the risk factor has:

Increased Decreased Not changed

34 Redde Northgate plc Annual Report and Accounts 2022

Viability statement

Effectively leveraging integrated mobility

capabilities with significant new business

wins, service diversification aligned to

our ESG framework and the successful

refinancing of borrowing facilities strongly

positions the Group forfuture growth.

Assessment of prospects

Our business model and strategy are central

tounderstanding the prospects of the Group,

details of which can be found on pages 14

to18. The Group’s current overall strategy

hasbeen in place for several years, subject

tothe ongoing monitoring and development

described below. The combined Group is well

established within the markets it operates in,

details of which can befound on pages 11 to 13,

and has proven resilience through difficult

economic conditions in recent years,

includingthe impact of COVID-19, and

strongmomentum has continued throughout

the year ended 30 April2022.

The Board continues to take a measured

approach to strategic risk, as the Group

continues to progress through the Focus, Drive

and Broaden elements of its strategy, securing

significant contract wins through our enhanced

commercial offering, and diversifying the

service, such as through the acquisition of

ChargedEV, whilst exploring further market

and geographic growth opportunities intended

to add long term value to the Group. The Board

continually assesses the changes in the risk

profile and emerging risks to the Group, further

details ofwhich can be found of pages 28 to

29. TheGroup pursues only those activities

which are acceptable in the context of the risk

profile of the Group as a whole.

The assessment process and key assumptions

The Group’s prospects are assessed through

its strategic planning process. This process

includes an annual review of the ongoing

strategic plan, ledby the CEO, together with

the involvement ofbusiness functions in all

territories. The Board engages closely with

executive management throughout this

process and challenges delivery ofthe

Assessment of viability

To assess the Group’s viability, the three year

strategic plan was stress tested against various

scenarios and other sensitivities.

Sensitivity analysis of our strategy

A detailed three year strategic review was

conducted which considers the Group’s cash

flows, dividend cover assuming operation of

stated policy, and headroom against borrowing

facilities and financial covenants under the

Group’s existing facilities. These metrics were

subjected to sensitivity analysis to assess the

Group’s ability to deliver its strategic objectives.

Strengthened financial position

In November 2021, the Group secured £792m of

new facilities in the form of £475m bank revolving

credit and €375m of new loan notes. The Group’s

principal banking facility has a maturity date of

November 2025 and the loan notes provide

significant lengthening ofmaturities spread

across 6, 8 and 10 years. Headroom against the

Group’s existing banking facilities at 30 April

2022 was £382m as detailed on page 24. This

compares with headroom of £305m at 30 April

2021. Given the financial strength of the Group,

we do not anticipate any material deterioration in

the credit status of the Group or access to credit

markets that would contradict this assumption.

Taking this into account, the Group’s facilities

provide sufficient headroom to fund the capital

expenditure and working capital requirements

during the planned period.

Stress testing our risk resilience

The Directors have further considered the

resilience of the Group, considering its current

position and the principal risks facing the business.

The plan was stress tested for severe but plausible

scenarios over the planned period as follows:

– No further growth in vehicles on hire with

rental customers.

– No further increase in pricing of rental hire rates.

– A 2% increase above plan assumptions in the

purchase cost of vehicles and other operating

expenses not passed on to customers.

– A 10% reduction to assumptions in the plan

for the residual value of usedvehicles.

strategic plan during regular Board meetings.

Part of the Board’s role is to challenge the

plantoensure it is robust andmakes

dueconsideration of the appropriate

externalenvironment.

The Directors have assessed the viability of the

Group over a three year period to 30 April 2025,

considering the Group’s current position and a

robust assessment of the potential impact of the

principal risks documented in the Strategic Report.

The three year period was selected as this

represents the normal investment cycle of the

Group. With the exception of some minimum

termrental contracts, there is no fixed period

overwhich revenue is contracted, in line with the

flexibility offered to customers. Within the rental

business, vehicles are normally held for up to five

years, with an average holding period of three

years. Within the insurance claims and services

business, there is no fixed investment cycle.

Theviability of the business is underpinned

byitscommercial relationships with insurance

partners. Commercial terms are continuously

reviewed with insurance partners, with three

years representing an average review cycle of

material terms. The three year period used for

assessing viability is therefore aligned to how

capital is employed in the business, the maturity

of key commercial relationships and, therefore,

how returns on investment are reviewed.

The plan makes certain assumptions about the

normal level of capital recycling likely to occur

and therefore considers whether additional

financing will be required.

The first year of the financial forecast forms the

Group’s operating budget, with post COVID-19

recoveries embedded into the operations of

theGroup, and will be continuously reviewed

throughout the financial year. Subsequent

yearsare forecast from the base year, based

on historical experience and expected

measures within the overall strategic plan.

Based upon this assessment, the Directors have a

reasonable expectation that the Group will be able

to continue in operation and meet its liabilities as

they fall due over the period to 30 April 2025.

– A 25% volume reduction in insurance claims

and services revenue in aggregate, either

through lower demand or through ending the

commercial relationship with a group of key

insurance partners.

– A slow down of 50 days in the time taken to

settle outstanding claims with insurers.

Revenues from insurance claims and services are

closely linked to the volume and density of traffic

on the roads which in recent years has been

materially impacted by COVID-19 lockdowns.

Despite additional restrictions over the final

quarter of the 2021 calendar year, February 2022

saw the UK Government lift all remaining

COVID-19 restrictions and trading in the final

quarter of the year saw volumes returning to 90%

of pre COVID levels, including normal seasonality.

Over the COVID period in 2020 and 2021, overall

profitability and cash generation of the Group

increased due to the resilience of the business

model. A separate COVID type scenario has

therefore not been included as a downside case.

The above scenarios took into account the

effectiveness of mitigating actions that would

bereasonably taken, such as reducing variable

costs that are directly related to revenue, but

didnot take into account further management

actions that would likely be taken, such as

achange to the indirect cost base of the

Groupora reduction in capital expenditure

andageing out of the vehicle fleet, both of

whichwould generate cash and reduce debt.

Conclusions relating to viability

andgoing concern

After considering the above sensitivities

andreasonable mitigating actions, sufficient

headroom remained against available debt facilities

and the covenants attached to those facilities.

The Directors have a reasonable expectation that

the Group will continue to be able to meet its

obligations as they fall due and continue to be

viable due over the period to 30 April 2025. The

Directors also considered it appropriate to prepare

the financial statements on the going concern

basis, as explained in the Basis of preparation

paragraph in Note 1 of the Financial Statements.

35 Redde Northgate plc Annual Report and Accounts 2022

ESG report

At Redde Northgate we are very conscious of

our significant responsibilities as a business

to our people, the planet, our customers and

the communities in which we operate. By

taking responsibility in everything we do,

wehelp deliver the trust that defines our

business reputation and cements our position

as the leader in our markets for integrated

mobility solutions.

What is of primary importance to us is the

healthand safety of our team members and

customers, the development of our people,

and minimising our impact on the environment

and on the communities we serve. We also

focus on having the right governance to ensure

that we behave ethically at all times and are

mindful of all of the emerging risks and

opportunities for the business.

Redde Northgate is at an early stage in

itsGroup wide ESG strategy formation,

developing the frameworks and reporting

systems to be able to monitor key metrics and

putting in place the building blocks that will

underpin its strategy and reporting. In FY2023,

we intend to develop a suite of KPIs and targets

which will bring our current efforts together in

a uniform approach, and help us to model our

risks and exposures and future trajectory

towards net zero.

We have a number of initiatives underway

toaddress the emissions directly in our control.

However, some of the sectors in which we

operate are at an early stage in the journey

tonet zero, and the availability of alternative

solutions for our segments is currently very

limited. For example, while the Group invests

inits EV passenger fleet as the UK car parc

evolves, many Northgate customers have

range and payload requirements unable to

beachieved with current EV solutions. As

Scope 3 category emissions are estimated

toaccount for well over 95% of our emissions,

weare, by necessity, restricted in the rate of

change we can achieve for ourselves as well

asfor our clients while embracing the many

opportunities that such a transition provides

usto make a significant difference.

Our ESG framework defines our approach

through four pillars: Experience, Impact,

Transition and Governance. We believe it

helpsus think about how best to address the

challenges before us as a business and engage

with our employees, who are key to its

successful implementation.

This review sets out our actions over the year

using this framework, and also introduces our

first year of Task Force on Climate-Related

Financial Disclosures. In the coming year, we

will increase the sophistication and analysis

underpinning this work as we roll out our ESG

data management systems across the Group.

We are trusted by our customers to provide

them with the advice and solutions which

bestfit their mobility needs and support their

own strategies and commitments to emission

reductions. In 2021, we launched our new

Group values: we are open, we respect one

another, weget it done, we work as one team,

we work with passion. These values were

chosen as theyresonate with all our

colleaguesand management team, and

reflectthe growth of a Group wide culture

following the Merger in 2020. By maintaining

customer trust and placing our values at the

heart of everything we do, we can grow

sustainably and responsibly.

36 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Sustainable mobility solutions, delivered responsibly

Managing our business to protect our people and the planet

Experience Impact Transition Governance

Commitment

Empowering our employees and

giving them the right tools to

deliver industry leading

customer experience.

Minimising our impact on the

environment and positively influencing

our surrounding communities;

supporting innovation in our industry.

Driving the transition to non-ICE

vehicles and to embrace the

opportunity to tackle climate change.

Maintaining high levels of integrity,

transparency and good governance.

Approach

Making Redde Northgate a great

place to work for our employees,

equipping them with the right tools

and training, providing a secure and

safe working environment, and

promote their wellbeing.

Retaining an engaged and highly

skilled workforce to ensure the

delivery of excellent experiences

forour customers.

By assessing our practices and educating our

workforce, we can minimise waste and ensure

best environmental practice.

Driving innovation and improvements in our

industry by sharing our expertise.

Taking a measured approach to our transition

to a non-ICE vehicle fleet, ensuring that we

meet the requirements and expectations of

ourcustomers.

Working with Government and industry to

ensure an appropriate environment for

commercial EV and other non-ICE solutions.

Building the skills, services and location based

infrastructure necessary to provide low

emission solutions.

Embedding robust training and procedures

across the business, ensuring employees and

suppliers act in accordance with the highest

standards of business ethics.

Communicating our actions transparently and

regularly to keep our stakeholders informed

and engaged.

Areas of key focus

– Health and safety

– Employee engagement and

wellbeing

– Diversity and inclusion

– Labour rights

– Employee training and development

– Customer experience and

engagement

– Emissions (Scope 1 and 2)

– Waste and hazardous materials management

– Water management

– Innovation

– Climate change

– Emissions (Scope 3)

– Vehicle transition

– Energy use and sources

– Public policy and industry participation

– Product lifecycle management

– Ethics, anti-corruption and compliance

– Cybersecurity and data privacy

– Risk management

– Corporate governance

– Supply chain management

37 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Influence on stakeholders HighLow

Significance to Redde Northgate

Water management

Executive remuneration

Community engagement and investment

Public policy and industry participation

Waste and hazardous materials management

Risk management

Supply chain management

Tax transparency

Climate change

Corporate governance

Labour rights

Vehicle transition

Innovation

Diversity and inclusion

Employee engagement and wellbeing

Health and safety

Ethics, anti-corruption and compliance

Customer experience and engagement

Cybersecurity and data privacy

Employee training and development

Product quality, safety and

lifecycle management

Social impact

Political, economic and social climate

Energy use and sources

Emissions

(Scope 1, 2 and 3)

Key

Experience Impact Transition Governance

Materiality assessment

We undertook a review of industry peers and

globally recognised ESG frameworks, including

the SASB and MSCI, creating a list of key issues

toform the basis of our quantitative survey.

Thesurvey was issued to a broad range of

over140 internal and external stakeholders,

complemented by qualitative interviews

with22 subject matter experts from across

theGroup.

Together this enabled a deeper understanding

of the key risks and opportunities and will

helpdefine the investment and focus of the

business into key areas as we build out our

ESGstrategy and reporting.

Materiality matrix

HighLow

38 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Experience

Engaging with our employees

The Employee Engagement Forum was

established to both increase engagement

andprovide an opportunity for the Board and

leadership team to hear direct feedback from

employees. We established a robust colleague

feedback model, including the rebranded

annual colleague survey “Have Your Say” on

abroad range of topics including health and

safety, personal development, and pay and

benefits. This year saw a 74% engagement

score in the survey.

We have had a strong focus in the year on

employee engagement and ensuring that

allour employees feel confident in our

business strategy and their role in our

future.An enhanced internal communications

team has focused on improving everyone’s

understanding of the Group strategy. Engaging

with teams across the business with a strategic

narrative that defined who we are, what we

stand for, and our purpose, vision and mission,

has enabled all employees to gain a better

understanding of where we are going as

abusiness.

We also created support for managers to

aidlocalised discussion around how their

rolespromote our long term strategic aims,

helping to establish connection to the strategy.

Theseefforts were reflected in an uplift of 22

percentage points (46%) on the prior year for

colleague’s understanding of our strategy, the

highest improving score in our annual survey.

Supporting our employees

We have invested in our Group Human

Resources function and rolled out a new HR

and payroll system, Group benefits plan and

wellbeing services, reflecting the feedback

from our previous employee survey for

enhanced health and wellbeing support.

We have partnered with a leading provider,

UNUM, to offer all employees free, remote

access to medical advice, 24/7, along with

access toour Employee Assistance

Programme. We continue to share self-care

suggestions for employees and promote

positive mental health regularly as part of a

broad calendar of events, such as our “Time to

Talk Day” virtual drop-in sessions held by the

HR team, giving employees the opportunity to

share how theywere feeling and any problems

they werefacing.

Throughout the COVID period, we

maintainedstrong communications to

ensurethat employees did not feel isolated

orunsupported, with webinars on wellbeing

and advice on how to manage mixed working

patterns. We encouraged all managers to

complete the Mental Health Awareness

module on Redde Northgate Academy, our

e-learning platform, and provided them with

atoolkit to help managers promote positive

mental health in their workplace and make

adjustments so that colleagues receive the

support they require.

In 2021 we introduced our new Benefits HUB,

broadening the suite of benefits to appeal to

different demographics and lifestyles. This

platform provides a one stop shop, allowing

employees to view the majority of their existing

benefits, as well as the opportunity to opt into

a wide range of other available benefits,

including GymFlex memberships, the

Cycle2Work scheme, retail offers, dental

insurance, travel, and health insurance, and

extended life assurance. The Group’s SAYE

scheme is an opportunity for all colleagues to

buy shares in Redde Northgate at a discounted

rate and invest in our Group for the long term,

and we continue to look for other opportunities

to facilitate employee participation in our

strategy and business.

Creating an inclusive and diverse culture

The Company is committed to promoting

equality and preventing discrimination

atwork.We aim to create an inclusive

environment, where everyone can contribute

their best work and develop to their full

potential. We also want to celebrate the fact

that everyone is different yet valued and to

make sure that every colleague is treated

withdignity and respect.

We’ve shaped our Group values by looking at

those existing across each of our businesses,

creating new ones that simply build on what we

know matters to everyone and that will help us

be the Group we want to be. One of those

values is that ‘We respect one another’ andhold

Our people are our key asset and we have

aclear focus on ensuring our business is

agreat place to work. We have invested

inequipping them with the right tools and

training, providing a safe and secure working

environment, and promoting their wellbeing.

We know that an engaged and highly skilled

workforce enables the delivery of consistent

and excellent customer service. We also

seek to support the communities in which

we live and work, as this supports the

wellbeing of our people and reflects the

importance of thelocal communities to us.

Following the Merger, in 2020 and the

subsequent acquisition of FMG RS, we have

been working to ensure harmonisation and

standardisation of practices across the Group.

In2021, we launched our new Group values

and have worked to ensure everyone

understands each value and what they mean

to the business, and how these values should

be upheld through day to day operations.

39 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

ourselves accountable to act with integrity and

honesty and to encourage and respect diversity.

To make sure our internal culture is inclusive

and supportive, we promote diverse events

and understanding of religious festivals. During

this year’s Ramadan, for example, we shared

with employees insight into what Ramadan and

Eid al-Fitr means to Muslim colleagues and

how to support colleagues observing these

holidays. We are also proactively ensuring the

diversity of our colleague base is represented

across all employee communications.

To raise awareness for the Group and to

address stereotypes that still exist about

working in our industry, we have developed a

programme of higher educational college and

university visits to talk about the opportunities

available to all at Redde Northgate. By

conducting these visits, as well as running our

apprenticeship scheme at FMG RS, we look to

broaden the pool of talent we are accessing

and encouraging those who might not have

considered a career with us to think again.

Recruiting and developing talent

Changing working practices resulting from

theCOVID-19 pandemic have seen us adapting

our approach to ensure we continue to attract

excellent candidates. By expanding our

recruitment team significantly in the year,

therehas been an increase of over 20% in

thenumber of offers made, and we partnered

withVacancy Filler, a UK Applicant Tracking

System (ATS), to better manage and improve

the candidate experience. We have also

increased the number of check-ins we do

withnew joiners and enhanced the materials

shared at the beginning of each employee’s

career with Redde Northgate, to ensure they

start their career with us with confidence.

We supported nearly 100 apprenticeships in 2021,

from workshop placements in our FMG RS and

Northgate businesses, to finance apprenticeships

in our Group functions. We seeapprenticeships as

a great way to help ourbusiness build a talented

workforce that isequipped with future-ready

skills, whilst alsobeing an opportunity for those

looking toupskill or have a career change. We

were delighted that colleagues won three awards

atthe British Bodyshop Awards 2022, for Paint

Apprentice, Apprentice of the Year and Mentor

of the Year.

We have now rolled out our e-learning

platform, the Redde Northgate Academy,

across the entire Group, improving access to

training for all employees. With over 20 new

courses launched in the past 12 months this

included introducing a series of new courses

covering topics such as time management,

building resilience, and conflict management.

We are committed to helping our current

managers and future leaders at every level

across our business to be prepared and

confident to lead from the front. To support

this, we ran a series of short online courses

covering management skills, as well as adding

a number of new courses designed specifically

for managers. We have also actively promoted

greater internal mobility and job opportunities

across the enlarged Group as part of our

programme to retain and develop key talent

Keeping our employees safe

The health and safety of our colleagues and

anyone else affected by our business activities

isof paramount importance and fundamental

toour culture. We have a zero-risk tolerance,

robust arrangements and strong governance

inthis area, along with detailed procedures,

engagement and training to reduce the risk

ofharm or injury, and processes around

investigation of near misses to ensure

Groupwide learning.

Employees are provided with information,

instruction and training in health and safety

bymethods including face-to-face, e-learning

and toolbox talks. The Group is committed to

monitoring and reviewing performance on a

regular and ongoing basis. Our Group Head of

HSE is responsible for setting policy and advising

the Board; their remit covers the whole Group

across all locations, reporting directly to the CFO.

We have ISO 45001 accreditation for Northgate

UK&I, NewLaw and Auxillis. The intention is to

have all FMG RS sites ISO 45001 accredited within

the next 12 to 18 months and we use a third party

to conduct audits for our accreditations annually.

One of the various tools we use to measure

health and safety performance across the Group

is by recording lost time incidents, which

provides an accident frequency rate (AFR) metric.

The year on year increase in AFR from 1.5 to 1.7

reflects the increased activity and work volume

across the Group and in particular an increasing

proportion of Group worked hours from within

our repair workshops and body shops, which are

more hazardous environments.

AFR*

2.5

2.0

1.5

1.0

0.5

0.0

FY2020

2.2

FY2021

1.5

FY2022

1.7

* AFR is calculated as the number of lost time

incidents, multiplied by 200,000, divided

bythenumber of hoursworked.

A programme of new Health and Safety

committees across the enlarged Group is

being set up, to encourage learning and best

practice as well as taking suggestions from

employees as to how best to improve safe

working practices within their work

environment, and greater benchmarking

across the depots and body shops.

Community engagement

We are committed to giving back to the

communities we operate in and are engaged

with a number of projects and charities at

alocal level. Examples include becoming

members of Darlington Cares, a collective

ofbusinesses in the North of England that

organises projects to benefit the local

community; working on environmental

andsocial activities in local areas and fund

raising for local and international causes. We

encourage our businesses to engage with their

communities, including volunteering, local

office initiatives and support for community

transportation needs.

40 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Impact

Energy saving

Some of our operations, such as our paint

workshops, are high energy consumption

facilities, while others, such as our customer

support centres, are significantly lower. We are

developing further programmes to reduce our

energy consumption, such as greater use of

LED lighting and management of idle-time

inworkshops and paint shops. Over60% of

Northgate sites now have full LED lighting,

asdo all main office buildings. In our Spanish

operations, seven sites have installed solar

panelling to provide in excess of 750KW

ofpower, and have plans for over 20

newinstallations in process.

Metrics and targets

Opposite are Redde Northgate’s energy

andcarbon reporting metrics as required

under SECR. These cover our Scope 1 and

Scope 2 emissions and have been

independently verified.

In FY2022, we commenced a project to greatly

enhance our understanding and collection of

emissions data on a location based level. This

has started to give us highly valuable insights

into our overall emissions and also an ability to

benchmark locations and identify opportunities

for emission reduction through changing

behavioural patterns and targeted investment

onhigh emission processes.

This data analysis, which is now reported

monthly across the Group, will also support

oursetting of targets and the development

ofrelevant KPIs which we plan to undertake

inthe coming year. They will also help to

inform our TCFD programme and net zero

strategy workstreams as we prepare to set

meaningful KPIs and targets.

During the year we established a Carbon

Reduction Action Group, drawn from across

thebusiness operations to define the elements

and priorities of our decarbonisation pathway

and to help support our TCFD analysis and net

zero targets.

SECR report

Energy and carbon reporting

This section incorporates the requirements for

reporting of greenhouse gas emissions, energy

consumption and energy efficiency actions

included in the Companies Act 2006

(StrategicReport and Directors’ Report)

Regulations 2018 (the Regulations).

Reporting and baseline year

We have aligned our reporting and fiscal years, so

the information presented covers the period from

1 May 2021 to 30 April 2022. Given the materiality

of the change following the introduction of FMG

RS emissions data, this year will also replace the

year ended 30 April 2021 as the baseline data for

subsequent periods, since we do not have the

equivalent data to restate the previous baseline.

Analysis

The material increase in emissions for FY2022,

particularly in relation to Scope 1 emissions, was

principally driven by the type of equipment

usedwithin the FMG RS business which was

incorporated in the figures for the first time in

FY2022. Gas powered ovens and more energy

intensive equipment within workshops are

utilised to deliver accident repair services.

Now that a new baseline has been established,

a Group wide working group has been

established to identify and initiate a series

ofcomplimentary actions, from employee

education and making improvement into our

processes, to investment into our properties,

workshops and owned fleet to define

adecarbonisation strategy.

Consolidation approach and

organisationalboundary

We have derived the emissions data presented

using the operational control approach,

required under the Companies (Directors’

Report) and Limited Liability Partnerships

(Energy and Carbon Report) Regulations 2018.

We have included each facility under

operational control within the figures. The

Group has used theprinciples of the GHG

Protocol Corporate Accounting and Reporting

Standard (revised edition), ISO 14064-1.

Methodology

We have used Defra’s current conversion

factors in arriving at the information supplied,

with the data verified by an independent,

UKAS-accredited, third party assessor.

Greenhouse gas emissions source

Tonnes of

e 2021

Tonnes of

e 2022

Tonnes of

e 2022

Baseline

Scope 1 – Combustion of fuel and operation of facilities 8,311 19,773 19,773

Scope 2 – Electricity, heat, steam and cooling 2,743 4,284 4,284

Intensity ratio: Tonnes of CO

e per £m of revenue* 12.6 22.0 22.0

Global emissions – Scope 1 2,978 3,187 3,187

Global emissions – Scope 2 1,052 939 939

UK emissions – Scope 1 5,333 16,586 16,586

UK emissions – Scope 2 1,691 3,345 3,345

* Revenue (excluding vehicle sales).

Energy consumption kWh 2021 kWh 2022

Scope 1 – Combustion of fuel and operation of facilities 36,507,978 90,844,288

Scope 2 – Electricity, heat, steam and cooling 11,767,089 20,390,430

Global consumption 17,117,198 18,323,458

UK consumption 31,157,869 92,911,260

There are a number of actions being taken

todirectly benefit the places and the

communities in which we both live and work,

through the careful management of the

natural resources we consume. The focus is

on establishing solutions that will support

our long term environmental objectives

which can be rolled out across the majority

of our locations.

As we upgrade or refurbish our branch sites

and body shops we look to find opportunities

which will deliver long term benefits through

energy saving measures and responsible

waste management, and seek to minimise

theirimpacton our neighbours.

Waste and water management

Across the Group, we are committed

tobothreducing the waste we produce

andincreasing the amount recycled. With

operating environments ranging from offices

toworkshops, we manage a variety of different

waste streams, from general office waste such

as paper and plastics, to hazardous materials

including oil and vehicle batteries from our

workshops. We have consolidated the number

of waste collection providers used which will

help make improvements across the Group,

aswell as enhancing our monitoring and

employee engagement.

To improve oversight of our water use in the

UK, we have also consolidated our providers

and will work with them to improve monitoring

and identification of high usage relative to

other similar facilities to benchmark our usage

and identify any potential leaks. We have a

number of water recycle units installed at our

Spanish sites, and are carrying out feasibly

studies to identify if similar vehicle wash

recycle facilities can be provided in the

UKandIreland.

41 Redde Northgate plc Annual Report and Accounts 2022

Transition

Working with the automotive and EV

infrastructure supply chain and ensuring

pragmatic government approaches to LCV

regulation are both going to be key to

accelerating such a transition and delivering

emission reductions for ourselves and our

customers. We are also monitoring the

viabilityof alternative fuel source solutions

such asbiofuels.

We are already ensuring our passenger vehicle

fleet reflects the UK car parc and are growing

our EV fleet to ensure we are able to provide

such cars as replacement vehicles through our

Auxilis network. For Northgate, currently only

ahandful of LCV models are available in either

hybrid or full EV format, and none are currently

able to fulfil the range and payload demands

of many of our customers.

In FY2021, we announced our ZEV strategy

with the expectation that by the mid-2030s,

our UK fleet would have substantially

transitioned to EVs, and our entire fleet in

theUK and Spain would have exited ICE

vehicles within the following decade. This is

aligned with the current regulatory regime

butwill be strongly influenced by technology

development across the EV supply chain.

Over the past year, we have been putting

inplace the key building blocks of this

strategy,including our Drive to Zero customer

programme (see case study in this report). In

FY2023, we intend to set interim targets and

define our net zero roadmap in more detail.

This strategy for managing our EV transition

centres around four elements:

Industry engagement

– OEMs: engaging with broad range of

OEMs on their EV plans for LCVs in

particular; and technology development

for both vehicles and fuels

– BVRLA: supporting industry lobbying

efforts with Government departments on

regulations which will facilitate the

transition to low or zero emission LCVs

Actions in FY2022

Supporting engagement with OZEV, DfT

and BEIS on BVRLA Van Plan proposals;

achieving extension to LCV plug-in grant

Enhancing EV skills and capabilities

– Skills: training across business areas on

how to manage EV fleet

– Capabilities: bringing expertise in-house

and capability to develop charging

infrastructure and consultancy

Actions in FY2022

Acquired ChargedEV business

Our workshop technicians in the UK are

certified to IMI Level 3 to work on EVs

Infrastructure investment

– Charging points at depots: we are

installing EV charging points across

ourestate

– Kitting out workshops for EV repairs

– Bringing EVs into fleet

Actions in FY2022

11 Northgate sites have EV charging

unitsinstalled

Over 50 sets of EV workshop equipment

Customer support

– Consulting: we have business analysts

andEV experts to support customer

fleetstrategy

– Customer infrastructure: installation of

EVchargers

Actions in FY2022

Consulting: launch of Drive to Zero

programme & services

Over 6,000 EV charging points installed at

customers’ premises

ESG report continued

The transition from ICE through to low

carbon, ZEV or other mobility solutions

overthe coming decades is one of the

fundamental energy transitions taking place

globally. It will have a significant impact on

countries and corporates achieving the goals

set out by the Paris Agreement for limiting

climate change and delivering on the

responsibility we have to protect the

planetand the communities in which

weliveand work.

For Redde Northgate and many of our vehicle

hire customers involved in logistics and

transportation, this transition is central to

achieving corporate net zero strategies. It has

far reaching consequences across the supply

chain, and for achieving timeframes for

emission reduction milestones.

Our plans to reduce our Scope 1 and 2

emissions are discussed under our “Impact”

pillar, but with emissions from our customers

expected to account for over 95% of our own

carbon footprint when recognised as Scope 3

emissions, our own pathway to net zero is

defined by the transition to EVs or other

non-ICE for both passenger vehicles and LCVs.

At Redde Northgate, we see significant

opportunities to be a force for positive change

and to help define and support our customers

as they look to develop strategies to

implement and manage such a transition

whichremains at its very early stages

forLCVsin particular.

42 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Seizing the

opportunity –

DrivetoZero

Our ambition is to provide turnkey solutions to

customers, and we launched Drive to Zero in

FY2022 to support customers across the wider

ZEV ecosystem in which they operate.

Drive to Zero is focused on four key pillars

ofsupport:

Suitability analysis

– Analysis on fleet utilisation using telematics

data on vehicle journeys, helping to identify

which parts of their current fleet might be

suitable for an early switch to electric

powertrains

– Commercial models and cost visibility for

transitioning a current fleet set up to lower

carbon emission vehicles

– Biofuel options for customers who are not

yetable or comfortable transitioning to full

EVs

Vehicle rental

– Offering low emission vehicle solutions,

including modern Euro 6 compliant ICEs,

orthrough our growing portfolio of EVs

Electric Charging Infrastructure

– Providing EV charging infrastructure to fleets

across domestic, commercial or public

vehicles with a digital onboarding service

Support and guidance

– Trained workshop technicians

supportingservice and maintenance forEVs

– Ongoing charging support including

remotesystem upgrades

– RAC partnership offering technicians who

areable to keep EVs on the road and charge

up where necessary

– Training modules for drivers and fleet

managers on fleet management and

EVoperation to maximise uptimeavailability

43 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Task Force on Climate-related

FinancialDisclosures

The Task Force on Climate-Related Financial

Disclosures (TCFD) is committed to increasing

market transparency on climate-related risks

and opportunities. In 2017, the TCFD released

climate-related ﬁnancial disclosure

recommendations designed to help

companies provide better information to

support informed capital allocation. We are

pleased to have started our TCFD journey as

part of our commitment to responsible

business and, through our disclosures, enable

our stakeholders to better understand our

position regarding climate-related risks and

opportunities. Through the processes involved,

including climate-related scenario analysis,

and better understanding of our footprint and

impacts, we are also developing our own

capacity to successfully manage and mitigate

climate-related risks and ensure we are

well-positioned to harness climate-related

opportunities.

Governance and metrics

Our Board of Directors has oversight of

climate-related risks and is informed of

climate-related matters that may positively or

negatively affect the Group’s ability to deliver

on strategy. Ithasresponsibility for reviewing

emerging trends and key issues related to ESG

matters, including climate-related matters,

setting andoverseeing the Group’s strategy,

and governance of ESG matters.

Ultimate responsibility for climate change

considerations is held by our CEO, while

daytoday management of these matters

sitswiththe Group Management Boards.

TheCEO isresponsible for the Group Strategy,

which includes the ZEV transition strategy

toensurethe business is aware of, prepared

andresourced to address relevant

marketopportunities.

Our CFO is responsible for overseeing the

development of our TCFD work programme.

Further detail on our ESG governance is set

outon page 49.

The metrics that we use to assess climate-

related risks and opportunities are disclosed

within our SECR Report on page 41.

During the year, we established a Carbon

Reduction Action Group, comprising key

management personnel from across our

operations, to define our decarbonisation

pathway. Reporting to the CFO, the group

isfocused on three areas of improvement:

Education, Processes and Infrastructure,

andistasked with developing interim

decarbonisation targets during FY2023.

Strategy

We operate from around 175 branches

encompassing workshops, body shops and

rental locations, together with over ten offices

and call centres across the UK, Ireland and

Spain. This geographical spread presents a

range of physical climate and environmental

conditions, as well as moderate variances in

climate-related maturity across market,

technology, policy and legal aspects.

Following the recommendations of the TCFD,

we conducted an assessment of our climate-

related risks, starting with climate-related

scenario analysis to determine what impacts

transitioning to a low carbon economy may

have, considering different scenarios over

theshort, medium and long term horizons.

Climate-related risks and opportunities

potentially relevant to the Group were

identified andcharacterised according

totheTCFDframework.

A list of risks and opportunities was identified

through various workshops and meetings

withkey personnel from different segments

and functions of the business. In the tables on

pages 45 to 46 wehave provided a summary

of the risks and opportunities from our

assessment, deemed tobe relevant to the

Group. These risks and opportunities describe

the most relevant potential drivers and impacts

that we couldface, if the respective risk

remained unmitigated, or the opportunity

actualised. Theclimate-related risks and

opportunities were divided into different

categories as outlined in the TCFD

recommendations, andasa Group we

considered the key impactsforeach category.

– Transitional risks: Market, Technology,

Reputational, Policy and Legal

– Physical risks: Acute and Chronic

– Opportunities: Resource efficiency,

Energysource, Products and Services,

Markets, Resilience

Short, medium and long term time horizons

were designed to correspond to key operational

planning dates (i.e. short term fleet renewal

cycle) and regional technology commitments

(i.e. ban of sale of ICE vehicles), whilst enabling

consideration of longer term climate-related

risks and opportunities that could materialise

beyond such horizons. Time horizons

wereassigned to climate-related risks and

opportunities depending on when they were

deemed as most likely to materialise, should

therisk remain unmitigated, or the opportunity

actualised, and are summarised below.

Time horizons considered for

climate-related risks and opportunities

Short term: 0-3 years (up to 2025) – Redde Northgate operates a three year fleet

renewal cycle

Medium term: 3-8 years (up to 2030) – European ICE sale ban by 2030’s (e.g. UK)

– 40% renewables share of gross final

consumption by 2030 proposed under

EURenewable Energy Directive

Long term: 8+ years (up to 2050) – Scientifically recognised target year for

achieving global net zero emissions to limit end

of century global temperature rise to 1.5degrees

44 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Risk Type Risk description Potential outcomes Mitigating activities Timeframe*

Transition:

Transitioning to a lower

carbon economy may

entail extensive policy,

legal, technology, and

market changes to

address mitigation and

adaptation

requirements related

toclimate change.

Policy and legislation More stringent reporting

obligationsdemand more

resourcetoremaincompliant.

Legal and/or reputational issues, which

in turn drive compliance costs and

potentially impact cost of capital.

Monitor potential legislative and

regulatory changes.

Committed to net zero by 2050 target.

Working to define net zero strategy and

set progress targets.

Short

Policy and legislation Increased acquisition costs of ZEVs due

to policy changes in fuel subsidies

driving increased demand for a limited

supply of fit for purpose light

commercial ZEVs.

Increased capex in an increasingly

competitive market.

Engaging with international footprint of

ZEV OEMs, expanding supplier base,

and considering new market entrants.

Long

Infrastructure and

technology

Public charging infrastructure is

insufficient to adequately support the

deployment of ZEVs.

The lack of access to adequate

infrastructure will impact demand for

ZEVs. ZEVs currently carry up to a 50%

premium on their ICE equivalent,

therefore reducing revenue.

Acquired ChargedEV to enhance the

Group’s ZEV offering, recognising that

charging infrastructure is a key inhibitor

to a timely transition.

Short

Infrastructure and

technology

The availability of fit for purpose ZEVs,

reducing ability to successfully

transition in step with current policy.

Lack of fit for purpose ZEVs may reduce

revenues.

Engaging with international footprint of

ZEV OEMs, expanding supplier base,

and considering new market entrants.

Long

Market Higher level of competition in the

mobility industry, particularly from

start-ups and new business models

built to service the green transition.

Increased competition will impact

market share and reduce revenues.

Marketing our Drive to Zero turnkey

product and services offering.

Engaging with international footprint of

ZEV OEMs, expanding supplier base,

and considering new market entrants.

Long

Reputational Failure to meet internal or external

stakeholder climate-related

expectations, impacting relations.

Perceived higher risk investment,

increasing cost of capital with investors,

financial institutions and insurers.

Access to financial and human capital,

lower employee retention.

Define and communicate our net

zeroambitions.

Continue to enhance our Drive to Zero

product offering and enhance non-ICE

product suite.

Short to

long

Physical:

Physical risks resulting

from climate change

can be event driven

(acute) or longer term

shifts (chronic) in

climate conditions.

Extreme weather events such

as drought, flooding

andstorms

Damage to our properties and vehicles which will incur increased capex and

insurance costs.

Impacts of supply chain disruption from increased severity of extreme weather

events may impact operating costs and capex, as well as impact revenue if

customer demands cannot be met.

Business continuity and crisis

management plans in place.

Investment and expansion of

supplychain.

Long

Changes in average climate

conditions including rising

sea levels, coastal flooding

and increased average

temperatures

Increased operating costs driven by the increased use of climate control systems

across our properties, particularly in parts of Spain.

Increased maintenance and insurance costs.

Investment into property portfolio.

Continue investment into solar projects

to reduce operating costs and our

carbon footprint.

Long

*In relation to climate-related risks and opportunities, the Group defines short term as 0 to 3 years (up to 2025), medium term as 3 to 8 years (up to 2030) and long term as over 8 years (up to 2050).

Climate-related risks

45 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Opportunity Description Progress Timeframe*

Products and services Provision of turnkey ZEV and charging solution to

simplify transition for customers

In late 2021, we conducted market research with our customer base to better understand their

questions and concerns regarding the transition from ICE to ZEV.

We have since designed our Drive to Zero offering that helps our customers conduct suitability

assessments of their fleet to transition to ZEVs where possible. In addition to helping source the

vehicle and identify an EV charging point, we offer an after-market support and management service,

making the move to ZEV as streamlined as possible.

Short to

long

Increased demand in our accident management

and repair services

As the potential for adverse weather events increases in frequency, so the potential demand for the

services provided by Redde, Auxillis, FMG and FMG RS may increase.

Consequently, customer and end user demand may increase, enhancing revenues.

Long

Faster access to ZEVs The Group has invested time researching new OEMs in order to get access to non-ICE vehicles.

Customers that have established more aggressive net zero plans may be willing to pay a premium to

convert their fleet faster, enhancing market share and revenues.

Short to

medium

Resource efficiency Increased energy efficiency across our

operatingsites

In the UK, we continue to invest in LED lights, which have a positive impact on energy usage to

reduceoperating costs.

Across our work and paint shops, we are implementing behavioural training programmes to raise

energy usage awareness and better operating practices. This will reduce operating costs.

Short to

medium

Increasing renewable energy supply across our

operations in Spain

Investing in solar projects across our portfolio in Northgate Spain to reduce operating costs and our

carbon footprint.

Short to

long

Climate-related opportunities

Sustainability report will be on our website:

www.reddenorthgate.com

46 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Scenario Rapid reduction (1.5°C) Steady progress (2-3°C) Business-as-usual (3+°C)

References 1. IEA Net Zero by 2050

2. National Grid “Leading the Way”

1. IEA Announced Pledges

2. National Grid “System transformation’”

1. IEA Stated Policies

2. National Grid “Steady Progression”

Summary – Investment in EVs and hydrogen infrastructure

surges 25 times by 2030

– Acceleration in the decarbonisation of the

powergrid

– Tax incentives and upfront subsidies incentivise the

widespread deployment of EV charging

infrastructure across the UK and EU, leading to a

rapid adoption of electric light commercial vehicles

– High fuel and tax rates shift customer attitudes in

favour of “mobility as a service”

– Trends in electromobility align with the national

decarbonisation agenda in the UK and EU

– Investment into EVs increases 15 times

– Grid availability/reliability is sufficient to ensure

the widespread adoption of EVs for domestic and

light commercial use

– Technological development is ineffective in

producing zero emission heavy trucks, resulting in

the continued operation of ICE vehicles

– Sales of all types of zero emission vehicles increases at a steady pace

– Existing legislation in the UK and EU continues to support green mobility,

however, industry lobbying fails to accelerate the production of fit for

purpose commercial vehicles and heavy vehicles

– Consumer demand for EVs remains hampered by the insufficiency of

recharging infrastructure

– An increase in the frequency and severity of extreme weather events

such as flooding impacting our UK business and heatwaves impacting our

Spanish operations. Additionally, changes in average climate conditions

that will drive increases in sea level and average temperatures

A further analysis is available within our sustainability report, which will be made available shortly after the publication of this report. See our website for further details.

www.reddenorthgate.com

Scenario analysis

A key recommendation of the TCFD framework is that organisations undertake climate scenario analysis. This process and the outcomes enable a

developed understanding of the potential exposure of their businesses, strategy, and financial planning to climate-related risks and opportunities.

The development of the scenarios and analysis applied by Redde Northgate was comprised of a three step process.

Assess materiality of climate-related risks and opportunities through interviews with key stakeholders

Identify and define a range of scenarios

Assess business impact

The sustainability report provides more comprehensive disclosure of our sustainable development activity. It also includes additional detail for each of the scenarios summarised above and the potential impacts of each

on the business. The expanded reporting in the sustainability report captures the fullness of the analysis conducted, whilst the Annual Report seeks to communicate the most material findings.

47 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

Resilience and Risk Management

Throughout the scenario analysis exercise

conducted, no potentially material short term

climate-related risks were identified to have a

significant impact on the financial performance

of the business. While risks do exist, our current

strategic actions and progress, as described

within the tables on pages 45 and 46, position

the organisation appropriately in terms

ofadequate mitigation. The low-carbon

transition also presents the Group with

severalclimate-related opportunities and

anearly understanding and strategy definition

allowsthe business to ensure opportunities

areactualised.

As of today, our products and services broadly

fall into the following areas: vehicle rental,

fleetmanagement, and our accident claims

and repair services. Whilst there is a carbon

footprint associated with each of these areas,

we perceive the greatest transition risks sit

firmly within our vehicle rental business,

giventhe greenhouse gas emissions profile

ofc.126,000 vehicles used by our customers.

Our Impact and Transition strategic ESG pillars

represent our approach to these risks and their

management. Scope 1 and 2 emissions

reduction inclusive of our waste and water

management remains our focus as well as

ourDrive to Zero product and service offering,

which targets Scope 3 emissions. Linked to

these pillars we are updating or developing

objectives and targets to identify and reduce

our own impacts and at the same time,

develop and improve measures to build

longterm resilience against the impacts of

climate change across the Group. Given the

uncertainty of this transition programme and

inparticular the role of government regulation,

technology and infrastructure advancement,

we recognise the importance of ensuring that

we continue to evolve our risk management

framework and the scenarios applied to

identify and explore climate-related risks.

Climate-related risk considerations are

embedded into the Group’s principal risks;

market, legal and compliance, and access

tocapital. The Group Management Boards

thereby incorporates climate change risks into

the assessment of the other principal risks to

the business. These risks form part of our

Group risk register and are shared directly with

the Board. Existing and emerging regulatory

requirements related to climate change

areconsidered a risk to the Group and are

therefore monitored closely as part of the

legaland compliance risk. Further details on

the potential risks and our mitigating actions

are documented in the risk management

section found within pages 30 and 34.

Compliance with TCFD requirements

We have included on pages 44 to 48 in the

Strategic Report and in the notes to our

Financial Statements on page 99 to 142,

climate-related financial disclosures consistent

with the TCFD’s Recommendations and

Recommended Disclosures, with the exception

of the following:

Strategy c) Describe the resilience of the

organisation’s strategy, taking into

consideration different climate-related

scenarios, including a 2°C or lower scenario.

This was our first year conducting scenario

analysis, during which we keenly focused upon

the transitional risks affecting the business. A

light physical risk assessment was conducted

during the year, the business intends to

increase assessment of physical risk potential

across portfolio, in addition to considering

quantitative scenario analysis.

Metrics and Targets b) Disclose Scope 1,

Scope 2 and, if appropriate, Scope 3

greenhouse gas emissions and the

relatedrisks.

Given the materiality of Scope 3 emissions

derived from customer usage of it c.126,000

fleet, the business started to internally

calculate and monitor these emissions. The

business will continue to work on defining its

methodology to capture and report these

emissions during FY2023, in addition to

considering an assessment of the remaining

upstream and downstream Scope 3 categories.

Metrics and Targets c) Describe the targets

used by the organisation to manage climate-

related risks and opportunities and

performance against targets.

We recognise the importance of setting

meaningful targets against which we can chart

the progress of our decarbonisation pathway.

During the year, the Company rebased its

scope 1 and 2 emissions, following the

acquisition of the FMG RS business and

established a Carbon Reduction Action Group

to identify programmes for investment that will

reduce Scope 1 and 2 emissions. This group is

working with an external consultancy to model

the impact of these investment programmes

and set interim decarbonisation targets based

on thorough research and due diligence. The

Board and Management team strongly believe

that this is the most credible approach to

defining the Group’s decarbonisation plans.

48 Redde Northgate plc Annual Report and Accounts 2022

Gender diversity

2022 2021

Male Female Total Male Female Total

UK and Ireland 3,717 1,808 5,525 3,373 1,909 5,282

Spain 808 397 1,205 820 405 1,225

Total 4,525 2,205 6,730 4,193 2,314 6,507

The gender split at a senior management level:

2022 2021

Male Female Total Male Female Total

Directors 6 1 7 6 1 7

Senior managers 17 5 22 18 6 24

ESG report continued

Governance

Executive functions with oversight and

responsibility for other ESG matters include

theHead of HSE in the UK and the Director

ofDevelopment and Sustainability in Spain.

AHead of Sustainability is expected to be

hiredin FY2023 who will oversee Group

strategy and governance, including the

development ofan ESG Committee,

broadening the focus ofthe current

NetZeroWorking Group.

Ethics, anti-corruption and compliance

Our Code of Business Conduct, applicable

toall employees of Redde Northgate, sets

outour ethical standards and guidance

onbehaving responsibly. This code and

ourstatement of compliance with the Modern

Slavery Act 2015 are contained on our website.

Compliance training is conducted and tracked

through our e-learning platform.

The Group has a formal whistleblowing policy

and procedures ensuring every employee can

have a voice and a means to raise concerns to

the Group. The Chair of Audit Committee holds

ultimate responsibility for managing any

complaints; in FY2022, no matters were

identified as sufficiently material to be

escalated for their attention.

Cybersecurity and data privacy

We are currently upgrading and centralising

our IT platforms, which will also enhance the

ability to manage vulnerabilities in data

security and privacy. All employees must

complete information security training, and we

set a number of rules and procedures in our

contact centres to mitigate particular risks.

Our IT function works closely with the Business

Change Teams across the Group to assess the

proposed and developing projects and ensure

best practice is adhered to. We conduct

vulnerability scanning, have rolling penetration

testing scheduled across all the businesses

inthe Group for the external facing systems,

and conduct penetration testing for any new

external system developments before they

golive. Our information security management

system identifies the security and policy

statements and ensures the necessary audits

are undertaken to evidence our compliance.

Supply chain management

With a significant number of suppliers and

partners at local and Group level, our suppliers

are an integral part of our business and value

chain. We seek to treat all of our suppliers

responsibly and ensure fair engagement

practices and payment terms. We actively

engage with suppliers to ensure compliance

with our code of conduct, which includes

provisions on human rights and

environmentalstandards.

Our procurement capabilities and expertise are

being enhanced at Group level, working

closely with each of the businesses to

standardise practices and policies; including

the onboarding of new suppliers who must

sign and comply with our ethical trading

statement, covering modern slavery, bribery

and corruption. Regular audits of the

suppliernetwork are undertaken in key

areasof the business.

Public policy and industry participation

As a Group, we value industry association

participation, as we believe it important to

contribute to discussions that drive innovation

inour sector as a whole and encourage our

employees to take an active role. The BVRLA is

the UK trade body for companies in the sector

and our Fleet Director is its Deputy Chair of the

Commercial Vehicle Committee. Other parts

ofthe Group are active members of their local

trade associations, such as the Irish Motoring

Industry and the Spanish AER and FENEVAL.

We have supported the BVRLA on a number

ofpolicy matters, including engaging with

OZEV, DfT and BEIS on areas which it believes

will help accelerate the adoption of EV and

other low emission vehicle solutions.

Board oversight

Our Board of Directors has ultimate

responsibility for the Group’s ESG strategy and

activities, including oversight of climate-related

issues. It has responsibility for reviewing best

practice and key issues related to ESG strategy

and governance, with the CEO reporting on

progress against KPIs and targets set.

The Board also takes responsibility for the

effectiveness of the monitoring of long term

non-financial objectives and risks relating

toclimate and sustainability, which are

embedded into the Group’s risk strategy and

management framework and independently

reviewed by the Audit Committee. This

Committee reports its findings to the Board

ona regular basis, and formally at least twice

ayear. Further details of our corporate

governance activities can be found from

pages58 of this Annual Report.

CEO and management responsibility

Ultimate responsibility for climate change

considerations and mitigating actions is

ascribed to the CEO, with day to day

management delegated to the Group

Management Boards, comprising business

andfunction heads.

The CFO is responsible for the TCFD

programme and development of relevant KPIs

and net zero strategy. Given the move to EV

and non-ICE vehicles is central to the Group’s

business as well as supporting our ESG

transition activities, these are managed

aspartof the Group’s corporate strategy

andnormal business activities.

The composition of our workforce and senior management as at 30 April 2022 is set out

below. A review of our Board composition and diversity is contained in the Corporate

Governance report set out from page 58.

49 Redde Northgate plc Annual Report and Accounts 2022

ESG report continued

TCFD pillar Recommended disclosures Disclosed

Governance a. Describe the Board’s oversight of climate-related risks and opportunities. See page 45, 46 and 49

b. Describe management’s role in assessing and managing climate-related risks and opportunities. See page 45, 46 and 49

Strategy a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium

and long term.

See page 44

b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy,

and financial planning.

See pages 45 and 46

c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related

scenarios, including a 2°C or lower scenario.

See page 47

Risk Management a. Describe the organisation’s processes for identifying and assessing climate-related risks. See page 48

See Risk Management section on pages 28 to 34

b. Describe the organisation’s processes for managing climate-related risks. See page 48

c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into

the organisation’s overall risk management.

See page 48

See Risk Management section on pages 28 to 34

Metrics and Targets a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with

its strategy and risk management process.

See Impact section on page 41

See Transition section on page 42

See page 44

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas emissions and the relatedrisks. See SECR report on page 41

c. Describe the targets used by the organisation to manage climate-related risks and opportunities and

performance against targets.

See page 44

As well as enhancing our emissions data collection and analysis capabilities (see Impact on page 41), we are also working to improve

thebreadth and depth of our ESG reporting and monitoring. In FY2022, we undertook our first CDP exercise and will look to build on this

experience in FY2023 and as we set emissions targets in the coming year.

Set out below is a cross referencing table, setting out where we have placed our TCFD disclosures within this Annual report.

50 Redde Northgate plc Annual Report and Accounts 2022

Non-financial information statement

Requirement

Policies and standards which govern

our approach

Risk management and additional

information

Environment

– Environmental statement

– Health and safety policy

– Waste minimisation and recycling policy

Impact page 41

Transition pages 42 and 48

Employees

– The Respect Training eLearning package

– Diversity policy

– Code of business conduct

– Whistleblowing policy

Experience pages 39 to 40

Employee numbers by gender page 49

Diversity pages 61 and 62

Keeping our employees safe page 40

CEO’s remuneration compared to employees

pages 77

Gender pay gap report published on qualifying

entities’ websites

Human rights

– Modern slavery statement

– Code of business conduct

– Whistleblowing policy

Governance page 49 How the Board monitors culture page 59

Anti-corruption and anti-bribery

– Code of business conduct

– Whistleblowing policy

Governance page 49

Social matters

Experience page 39 to 40 Our communities page 40

Policy embedding, due diligence and

outcomes

Governance framework and structure pages54

and 55

Board activity during the year pages 52 and 53

Report of the Audit Committee pages62 to 66

Principal risks and impact on business

activity

Identifying and managing risks pages28 and29 Principal risks and uncertainties pages30to34

Description of business model

Our business model pages 14 Our strategy pages 15 to 18

Non-financial key performance

indicators

Operational highlights pages 4 to 10

Key performance indicators pages 19 and 20

51 Redde Northgate plc Annual Report and Accounts 2022

Section 172 statement

Promoting the success

of the Company for the

benefit of all – Section

172 statement

In accordance with Section 172 of the

Companies Act 2006 (Section 172), the

Groupand its Directors act in the way that

theyconsider in good faith would most likely

promote the success of the Company for the

benefit of its members as a whole. Throughout

the Annual Report, we provide examples of

how the Group has taken into account the

likelyconsequences of decisions in the long

term, fosters and builds relationships with

stakeholders, understands the importance

ofengaging with our employees and

givingconsideration to their interests,

understands the impact of our operations

onthe communities in the regions where

weoperate and the environment we depend

upon and attributes importance to behaving

asa responsible business.

The Board appreciates the importance

ofeffective stakeholder engagement and

considers its stakeholders’ views in its decision

making and setting its strategy. The Board also

understands the need to act fairly between

theGroup’s members. Although the Board’s

decisions do not always impact all of the

Group’s stakeholders to the same extent, by

having a process in place for decision making,

the Board ensures that it has due regard for

theinterests of its stakeholders, including

employees, customers, suppliers, shareholders

and regulators, when taking decisions.

Employee engagement

As part of the delivery of the Group’s strategy,

the Board sets the purpose, vision and aims

ofthe business and how these are to be

implemented for its employees and other

stakeholders. The Group has enhanced

employee engagement across the business

through the delivery of key messaging

communication channels, employee

presentations and roadshows, and the launch

of a new Employee Engagement Forum which

has met 6 times during the year, with the aim

ofdriving the Group’s “One Group” philosophy.

The Group also conducted its second annual

Employee Engagement Survey, in which a

substantial percentage of colleagues strongly

believed that the Group is in a good position

togrow over the next two years and that

employees in the Company work beyond

whatis required todeliver that success.

Acquisitions

The Board also oversaw a number of

acquisitions in the year. In addition to asset

acquisitions of fleet businesses and vehicles,

the Group acquired ChargedEV and

GRGResources.

On 9 July 2021, the Group completed

theacquisition of ChargedEV, a specialist inthe

supply and installation of EV charging

equipment across the UK. This strategically

significant acquisition provided the Group

witha platform to expand its offerings in this

important and growing area as both its own

EVfleet and its customers’ EV fleets evolve.

ChargedEV also supports the Group in its

environmental goals as an integral component

of its overall programme around EV transition

and reducing carbon emissions.

On 25 March 2022, the Group completed the

acquisition of GRG Resources, a provider of 24

hour, year round call handling for vehicle

removal and emergency boarding of premises

for the blue light industry. This transaction

broadened the Group’s capabilities, knowledge

More details on stakeholder engagement can

be found throughout the ESG report on pages

36 and 50. The following principal decisions

and activities provide examples of how the

Board and its Directors have complied with

Section 172 and have considered, individually

and collectively, stakeholder interests and

impacts in making different decisions that

support the implementation of the Group’s

strategy and the delivery of the Group’s

objectives now and in the longer term. Details

of how the Group’s Board and Committees of

the Board operate, their responsibilities, and

the matters they considered during the year

are contained in the Corporate Governance

Report on 54 and 55.

Delivery of the Group’s strategy

asan integrated mobility

solutionsprovider

The Board has continued to deliver the Group’s

strategy to be the leading integrated mobility

services platform providing services across the

vehicle lifecycle. As part of this strategy, the

Group offers integrated mobility solutions to

businesses, fleet operators, insurers, OEMs

andother customers across seven key

areas:vehicle rental, vehicle data, accident

management, vehicle repairs, fleet

management service and maintenance,

vehicle ancillary services and vehicles sales.

The breadth of services and products offered

through the Group’s mobility platform has

extended the Group’s reach with existing and

new customer partners, leading to significant

new multi year contracts with a number of

majorinsurers. The benefits that the Group’s

customers see in the Group’s strategic

proposition and the Group’s commitment to

foster business relationships and maintain

highstandards of business conduct are

reflected in the Group’s financial

performanceand in this way benefit

theGroup’s stakeholders generally,

includingits shareholders and employees.

and expertise in the provision of effective and

efficient services to the police and fire services

as customer stakeholders.

Debt capital structure

In November 2021, the Group completed

acomprehensive refinancing of its debt

arrangements to optimise its debt portfolio

andto support the next phase of the Group’s

strategy in the longer term. The Group

increased the overall debt capital available

tothe Group to £792m (an increase of £104m),

through the entry into: (i) €375m of new

debtprivate placements with maturities

spreadacross 6, 8 and 10 years at an attractive

interest rate; and (ii) a £475m bank revolving

credit facility, with a 4 year maturity to

November 2025.

This decision provides a solid financing

platform to allow the Group to invest in and

grow its businesses in a sustainable and

responsible way both organically, including

through the development of its IT systems and

the development and wellbeing of its people,

and through inorganic opportunities where

they arise.

Share buyback programme

In March, the Board decided to launch a

sharebuyback programme of the Company’s

Ordinary shares for up to a maximum

aggregate consideration of £30m. In

makingthis decision, the Board took

accountofa number of shorter and long

termconsiderations, including the interests of

its shareholders, the capital that the Company

would need to fund organic growth, payment

of dividends in line with the Company’s

dividend policy and acquisitions within

theM&A pipeline, as well as the Company’s

substantial headroom under its new facilities

and target leverage of 1.0x to 2.0x.

netdebt:EBITDA.

52 Redde Northgate plc Annual Report and Accounts 2022

Section 172 statement continued

The Group’s approach to ongoing

macro events, including COVID-19

measures and ongoing macro

challenges in global automotive

supply chains

The Group’s approach to COVID-19 and

COVID-19 measures, and the impacts on the

Group’s stakeholders, continued to form part

ofthe Board’s discussions and decision making

during the year. The Group continued to

carefully monitor costs and new fleet capital

expenditure, to ensure the safety and

protection of employees, customers and

suppliers, to support customers through

business interruption to protect their long

terminterests, to continue to support

employees working from home through

appropriate equipment and working

arrangements and tomaintain dividend

policyto support shareholders.

During the year, the Group also maintained

focus on the effective management of both

thesupply of new vehicles to the business

from the Group’s suppliers and the number

ofvehicles disposed to the Group’s customers

in response to the ongoing macro challenges

in the global automotive supply chains and

inlight of the strength of demand for used

vehicle sales, which have positively impacted

residual values.

Finally, in light of the Group’s performance

during the year and the benefits that this

hasdelivered for its shareholders, the Group

took account of Investor Association guidance

and feedback received from shareholder

consultations, and repaid the furlough

payments it had received within the year.

Further information

Further information on the Board’s principal

activities can be found in the Governance

section from page 54. In accordance with

ourduty to do so under Section 172(1) of the

Companies Act 2006, the Board, individually

and collectively, has acted in a way that it

considers, in good faith, is most likely to

promote the success of the Company for

thebenefit of its members as a whole.

The Strategic Report was approved by the

Board on 6 July 2022 and signed on its

behalf by:

Martin Ward

Chief Executive Officer

53 Redde Northgate plc Annual Report and Accounts 2022

Chairman’s introduction to governance

2022 Key activities

– Approval of our ESG strategy

– Overseeing the Groups response to

restricted vehicle availability

– Approval of the Group’s refinancing of

debt facilities

– Approval of the acquisitions of ChargedEV

and GRG Resources

– Promoting employee welfare and culture.

– Supporting investment in IT architecture

andresources

– Implementation of external Board evaluation

recommendations made in FY2021

In May 2022, we welcomed Bindi Karia to the

Board, with the skills and experience which will

be of great benefit as we continue to invest in

digitalisation to enhance our mobility solutions

platform. At the same time, John Davies

stepped down from the Board. The Board would

like to thank John for his service over his tenure

on the Redde Northgate plc Board post-Merger

and previously the Redde plc Board.

Further information on some of the key

decisions and how the Board had regard for the

long term success of the business as well as the

interests of all stakeholders is included in the

Section 172 statement on pages 52 and 53.

Compliance with the Code

The Board considers that it has complied

withthe provisions of the revised UK Corporate

Governance Code (2018 version) (the Code)

throughout the year, with the exception of

thefollowing areas; requirements relating to

independence of Directors as detailed on page

58, provision 38 relating to executive pension

rates, and provision 41 regarding specific

workforce engagement on how executive

remuneration aligns to the wider workforce,

with further details found on page 67.

Details demonstrating how the main principles

and relevant provisions of the Code have

beenapplied can be found throughout the

Corporate Governance Report, the Directors’

Report, each of the Board Committee reports

and the Strategic Report.

I am confident that the corporate governance

structure of the Board provides an appropriate

forum to develop, adapt and implement the

Group’s strategy and to address future challenges

and opportunities as they arise. TheBoard

believes in our strategy and its importance

across all our markets, and in the coming year,

will focus on the Company’s progression and

the implementation of the business strategy.

Avril Palmer-Baunack

Chairman

6 July 2022

Dear stakeholder,

On behalf of the Board, I am pleased to

present our Corporate Governance Report

for 2022. This section of the Annual Report

highlights the Company’s corporate

governance processes (alongside the work

of the Board and Board Committees) which

are the framework through which we build

our business and form our decisions. The

Board remains committed to maintaining

effective corporate governance and integrity

so that we can promote the long term

sustainable success of the Group, generating

value for shareholders and contributing to

wider society.

The Board has played an active and ongoing

role in the development and approval of our

Group’s ESG strategy, engaging specialists to

develop a framework which ensures resilience

to the ever-changing environment in which we

operate. The Board is committed to standards

of business conduct and is dedicated to

delivering sustainable mobility solutions

inaresponsible manner.

Restricted vehicle availability has been a

challenge that the Group faced in FY2022,

prompting decisive action. The Board oversaw

the Group’s quick response, minimising the

impact through diligent supply chain

management and slowing of the de-fleeting

process, ensuring we are able to fulfil our

purpose of keeping customers mobile. The

impact of vehicle restrictions on the rental

market has been offset by the resulting demand

in used vehicle markets, where residual vehicle

values remain high although slowly reducing.

In November 2021, the Board approved

theGroup’s refinancing of debt facilities.

Therefinancing provided opportunity to

optimise the Group’s debt portfolio, offering

extended maturities, improved pricing and

debt diversification. This solid financing

platform allows for greater flexibility to

executethe long term objectives of the

business to the benefit of all stakeholders.

Avril Palmer-Baunack

Chairman

“

I am delighted to welcome

Bindi Karia tothe Board

andwould like to thank

JohnDavies for his significant

contribution and service

overthe pastdecade.

54 Redde Northgate plc Annual Report and Accounts 2022

Chairman’s introduction to governance continued

The full terms of reference of the Audit, Remuneration and

Nominations Committees can be found on the Group’s

corporate website:

www.reddenorthgate.com

Responsibilities of those charged

withgovernance

Individual Role

Chairman – Oversees Board responsibilities

CEO – Develops and executes the

strategic plan and manages risk

Senior Independent Director – Oversees governance

procedures

Non-executive Director – Carries out Board responsibilities

Company Secretary – Facilitates effective operation

ofBoard and Board Committees

Board Key focus

Responsibility:

– monitoring progress against

the strategy of the Group and

ensuring long term success for

the benefit of all stakeholders;

– ensuring that adequate

resources are available

sothatstrategic objectives

maybe achieved through

theannual planning process

andongoing monitoring;

– ensuring that the Group’s

internal control systems (both

financial and operational) are

fit for purpose and operating

as they should be;

– reporting to and maintaining

relationships with stakeholders;

– compliance with laws and

regulations and good

corporategovernance;

– dividend policy;

– treasury policy;

– insurance policy;

– major capital expenditure;

– acquisitions and disposals;

– board structure; and

– remuneration policy.

– Ensuring continued optimal

integration across the enlarged

Group and achievement

ofsynergies.

– Embedding vision and values

throughout the Group.

– Ensuring execution of Group

strategy by executive team.

– Monitoring progress against

strategic objectives.

Executive Directors Key focus

Responsibility:

– ensuring the Group strategy

isexecuted effectively via the

Group Management Boards;

– monitoring Group performance;

– managing the Group’s financial

affairs; and

– implementing the system

ofinternal control.

Delivery of the strategic plan

– Achievement of integration

andsynergies.

– Monitoring progress against

strategic objectives.

Group Management Boards Key focus

Responsibility:

– executing Group strategy

andpolicies;

– considering operational

business issues;

– reviewing risk reporting and

taking necessary actions; and

– managing business

performance.

Delivery of the strategic plan

– The Group Management Boards

are focused on the operational

delivery of the strategic plan,

implementing the strategy

anddeveloping strategic

opportunities to enhance

thebusiness.

Audit Committee Key focus

Responsibility:

– monitoring the integrity of

financial reporting and the

Group’s risk management

systems on behalf of the Board,

including reviewing the work

ofGroup Internal Audit;

– overseeing the statutory audit

process; monitoring quality of

the audit process and resultant

findings; and evaluating

auditor effectiveness;

– monitoring independence

andobjectivity, including

monitoring auditor rotation

anddeveloping policy on

non-audit services provided;

– approving auditors

remuneration and terms

ofengagement; and

– overseeing the audit

tenderprocess.

Risk management

– Supporting the Board as they

grow the business through

strategic acquisitions; managing

the transition process as the new

enlarged business embeds the

Group’s governance framework,

financial reporting, risks and

internal controls.

– Making recommendations to the

Board regarding the Group’s risk

appetite.

– Ensuring that our internal

controls and risk management

systems adequately mitigate

riskaccording to the Group’s

riskappetite.

Remuneration Committee Key focus

Responsibility:

– assessing, reviewing

andagreeing with the

Boardtheremuneration

policyfor the Board and

seniormanagement excluding

the Non-executive Directors;

– assessing and reviewing

theremuneration policy

andbenefit structure for

Groupemployees; and

– monitoring the share incentive

plans including participation

and exceptional circumstances

and amending the design of the

plans in line with best practice.

Remuneration policy

– Setting appropriate targets for

bonus and long term incentive

schemes having regard to the

long term value creation

objectives of the Group.

– Bringing the executive

Directors’pension arrangements

into line with best practice by

31 December 2022.

Nominations Committee Key focus

Responsibility:

– reviewing the structure, size,

skills and experience of the

Board and making

recommendations regarding

anychanges;

– considering succession

planningfor Directors and

othersenior executives; and

– making recommendations to

theBoard for candidates to fill

Board vacancies when they

ariseor to fulfil the need for

additional Directors, normally

using the services of

professional consultants

inthesearch.

– Reviewing the performance

oftheChairman and the

executiveDirectors.

– Implement recommendations

from that the Board

effectiveness evaluation which

was conducted in the previous

financial year.

– Reviewing succession plans to

ensure the Board can operate

effectively and add value to

theGroup.

55 Redde Northgate plc Annual Report and Accounts 2022

Key

Chairman of

Committee

Member of Committee

Audit Committee

Remuneration

Co mmittee

Nominations

Committee

Avril Palmer-Baunack

Non-executive Chairman

Martin Ward

Chief Executive Officer

Philip Vincent

Chief Financial Officer

John Pattullo OBE

Senior Independent Director and

Remuneration Committee Chairman

Joined Board August 2019 Joined Board February 2020 Joined Board July 2018 Joined Board January 2019

Key areas of expertise Key areas of expertise Key areas of expertise Key areas of expertise

Avril has more than 25 years’ experience in leading

businesses in the automotive industry in a number

ofsenior executive and non-executive roles and

wasappointed as Non-executive Chairman

inAugust2019.

Martin was appointed to the Board as CEO in

February 2020 as the former CEO of Redde plc,

having been in that role since 2011 after joining

asubsidiary of the group as Managing Director in

2005. Martin has over 25 years’ insurance industry

and vehicle sector experience.

Philip was appointed as CFO in July2018. He has

extensive experience insenior finance roles across a

range of sectorsworldwide.

John was appointed to the Board as a Non-executive

Director in January 2019, Senior Independent Director

in September 2019 and Chairman of the

Remuneration Committee in May 2022 and has a

wide range of experience in a number of executive

roles in the consumer goods and logistics sectors

and non-executive roles across a range of other

industries.

Current external appointments Current external appointments Current external appointments Current external appointments

Currently executive Chairman of Constellation

Automotive Group, and Non-executive Chairman

ofSafe Harbour Holdings plc.

None. None. None.

Previous experience Previous experience Previous experience Previous experience

Previously held roles as Non-executive Chairman

ofQuartix plc, Non-executive Chairman of Redde

plc,executive Chairman ofStobart Group and Chief

Executive Officer ofAutologic Holdings plc and

ofUniversal Salvage plc.

Jointly founded the Rarrigini & Rosso Group in 1994, a

leading independent wholesale motor fleet, property

and risk management insurance business, which was

later acquired by THB plc in 2003. Martin has an MBA

from Durham University.

Regional Finance Director Asia Pacific of SABMiller

plc and before that he was the Group Director of

finance and control. Prior to SABMiller, Philip held

several senior positions at BBC Worldwide, the

largest commercial arm of the BBC, including three

years as group CFO and Board Director. He is a

qualified Chartered Accountant, having trained

withKPMG.

Chairman of V Group until December 2020.

Otherprevious non-executive roles include Senior

Independent Director and Remuneration Committee

Chairman of Electrocomponents plc, Chairman

ofNHS Blood & Transplant, Chairman of Marken

Logistics and Chairman of In Kind Direct, a Prince’s

charity. Chief Executive Officer of Ceva Logistics Ltd

between 2007 and 2012. Before that, he worked

forExel plc/DHL where he led the EMEA logistics

business and, prior to that, held a number of senior

global supply chain appointments with Procter

&Gamble.

Board of Directors

56 Redde Northgate plc Annual Report and Accounts 2022

The Directors of the Company who were

in office at the date of signing the

financial statements are as noted within

these pages.

Board diversity by gender

Board balance

Male 5

Female 2

Executive 2

Non-executive 5

Total Board members

Board of Directors continued

Mark Butcher

Non-executive Director and

Audit Committee Chairman

Bindi Karia

Non-executive Director

Mark McCafferty

Non-executive Director

Joined Board September 2019 Joined Board May 2022 Joined Board February 2020

Key areas of expertise Key areas of expertise Key areas of expertise

Mark was appointed to the Board as a Non-

executiveDirector and Chairman of the Remuneration

Committee in September 2019; since the Merger

hehas chaired the Audit Committee. Mark has more

than 20 years’ public company experience including

international accounting, corporate finance and

banking transactions, as well as sitting on a number

of public company boards.

Bindi was appointed to the Board as a Non-executive

Director in May 2022. Bindi brings deep experience

intechnology and innovation having held senior

board, investment and advisory roles across the

technology ecosystem in Europe.

Mark was appointed to the Board as a Non-executive

Director in February 2020. He had previously joined

the board of Redde plc asNon-executive Director in

March 2009, chairing the remuneration committee

for a large part of his tenure. He brings extensive

sector management and commercial experience,

having spent six years asCEOof Avis Europe plc.

Current external appointments Current external appointments Current external appointments

Currently a Non-executive Director of AssetCo plc,

National Milk Records plc and Zytronic plc.

Bindi is currently a Venture Partner at Molten

Ventures Plc, a European Technology Venture

CapitalFund. Bindi is also an Advisory Board Member

of CognitionX, Humanity Health and Wrisk Ltd and a

World Economic Forum Member for the Digital

Leaders of Europe. Bindi also serves on the University

of East London Board of Governors, where she is also

Chair of the Ethics Advisory Committee.

Currently an adviser to CVC Capital Partners as well

as Chairman oftheWarwickshire CCC board.

Previous experience Previous experience Previous experience

More than 20 years’ public company experience

working predominantly for GPG (UK) Holdings plc,

theUK investment arm of Guinness Peat Group plc,

where he managed a significant proportion of

groupinvestments.

Bindi has previously held a variety of senior

technology roles, including as a Digital Advisory

Board member at The Very Group and Centrica,

aswell as senior roles at Silicon Valley Bank,

Microsoft Ventures and PwC.

Prior to Avis, Mark was Group Managing Director of

Thomas Cook’s global travel and foreign exchange

business and before that spent sevenyears with

Midland Bank International in corporate finance and

international operations. He was CEO of Premiership

Rugby until July 2019. Previously held non-executive

directorships with HMV Group plc, Umbro plc and

Horserace Totalisator Board (Tote).

AA RR NN

57 Redde Northgate plc Annual Report and Accounts 2022

Corporate governance

UK premium listed companies are required by

the FCA (the designated UK Listing Authority)

to include a statement in their annual

accounts on compliance with the principles of

good corporate governance and code of best

practice, being the UK Corporate Governance

Code updated in July 2018. The provisions of

the Code applicable to listed companies are

divided into five parts, as set out below:

1. Board leadership and Company purpose

The Board’s ultimate objective is the long term

sustainable success of the Group. The Board

assesses the basis on which the Company

generates and preserves value over the long

term. Opportunities and risks to the future

success of the business have been considered

and addressed, contributing to the delivery of

the Group’s strategy. Information on this can be

seen throughout this Corporate Governance

Report, the Directors’ Report, each of the Board

Committee reports and the Strategic Report.

Section 172

The Board is committed in its duties in

relationto Section 172 of the Companies Act

topromote the success of the Company. The

Board seeks to understand the views of the

Company’s key stakeholders and how their

interests and the matters set out in Section 172

are considered in Board discussions and

decision making. A description on how the

Board has evidenced this is included in the

Section 172 statement on pages 52 to 53.

How the Board monitors culture

The Board recognises that delivering for all

ourstakeholders, in line with our purpose and

vision to be the leading supplier in mobility

solutions, is underpinned by our culture.

The Board regularly monitors the culture of the

business in a number of ways:

– Through interaction with executives,

members of the leadership team, and

othercolleagues in Board meetings.

– Through regular Board agenda items and

supporting papers, covering culture

indicators such as risk management, Group

Internal Audit reports and follow-up actions,

customer engagement, health and safety,

whistleblowing, modern slavery

andregulatory breaches.

– Through receipt of reports from executives

ona range of indicators, including staff

engagement, retention, absence,

genderpay,diversity, andthe results

ofemployeesurveys.

During the year, the Board was satisfied that the

policy, practices and behaviour of the Board and

Group employees aligned with the Company’s

purpose, values and strategy and that no

correction was required by management. The

Board reinforces our culture and values through

its decisions, ensuring that decisions made are

within the approved risk appetite of the Group

and aligned with the Group’s strategy.

Shareholder engagement

Shareholders play a valuable role in

safeguarding the Group’s governance through

means such as annual re-election of Directors,

monitoring and compensating Director

performance and constructive dialogue with

the Board. Redde Northgate engages actively

with analysts and investors and is open and

transparent in its communications. The Board is

updated regularly on the views of shareholders

through briefings and reports from those who

have interacted with shareholders, including

the Directors and the Company’s brokers.

The Board and the Redde Northgate investor

relations team engage directly with investors

through a variety of communication channels

toensure prompt and effective communication:

– The AGM, which allows shareholders the

opportunity to engage with the Directors

andChairs of each of the Board Committees.

– Presentations and briefings given by the

CEOand CFO, particularly at the time

ofannouncing the Company’s half year

andfull year results.

– One-to-one meetings with institutional

shareholders on a regular basis by the

Chairman and Senior Independent Director.

– CEO and CFO meet with shareholders

following six monthly results announcements

or in the intervening period if necessary.

– Direct shareholder consultations when

considering matters of material impact to the

Group, such as consultation on Remuneration

report and policy, or indirect engagement

such as engaging specialists to interview

shareholders for the development of our

ESGstrategy as outlined on pages 36 to 50.

– Annual and interim reports and results

presentations which are available to

allshareholders and also include the

contactdetails for the Company Secretary.

– Our corporate website, which has a dedicated

investor relations section and contact details.

The Group’s results and other news releases

arepublished via the London Stock

Exchange’sRegulatory News Service or

another Regulatory Information Service.

Inaddition, these news releases are

publishedin the Investor Relations

sectionofthe Group’s website at:

www.reddenorthgate.com

Shareholders and other interested parties can

subscribe to receive these news updates by

email by registering online via the website.

2. Division of responsibilities

The business is managed by the Board of

Directors, currently comprising two executive

and five Non-executive Directors. You can find

more information about the members of the

Board on pages 56 and 57. The offices of the

Chairman and CEO are separate. An overview

of the leadership of the Group, including

theresponsibilities and activities of each

component, is outlined on pages 54 and 55.

Information and communication

The Chairman ensures that all Directors

areappropriately briefed so that they can

discharge their duties effectively. Management

accounts are prepared and submitted to the

Board monthly. Before each Board meeting

appropriate documentation on all items to

bediscussed is circulated. The Company

Secretary is available to the Non-executive

Directors and can facilitate Board training

events whenever required. The Non-executive

Directors meet without the executive Directors

present and the Senior Independent Director

leads the evaluation of the Chairman.

Each reporting segment of the Group

preparesmonthly management accounts

which include a comparison against their

individual business plans and prior year

performance. Management review any

variance from targeted performance levels.

These commentaries are consolidated and

submitted to the Board. Year-to-date actuals

are used to guide forecasts, which are updated

regularly and communicated to the Board.

Independence

Pursuant to those provisions of the Companies

Act 2006 relating to conflicts of interest and

inaccordance with the authority contained in

the Company’s Articles of Association, the

Board has put in place procedures to deal

withthe notification, authorisation, recording

and monitoring of Directors’ conflicts of

interestand these procedures have operated

effectively throughout the year and to the date

of signing of this Annual Report and Accounts.

Following the Merger, Mark McCafferty

andJohn Davies joined the Group Board.

Priorto the Merger, they had completed

10and8 years’ service respectively on the

ReddeBoard; constituting “a material business

relationship with the company within the last

three years” as set out in provision 10 of the

Code as a matter that is relevant to the Board’s

determination of independence. Upon

assessment against this criteria, Mark

McCafferty and John Davies are not

considered to be independent.

The Company is committed to good

governance, but acknowledges that the Board

has not complied with the requirement for at

least half of the Board (excluding the Chairman)

58 Redde Northgate plc Annual Report and Accounts 2022

to be independent Non-executive Directors,

inaccordance with provision 11 of the Code,

aswell as provisions 17, 24 and 32 for the

Committees to be made up of independent

Non-executive Directors.

The Board remains of the opinion that Mark

and John were objective throughout the year

despite their previous relationship with the

Redde business. In May 2022, John Davies had

stepped down from the Board and at the same

time Bindi Karia joined. Following this change,

the Group will be compliant with aspects of

theindependence requirement for FY2023.

3. Composition, succession and evaluation

The Nominations Committee report (page 61)

sets out its activities during the year, including

information on succession planning, diversity and

inclusion. There were no Board changes during

the year. As previously noted, in May 2022, John

Davies left the Board and Bindi Karia joined.

The Nominations Committee are confident

theBoard is equipped with right mix of skills

and experience to deliver long term strategic

objectives. The Directors have sufficient time to

execute their duties. The Committee met twice

in the year satisfying its terms of reference.

Board evaluation

In the prior year, Korn Ferry was engaged

toperform a Board Effectiveness Review

evaluating the Board, each Director and the

Board’s Committees. Korn Ferry also provided

advice on talent and reward in the prior year

through a separate team. The Board remains

satisfied that Korn Ferry was objective and

independent in its assessment.

The review concluded that the Board had

operated “effectively and efficiently” given the

broader COVID-19 context, and that the Board

is “characterised by mutual trust in which all

Directors contribute to the success of the

business”. The findings and recommendations

ofthe review focused upon three key areas,

aslaid out below. Each area, both reflected

andguided the Group in the transition away

from afocused integration mode to the next

phase ofgrowth, and away from socially

distanced interactions to an environment that

allows for physical interactions within the

Boardand the wider business.

Our progress to date against the

recommendations is outlined as below:

Area of focus Recommendations Progress to date

Moving to

“business as

usual”

There is the opportunity to shift focus from successful completion of short term

integration issues to a medium and long term strategic debate.

Ensure that the Board settles back into a regular rhythm for discussing strategy

as physical meetings return, and that the strategy day becomes an ongoing

feature of the Board calendar moving forward.

As the Board moves forward from the Merger, the risk register and the

identification of key risks will be an area of focus with greater discussion around

risk appetite, including deep dives on critical areas such as IT risk.

Board and Committee meetings have returned to face-to-face meetings throughout the year.

Focus on long term value creation for the business, diversifying into complementary markets and

development of ESG strategy.

Resetting of the risk appetite for the enlarged Group in the year – developments in the year include

detailed appraisals of IT systems and planned investments (for further details see pages 30 to 34).

Board

learningand

development

As restrictions are lifted, opportunities should be identified for Board Members

togain an “on the ground” understanding of each of the business’s divisions via:

– arranged site visits in varying locations; and

– presentations to the Board, from time to time, by the members of the wider

management team.

The Remuneration Committee will continue to engage with investors and utilise

external advisers where suitable, remaining cognisant of investor expectations

and broader trends.

The Board could make use of external experts to provide deep dives and stimulate

debate on critical themes such as ESG, EV transition and other trends in the sector.

Site visits by the Executive Directors resumed throughout the year including travel to our branches in

UK and Spain. Management have been invited to present at Board meetings throughout the year.

Continued engagement with investors by the Remuneration Committee Chairman. External advisors

engaged for compliance reviews.

External experts engaged for the development of our ESG strategy and net zero strategy, providing

valuable insight to the Board as to the matters which matter the most to our stakeholders.

Succession

planning

The work of the Nominations Committee could focus on succession planning in

the organisation and consider how best to increase the visibility of management

below the Group Management Boards, for example through a rotation of

management presentations and site visits, as noted above.

As part of a return to business as usual, the Nominations Committee should

actively review the aggregate competencies of the Board, adding skills and

expertise as appropriate and in line with the Company’s evolving strategy.

The Board should continue to recognise the importance of maintaining a

continued focus on diversity and inclusion on the Board, as it is in the business.

Increased oversight of management including invitation to present at Boardmeetings.

The Nominations Committee reviewed aggregate competencies and concluded that the Board continues

to hold appropriate expertise as detailed on page 61.

Diversity is recognised as an important attribute to Company success. This is discussed in further

detail within this report.

Corporate governance continued

59 Redde Northgate plc Annual Report and Accounts 2022

Corporate governance continued

During the current year, the Directors have

reviewed the effectiveness of the Board

asawhole and its Committees, and have

considered the results of the prior year

assessments, concluding that, overall, the

Board and its committees continue to operate

in an effective and constructive way.

Diversity

The Board has considered the

recommendations of the Davies Review and

the Hampton-Alexander Review into women

on boards in the light of the provisions of the

Code, with which we are compliant, and in the

light of our own existing policies and

procedures. The Board has also considered

thefindings of the Parker Review onethnic

diversity on boards and has aclear

responsibility to promote diversity throughout

thebusiness and talent pipeline. Further

information can be found on page 61.

The Board recognises the benefits of diversity

atall levels of the business, endorsing Group

values which recognise and promote equality,

ensuring that, as a Board and as a Group,

weact with integrity and honesty, and we

encourage and respect diversity.

While the overriding criteria we use to make

Board appointments will always be based

onindividual merit and our need to encourage

an appropriate balance of skills, experience

and knowledge on the Board at all times,

weonly useexecutive search firms that have

committed to the Voluntary Code of Conduct

on genderdiversity.

As at the date of this report, 29% of Board

members, 23% ofthe senior management

team and 33% of all employees were female

(2021: 14% of Board members, 25% of the senior

management team and 34% of all employees).

4. Audit, risk and internal control

The Audit Committee report on pages 62 to 66

describes the work of the Committee and how

it discharges its roles andresponsibilities.

The Board is accountable for the Group’s

successand dealing with the challenges

itfaces. The Board reviews the results, risks

and opportunities facing the Group. The

AuditCommittee plays a key part in this

work,monitoring and evaluating the Group’s

processes and internal controls and providing

alayer of independent oversight over our

keyactivities.

The Group’s systems of risk management

andinternal control ensure that our businesses

operate within risk appetite levels approved by

the Board. These are set out in the Identifying

and managing risk report from page 28.

Internal control

Although no system of internal controls can

provide absolute assurance against material

misstatement or loss, the Group’s own system

isdesigned to provide the Directors with

reasonable assurance that, should any

problems occur, these are identified on a

timely basis and dealt with appropriately.

Confirmation that the Board has performed

anassessment of the risk management and

internal control systems of the Group, as

required by the Code, is contained in the

Identifying and managing risk report on

pages28 to 29.

5. Remuneration

The Remuneration Committee report on pages

67 to 79 describes the work of the Committee

during the year. It sets out how executive

remuneration is aligned to the Company’s

purpose, values and strategy. It also shows

how workforce remuneration and related

policies have been considered in its decision

making regarding executive remuneration.

Compliance with the Code

The Group has complied with the provisions

ofthe Code throughout the year, with the

exception of the following areas:

– Provision 11 of the Code, for at least half

oftheBoard to be independent, as

explainedabove.

– Provision 17 for the Nominations Committee

to comprise of at least three independent

Non-executive Directors.

– Provision 24 for the Audit Committee to

comprise of at least three independent

Non-executive Directors.

– Provision 32 for the Remuneration Committee

to comprise of at least three independent

Non-executive Directors.

We will be compliant with the provisions above

in FY2023 due to John Davies stepping down

from the Board and Bindi Karia’s appointment

in May 2022.

– Provision 38 in respect to pension rates

forExecutive Directors being aligned

towiderworkforce averages; we will be

alignedby 31 December 2022 as detailed

inthe Remuneration report pages 67 to 79.

– Provision 41 regarding specific

engagementwith the workforce explaining

how executive remuneration aligns with

widerCompany paypolicy. While during the

year we have notspecifically consulted with

employeesregarding executive remuneration

arrangements, The Employee Engagement

Forum provides a forum in which the

Company can engage with the workforce

onhow executive remuneration aligns with

wider Group pay policy.

James Kerton

Company Secretary

6 July 2022

Attendance

Directors’ attendance at Board and Committee meetings during the year is detailed

asfollows:

No. of meetings

Board

Audit

Remuneration

Nominations

Avril Palmer-Baunack* 10 4 5 2

Martin Ward** 10 4 ***1 ***1

Philip Vincent** 10 4 ***1 ***1

John Pattullo 10 4 5 2

Mark Butcher 10 4 5 2

John Davies 10 4 5 2

Mark McCafferty** 10 4 ***5 ***2

* By invitation when attending Audit Committee.

** By invitation when attending Committees.

*** Only meetings to which invited.

All Directors in office at that time were present at the AGM held on 20 September 2021,

eitherinperson (Chairman/CEO) or remotely and able to participate.

The external auditors and the Group Head of Internal Audit attended all

AuditCommitteemeetings.

60 Redde Northgate plc Annual Report and Accounts 2022

Avril Palmer-Baunack

Committee Chairman

Committee membership

The members of the Committee are

shown in the table below. Details of their

experience and qualifications are shown

on pages 56 and 57:

Avril Palmer-Baunack

Mark Butcher

John Pattullo

Bindi Karia (joined the Committee

on5May 2022)

John Davies (left the Committee

on6May 2022)

Number of meetings 2

Avril Palmer-Baunack 2

Mark Butcher 2

John Davies 2

John Pattullo 2

Report of the Nominations Committee

Dear stakeholder,

I am pleased to present the Nominations

Committee’s (the Committee) report for the

year ended 30 April 2022. As a Committee

our core responsibilities include promoting

diversity and inclusion, reviewing the

structure of the Board and Committees,

recommending new Board appointments,

and ensuring adherence to formal, rigorous

selection, appointment and induction

processes for new Directors.

Committee purpose

The Committee assists the Board in reviewing

the structure, size, skills and experience

oftheBoard. It is also responsible for

reviewingsuccession plans for Group

Directors, including the Chairman and

theCEOand other senior executives.

The Committee’s role, authority, responsibilities

and scope are set out on page 55 and in detail

in its terms of reference which are available on

the Governance section of our website:

www.reddenorthgate.com

Operation of the Nominations

Committee

The Committee keeps the overall structure,

size and composition of the Board under

continuous review, and is responsible for

evaluating the balance of skills, knowledge

and experience of the Board and

itsCommittees.

Board recruitment

During the year, In order to support the

execution of our strategic objectives, the

search for a new Non-executive Director

commenced. We are pleased to announce that

as of May 2022, Bindi Karia joined the Board.

As part of the recruitment process conducted

for the appointment of Bindi, the Group

engaged Korn Ferry as a search agency to

facilitate this appointment. Korn Ferry were

also engaged as advisors on matters of

remuneration. The recruitment process was

performed by an independent team to the

advisors on remuneration matters.

When seeking to appoint a new Non-executive

Director, the Committee prepares a description

of the role and the attributes required in the

candidates, which will include a job

specification and an estimate of the time

commitment expected. The Committee then

compiles a shortlist taking account of known

candidates and candidates suggested by the

Group’s advisers and/or appointed recruitment

consultants. Only executive search firms that

have committed to the Voluntary Code of

Conduct on gender and ethnic diversity are

engaged inthe recruitment process. The

appointments process takes account of the

benefits of diversity of the Board, including

gender diversity, and in identifying suitable

candidates, the Committee considers

candidates from a range of backgrounds.

Appointments are made on the merit of the

skills and experience of the candidate with

nobias towards gender or ethnicity.

Board succession planning

The current Board was brought together

following the Merger and the combination of

the most appropriate skills and talent, with

relevant industry experience and knowledge

toform the most effective Board to ensure

theexecution of Group strategy and ensure

optimal integration and achievement

ofsynergies. On an annual basis, the

Nominations Committee considers the

composition of the Board and its Committees

in terms of its balance of skills, experience,

length of service, knowledge of the Group

andwider diversity considerations.

Diversity and inclusion

We are committed to seeking opportunities

toenhance the breadth and skills of the Board

for the benefit of the Group’s stakeholders.

Redde and Northgate merged in 2020, and

initially we maintained a Board taken from both

businesses to ensure appropriate governance

and continuity. In 2021, we launched a full

search process to identify a new Non-executive

Director with the requisite skills and strategic

experience for the combined business, with

aparticular focus on digital transformation.

The Company announced on 6 May 2022,

thatBindi Karia had joined our Board as a

Non-executive Director. Bindi brings deep

experience in technology and innovation,

aswell as in governance. At the same time,

John Davies stepped down, after making a

significant and longstanding contribution as a

Non-executive Director and our Remuneration

Committee Chairman over ten years at both

Redde and then Redde Northgate.

Following these changes to the composition

ofour Board, just under 30% of the Board is

female (including the Chair) and Board’s ethnic

diversity is in line with the recommendations

ofthe Parker Review. The Company actively

continues to seek to enhance the breadth and

diversity of the Board, and is targeting being

inline with the FCA’s recent policy statement

on diversity and inclusion on listed company

Boards and executive management by the end

of FY2023.

The Board remains committed to ensuring

diversity is embedded not only in the Board,

but throughout the entire Group – this is why

we actively work to attract, retain and develop

employees to improve our talent pipeline

(further information on pages 49 and 50).

Future priorities

In FY2023, the Committee intends to

continuereviewing succession plans for the

consolidated Board to make sure it can operate

effectively and add value to the Group.

Avril Palmer-Baunack

Chairman

6 July 2022

61 Redde Northgate plc Annual Report and Accounts 2022

Mark Butcher

Chairman of Audit Committee

Committee membership

The members of the Audit Committee

are shown below.

Mark Butcher

John Pattullo

Bindi Karia (joined the Committee

on5May 2022)

John Davies (left the Committee

on6May 2022)

Number of meetings 4

Mark Butcher 4

John Davies 4

John Pattullo 4

The Code requires that at least one

member of the Committee should have

recent and relevant financial experience.

Currently, the Chairman of the Committee

fulfils this requirement. All members of the

Committee are expected to be and are

financially literate. Relevant information

onthe skills and experience of our Board

members is outlined on pages 56 and 57.

Report of the Audit Committee

Supporting Group

integration and

ensuring integrity of

financial reporting

Dear stakeholder,

On behalf of the Audit Committee (the

Committee) and the Board, I am pleased

topresent the report of the Committee for

the year ended 30 April 2022. The objective

of this report is to provide an understanding

of the work undertaken by the Committee

during the year to ensure that the interests

ofthe Company’s stakeholders are

protected through a robust system

ofinternal controls, risk management

andtransparent financial reporting.

The report explains the role the Committee

plays in the Group’s governance framework by

supporting the Board in assessing the integrity

of the Company’s financial reporting and the

adequacy and effectiveness of the Company’s

management of risk and internal controls.

Recognising the importance of risk

management and the setting of risk appetite

and the review ofthe risk register are items

reserved for the Board. During the year, the

Committee supported the Board by focusing

on improving risk management within the

Group through standardising processes across

the businesses, ensuring that risk factors

arising from restricted vehicle availability

andinflationary pressures were adequately

captured, challenged and managed.

Additionally, the Committee continued to

focuson its core areas of responsibility,

namelyprotecting the interestsof the Group,

our shareholders andourstakeholder base

through ensuring theintegrity of the Group’s

financial information, audit quality and the

effectiveness of internal controls throughout

the year.

Role

The Committee’s role, authority, responsibilities

and scope are set out on page 55 and in detail

in its terms of reference which are available on

the Governance section of our website:

www.reddenorthgate.com

Meetings

The Committee is required to meet at least

three times a year. Details of attendance at

meetings held in the year ended 30 April 2022

are detailed in this report. Due to the cyclical

nature of its agenda, which is linked to

eventsin the Group’s financial calendar,

theCommittee meet four times during the

year. The other Directors, together with the

Group Head ofInternal Audit and the external

auditors, arecommonly invited to attend

allmeetings.

Key focus

A key focus of the Audit Committee and

theBoard in the yearunder review has

beenmanaging standardisation of the risk

management processes within the business.

This included the resetting of the Group’s risk

appetite, with varying tolerances depending

onthe impact category as further explained

within pages 28 and 39. The Group’s

riskassessment procedures ensure the

safeguarding of theGroup’s long term viability.

The Audit Committee reviewed management’s

assessment of the long term viability of

theGroup, taking into account downside

sensitivities, and challenged those

assumptions. The Committee is satisfied

thatthe Group is viable in the long term,

withfurther details provided within the

viabilitystatement found on page35.

In the current year, the Committee has also

given due consideration to the uncertainties

surrounding supply chain restrictions, and

theimpact that these may have on the ageing

ofthe fleet balanced with high residual values

experienced in the used vehicles market.

Suchfactors are important variables in the

determination of appropriate depreciation

ratesfor vehicles available for hire.

The Committee challenged and debated

management’s assessment of future residual

values, and whilst acknowledging that this is

asignificant area of judgement, the Committee

agreed with management’s proposals with

respect to depreciation rates on new vehicle

purchases and those applied to the existing

vehicle fleet.

Management have proposed to reduce

depreciation rates on a component of the

fleetfrom May 2022 in response to expected

high residual values in the short to medium

term period.

The approach towards assessing depreciation

rates on new vehicles to be purchased in the

next financial year has been consistently

applied. This requires management to set

depreciation rates based on their assessment

of future residual values anticipated at the

point of disposal.

Following recent acquisitions, the Committee

continues to support the Board through

theembedding of the Group’s governance

framework, financial reporting systems, risk

management processes and internal controls.

The Committee reviewed and recommended

that the Board approve the Group’s published

tax strategy and believes this demonstrates the

Group’s commitment to tax transparency and

its stated desire to pay the right amount of tax.

The Committee has provided the Board with

assurance that both the principal and emerging

risks which could adversely affect the delivery

of the Group’s strategy, or impact negatively

onits financial performance or business

operations, are being identified and

managedappropriately.

62 Redde Northgate plc Annual Report and Accounts 2022

Report of the Audit Committee continued

Significant matters considered in relation

tothe financial statements

During the year the Committee reviewed the

significant matters set out in this report in

relation to the Group’s financial statements

forthe year ended 30 April 2022. We

discussed these issues at various stages

withmanagement during the financial year

andduring the preparation and approval

ofthefinancial statements.

Following review and consideration of the

presentations and reports presented by

management, we are satisfied that the financial

statements appropriately address the critical

judgements and key estimates, in respect of

both the amounts reported and the disclosures

made. We also reviewed these issues with the

auditors during the audit planning process and

at the conclusion of the year end audit. We

aresatisfied that our conclusions in relation

tothese issues are in line with those drawn

bythe auditors.

Risk management

The Committee is responsible for overseeing

the adequacy of internal controls and the work

of Group Internal Audit. In this capacity, the

Committee oversee risk management activity

of the Group.

The Board determines the extent and nature

ofthe risks it is prepared to take in order

toachieve the Group’s strategic objectives.

Further information on the Group’s risk

management processes can be found

onpages 28 and 29.

The Board has responsibility for the Company’s

overall approach to risk management and

internal control which includes ensuring the

design and implementation of appropriate

riskmanagement and internal control systems.

The Board ensures that the Group is

identifying, considering and as far as

practicable mitigating the risks for the

business. The Board assesses the

effectiveness of the Company’s risk

management and internal control

systemsthrough ongoing monitoring activities

as well as separate evaluations performed by

Internal Audit. Procedures for monitoring

control effectiveness are embedded into the

normal operations of the business in addition

to regular reporting on internal controls. The

Board considers the findings in the reports

throughout the year and encourages open

andfrank conversations between management

and theCommittee on matters of risk and

controls. These reviews and the results of

Internal audit evaluations provide reasonable

assurance that the risk management and

internal control systems are appropriate.

During the year, the Board monitored

theGroup’s risk management processes and

business continuity procedures. The Group

Risk Committee meets quarterly and reports

tothe Board on a biannual basis. Both external

and internal risks are reviewed and their effect

on the Group’s strategic aims considered.

The Board also reviewed the Group’s emerging

risks, following a bottom up assessment

throughout business units and topdown

reviewby the Group Risk Committee. The

Board also reviewed the status of key risk

indicators throughout the year against risk

appetite, focusing on any which were outside

optimal ranges. The Board gave particular

attention to the risks relating to vehicle supply

constraints, the potential impact of the conflict

in Ukraine, global and domestic inflationary

pressures, and the long term impact of

climatechange.

The Committee monitored and reviewed the

activities of the Group Internal Audit function,

including agreeing the scope of work to be

performed by it in connection with the principal

risks facing the Group.

During the course of its review for the year

ended 30 April 2022, and to the date of this

report, the Committee has not identified, nor

been advised of, a failing or weakness which

ithas determined to be significant.

Activity

Since May 2021, the Committee has:

– reviewed the financial statements for the years ended 30 April 2021 and 2022 and the half

yearly report issued in December 2021. As part ofthis review process, the Committee

received reports from PwC;

– reviewed and agreed the scope of the audit work to be undertaken by PwC and agreed

itsfees;

– reviewed the effectiveness of external audit;

– had discussions with the external audit partner in the absence of management;

– presented bi-annual risk reports of key risks to the Board;

– reviewed and approved the Group wide risk assessment process;

– reviewed the effectiveness of the Group’s system of internal controls;

– set the programme of internal audits;

– received regular reports from the Group Head of Internal Audit;

– had discussions with the Group Head of Internal Audit in the absence of other management;

– reviewed the progress made by management in implementing the internal control

improvements recommended by Group Internal Audit;

– reviewed the Group’s corporate taxation arrangements and recommended that the Board

approve the Group tax strategy;

– reviewed the Group’s treasury arrangements and policies;

– reviewed and confirmed endorsement ofthe Group’s non-audit fee policy;

– reviewed the Group’s depreciation policy and depreciation rates adopted within thispolicy;

– reviewed a management paper on items classified as exceptional within the income

statement;

– reviewed a management paper on theaccounting consideration of the recoverability of

contract assets withinRedde;

– reviewed and approved the Group’s “Fair,Balanced and Understandable” statement; and

– reviewed managements assessment of going concern and viability.

63 Redde Northgate plc Annual Report and Accounts 2022

Overview of internal financial controls

Governance framework

Our governance framework supports effective internal control through an approved schedule

ofmatters reserved for decision by the Board and the Group Management Boards, supported by

defined responsibilities, levels of authority and supporting committees.

Financial review and

internalprocedures

Comprehensive systems of financial reporting and forecasting which are conducted frequently

and include both sensitivity and variance analysis. A budgeting exercise and strategic review

isconducted annually. Sensitivity analyses are included in both the strategic review and the

rolling forecasts.

Tax and Treasury procedures

Taxation is a complex area and is subject to frequent external review. Regular oversight of

taxgovernance is provided by the Audit Committee, covering implementation of the Group’s

taxstrategy, compliance, and all significant commercial transactions. We maintain an open

relationship with HMRC and have a “low risk” tax status.

The Treasury function ensures that all transactions are checked and monitored as well as the

continual monitoring of the Group’s debt facilities to ensure sufficient access to capital. All

complex or large transactions are discussed in advance with the Board and executive Directors.

Risk management

The Board regularly reviews the Group’s risk register, the schedule of key controls and key risk

indicators. The Board also assesses the impact of emerging risks to the Group. Our risk

management procedures are robust and can be viewed on pages 28 to 34.

External verification

During the year, no significant deficiencies had been raised by PwC through the course of the

annual audit nor through the work carried out by Group Internal Audit.

Report of the Audit Committee continued

Internal financial controls

On an ongoing basis, the Audit Committee

reviews the adequacy and effectiveness

oftheGroup’s system of internal financial

controls, which are described briefly

inthetable on this page.

The Committee received detailed reports on

the operation and effectiveness of the internal

financial controls from members of the senior

management team. The outcome of the

external audit at year end and the half year

review are considered in respect to our internal

controls. The Committee also receives updates

on the policies and procedures in place and

how these are being communicated to and

complied with by our staff.

64 Redde Northgate plc Annual Report and Accounts 2022

Report of the Audit Committee continued

Matter Key consideration Progress to date Conclusion

Determining

appropriate

depreciation

ratesfor vehicles

available for hire

Ensuring that depreciation rates are

setappropriately.

The Committee reviews trends in vehicle residual values on a regular

basis. Inaddition, we reviewed papers prepared by management at

eachreporting date which included a quantitative and qualitative

assessment of the current and forecast trends in the used vehicle

market, benchmarking of the Group’s depreciation policy,

andrecommendations for changes in depreciation rate

accountingestimates.

After due challenge and debate, the Committee was content

withtheassumptions and judgements made and accepted

management’sconclusions with respect to the proposed depreciation

rates for new vehicle purchases and that a prospective reduction in

depreciation rates on certain vehicles should be applied in FY2023.

We agreed with management’s proposal for

depreciation rates on new vehicle purchases

and also agreed with the proposed reduction

in depreciation rates on certain fleet vehicles

tobe applied in FY2023.

Claims due

frominsurance

companies and

self-insuring

organisations

Ensuring that the carrying value of insurance

claims represents the best estimate of the net

claim value to be recovered.

The Committee reviewed papers prepared by management at each

reporting date which included management’s assessment of the

expected net claim values at each reporting date.

We challenged the underlying assumptions and significant areas

ofjudgement and were satisfied with management’s assessments.

We concluded that the judgements made

indetermining net claim values as at

30 April2022 are appropriate.

Financial

statements and

other information

Fair and balanced presentation of financial

statements and other information including

useof appropriate alternative

performancemeasures.

The Committee considered the presentation of the financial statements,

including the presentation of reported results between underlying

andstatutory performance, as well as evaluating how financial results

and alternative performance measures were used as part of the

Strategic report.

The Committee reviewed papers prepared by management at each

reporting date which outlined management’s judgement in assessing

which items should be classified as exceptional items or otherwise

excluded from underlying results to ensure that the judgements

madewere reasonable and were in line with stated policy.

We concluded that the annual report and

accounts, taken as a whole, were fair,

balancedand understandable, and that

theusage ofalternative performance

measures wasappropriate.

Significant financial judgements, key assumptions and estimates

Any key accounting issues or judgements made by management are

monitored and discussed with the Committee throughout the year.

Thetable below provides information on the key issues discussed

withthe Committee during the year and the judgements adopted.

65 Redde Northgate plc Annual Report and Accounts 2022

Report of the Audit Committee continued

External auditors

The Committee reviews and makes

recommendations regarding the appointment

of the external auditors. In making this

recommendation, we consider auditor

effectiveness and independence including

consideration of non-audit fees and length

oftenure of audit firm and lead partner.

The Committee confirmed compliance with

the Statutory Audit Services for Large

Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and

Audit Committee Responsibilities) Order 2014,

having last carried out a competitive tender

and appointed PwC as Group auditors in 2015.

Jonathan Greenaway became the lead audit

partner for the year ended 30 April 2022,

following the rotation of the previous partner

after their five year tenure. The Company

isrequired to have a mandatory audit tender

after 10 years and, as the Audit Committee

considers the relationship with the auditors

tobe working well and remains satisfied with

their effectiveness and the quality of audit

work, their geographical and professional

capabilities, the Audit Committee does not

currently anticipate that it will conduct an audit

tender before it isrequired to do so in 2025.

This Committee willcontinue to monitor this

annually to ensurethe timing for theaudit

retender remainsappropriate, taking into

account the effectiveness and independence

of the auditors.

The Committee believes that non-audit

workmay only be undertaken by the external

auditor in limited circumstances. All non-audit

services are subject to the Committee’s prior

approval. Non-audit services provided by our

external auditors are subject to a cap equal to

70% of the average annual audit fee for the

preceding three years.

Non-audit fees for services provided by PwC

for the year amounted to £57,000 related to

the review of the interim financial statements

as required by regulation. As this work was

required by legislation there were no non-audit

services conducted for the purposes of

comparison to the 70% cap included in the

FRC’s guidance.

The Committee reviewed the effectiveness

and independence of the external auditors,

both in terms of the engagement team and

thefirm as a whole. In order to perform

thisassessment, the following criteria

areconsidered:

– the auditor’s independence letter which

annually confirms their independence and

compliance with the FRC Ethical Standard;

– the operation, and compliance with, the

Group’s policy on non-audit work being

performed by the auditors;

– how the auditors identified risks to audit

quality and how these were addressed,

including the network level controls the

auditors relied upon;

– how the auditors demonstrated professional

scepticism and challenged management’s

assumptions where necessary; and

– the outcome of the FRC’s inspection of PwC’s

audit quality.

In assessing how the auditors demonstrated

professional scepticism and challenged

management’s assumptions, the Committee

considered the depth of discussions held

withthe auditor, particularly in respect to

challenging the Group’s approach to its

significant judgements and estimates.

TheCommittee has been pleased with

thechallenge raised by the new audit

partnerandthe team during the year.

The Committee concluded that the

auditprocess was operating effectively.

Consequently, the Committee has

recommended the reappointment

ofPwCasexternal auditor at the

AGMinSeptember2022.

Group Internal Audit

In fulfilling its duty to monitor the

effectivenessof the Internal Audit function,

theCommittee has:

– reviewed the adequacy of the resources of

the Group Internal Audit department;

– ensured that the Group Head of Internal Audit

has direct access to the Chairman of the

Board and to all members of the Committee;

– conducted a one to one meeting with the

Group Head of Internal Audit without

management present; and

– approved the Group Internal Audit

programme and reviewed quarterly reports

by the Group Head of Internal Audit, ensuring

the Committee was satisfied with the quality

of these reports.

The Committee concluded that the Group

internal audit process had been conducted

effectively and that the quality of audit and

reporting was rated highly.

Looking forward

In FY2023, the Committee will continue to

support the Board through integration of the

business as it continues to grow organically

and inorganically, embedding the Group’s

governance framework, financial reporting

systems, risk management processes and

internal controls.

Mark Butcher

Chairman of Audit Committee

6 July 2022

66 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report

Dear stakeholder,

I am delighted to introduce the Directors’

Remuneration report for the year ended

30 April 2022.

This report is comprised of this introduction,

the Remuneration policy report (page 69) and

the annual report on remuneration (page 73).

This year, the decisions of the Committee were

made in a positive context of strong Group

trading and financial performance throughout

the year.

Remuneration for the year ended

30April 2022

Base salary and fees

As disclosed in the 2021 Directors’

Remuneration report, the executive Directors’

salaries for the year were raised by 2%, in line

with the wider workforce, and Philip Vincent

received an additional £20,000 increase in

base salary, reflecting his development in the

role and the increased scope of his role

following the integration of Redde with

Northgate.

Annual bonus

The maximum annual bonus opportunity for

the year was 125% of salary for the CEO and

100% of salary for the CFO. Both the CEO and

CFO received a maximum award based on

outcomes against financial and strategic

objectives, as outlined further in the main

bodyof the report. With respect to financial

objectives, this approach is in line with the

award outcome for those in the wider

workforce who participate in Group

bonusschemes.

Long term incentive plans

As disclosed in the 2021 Annual Report,

MartinWard and Philip Vincent received

awards in the year in line with the

Remuneration Policy equating to 150% of

salary with a three year performance period

ending April 2024.

Discretion

The Committee reviewed the formulaic

incentive outcomes for FY2022 and is

comfortable that the payouts reflect the

underlying performance of the Company.

TheCommittee did not exercise any discretion

in the award of Directors’ remuneration in

theyear.

The Committee is comfortable that the policy

operated as intended.

Responding to shareholder feedback

Last year’s AGM

The Committee notes that the advisory vote

toapprove the Remuneration report at the

2021 AGM was approved by a clear majority,

although there was a significant minority vote

against the resolution. The Company engaged

with shareholders prior to and following the

2021 AGM.

As part of this engagement, the Committee

engaged with shareholders who voted against

the resolution and understands that they did

sobecause of the Company’s decision to pay

bonuses to executive Directors but not to repay

the furlough monies the Company received in

FY2021. For FY2022, the Company has taken

the decision to repay all furlough monies

received in the year.

Board engagement with

widerworkforce

The Group has enhanced employee

engagement across the business through

thelaunch of an Employee Engagement

Forum, chaired by a senior member of the

Group Management Boards, to help theBoard

and the Group Management Boards to

understand the views of the workforce and to

ensure feedback between the workforce and

the Board on an ongoing basis.

The Employee Engagement Forum comprises

members from across the Group’s businesses

to ensure a balanced representation of the

workforce, and it meets at different locations

across the Group to promote accessibility.

TheCEO has also attended the forum.

The Employee Engagement Forum has met on

six occasions during the year, and has agreed

aset of guiding principles and a roadmap for

how the Employee Engagement Forum should

work. The Employee Engagement Forum

alsoprovides a forum in which the Company

canengage with the workforce on how

executive remuneration aligns with wider

Group paypolicy.

Key areas of focus have been:

(i) ensuring the effectiveness of internal

communications and enhanced

employeeengagement across the

business through the delivery of key

messaging communication channels,

forexample a “Getting to Know Redde

Northgate” video series. This responds

toinsights from the Group’s Employee

Engagement survey in FY2021;

(ii) promoting engagement by all employees

in the FY2022 Employee Engagement

Survey, resulting in a very positive overall

response rate of 71.4% of the 6,709

colleagues invited to participate in the

survey between 23 March 2022 and

6 April2022;

(iii) inputting ideas and suggestions into

thenew Employee Benefits Hub that

theGroup has launched to the workforce,

resulting in the introduction of nine

newbenefits, with £114,000 spent by

employees in the Employee Benefits Hub,

achieving discount savings for colleagues

and over 1,500 colleagues taking up 9

additional benefits;

John Pattullo

Chairman of Remuneration

Committee

Committee membership

Members of the Remuneration

Committee are shown below:

John Pattullo (Chairman from 6 May 2022)

Mark Butcher

Avril Palmer-Baunack

Bindi Karia (joined the Committee

on5May 2022)

John Davies (Chairman until leaving

theCommittee on 6 May 2022)

Number of meetings 5

John Pattullo 5

Mark Butcher 5

Avril Palmer-Baunack 5

John Davies 5

67 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report continued

Operation of policy for FY2023

There are no significant changes proposed

tothe implementation of the remuneration

policy for FY2023.

Base salary

The executive Directors’ salaries have been

increased by 3% in line with increases given to

the wider workforce to £609,348 for the CEO

and £393,563 for the CFO.

Annual bonus

In line with the decisions taken last year,

theannual bonus maximum opportunity for

FY2023 remains at 125% of salary for the CEO

and 100% of salary for the CFO. The maximum

opportunity permitted under the remuneration

policy is 150% of salary for the CEO and 100%

for theCFO.

The balance of measures used in the annual

bonus plan remain the same. The bonus

willtherefore be determined based on

75%financial targets and 25% on a range

ofstrategic objectives. The Committee has

thediscretion to adjust the bonus outcome

ifitis not deemed appropriate, for example,

interms of the underlying performance of

theCompany.

As with previous years, due to the commercial

sensitivity of the performance targets, the

targets will be disclosed retrospectively.

Up to 100% of salary, half of any bonus earned

and all of any bonus earned in excess of 100%

of salary net of taxes will be used by the

executive Directors to purchase shares, which

will be subject to a three year holding period

and cannot be sold during that time. The

shares will be subject to recovery provisions.

(iv) input into the workforce car salary

sacrificescheme, which has now

beensuccessfullylaunched; and

(v) sharing an overview of business

performance and the long term strategy

forthebusiness. This helped us achieve

arecord employee engagement score for

“understanding business direction” in the

FY2022 Employee Engagement Survey.

Board changes

Bindi Karia joined the Board as an Independent

Non-executive Director and a member of the

Company’s Remuneration Committee, Audit

Committee and Nominations Committee on

5 May 2022. Bindi brings deep experience in

technology and innovation, having held senior

board, investment and advisory roles across

the technology ecosystem in Europe. Further

to the announcement by the Company on

6 May 2022, John Davies has stepped down

asaNon-executive Director of the Company.

John Davies received a payment of £17,796 in

accordance with the terms of his appointment

and the remuneration policy. No other

remuneration payment, nor any payment

forloss of office will be made by the Company

to John Davies. Further information will be

disclosed in the FY2023 Annual Report.

Executive pensions

As reported last year, executive Director

pensions will be aligned to the majority of the

UK workforce (currently 3.59% of salary) by

31 December 2022.

Long term incentive plans

The Committee intends to grant LTIP awards

of150% of salary for the executive Directors

inline with the normal maximum award under

theremuneration policy. The awards will be

based on three year EPS and PBT targets.

Themeasures and weightings for the 2022

awards and the targets are set out in the

mainbody ofthis report.

The Committee will have the discretion

toadjust the formulaic outcome of the awards

totake into account the wider

businessperformance.

Conclusion

The Committee remains committed to the

operation of a remuneration policy that

provides the appropriate opportunity for the

executives to be fairly rewarded for their

contribution to the business, whilst also

ensuring alignment with the interests

ofallstakeholders.

The Committee will be undertaking a

consultation with shareholders ahead of its

2023 AGM at which it will put forward its

Remuneration Policy for shareholder approval.

John Pattullo

Chairman

6 July 2022

68 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report continued

Remuneration policy report

This part of the Directors’ remuneration report sets out the remuneration policy for the Group and has been prepared in accordance with the relevant law and regulations. The full policy can be found

within the 2020 Annual Report on the Company’s website:

www.reddenorthgate.com

The Remuneration Policy was approved by shareholders at the October 2020 AGM and is expected to apply for a period of three years.

When implementing the remuneration policy, the Remuneration Committee considers the six factors listed under Provision 40 of the UK Corporate Governance Code:

– Clarity – a summary of the remuneration policy is set out below in a clear and transparent manner.

– Simplicity – remuneration structures are simple and market typical, whilst at the same time incorporating the necessary structural features to ensure a strong alignment to performance.

– Risk:

– The remuneration policy has been shaped to discourage inappropriate risk. Awards under the remuneration policy are subject to malus and clawback provisions. The performance conditions are

reviewed annually to ensure that they remain suitable and do not incentivise risk taking.

– To avoid conflicts of interest, Committee members are required to disclose any conflicts or potential conflicts ahead of Committee meetings. No executive Director or other member of

management is present when their own remuneration is under discussion.

– Predictability – incentives are capped in the remuneration policy.

– Proportionality – the link between each element of policy and Company strategy is noted in the table below. Variable pay is subject to a combination of financial and non-financial measures that are

linked to Company strategy.

– Alignment to culture – we seek to align of incentives to our Group values (see page 39 for more information about our values).

The table below summarises the key aspects of that policy.

Purpose and link to strategy Operation Maximum opportunity

Base salary

To recruit and reward executives

ofasuitable calibre for the role

anddutiesrequired.

Reviewed annually by the Committee, taking account of Company performance, individual

performance, changes in responsibility and levels of increase for the broader UK population.

Reference is also made to remuneration levels within relevant FTSE and industry

comparatorcompanies.

The Committee considers the impact of any basic salary increase on the total

remunerationpackage.

Salary increases for executive Directors will not

normally exceed the general increase for the

broader UK employee population but on

occasions may need to recognise, for example,

changes in the scale, scope, complexity or

responsibility of the role, and/or specific

retention issues, and to allow the base salary

ofnewly appointed executives to increase in

line with their experience and contribution.

Details of the outcome of the most recent

salary review are provided in the annual

Remuneration report.

Benefits

To provide market competitive benefits

toensure the wellbeing of executives.

The Company typically provides:

– a car or cash allowance in lieu;

– medical insurance;

– death in service benefits;

– critical illness insurance; and

– other ancillary benefits, including relocation expenses (as required).

Executive Directors are also entitled to 30 days’ leave per annum.

Reimbursement of all costs associated with reasonable expenses incurred for the proper performance

of the role including tax thereon where a business expense is deemed taxable byHMRC.

The value of benefits is based on the cost to

theCompany and is not predetermined. It is a

relatively small part of the overall value of the

total remuneration package.

69 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report continued

Purpose and link to strategy Operation Maximum opportunity

Pension

To provide market competitive

retirementbenefits.

A Company contribution to a Group personal pension plan or provision of cash allowance in lieu

at the request of the individual.

Up to 18% of salary for the current executive

Directors save that pension benefits for the

current Directors will be aligned to the

applicable workforce rate (currently 3.59%) by

31 December 2022.

New appointments will receive a Company

contribution not exceeding that applicable

tothe workforce in the country in which they

are based.

Annual bonus

To encourage and reward delivery of the

Company’s operational objectives and to

provide alignment with shareholders

through the deferred share element.

The annual bonus is based on performance against one or more financial targets. A proportion

(not exceeding 25%) may also be based on non-financial strategic KPIs.

Details of the performance measures, weightings and targets (where these are not

consideredcommercially sensitive) set for the year under review is provided in the Annual

reporton remuneration.

Up to 100% of salary, half of any bonus earned and all of any bonus earned in excess of 100%

ofsalary net of taxes will be used by the executive Directors to purchase shares which will be

subject to a three year holding period and cannot be sold during that time. The shares will be

subject to recovery provisions.

For unvested deferred share awards the Committee has the discretion to permit the payment

ofdividend equivalents arising over the period between grant and the vesting date. These would

be paid in shares and only exceptionally in cash.

The Committee has the discretion to adjust the formulaic outcome of the bonus where it

considers it is not appropriate taking into account matters such as the underlying performance

ofthe Company, investor experience or wider employee reward experience.

Recovery and withholding provisions apply to all participants in the event of a restatement

oftheGroup’s accounts, error in assessing performance criteria, corporate failure, serious

reputational damage, misrepresentation or such other exceptional circumstances as the

Committee determines.

Maximum: 150% of salary for CEO; 100% of

salary forotherexecutives.

Target: No greater than 50% of maximum.

Threshold: No greater than 25% of maximum.

For performance below threshold, no bonus

ispayable.

70 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report continued

Purpose and link to strategy Operation Maximum opportunity

Long term incentives (EPSP)

To encourage and reward delivery of the

Company’s strategic objectives and provide

alignment with shareholders through the

use of shares.

Annual awards of performance shares (or nil cost options) to executive Directors.

Awards are granted subject to continued employment and satisfaction of challenging

performance conditions measured over three years.

The Committee will select the performance measures for awards that it considers best support

the Company’s medium to long term objectives. If the Committee considers that the changes it

ismaking inselecting alternative measures or weightings for a new award are substantive it will

consult with the Company’s major shareholders prior to making any changes.

Awards will vest, subject to performance, on the third anniversary of grant and will be subject to

an additional two year holding period post vesting, during which time awarded shares may not be

sold (other than to meet tax or social security obligations).

The terms of the EPSP rules provide the Committee with the discretion to grant and/or settle all

or part of an EPSP award in cash. In practice this discretion would only be used in exceptional

circumstances for executive Directors or to enable the Company to settle any tax or social

security withholding which may apply.

The Committee has the discretion to permit the payment of dividend equivalents arising over the

periodbetween grant and the vesting date. These would be paid in shares and only in exceptional

circumstances cash.

The Committee has the discretion to adjust the formulaic outcome of the bonus where it

considers it is not appropriate taking into account matters such as the underlying performance

ofthe Company, investor experience or wider employee reward experience.

Recovery and withholding provisions apply to all participants in the event of a restatement of the

Group’saccounts, error in assessing performance criteria, poor risk management, corporate

failure, seriousreputational damage, misrepresentation or such other exceptional circumstances

as the Committeedetermines.

The maximum grant limit in the plan rules is

150% of salary (face value of shares at grant)

although exceptionally 250% may be used, e.g.

in recruitment.

The normal grant policy is 150% of salary for

each executive Director.

No greater than 25% of the grant vests for

threshold performance increasing progressively

to 100% for maximum performance.

If performance is below threshold for a

measure, then the proportion of the award

subject to that measure will lapse.

All employee share scheme

All employees including executive Directors

are encouraged to become shareholders

through the operation of an all employee

share scheme. The Board believes that

encouraging wider share ownership by all

staff will have longer term benefits for the

Company and for shareholders.

The SAYE has standard terms under which all employees can participate. Employees can elect to save (through a

recognised financial institution) up to a

maximum amount determined by the Company

and within the statutory limits for SAYEs per

month from post tax salary in return for options

to buy shares in the Company at the end of the

(typically) three year savings period.

Non-executive Director fees

To attract and retain a high calibre Chairman

and Non-executive Directors by offering a

market competitive fee level.

The Chairman is paid a single fee for all his/her responsibilities. The Non-executive Directors are

paid a basic fee. The chairmen of the main Board Committees and the Senior Independent

Director are paid an additional fee to reflect their extra responsibilities.

Additional fees may be paid for new roles and/or additional responsibilities.

The level of these fees is reviewed periodically by the Committee and CEO for the Chairman and by

the Chairman and executive Directors for the Non-executive Directors within the overall limit set by

the Articles of Association and with reference to market levels in comparably sized FTSE companies,

time commitment and responsibilities of the Non-executive Directors. Fees are paid in cash.

The maximum aggregate amount is

currently£700,000 as provided in the

Articlesof Association.

71 Redde Northgate plc Annual Report and Accounts 2022

Remuneration report continued

Share ownership requirements

The executive Directors are required to accumulate, over a period of five years from the date of

appointment, a holding of Ordinary shares of the Company equivalent in value to 200% of their

basic annual salary, measured annually. It is intended that this should be achieved primarily

through shares acquired on the exercise of share incentive awards and from annual bonus.

Directors are not required to go into the market to purchase shares, although this is encouraged

and any shares so acquired would count towards meeting the guidelines. Executive Directors are

required to retain all shares which they are required to acquire with annual bonus payments, all

vested DABP, EAB and EPSP awards on vesting, subject to sales to meet tax obligations, and the

Committee’s discretion in exceptional circumstances until the ownership requirement is met.

Other than in exceptional circumstances as determined by the Committee, the executive Directors

are required to hold the lower of (1) Ordinary shares held on cessation and (2) Ordinary shares

equivalent in value to 200% of salary at the time of cessation, for a period of two years from the

date they cease to be an executive Director.

Service contracts and letters of appointment

The table below gives details of the service contracts and letter of appointments for each

member of the Board.

Date of appointment

Date of current

contract/letter of

appointment

Notice from

the Company

Notice from

the individual

Unexpired period of

service contract/

letter of

appointment

Executive

Directors

M Ward

21 February 2020 22 December 2010 12 months 12 months Rolling contract

P Vincent 16 July 2018 16 July 2018 6 months 6 months Rolling contract

Non-executive Directors

A Palmer-Baunack 12 August 2019 12 August 2019 6 months 6 months Rolling contract

J Pattullo 1 January 2019 18 December 2020 3 months 3 months Rolling contract

M Butcher 9 October 2019 18 September 2019 3 months 3 months Rolling contract

J Davies

21 February 2020 21 February 2020 3 months 3 months Rolling contract

B Karia 5 May 2022 5 May 2022 3 months 3 months Rolling contract

M McCafferty 21 February 2020 21 February 2020 3 months 3 months Rolling contract

Redde plc (as it was) contract rolled over.

John Davies stepped down as Non-executive Director and Chairman of the Remuneration Committee

on6 May2022.

The Non-executive Directors’ contracts are typically entered into for an anticipated term of three years, which is

extended by the Board for further terms as appropriate.

72 Redde Northgate plc Annual Report and Accounts 2022

Annual report on remuneration

The Remuneration Committee

The members of the Committee during the year are listed below. The attendance of the members

of the Committee at meetings during the year are shown below.

Number of

meetings

attended out of

potential

maximum

John Davies (Chairman) 5 of 5

Mark Butcher 5 of 5

Avril Palmer-Baunack 5 of 5

John Pattullo 5 of 5

The CEO attends meetings by invitation and assists the Committee in its deliberations, except

when issues relating to his remuneration are discussed. No Directors are involved in deciding their

own remuneration. The Company Secretary acts as secretary to the Committee.

Korn Ferry provided independent advice to the Committee during FY2022 having been appointed

by the Committee in FY2019.

The Committee is advised by Korn Ferry on certain remuneration matters. The total fees paid to

Korn Ferry in respect of its services to the Committee during the year were £12,993 excluding VAT.

The fees are predominantly charged on a time spent basis.

Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct. Korn Ferry provides

advice on talent and reward matters and Board appointments to the Group through separate

teams and has no other connection to the Company or Directors. The Committee is satisfied that

the advice that it receives is objective and independent.

The Committee’s terms of reference are available on the Company’s website:

www.reddenorthgate.com

The Committee is responsible for making recommendations to the Board on the remuneration

packages and terms and conditions of employment of the Chairman and the executive Directors

of the Company, as well as the Company Secretary and under the new Code the most senior

executives below Board level in the UK, Spain and Ireland. The Committee also reviews

remuneration policies and practices generally throughout the Group. In accordance with the

Company’s Remuneration Policy the Committee has sought to ensure that the incentive structure

will not raise ESG risks by inadvertently motivating irresponsible behaviour and will take account

of ESG matters generally in determining overall Remuneration Policy and structure, and the

Remuneration Committee is able to consider corporate performance on ESG issues when setting

the executive Directors’ annual objectives and remuneration.

Statement of shareholder voting and shareholder feedback

The following table sets out the votes received from shareholders for the Directors’ Remuneration

report at the 2021 AGM:

Directors’ Remuneration report – Resolution3

Total number

ofvotes

Approve the

report on

remuneration

% of votes cast

For 119,548,493 62.36

Against 72,170,628 37.64

Total votes cast (excluding votes withheld) 191,719,121

Votes withheld 4,711,475

Total votes cast (including votes withheld) 196,430,596

The Committee notes that the advisory vote to approve the Remuneration report at the 2021 AGM

was approved by a majority; however, there was a significant minority vote against the resolution.

The Company engaged with shareholders prior to and following the 2021 AGM. As discussed on

page 67, the Committee engaged with shareholders who voted against the resolution and

understands that they did so on the basis of the Company’s decision to award executive Directors

their bonuses but not to repay the furlough monies the Company received in FY2021. For FY2022,

the Company has taken the decision to repay all furlough monies received in FY2022.

The following table sets out the votes received from shareholders for the Directors’ Remuneration

Policy at the 2020 AGM:

Directors’ Remuneration report – Resolution4

Total number

ofvotes

Approve the

remuneration

policy

% of votes cast

For 115,101,869 58.98

Against 80,054,014 41.02

Total votes cast (excluding votes withheld) 195,155,883

Votes withheld 30,065

Total votes cast (including votes withheld) 195,185,948

Votes withheld are not included in the final proxy figures as they are not recognised as a vote

inlaw.

73 Redde Northgate plc Annual Report and Accounts 2022

Annual report on remuneration continued

Remuneration for the year ended 30 April 2022 (audited)

The table below sets out the remuneration received by the Directors in relation to performance in

the year ended 30 April 2022 (and for long term incentive awards’ performance periods ending in

the year) and in the year ended 30 April 2021.

£000

Salary

and fees

Taxable

benefits

Annual

bonus

Long

term

incentive Pension Total

Total

Fixed

Total

Variable

M Ward 2022 592 19 740 – 89 1,440 700 740

2021 514 17 580 – 89 1,200 620 580

P Vincent 2022 382 14 382 – 69 847 465 382

2021 339 13 355 – 63 770 415 355

Chairman

A Palmer-

Baunack

2022 200 – – – – 200 200 –

2021 167 – – – – 167 167 –

Non-executive Directors

J Pattullo 2022 65 – – – – 65 65 –

2021 63 – – – – 63 63 –

M Butcher

2022 65 – – – – 65 65 –

2021 63 – – – – 63 63 –

J Davies 2022 65 – – – – 65 65 –

2021 63 – – – – 63 63 –

M McCafferty 2022 55 – – – – 55 55 –

2021 53 – – – – 53 53 –

1 In FY2021, due to the business disruption of COVID-19, all Directors with continuing service agreed to a 20%

reduction in salary and fees between 1 April 2020 and 30 June 2020, with the exception of Avril Palmer-

Baunack, who agreed to a 100% waiver in fees over the same period.

Pension and taxable benefits

A breakdown of the taxable benefits received by Executive Directors is set out in the table below:

M Ward

£000

P Vincent

£000

Car 15 12

Medical insurance 4 2

The executive Directors are eligible for membership of a Group personal pension plan. In view

ofthe Annual Allowance cap, part or all of their entitlements were paid to them in cash. Philip

Vincent received an entitlement of 18% of base salary and Martin Ward received an entitlement

of15% of base salary.

Annual bonus for the year ended 30 April 2022 (audited)

Total opportunity

The maximum bonus opportunity for the CEO was 125% of salary and for the CFO was 100% of

salary. The bonus was based 75% on Group PBT and 25% on strategic objectives. No bonus was

payable if PBT was below the threshold level of £110m, 50% of the bonus was payable for a PBT

of£115m and the full bonus was payable if PBT was £120m.. The targets, performance against

them and resulting payment are set out in the tables below.

PBT element at %

maximum

Strategic

objective

%maximum

Total bonus

%maximum

Total bonus

%salary

Bonus payable

£000

M Ward 75 25 100 125

296 cash 444

deferred in

P Vincent 75 25 100 100

191 cash 191

deferred in

Total award

As stated above the total bonus award was based 75% on Group PBT and 25%

onstrategicobjectives.

Financial objectives

Awarded at maximum of 75% of the total bonus opportunity (93.75% of salary for M Ward and 75%

of salary for P Vincent) as follows:

PBT performance

Threshold

performance

Target

performance

Maximum

performance

Actual PBT

performance

PBT 75% of total bonus £110m £115m £120m £151m

M Ward 93.75% salary

93.75% salary

100% max

P Vincent 75% salary

75% salary

100% max

74 Redde Northgate plc Annual Report and Accounts 2022

Strategic objectives

Awarded at maximum of 25% of the total bonus opportunity (31.25% of salary for M Ward and 25%

of salary for P Vincent) as set out below. The directors’ strategic objectives were set by the

Remuneration Committee at the beginning of the financial year and were based on a robust

framework of clear objectives directly aligned to the Board’s strategic priorities for the year. The

strategic objectives and the performance against them for each of the executive Directors for

FY2022 are set out below:

M Ward Performance/achievement Max scoring %

To deliver core values

and a strategic vision

plan evidenced against

strategic delivery.

Fully met. The Focus, Drive and Broaden strategic framework

was used to create a detailed plan that set out the Group’s

purpose, aims and vision as described further (including how

we have delivered against the plan and our future priorities)

on page 15.

Enhance employee

engagement by key

messaging,

communication

channels, employee

presentations and

roadshowsand the

Employee

Engagement Forum.

Fully met. As described elsewhere in the Annual Report, the

launch of our Employee Engagement Forum, the 74%

engagement score, the level of participation in our annual

colleague survey and other employee events reflects a

significant enhancement in thisarea.

Deliver succession

plans for Group

Management Board

members in the UK

and Spain.

Fully met. The implementation of this objective was

significant for the Group given the importance of succession

planning following the Group’s merger in 2020. Accordingly,

this formed a material component of the Group’s Board and

governance agenda for FY2022 and the Remuneration

Committee was satisfied that the CEO’s performance fully

met the objective

Develop new business

continuity plans.

Fully met. The implementation of this objective was

identified by the Board as an area of key focus for the Group

in light of macro events. Accordingly, this formed a material

component of the Group’s Board and governance agenda for

FY2022 and the Remuneration Committee was satisfied that

the CEO’s performance fully met the objective.

Develop a financial five

year business plan.

Fully met. Undertook an extensive strategic review during

the year in the context of the long term opportunities for the

Group following the Merger and in order to develop with the

business a five year strategic plan for the Board to enhance

the Group’s proposition as an integrated mobility solutions

provider, taking account of mobility trends, segment growth

opportunities and organic and inorganic growth initiatives

Total 25% out of 25%

P Vincent Performance/achievement Max scoring %

Develop and deliver

medium-term funding

strategy.

Fully met. As described in the Financial review, the Group‘s

financing strategy and capital structure was enhanced in the

year to mitigate future refinancing risk and benefit from

market conditions. This expanded the Group’s funding

facilities and lowered funding costs, as further described in

the Financial review on pages 21 to 25, allowing the Group

scope to invest further in the business and to take advantage

of inorganic growth opportunities as they arise.

6.25%

Develop financial

reporting and analysis

to support the

strategic vision to

promote the business

strategy to

stakeholders.

Fully met. Developed and implemented enhanced financial

reporting and analysis. Improved strategic commentary

relating to the Group’s business, products and services and

enhanced the Group’s funding model.

6.25%

Develop a financial five

year business plan

with key initiatives for

organic growth.

Fully met. Undertook an extensive strategic review during

the year in the context of the long term opportunities for the

Group following the Merger and in order to develop with the

business a five year strategic plan for the Board to enhance

the Group’s proposition as an integrated mobility solutions

provider, taking account of mobility trends, segment growth

opportunities and organic and inorganic growth initiatives

6.25%

Executing corporate

strategy: including

maintaining good

headroom in financial

covenants; improving

working capital

andROCE.

Fully met. Drove focus on financial management with

improvements in working capital and ROCE and maintenance

of good headroom in financial covenants

6.25%

Total 25% out of 25%

Based on performance to 30 April 2022, the annual bonus outcomes for executive Directors

during the year are shown overleaf. The Committee is satisfied that no adjustments to the

pay-outs are required, and that the outcome is reflective of underlying performance.

Annual report on remuneration continued

75 Redde Northgate plc Annual Report and Accounts 2022

Annual report on remuneration continued

A summary of the bonus outcome is as follows:

Executive % of maximum % of salary Bonus outcome Awarded in cash Awarded in shares

M Ward 100 125 740 296 444

P Vincent 100 100 382 191 191

Fifty percent of the bonus and any amount in excess of 100% of salary will be used to purchase

shares. Shares are subject to a minimum holding period of three years and are not subject to

continued employment.

Vesting of LTIP awards

As noted in the prior year, 198,994 of Philip Vincent’s LTIP awards made in 2018 and 2019 with

original performance periods ending on 30 April 2021 and 30 April 2022 respectively were

forfeited due to the Merger as the performance conditions would not be capable of being

measured on the same basis and the remaining 54,187 options were permitted to vest on their

respective, original vesting dates subject only to the remaining service conditions detailed under

the outstanding awards section below. As Martin Ward joined the Board in February 2020, his

firstawards were granted in August 2020 and will be eligible to vest subject to performance

to30 April 2023. Therefore, no LTIP awards were due to vest based on performance to

30 April2022.

LTIP awards made during the year (audited)

On 9 August 2021, the following LTIP awards were granted to executive Directors:

Type of award

Basis of

award

granted

Share price

foraward

Number of

shares over

which award

was granted

Face value of

award (£)

% of face value

that would

vest on

threshold

performance

Vesting

determined by

performance

over

M Ward

Nominal

cost option

150% of

salary of

£591,600 429p 206,853 887,400 25%

Three

financial

years to 30

April 2024

P Vincent

Nominal

cost option

150% of

salary of

£382,100 429p 133,601 573,150 25% As above

The share price for award was calculated based on a three day average prior to the award grant.

These awards are subject to the following performance targets, which were set in the context of

uncertainty regarding COVID recovery:

Weighting

Threshold target

(25% vesting)

Stretch target

(100% vesting) End measurement point

PBT 50% £130m £145m Final year of the performance period

EPS 50% 39.60p 44.20p Final year of the performance period

Percentage change in remuneration levels

The table below sets out the percentage change in base salary, value of taxable benefits

andbonus for all the Directors compared with the average percentage change for employees

ofthe Company.

Average percentage change 2021–2022 Average percentage change 2020–2021

Salary

Taxable

benefits Annual bonus Salary

Taxable

benefits Annual bonus

M Ward 15% 12% 28% 620% 387% n/a

P Vincent 13% 8% 8% 2% (14%) n/a

A Palmer-Baunack 20% n/a n/a 31% n/a n/a

J Pattullo 3% n/a n/a 5% n/a n/a

M Butcher 3% n/a n/a 65% n/a n/a

J Davies 3% n/a n/a 504% n/a n/a

M McCafferty 3% n/a n/a 466% n/a n/a

Company employees 44% (70%) 2015% (6%) 11% (87%)

The above table shows the movement in the salary, benefits and annual bonus for Directors

compared to that for the average employee of the Company as required under legislation. It does

not reflect the total average for the Group. As there are only a small number of employees in the

Company, the average pay calculation is meaningless as it can be easily skewed by a change in

composition of staff and this is the reason for the increase in average salary and bonus during

theyear. The average increase in salary for the wider UK workforce was 3%.

The average percentage changes in remuneration in FY2022 included the impact of the

paywaivers accepted by the Directors during the COVID-19 period in the prior year and

aspreviously disclosed.

Annual bonus for Company employees is the amount paid in each year, whereas the Directors’

bonus is the amount earned in each period as the information on Company employees’ bonus

amounts is not available at the date of this report.

Payments to past Directors

There were no payments to past Directors during FY2022.

Payments for loss of office

There were no payments for loss of office during FY2022.

CEO to employee pay ratio

The table on page 77 sets out the ratio of the CEO’s single figure of total remuneration to the total

remuneration of the 25th percentile, median (50th percentile), and 75th percentile remuneration of

our UK employees.

The Committee has chosen to use the average UK employees as a comparator as it feels that it

provides a more appropriate reflection of the earnings of the average worker than the Group’s

total wage bill which can be distorted by movements in the number of employees and variations

in wage practices in Spain.

76 Redde Northgate plc Annual Report and Accounts 2022

Option A of the Companies (Miscellaneous Reporting) Regulations 2018 has been used to

calculate the ratio as it was considered to provide the most accurate basis of calculation. Full-time

equivalent remuneration for all UK employees for the financial year has been used for pay periods

across the year as adjusted for joiners and leavers. Total remuneration has been prepared using

the same methodology as the single figure table with the exception of the bonus. The bonus

figure for employees is based on the amount paid in each year as the information on employees

bonus amounts is not available at the date of this report whereas the bonus included in the single

figure table is the amount earned in each period.

Financial Year Method

25th percentile

pay ratio Median pay ratio

75th percentile

pay ratio

2022 Option A 63:1 51:1 35:1

2021 Option A 57:1 45:1 30:1

2020 Option A 64:1 53:1 37:1

2019 Option A 47:1 38:1 26:1

Salary and total remuneration details for the relevant individuals are set out as follows:

CEO

£000

25th percentile

£000

Median

£000

75th percentile

£000

2022

Salary £592 £20 £25 £33

Total remuneration £1,440 £23 £28 £41

The employees at the 25th, 50th and 75th percentile have been determined by reference to

average employee pay across the Group for the financial year being reported on.

The ratio of total remuneration of the CEO compared to the UK workforce has widened in the year due

to the bonus achievement of the CEO. The CEO’s salary has increased in line with the wider workforce.

The Committee has responsibility for setting the remuneration of the executive Directors and

other senior management and reviews the wider policies and practices for our workforce. The

Committee is satisfied that the median pay ratio is consistent with the Group’s pay, reward and

progression policies.

Performance graph measured by TSR

The graph below illustrates the performance of Redde Northgate plc measured by Total

Shareholder Return (share price growth plus dividends reinvested in shares) against a ‘broad

equity market index’ over the last ten years from 30 April 2012 to 30 April 2022. As the Company

has been a constituent of the FTSE SmallCap index for the majority of that time, that index

(excluding investment companies) is considered to be the most appropriate benchmark.

Consistent with the approach adopted in previous years, we show performance against the FTSE

250. The mid-market price of the Company’s Ordinary shares at 30 April 2022 was 397p (30 April

2021: 364p). The range during the year was 345p to 443p.

Total shareholder return

The graph shows the value, at 30 April 2022, of £100 invested in Redde Northgate plc on 30 April

2012, compared with the value of £100 invested in the FTSE 250 index (excl. investment trusts) on

the same date. The other points plotted are the values at intervening financial year ends. The

FTSE 250 index (excl. investment trusts) is considered an appropriate comparison as Redde

Northgate plc is a constituent of the index. In previous years, the FTSE SmallCap (excl. investment

trusts) was also included in the graph. However, as Redde Northgate plc is no longer a constituent

ofthis index, it is not considered appropriate to include this index in the graph. This data is sourced

from Refinitiv.

FTSE 250 (Excl. Inv. Trusts) Index

Source: Reﬁnitiv

Redde Northgate plc

30 Apr

2013

30 Apr

2012

350

300

250

200

150

100

30 Apr

2014

30 Apr

2015

30 Apr

2016

30 Apr

2017

30 Apr

2018

30 Apr

2020

30 Apr

2019

30 Apr

2021

30 Apr

2022

Total remuneration for CEO

The total remuneration figure for the CEO during each of the previous ten financial years

isasfollows:

Year ended 30 April 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total remuneration £000 859 628 1,138 1,214 821 490 1,032 1,319 1,200 1,440

Annual bonus

(%ofmaximum) – 43.6 90.3 34.1 – – 72.4 – 100 100

Long term incentive (EPSP)

vesting* (%ofmaximum) 33.3 – 47.9 79.2 61.8 – – – – –

The total remuneration figure includes the annual bonus and EPSP awards which vested based on

performance periods ending in those years. The annual bonus and EPSP percentages show the

pay-out foreach year as a percentage of the maximum. In years when there was a change of CEO,

the figures shown are the aggregate for the office holders during that year and include any

payments for loss of office.

Relative importance of spend on pay

2021 2022 % increase

Staff costs £000 195,074 227,744 17%

Dividends £000 24,928 43,897 76%

Share buybacks £000 – 7,493 N/A

The table above shows the movement in spend on staff costs versus that in dividends and

sharebuybacks.

Annual report on remuneration continued

77 Redde Northgate plc Annual Report and Accounts 2022

Annual report on remuneration continued

Outstanding share awards

The table below sets out details of executive Directors’ outstanding share awards.

M Ward

Scheme Grant date

Exercise price

(p)

Shares at 30

April 2021

Number of

shares granted

during the year

Vested during

year

Exercised

during

year

Lapsed

during

year

Forfeited

during

year

Number of

shares at 30

April 2022

End of original

performance

period Vesting date Exercise period

EPSP

13.08.20 Nil 778,315 – – – – – 778,315 30.04.23 13.08.23 13.08.23 – 13.08.30

EPSP

09.08.21 Nil – 206,853 – – – – 206,853 30.04.24 09.08.24 09.08.24 – 09.08.31

Total 778,315 206,853 – – – – 985,168

P Vincent

Scheme Grant date

Exercise price

(p)

Shares at 30

April 2021

Number of

shares granted

during the year

Vested during

year

Exercised

during

year

Lapsed

during

year

Forfeited

during

year

Number of

shares at 30

April 2022

End of original

performance

period Vesting date Exercise period

EPSP

27.07.18 Nil 27,995 – 27,995 – – – 27,995 30.04.21 27.07.21 27.07.21 – 27.07.28

EPSP

24.09.19 Nil 26,192 – – – – – 26,192 30.04.22 24.09.22 24.09.22 – 24.09.29

EPSP

13.08.20 Nil 476,382 – – – – – 476,382 30.04.23 13.08.23 13.08.23 – 13.08.30

EPSP

09.08.21 Nil – 133,601 – – – – 133,601 30.04.24 09.08.24 09.08.24 – 09.08.31

Total 530,569 133,601 – – – – 664,170

Performance targets as set out above.

A proportion of these awards were adjusted and forfeited following the Merger in order to remove the proportion not expected to vest based on forecast performance. No remaining performance conditions remain other than the

on-going service obligation.

Performance targets set out in prior year Annual Report.

All outstanding awards are structured as nil-cost options.

SAYE

The Board believes that encouraging wider share ownership by all staff will have longer term

benefits for the Company and therefore introduced a SAYE in 2020 with the first saving period

commencing in February 2021. The SAYE provides an effective way of achieving that aim at no

financial risk to employees.

Under the SAYE employees choose to make monthly savings amounts (paid to a financial

institution) in return for options to buy shares in the Company at the option price and use savings

accumulated over the savings period (typically three years). Employees can choose to cease

saving and withdraw their money at any time (including at the end of the savings period) allowing

the related options to lapse.

Options over 2,003,552 shares were granted in February 2021, with 1,161 employees contributing

at an average saving rate of £102 per month. The next offer to take part in the SAYE scheme is

expected to be made after the announcement of the FY2022 financial results.

The executive Directors are entitled to participate in the SAYE scheme but the Non-executive

Directors cannot participate in this scheme.

Executive Directors were not granted any SAYE awards during FY2022.

Sourcing of shares

A combination of newly issued, treasury and market purchase shares (using a Guernsey employee

benefit trust) may be used to satisfy the requirements of the Group’s existing share schemes.

Overall plan limits and clawback

All the Company’s share schemes operate within the following limits: in any 10 calendar year

period, the Company may not issue (or grant rights to issue) more than:

a. 10% of the issued Ordinary share capital under all the share plans; and

b. 5% of the issued Ordinary share capital under the executive share plans

(EPSP,DABPandMPSP).

The dilution position as at 30 April 2022 was 1.5% under the EPSP, MPSP and DABP, and 2.6%

under all schemes.

In line with current best practice guidelines, the Committee has introduced recovery and

withholding provisions into the rules of all discretionary schemes, which can be invoked in the

event of a number of situations including error, financial misstatement, gross misconduct,

reputational damage, failure of risk management and corporate failure, with the last three events

applying to awards granted from 2020 only.

78 Redde Northgate plc Annual Report and Accounts 2022

Annual report on remuneration continued

Directors’ shareholding and share interests

The executive Directors are required to build up a shareholding equivalent to 200% of salary, to

beachieved primarily through the retention, after tax, of shares acquired on exercise of options

granted under the long term incentive share plan and shares acquired through bonus deferral,

until such time as their share ownership requirement has been met. Directors are not required

togo into the market to purchase shares, although market purchases are encouraged and any

shares so acquired would count towards meeting the guidelines.

The Chairman and non-executive Directors do not have a shareholding guideline although the

holding of shares in the business is encouraged. Details of the Directors’ interests in shares are

shown in the table below:

Share interests (audited)

Number of shares:

Beneficially

owned at

30April2022

Vested but not

exercised EPSP Not vested EPSP

% shareholding

guideline

achieved at

30April 2022

M Ward 1,647,308 – 985,168 fully met

P Vincent 59,301 27,995 636,175 31% unmet

A Palmer-Baunack 110,442 – – N/A

J Pattullo 30,000 – – N/A

M Butcher 24,676 – – N/A

J Davies – – – N/A

M McCafferty 11,007 – – N/A

Martin Ward has met the shareholding policy guideline as he holds shares with a value in excess

of 200% of basic annual salary.

Philip Vincent has not yet met the shareholding guideline given the levels of variable pay awards

vesting since his appointment on 16 July 2018. The Committee normally expects the guideline to

be achieved within five years of appointment.

Martin Ward’s shareholding includes 38,329 of shares awarded in July 2021 under the EAB annual

bonus scheme. Philip Vincent’s shareholding includes 23,460 of shares awarded in July 2021 and

15,674 of shares awarded in September 2020 under the EAB annual bonus scheme. The EAB

shares vested immediately but are held in trust for three years following the date of award in

accordance with the scheme rules.

No changes in the above interests have occurred between 30 April 2022 and the date of thisreport.

Operation of policy for FY2023

There are no significant changes to the implementation of the policy proposed for FY2023.

Base salaries

The executive Directors’ salaries will be revised as follows.

Salary as at

1May2021

Salary as at

1May2022 Increase

M Ward 591,600 609,348 3%

P Vincent 382,100 393,563 3%

The proposed increases in salary are in line with increases for the wider workforce of 3%.

Annual bonus

For FY2023, the annual bonus maximum opportunity is 125% of salary for CEO and 100% of salary

for the CFO.

In line with previous years, the bonus will be determined as to:

– 75% PBT;

– 25% a range of strategic and operational objectives.

The Committee has chosen not to disclose, in advance, the performance targets for the annual

bonus as these include items which the Committee considers commercially sensitive. Full

retrospective disclosure of the targets and performance against them will be provided in next

year’s annual report on remuneration.

The Committee will have the discretion under the new policy to adjust the bonus outcome if it is

not deemed appropriate, for example, in terms of the underlying performance of the Company.

EPSP awards to be granted in 2022

Award levels for 2022 will be made at 150% of salary for the CEO and CFO (150% in the prior year)

and will be made after release of the preliminary results.

Vesting of EPSP awards will be dependent upon the achievement of certain suitably challenging

performance measures against targets which will be disclosed when the awards are made. It is

expected that those targets will be set on a similar basis to the awards in the prior year, which

were weighted as 50% against underlying PBT and 50% against underlying EPS.

Fees for the Chairman and Non-executive Directors

The fees for the Non-executive Directors have been reviewed with effect from 1 May 2022.

Non-executive Directors’ base fees have been increased by 3%, with the exception of Avril

Palmer-Baunack, who has waived this increase. The fees are as set out below.

Fee as at

1May2021

Fee as at

1 May 2022 Increase

Chairman £200,000 £200,000 0%

Base fee £55,000 £56,650 3%

Senior Independent Director £10,000 £10,000 0%

Audit Committee Chairman £10,000 £10,000 0%

Remuneration Committee Chairman £10,000 £10,000 0%

Approval

This annual report on remuneration has been approved by, and signed on behalf of,

theBoardofDirectors.

John Pattullo

Chairman of the Remuneration Committee

6 July 2022

79 Redde Northgate plc Annual Report and Accounts 2022

Report of the Directors

The Directors present their report and the

audited consolidated accounts for the year

ended 30 April 2022.

Results and preparation

Details on financial performance and dividends

can be found in the Strategic Report from

pages 1 to 53.

This report has been prepared in accordance

with requirements outlined within The Large

and Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008 and

forms part ofthe management report as

required under Disclosure Guidance and

Transparency Rule (DTR) 4. This section,

together with the Strategic Report, the

Corporate Governance section on pages 54 to

84 and the other sections of the Annual Report

as referred to herein, fulfils the requirements

ofthe Directors’ report.

Strategic Report

The Strategic Report on pages 1 to 53 was

approved by the Board on 6 July 2022

andisincorporated into this Directors’ report

byreference.

Close company status

So far as the Directors are aware, the close

company provisions of the Income and

Corporation Taxes Act 2010 do not apply

totheCompany.

Articles of Association

Articles of Association (the Articles) may

onlybe amended by special resolution of the

shareholders. With regard to the appointment

and replacement of Directors, the Company

isgoverned by the Articles, the UK Corporate

Governance Code, the Companies Act 2006

and related legislation. The powers of Directors

are set out in the Articles.

Share capital

Details of the issued share capital, together

with details of any movements during the

year,are shown in Note 25 to the financial

statements. The Company has one class of

Ordinary share which carries no right to fixed

income. Each Ordinary share carries the right to

one vote atgeneral meetings of the Company.

The Company has also issued cumulative

Preference shares of 50p each that entitle

theholder to receive a cumulative preferential

dividend at the rate of 5% on the paid up capital

and the right to a return of capital at either

winding up or a repayment of capital. The

cumulative Preference shares do not entitle

theholders to any further or other participation

in the profits or assets of the Company.

The percentage of the issued nominal value

ofthe Ordinary shares is 98.3% (2021: 98.3%)

ofthe total issued nominal value of all

sharecapital.

Share rights

No shareholder shall be entitled to vote at a

general meeting, either in person or by proxy,

inrespect of any share held by them unless all

monies presently payable by them in respect

ofthat share have been paid. In addition, no

shareholder shall be entitled to vote, either in

person or by proxy, if they have been served

with a notice under section 793 of the

Companies Act 2006 (concerning interests

inthose shares) and has failed to supply the

Company with the requisite information.

Other than restrictions considered to be

standard for a UK listed company (for example,

restrictions on partly paid certificated shares),

There are no specific restrictions on the size of

a holding nor on the transfer of shares, which

are both governed by the general provisions

ofthe Articles of Association (the Articles) and

prevailing legislation. The Directors are not

aware of any agreements between holders

ofthe Company’s shares that may result in

restrictions on the transfer of securities or

onvoting rights.

Details of employee share schemes are set out

inthe Remuneration report. Shares held by the

Company’s Share Schemes Trustees are voted

on the instructions of the employees on whose

behalf they are held. Shares in the Guernsey

Trust are voted at the discretion of the Trustees.

No person has any special rights of control

over the Company’s share capital and all

issued shares are fully paid.

Directors’ interests

Details of the Directors’ interests in shares are

set out in the Remuneration Report on pages

67 and 79. No company in the Group was,

during or at the end of the year, party to any

contract of significance in which any Director

was materially interested. The Directors are

notaware of any agreements between the

Company and its Directors or employees that

provide for compensation for loss of office

oremployment that occurs because of a

change of control.

Authority to issue shares

Subject to the provisions of the Companies

Act2006 and without prejudice to any rights

attached to any existing shares or class of

shares, any share may be issued with such

rights or restrictions as the Company may by

ordinary resolution determine or, subject to

and in default of such determination, as the

Board shall determine.

The authority conferred on the Directors at last

year’s AGM to allot shares in the Company up

to a maximum nominal amount of £40,974,222

(representing 33.3% of the issued share capital

of the Company (excluding treasury shares) as

at the latest practicable date before publication

of the Notice of the Company’s last AGM) and,

in connection with a pre-emptive offer to

existing shareholders by way of a rights issue,

to allot a additional shares in the Company up

to a maximum nominal amount of £40,974,222

(representing a further 33.3% of the issued

share capital of the Company (excluding

treasury shares) as at the latest practicable

date before publication of the Notice of the

Company’s last AGM), expires on the date of

the forthcoming AGM. Shareholders will be

asked to give a similar authority to allot shares

at the forthcoming AGM.

The authority conferred on the Directors at

lastyear’s AGM to allot shares in the Company

and/or to sell ordinary shares held by the

Company as treasury shares for cash as if the

pre-emption provisions of Section 561(1) of the

Companies Act 2006 did not apply, limited to:

– firstly, an aggregate nominal amount

of£6,152,285, representing approximately

5%ofthe current issued Ordinary share

capital; and

– secondly, a further 5% of the Company’s

Ordinary share capital, provided that this

additional power is only used in connection

with acquisitions and specified capital

investments which are announced

contemporaneously with the issue or

whichhave taken place in the preceding

sixmonth period and are disclosed in the

announcement of the issue, will expire at the

end of the Company’s next AGM or, if earlier,

at the close of business on 20 November

2022. The Company will seek a similar

authority at its next AGM.

80 Redde Northgate plc Annual Report and Accounts 2022

Authority to purchase shares

The authority for the Company to purchase

inthe market up to 24,609,142 of its ordinary

shares (representing 10% of the issued share

capital of the Company as at the latest

practicable date before publication of the

Notice of the Company’s last AGM) granted

atthe Company’s last AGM, expires on the date

of the forthcoming AGM. Shareholders will be

asked to give a similar authority to purchase

shares at the forthcoming AGM.

Shares purchased by the Company

The Group’s objective is to employ a

disciplined approach to investment, returns

and capital efficiency to deliver sustainable

compounding growth. Reflecting this approach

and in light of the Company’s substantial

headroom under its facilities and target

leverage, on 15 March 2022 the Company

launched a share buyback programme

oftheCompany’s Ordinary shares for up

toamaximum aggregate consideration of

£30m (the Programme). The Company has

entered into an agreement with Numis

pursuant to which it is intended that Numis

willpurchase up to a maximum of 24 million

Ordinary shares on the Company’s behalf.

Under the Programme the repurchased

Ordinary shares will be held in treasury.

Itisexpected that the Programme will

becompleted by 15 September 2022.

As at 30 April 2022, in furtherance of the

Programme, the Company had bought

1,825,991 of its Ordinary shares of 50p

each(having an aggregate nominal value of

£912,995.50 and representing 0.0074% of the

called-up share capital of the Company as at

30 April 2022) for an aggregate consideration

of £7,478,022, which was also the maximum

number (and nominal value) of Ordinary

sharesso acquired and held at any time

bytheCompany during the year. No such

Ordinary shares were disposed of or

cancelledby the Company.

Interests in shares

As at 30 April 2022, the Company is aware of

the following persons who, either directly or

indirectly, hold 3% or more of the issued share

capital of the Company:

30 April 2022 %

FIL Limited* 20,300,963 8.24

Richard Griffiths 17,784,481 7.28

Aberforth Partners* 17,451,690 7.14

Schroders plc* 16,024,709 6.56

Lombard Odier

Investment Management* 15,630,425 6.39

BlackRock* 13,207,116 5.40

Artemis Investment

Management LLP* 11,944,882 4.89

Vanguard Group* 11,256,874 4.61

JO Hambro Capital

Management* 10,219,378 4.18

Dimensional Fund

Advisors* 8,798,638 3.60

Janus Henderson

Investors* 7,902,593 3.23

* information obtained from the Company’s share

Directors

Details of the present Directors are listed on

pages 56 and 57. Resolutions to reappoint each

of the Directors in office at the date

ofthisreport will be proposed at the AGM.

Termination provisions in respect of executive

Directors’ contracts can be found in the

Remuneration report, starting on page 67.

Directors’ indemnities

As permitted by the Company’s Articles,

qualifying third party indemnities for each

Director of the Company were in place

throughout their periods of office during the

year and, for those currently in office, remained

in force as at the date of signing of this report.

The Company’s Articles are available on the

Company’s website:

www.reddenorthgate.com

Employee consultation and

disabledemployees

The disclosures surrounding employee

engagement and disabled employees are

included within our ESG report on pages 36 to

50.

Employee and other stakeholder

engagement

Details of Directors’ engagement with

employees and other stakeholders are

included within the Strategic Report, as part

ofour ESG report, on pages 36 and 50.

Details on how the Directors have discharged

their duties under Section 172(1) of the

Companies Act 2006 are included on

pages52to 53.

Future developments

Details of likely future developments affecting

the Group are included within the CEO review

on pages 4 to 10 and included within Our

strategy on pages 15 to18.

Dividends

Subject to approval, the Directors are

recommending a final dividend of 15.0p

pershare (2021: 12.0p) which will be paid

on30 September 2022 to shareholders

ontheregister as at close of business

on2 September2022.

Political donations

No political donations were made by any

Group company in the year.

Subsidiaries

As a Group our interests and activities are

operated through subsidiaries in the UK, Spain

and Ireland, and are subject to the laws and

regulations of these jurisdictions.

There are no overseas branches.

Significant agreements

The Group’s financing facilities are subject to

change of control provisions (see Note 21 in the

financial statements).

Research and development

The Group carries out research and

development necessary to support its principal

activities as a mobility solutions provider.

Energy & carbon reporting

The disclosures regarding greenhouse gas

emissions, energy consumption and energy

efficiency actions included in the Companies

Act 2006 (Strategic Report and Directors’

Report) Regulations 2018 are included in the

Impact focus section of the Strategic Report on

page 41.

Remuneration report

The Directors’ Remuneration report contains:

– a statement by John Pattullo, Chairman of the

Remuneration Committee;

– the Directors’ remuneration policy; and

– the annual report on remuneration, which

sets out payments made in the financial year

ended 30 April 2022.

The statement by the Chairman and

Annualreport on remuneration will be

puttoanadvisory shareholder vote

byordinaryresolution.

The Directors’ Remuneration report can be

found on pages 67 to 79 and is incorporated

inthis Directors’ report by reference.

Disclosure of information under

ListingRule9.8.4

Dividend waiver arrangements are in place

forthe employee trusts.

Report of the Directors continued

81 Redde Northgate plc Annual Report and Accounts 2022

Report of the Directors continued

Length of notice of general meetings

The minimum notice period permitted by

theCompanies Act 2006 for general meetings

of listed companies is 21 days, but the Act

provides that companies may reduce this

period to 14 days (other than for AGMs)

provided that two conditions are met. The

firstcondition is that the Company offers a

facility for shareholders to vote by electronic

means. This condition is met if the Company

offers afacility, accessible to all shareholders,

toappoint a proxy by means of a website.

Aseparate notice of AGM has been issued

toallshareholders which includes details

ofthe Company’s arrangements for electronic

proxy appointment. The second condition

isthat there is an annual resolution of

shareholders approving the reduction of the

minimum notice period from 21 days to 14 days.

A resolution to approve 14 days as the

minimum period of notice for all general

meetings of the Company other than AGMs

willbe proposed at the AGM. The approval

willbe effective until the Company’s next

AGM,when it is intended that the approval

berenewed.

It is the Board’s intention that this authority

would not be used as a matter of routine

butonly when merited by the circumstances

ofthe meeting and in the best interests

ofshareholders.

Financial instruments

Details of the Group’s use of financial

instruments are given in the Financial review

onpages 21 to 25 and in Note 31 to the

financialstatements.

Important events

Details of important events affecting the

Company since the end of the financial year

are set out in Note 33 of the financial

statements on page 142.

Auditors

In the case of each of the persons who are

Directors of the Company at the date when

thisreport was approved:

– so far as each of the Directors is aware, there

is no relevant audit information of which the

Company’s auditors are unaware; and

– each of the Directors has taken all the steps

that they ought to have taken as a Director

tomake himself aware of any relevant audit

information (as defined) 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 Companies Act 2006.

A resolution for the appointment of PwC

asauditors of the Company will be proposed

atthe forthcoming AGM. This proposal is

supported by the Audit Committee.

The Directors’ Report, comprising the

Corporate Governance Report and the reports

of the Audit and Remuneration Committees,

has been approved by the Board and signed

on its behalf.

By order of the Board

James Kerton

Company Secretary

6 July 2022

82 Redde Northgate plc Annual Report and Accounts 2022

Statement of Directors’ responsibilities in respect of the financial statements

The Directors are responsible for preparing

theAnnual Report and the financial

statementsin accordance with applicable

lawand regulation.

Company law requires the Directors to prepare

financial statements for each financial year.

Under that law the Directors have prepared the

Group and the Company financial statements

inaccordance with UK-adopted international

accounting standards.

Under company law, 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 Group and

Company and of the profit or loss of the group

for that period. In preparing the financial

statements, the Directors are required to:

– select suitable accounting policies and

thenapply them consistently;

– state whether applicable UK-adopted

international accounting standards have

beenfollowed, subject to any material

departures disclosed and explained in the

financial statements;

– make judgements and accounting estimates

that are reasonable and prudent; and

– prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and Company will

continue in business.

The Directors are responsible for safeguarding

the assets of the Group and Company and

hence for taking reasonable steps for the

prevention and detection of fraud and

otherirregularities.

The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and

Company’s transactions and disclose with

reasonable accuracy at any time the financial

position of the group and company and enable

them to ensure that the financial statements

and the Directors’ Remuneration Report

comply with the Companies Act 2006.

The Directors are responsible for the

maintenance and integrity of the company’s

website. Legislation in the United Kingdom

governing the preparation and dissemination of

financial statements may differ from legislation

in other jurisdictions.

Directors’ confirmations

– The Directors consider that the Annual

Reportand accounts, taken as a whole,

isfair,balanced and understandable and

provides the information necessary for

shareholders to assess the group’s and

company’s position and performance,

business model and strategy.

– Each of the Directors, whose names

andfunctions are listed in the Corporate

Governance section confirm that, to the

bestof their knowledge:

– The Group and Company financial

statements, which have been prepared in

accordance withUK-adopted international

accounting standards, give a true and fair

view of the assets, liabilities and financial

position of the Group and Company, and of

the profit of the Group; and

– The Report of the Directors includes a fair

review of the development and performance

of the business and the position of the Group

and Company, together with a description

ofthe principal risks and uncertainties that

itfaces.

– In the case of each Director in office at the

date the Directors’ report is approved:

– So far as the Director is aware, there is no

relevant audit information of which the

group’s and company’s auditors are

unaware;and

– they have taken all the steps that they

oughttohave taken as a Director in order

tomake themselves aware of any relevant

audit information and to establish that the

Group’sand Company’s auditors are aware

ofthat information.

By Order of the Board

Martin Ward

Chief Executive Officer

6 July 2022

83 Redde Northgate plc Annual Report and Accounts 2022

Independent auditors’ report to the members of Redde Northgate plc

Report on the audit of the financial statements

Opinion

In our opinion, Redde Northgate plc’s Group financial statements and company financial statements (the “financial statements”):

– give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 April 2022 and of the Group’s profit and the Group’s and Company’s cash flows for the year then ended;

– have been properly prepared in accordance with UK-adopted international accounting standards; and

– have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise: the Group and Company balance sheets as at 30 April 2022; the

consolidated income statement, the Group and Company statements of comprehensive income, the Group and Company cash flow statements, and the Group and Company statements of changes

in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’

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 remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as

applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in Note 6, we have provided no non-audit services to the Company or its controlled undertakings in the period under audit.

Our audit approach

Overview

Audit scope

– The Group is organised into 12 reporting components and the Group financial statements are a consolidation of these reporting components.

– Of the 12 components we identified three which, in our view, required a full scope audit either due to their size or risk characteristics, one of these was audited by the Group engagement team.

– There is one significant component based overseas, Northgate España Renting Flexible S.A, and one other in the UK, Auxillis Services Limited, which have been audited by PwC component auditors.

– Specific audit procedures were performed over a further 3 reporting components due to their contributions to the financial statement line items in the Group financial statements. These include

procedures over cash and bank balances, external loans, interest costs, dividends paid, property, plant and equipment, lease liabilities, operating expenses and payroll costs.

– As a result of this scoping we obtained coverage over 81% of the consolidated revenues and 86% of the consolidated profit before tax, exceptional items and amortisation on acquired intangible

assets.

– In addition, as part of our audit we made enquiries of management to understand the process they adopted to assess the potential impact of climate change risk on the consolidated financial

statements. Management have included their assessment of the impact of climate change within their goodwill impairment assessment as explained in Note 13. We used our knowledge of the

Group to evaluate management’s assessment and based on our assessment we have not identified any findings that would impact our key audit matters. We discussed with management the ways in

which climate change disclosures should continue to evolve as the Group continues to develop its response to the impact of climate change. We also considered the consistency of the disclosures in

relation to climate change made in the other information within the Annual Report with the financial statements and our knowledge from our audit.

Key audit matters

– Determining appropriate depreciation rates for vehicle assets held for hire (Group)

– Claims due from insurance companies and self-insuring organisations, incorporating revenue recognition (Group)

– Recoverability of investments in subsidiary undertakings and amounts owed by subsidiary undertakings (Parent)

Materiality

– Overall group materiality: £7,500,000 (2021: £4,700,000) based on 5% of profit before tax, exceptional items and amortisation on acquired intangible assets.

84 Redde Northgate plc Annual Report and Accounts 2022

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– Overall company materiality: £15,000,000 (2021: £2,500,000) based on 1% of total assets, (2021: the company was a full scope component of the group audit and its materiality was capped due

togroup materiality allocation). A number of financial statement line items in the company, that are in-scope for the Group consolidation, are audited to a capped allocated component materiality

ofa lower amount.

– Performance materiality: £5,625,000 (2021: £3,525,000) (Group) and £11,250,000 (2021: £1,900,000) (Company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, 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, and any comments we make on the results of our procedures thereon, 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.

This is not a complete list of all risks identified by our audit.

The recoverability of investments in Group undertakings and amounts receivable from Group undertakings is a new key audit matter this year. Impact of COVID-19, which was a key audit matter last

year, is no longer included because of the improved situation since the issuance of the previous annual report, including the proven effectiveness of the vaccine and the appetite of the current

administration towards further lockdowns, which suggests the continued impact of COVID-19 will be minimal. Otherwise, the key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Determining appropriate depreciation rates for vehicle assets held for hire (group)

The Group has a total of £888.9m (2021: £893.3m) of vehicle assets held for hire with a

depreciation charge totalling £158.7m (2021: £161.2m). The Group adopts an accounting policy

that uses depreciation rates based on estimated useful lives with the anticipation that the net

book value of these vehicle assets approximates to their market value at the time of disposal.

This policy seeks to minimise any significant gains or losses upon disposal of the vehicle

assets. This policy requires management to make an estimate of what the residual value will

be at the time of disposal. Determining likely residual values for future vehicle disposals is

judgemental and requires a number of judgments and estimates to be made, including the

age, condition, the method of selling a vehicle and expected future market conditions, such as

forecast levels of supply and demand. Further explanation is included in the Group’s critical

accounting judgements and key sources of estimation uncertainty in Note 3 and the Report of

the Audit Committee on pages 62 to 66. The disclosures in respect of vehicle assets held for

hire are shown in Notes 2, 3 and 15.

We have obtained management’s model to support the depreciation rates selected and confirmed its mathematical accuracy.

We examined management’s assumptions of expected future market values of hire vehicles, taking into account the various

judgements used in the calculation of future residual values by reference to an external third-party industry data point for

current prices, and testing managements adjustments from this. In addition we performed sensitivities on the residual values

used by management. We performed detailed testing of the calculations supporting the estimates and judgements taken by

management, including comparison to recent actual market prices achieved on disposal of similar vehicles, assessing the

remaining impact of previous depreciation rate changes, and performing sensitivities using alternative depreciation rates. We

have assessed management’s assumptions in respect of the future changes to the vehicle hire fleet, including expected

infleets, defleets and purchase pricing. We also considered the adequacy of the Group’s disclosures in respect of the

estimation uncertainty in setting appropriate depreciation rates. Based on the procedures performed, we were able to obtain

sufficient audit evidence in respect of the judgements and estimates applied by management in determining the depreciation

rates used.

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Key audit matter How our audit addressed the key audit matter

Claims due from insurance companies and self-insuring organisations, incorporating

revenue recognition(Group)

Within the Redde operating segment the Group recognises contract assets amounting to

£193.8 million (2021: £144.7 million) on claims due from insurance companies and self-insuring

organisations which are subject to the insurance claims being settled. As such, revenue

recognised in respect of these claims represents variable consideration and is subject to a

variable consideration adjustment which takes into account the settlement risk. This includes

historical and expected collection rates, as well as the aged profile of amounts due. The

assumptions underlying the calculation of the variable consideration adjustment, as well as

the adjustments made, involve significant judgement and therefore impact both the carrying

value of the associated assets and revenue recognised in relation to the associated claims.

We determined that the valuation of outstanding claims,which incorporates the variable

consideration adjustment,has a high degree of estimation uncertainty, with a potential range

of reasonable outcomes greater than our materiality for the financial statements as a whole,

and possibly many times that amount. Further explanation of the estimation uncertainty is

included in the critical accounting judgements and key sources of estimation uncertainty in

Note 3 and the Report of the Audit Committee on pages 62 to 66.

We assessed the accounting policy and approach to recognising revenue to ensure it was consistent with the principles of IFRS

15 ‘Revenue from contracts with customers’ and in particular variable consideration. We reperformed the calculation within the

model from the input data such as the ageing and recovery rates. We assessed and challenged the key assumptions used by

management to derive the variable consideration adjustment, taking into account historical collection rates for individual

insurers for each category of claim and any outliers within the data. We assessed whether there was any contradictory

evidence which could call in question the assumptions made and we corroborated explanations provided to supporting

information or evidence. We formed an independent view of the adequacy of the variable consideration adjustment, by

obtaining invoice and settlement data since January 2016. We used this data to analyse the historical collection performance

ofmonthly cohorts of invoices for each category of claim and derive an expectation of the potential settlement of claims

outstanding at the balance sheet date. We also requested management perform a look back test, by assessing the outcome

ofcash settlements in the period against the assumptions made in determining the variable consideration adjustment at the

previous balance sheet date. Using the historical recovery rates and aging profiles we calculated an auditors range as of the

expected provision required. The results of this look back test have been disclosed in the financial statements within Note 19,

receivables and contract assets. We have considered the adequacy of the disclosures in respect of estimation uncertainty

included within the financial statements. Based on the procedures above, we concluded that the level of the provision held

atthe balance sheet date was reasonable.

Recoverability of investments in subsidiary undertakings and amounts owed by subsidiary

undertakings(parent)

The Company has significant investments in respect of acquisitions made across various

subsidiaries amounting to £445.6m (2021: £443.5m) and amounts owed from subsidiary

undertakings amounting to £1,053.6m (2021: £995.2m). The recoverable amount of the

subsidiary is impacted by various factors, a number of which are outside of Redde Northgate’s

control, which could affect whether results are in line with expectations. Where a subsidiary

has been subject to poor historical performance, there is a risk around the recoverability of

this investment. There is inherent uncertainty and judgement in forecasting future cash flows

which are above more recent results, and therefore this is a particularly judgement area of the

audit. Amounts due from Group undertakings are considered as part of management’s IFRS 9

expected credit loss assessment. The disclosures in respect of investments in subsidiary

undertakings and amounts owed by subsidiary undertakings are shown in Notes 2, 16 and 19.

We evaluated management’s process for assessing impairment triggers for investments in subsidiary undertakings and

management’s IFRS 9 expected credit loss model in respect of amounts owed by subsidiary undertakings.

We have undertaken the following in respect of the investment in subsidiary undertakings:

• Compared historical performance to historical forecasts to assess accuracy in the budget process;

• Key inputs are assessed, for example discount rates, inflation and forecast revenues and costs;

• We engaged with PwC experts to assess the discount rate; and

• We performed sensitivity analysis on the forecasts, including downside scenarios to assess headroom.

• Assessed the Group’s budgeting procedures as a basis for value in use calculations;

We have considered management’s approach to the expected credit loss assessment of each of the counterparty balances,

agreeing inputs to counterparty entity accounting records and considering the risk of default. We have also considered the

adequacy of the disclosures in respect of investments in subsidiary undertakings and amounts receivable from subsidiary

undertakings. We are satisfied with management’s conclusion on the carrying value of investments and amounts due from

subsidiary undertakings.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and

the company, the accounting processes and controls, and the industry in which they operate.

The Group is organised into 12 reporting components and the group financial statements are a consolidation of these reporting components. The reporting components vary in size and we identified

three components, in the UK and Spain, that required a full-scope audit of their financial information due to either their size or risk characteristics, one of these was audited by the Group engagement

team. There is one significant component based overseas, Northgate España Renting Flexible S.A, and one in the UK, Auxillis Services Limited, which have been audited by PwC component auditors.

Audit procedures were performed over a further 3 reporting components due to their contributions to the financial statement line items in the group financial statements. These include procedures

over cash and bank balances, external loans, interest costs, dividends paid, property, plant and equipment, lease liabilities, operating expenses and payroll costs. All other audit work was completed

by the Group audit team. On the remaining components we performed analytical procedures to respond to any potential risks of material misstatement to the Group.

Our audit scope was determined by considering the significance of each component’s contribution to profit before tax,exceptional items and amortisation on acquired intangible assets, and individual

financial statement line items, with specific consideration to obtaining sufficient coverage over significant risks. As a result of this scoping we obtained coverage over 81% of the consolidated revenues

and 86% of the consolidated profit before tax, exceptional items and amortisation on acquired intangible assets. The Group engagement team were significantly involved at all stages of the

component audits by virtue of numerous communications throughout, including the issuance of detailed audit instructions and review and discussions of the audit approach and findings, in particular

86 Redde Northgate plc Annual Report and Accounts 2022

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over our areas of focus. The Group audit team met with local management and the component audit teams and attended their clearance meetings. In addition, we reviewed the component team

reporting results and their supporting working papers, which together with the additional procedures performed at group level, gave us the evidence required for our opinion on the financial

statements as a whole. Our audit procedures at the group level included the audit of the consolidation, goodwill and other intangible assets, investments in associates, taxes and certain aspects

ofIFRS 16 ‘Leases’. The Group engagement team also performed the audit of the Company.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine

the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Name Financial statements – group Financial statements – company

Overall materiality £7,500,000 (2021: £4,700,000). £15,000,000 (2021: £2,500,000).

How we determined it 5% of profit before tax, exceptional items and amortisation on acquired intangible assets 1% of total assets. A number of financial statement line items in the company, that

are in-scope for the Group consolidation, are audited to a capped allocated

component materiality of a lower amount. In 2021 the company was a full scope

component of the group audit and its materiality was capped due to group

materiality allocation.

Rationale for

benchmark applied

Based on the benchmarks used in the Annual Report, profit before tax, exceptional items and amortisation on

acquired intangible assets is the primary measure used by the shareholders in assessing the performance of

the group, and is a generally accepted auditing benchmark. We have chosen this as our benchmark as it is a

key performance measure disclosed to users of the financial statements. This figure takes prominence in the

Annual Report, as well as the communications to both the shareholders and the market, and an element of

management remuneration is linked to this performance measure. Based on this it is considered appropriate

to use the adjusted profit before tax figure for the year as an appropriate benchmark

We believe that total assets are considered to be appropriate as it is not a profit

oriented company. The Company is a holding company only and therefore total

assets is deemed a generally accepted auditing benchmark. As mentioned

above, a number of financial statement line items related to cash and cash

equivalents, loans, interest costs and dividends of the company are included in

the scope of the Group audit and were audited to a lower capped materiality.

However, we determined that the company did not require a full scope audit of its

complete financial information for the purposes of the Group audit.

For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across components was between £3m

and £5.5m. Certain components were audited to a local statutory audit materiality that was also less than our overall Group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we

use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining

sample sizes. Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to £5,625,000 (2021: £3,525,000) for the Group financial statements and £11,250,000

(2021: £1,900,000) for the Company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded

that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £375,000 (Group audit) (2021: £230,000) and £750,000 (Company audit)

(2021: £230,000) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of accounting included:

– We obtained from management their latest assessments supporting their conclusions with respect to the going concern basis of preparation of the financial statements;

– We evaluated the historical accuracy of the budgeting process to assess the reliability of the data;

– We evaluated management’s base case forecast and downside scenarios, and challenged the adequacy and appropriateness of the underlying assumptions;

– In conjunction with the above we have also reviewed management’s analysis of both liquidity, including the group’s available financing and maturity profile, and covenant compliance to satisfy

ourselves that no breaches are anticipated over the period of assessment;

87 Redde Northgate plc Annual Report and Accounts 2022

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– We reviewed management accounts for the financial period to date and checked that these were consistent with the starting point of management’s forecasts, and supported the key assumptions

included in the assessment; and

– We have reviewed the disclosures made in respect of going concern included in the 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’s and

the 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.

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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the company’s ability to continue as a going concern.

In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the

financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information,

which includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Our opinion on the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are

required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

With respect to the Strategic report and Report of the Directors, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic report and Report of the Directors

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Report of the Directors for the year ended 30 April 2022 is consistent with the

financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report

and Report of the Directors.

Directors’ Remuneration

In our opinion, the part of the Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate governance statement relating to the company’s

compliance with the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information

are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is materially consistent with the financial statements

and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:

– The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

– The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated;

– The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any

material uncertainties to the Group’s and Company’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;

– The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and why the period is appropriate; and

88 Redde Northgate plc Annual Report and Accounts 2022

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– The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of its

assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the Directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit and only consisted of making inquiries and considering the

Directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is

consistent with the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

– The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the group’s

and company’s position, performance, business model and strategy;

– The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

– The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s compliance with the Code does not properly disclose a departure from

arelevant provision of the Code specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the Directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the Directors are responsible for the preparation of the financial statements in accordance

with the applicable framework and for being satisfied that they give a true and fair view. The Directors are also responsible for such internal control as they 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 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 Company or to cease operations, or have no realistic alternative

buttodo so.

Auditors’ 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 auditors’ 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.

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.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to tax legislation and the Companies Act 2006, and

we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation

ofthe financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate revenue and financial

performance and management bias included within accounting judgements and estimates. The Group engagement team shared this risk assessment with the component auditors so that they could

include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the Group engagement team and/or component auditors are included within this report:

– Review of board minutes, discussions with management, internal audit and the Group’s legal function, including consideration of known or suspected instances of non-compliance with laws and

regulations and fraud;

– Evaluation of management’s controls designed to prevent and detect fraudulent financial reporting;

– Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations including to revenue;

– Assessing management’s significant judgements and estimates in particular to those relating to the determination of depreciation rates for vehicles held for hire and claims due from insurance

companies and self-insuring organisations; and

– Reviewing financial statement disclosures and testing to supporting documentation, where appropriate, to assess compliance with applicable laws and regulations.

89 Redde Northgate plc Annual Report and Accounts 2022

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There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related

toevents and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number

ofitems for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit

samplingto enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other

purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where

expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

– we have not obtained all the information and explanations we require for our audit; or

– adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

– certain disclosures of directors’ remuneration specified by law are not made; or

– the company financial statements and the part of the Remuneration report to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the directors on 17 June 2015 to audit the financial statements for the year ended 30 April 2016 and subsequent

financial periods. The period of total uninterrupted engagement is 7 years, covering the years ended 30 April 2016 to 30 April 2022.

Other matter

As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements form part of the ESEF-prepared annual financial report filed on the

National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether

theannual financial report has been prepared using the single electronic format specified in the ESEF RTS.

Jonathan Greenaway (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Newcastle upon Tyne

6 July 2022

90 Redde Northgate plc Annual Report and Accounts 2022

Financial

Statements

91 Redde Northgate plc Annual Report and Accounts 202291 Redde Northgate plc Annual Report and Accounts 2022

Consolidated income statement

Note(s)

2022

£000

2021

£000

Revenue: hire of vehicles 5 5 63, 288 515 ,5 66

Revenue: sale of vehicles 5 1 49,93 9 229,809

Revenue: claims and services 5 530,330 3 6 4 ,1 24

Total revenue 5 1 , 243 , 557 1 ,10 9,49 9

Cost of sales (8 9 7, 3 4 9) (856 ,955)

Gross profit 346, 208 252 ,544

Administrative expenses (excluding exceptional items and amortisation onacquired intangible assets) (182 , 20 4) (1 4 7, 0 9 2 )

Exceptional administrative expenses: impairment of property, plant and equipment 15, 29 – (4, 3 41)

Exceptional administrative expenses: reversal of previous impairment of property, plant and equipment 15 29 2 ,998 1, 304

Exceptional administrative expenses: other costs 29 (690) (4, 98 0)

Amortisation on acquired intangible assets 14 (19,778) (19, 513)

Total administrative expenses (199,67 4) (1 74 , 6 2 2)

Operating profit 6 146, 534 7 7, 9 2 2

Share of net profit of associates accounted for using the equity method 17 3,866 4,364

Gain on bargain purchase 4, 29 355 1,489

EBIT 5 1 50 ,75 5 83 ,7 75

Finance income 34 16 4

Finance costs 8 (18, 10 0) (16 ,76 0)

Profit before taxation 132 ,689 6 7, 1 7 9

Taxatio n 9 (31 ,1 44) (1,613)

Profit for the year 101 , 54 5 65,56 6

Profit for the year is wholly attributable to owners of the Parent Company. All results arise from continuing operations.

Earnings per share

Basic 11 41 .3p 26 .6p

Diluted 11 40. 4p 26 . 2p

Throughout this report we refer to underlying results in order to allow management and other stakeholders to better compare the performance of the Group between periods. For a reconciliation of

underlying to reported results see pages 26 and 27.

For the year ended 30 April 2022

92 Redde Northgate plc Annual Report and Accounts 2022

Statements of comprehensive income

For the year ended 30 April 2022

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Amounts attributable to the owners of the Parent Company

Profit attributable to the owners 101 , 54 5 65,56 6 47,189 58,028

Other comprehensive (expense) income

Foreign exchange differences on retranslation of net assets of subsidiary undertakings (16 , 347) 338 – –

Net foreign exchange differences on long term borrowings held as hedges 11 ,904 (2,019) – –

Foreign exchange difference on revaluation reserve 28 (4 1) (1) – –

Net fair value gains on cash flow hedges – 184 – 184

Deferred tax charge recognised directly in equity relating to cash flow hedges – (35) – (35)

Total other comprehensive (expense) income (4, 4 84) (1 ,533) – 149

Total comprehensive income for the year 9 7, 0 6 1 64,033 47,189 58,177

All items will subsequently be reclassified to the consolidated income statement. Profit attributable to the owners of the Parent Company includes amortisation of intangible assets.

93 Redde Northgate plc Annual Report and Accounts 2022

Balance sheets

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Non-current assets

Goodwill 13 114,92 6 1 14,503 – –

Other intangible assets 14 151 , 312 1 70, 8 30 – 10

Property, plant and equipment 15 1,1 61, 91 5 1,083,920 – –

Deferred tax assets 24 3 , 175 4, 826 1,589 1,068

Investments 16 – – 445,600 443,546

Interest in associates 17 5,8 43 6 ,0 47 – –

Total non-current assets 1 , 4 3 7, 1 7 1 1 , 38 0,12 6 447,189 444,624

Current assets

Inventories 18 18,696 21 ,545 – –

Receivables and contract assets 19 359,053 3 02,3 49 1,054,052 996,113

Current tax assets 7, 4 3 2 – – -

Cash and bank balances 24, 561 11,169 35 –

Total current assets 4 0 9 , 74 2 335,063 1,054,087 996,113

Total assets 1,846,913 1,7 15,189 1,501,276 1,440,737

Current liabilities

Trade and other payables 20 246 ,83 3 229 ,666 369,091 332,738

Current tax liabilities 3, 327 562 – –

Lease liabilities 22 52, 524 32, 375 – –

Short term borrowings 21 21 , 007 1 2,159 8,265 4,200

Total current liabilities 323,691 27 4,762 377,356 336,938

Net current assets 86 ,051 6 0,3 01 676,731 659,175

Non-current liabilities

Trade and other payables 20 4,5 09 3, 848 – –

Lease liabilities 22 111 ,755 96,0 93 – –

Long term borrowings 21 421 ,82 2 400,885 421,822 401,028

Deferred tax liabilities 24 38 , 375 31 , 472 – –

Total non-current liabilities 576 , 46 1 532, 298 421,822 401,028

Total liabilities 900, 15 2

807,060

799,178 737,9 66

Net assets 94 6 , 761 9 08,1 29 702,098 702,771

As at 30 April 2022

94 Redde Northgate plc Annual Report and Accounts 2022

Balance sheets continued

As at 30 April 2022

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Equity

Share capital 25 12 3,0 46 123 ,04 6 123,046 123,046

Share premium account 26 113 , 510 11 3, 510 113,510 113,510

Treasury shares reserve 27 (7, 4 9 3) – (7,493) –

Own shares reserve 27 (16 ,439) (6,460) – –

Translation reserve 28 (8,633) (4,1 90) – –

Other reserves 28 330, 435 330,47 6 325,030 325,030

Retained earnings

At 1 May 3 5 1 , 74 7 3 10,2 82 141,185 105,555

Profit for the financial year 101 , 54 5 65,56 6 47,189 58,028

Other changes in retained earnings (40, 9 57) (24, 101) (40,369) (22,398)

At 30 April 412 , 335 3 5 1 , 74 7 148,005 141,185

Total equity 94 6 , 761 9 08,1 29 702,098 702,771

Total equity is wholly attributable to the owners of the Parent Company (Company number 00053171). A profit of £47,189,000 (2021: £58,028,000) is dealt with in the financial statements of the

Company. Thefinancial statements on pages 92 to 142 were approved by the Board of Directors and authorised for issue on 6 July 2022.

They were signed on its behalf by:

Philip Vincent

Chief Financial Officer

95 Redde Northgate plc Annual Report and Accounts 2022

Cash flow statements

Group Company

Note

2022

£000

2021

£000

2022

£000

2021

£000

Net cash generated from (used in) operations (a) 1 2 7, 6 4 3 1 3 7, 8 7 8 (10,276) (24,731)

Investing activities

Interest received 34 16 4 1,418 666

Dividends received from subsidiary undertakings – – 73,542 78,521

Loans (to) from subsidiary undertakings – – (38,625) 84,640

Distributions from associates 17 4 ,0 70 4,3 25 – –

Acquisitions of business 4 (853) (10, 823) – –

Cash acquired on acquisitions 371 – – –

Proceeds from disposal of vehicles for credit hire and other property, plant and equipment 2, 683 3 5,9 19 – –

Purchases of other property, plant and equipment (52, 369) (7 ,460) – –

Purchases of intangible assets (1, 373) (1,83 4) – –

Net cash (used in) generated from investing activities (4 7, 4 3 7 ) 2 0,2 91 36,335 163,827

Financing activities

Dividends paid (43 , 897) (24, 9 28) (43,897) (24,928)

Receipt of bank loans and other borrowings 318 ,056 2 7, 1 9 5 318,056 –

Repayments of bank loans and other borrowings (2 7 7, 6 1 7) (10 9,7 12) (281,817) (61,495)

Debt issue costs paid (5,42 8) (520) (5,428) (520)

Exceptional finance costs (1 ,435) – – –

Principal element of lease payments under IFRS 16 (2 7, 9 5 9) (16,9 94) – –

Principal element of lease payments under HP obligations (1 5 , 70 0) (37,814) – –

Payments to acquire treasury shares (7, 4 9 3) – ( 7,493) –

Payments to acquire own shares for share schemes (9,933) (5 , 073) (9,933) (5,073)

Net cash (used in) financing activities (71 , 406) ( 1 6 7, 8 4 6) (30,512) (92,016)

Net increase (decrease) in cash and cash equivalents 8,800 (9,67 7) (4,453) 47,080

Cash and cash equivalents at 1 May 6,821 16,78 0 (4,200) (50,853)

Effect of foreign exchange movements 148 (282) 423 (427)

Cash and cash equivalents at 30 April (b) 1 5, 76 9 6 ,821 (8,230) (4,200)

For the year ended 30 April 2022

96 Redde Northgate plc Annual Report and Accounts 2022

Notes to the cash flow statements

For the year ended 30 April 2022

(a) Net cash generated from (used in) operations

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Operating profit (loss) 146, 534 7 7, 9 2 2 (12,474) (7,0 5 4)

Adjustments for:

Depreciation of property, plant and equipment 1 9 7, 1 6 2 191 ,60 9 – –

Net impairment of property, plant and equipment (2,998) 3,037 –

Amortisation of intangible assets 20,7 71 2 0,198 10 19

Loss on disposal of vehicles for credit hire and other property, plant and equipment 581 195 – –

Loss on disposal of intangible assets 34 31 – –

Share options fair value charge 3,695 2, 518 3,695 2,518

Operating cash flows before movements in working capital 36 5, 7 79 295 ,510 (8,769) (4,517)

Increase in non-vehicle inventories (1, 169) (1,407) – –

(Increase) decrease in receivables (54, 400) (69) 11,019 4,570

Increase (decrease) in payables 22, 253 (9 ,011) 98 (11,795)

Decrease in provisions – (4 , 57 7) – –

Cash generated from (used in) operations 332 ,463 28 0,4 46 2,348 (11,742)

Income taxes paid, net (2 7, 3 8 2) (1 2, 678) – –

Interest paid (13 ,275) (14,945) (12,624) (12,989)

Net cash generated from (used in) operations before purchases ofandproceeds from disposal of vehicles for hire 291 ,806 252, 823 (10,276) (24,731)

Purchases of vehicles for hire (292 , 935) (3 03, 537) – –

Proceeds from disposals of vehicles for hire 128 ,772 188, 592 – –

Net cash generated from (used in) operations 1 2 7, 6 4 3 1 3 7, 8 7 8 (10,276) (24,731)

Additions in relation to vehicles for hire are recognised within net operating cash, Additions in relation to other property, plant and equipment are recognised as investing activities.

(b) Cash and cash equivalents

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Cash and cash equivalents comprise:

Cash and bank balances 24, 561 11,169 35 –

Bank overdrafts (8 ,792) (4, 3 4 8) (8,265) (4,200)

Cash and cash equivalents 1 5 ,76 9 6 ,821 (8,230) (4,200)

Cash and bank balances are stated gross of arrangements that exist with lenders to pool accounts and offset balances.

97 Redde Northgate plc Annual Report and Accounts 2022

Statements of changes in equity

(b) Cash and cash equivalents continued

Group

Share capital

and share

premium

£000

Treasury shares

reserve

£000

Own shares

reserve

£000

Hedging

reserve

£000

Translation

reserve

£000

Other

reserves

£000

Retained

earnings

£000

Total

£000

Total equity at 1 May 2020 236, 556 – (3,090) (149) (2, 509) 330,477 310,28 2 87 1 , 567

Share options fair value charge – – – – – – 2,51 8 2, 518

Share options exercised – – – – – – (1 , 703) (1 , 703)

Dividends paid – – – – – – (24 , 92 8) (24 ,9 28)

Net purchase of shares – – (5 ,07 3) – – – – (5 ,07 3)

Transfer of shares on vesting of share options – – 1 , 703 – – – – 1 , 703

Deferred tax on share based payments recognised in equity – – – – – – 12 12

Total comprehensive income (expense) – – – 14 9 (1 ,681) (1) 65,56 6 6 4,03 3

Total equity at 30 April 2021 and 1 May 2021 236, 556 – (6,460) – (4, 19 0) 330,47 6 3 5 1 , 74 7 90 8.129

Share options fair value charge – – – – – – 3,695 3,69 5

Share options exercised – – – – – – (5 88) (58 8)

Dividends paid – – – – – – (4 3, 8 97) (4 3 ,8 97)

Net purchase of shares – (7 ,493) (10, 567) – – – – (1 8,0 60)

Transfer of shares on vesting of share options – – 588 – – – – 588

Deferred tax on share based payments recognised in equity – – – – – – (167) (167)

Total comprehensive income (expense) – – – – (4,443) (41) 101 ,5 45 9 7, 0 6 1

Total equity at 30 April 2022 236,556 (7, 4 9 3) (16,43 9) – (8, 633) 33 0,43 5 41 2, 335 94 6, 76 1

Company

Share capital

and share

premium

£000

Hedging

reserve

£000

Treasury shares

reserve

£000

Other

reserves

£000

Retained

earnings

£000

Total

£000

Total equity at 1 May 2020 236,556 (149) – 325,030 105,555 666,992

Share options fair value charge – – – – 2,518 2,518

Dividends paid – – – – (24,928) (24,928)

Deferred tax on share based payments recognised in equity – – – – 12 12

Total comprehensive income – 149 – – 58,028 58,177

Total equity at 30 April 2021 and 1 May 2021 236,556 – – 325,030 141,185 702,771

Share options fair value charge – – – – 3,695 3,695

Net purchase of shares – – (7,493) – – (7,493)

Dividends paid – – – – (43,897) (43,897)

Deferred tax on share based payments recognised in equity – – – – (167) (167)

Total comprehensive income – – – – 47, 1 8 9 47,189

Total equity at 30 April 2022 236,556 – ( 7,493) 325,030 148,005 702,098

¹ Further details can be found within Note 25 and 26.

² Further details can be found within Note 27.

³ Other reserves comprise the other reserve, capital redemption reserve, revaluation reserve and merger reserve, further details of which can be found within Note 28.

For the year ended 30 April 2022

98 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements

1 General information

Redde Northgate plc is a public limited company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 145 of this

report. The nature of the Group’s operations and its principal activities are set out in the Strategic Report on pages 1 to 53.

The financial statements are presented in UK Sterling because this is the currency of the primary economic environment in which the Group operates. Foreign operations are included inaccordance

with the policies set out in Note 2.

2 Principal accounting policies

Statement of compliance

The financial statements have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies

reporting under those standards.

Basis of preparation

The financial information has been prepared on the historical cost basis, except for the revaluation of certain financial instruments.

On 31 December 2020, IFRS as adopted by the European Union at that date were brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject

to endorsement by the UK endorsement Board. Redde Northgate plc transitioned to the UK-adopted International Accounting Standards in its Company financial statements on 1 May 2021. This

change constitutes a change in accounting framework. However, there is no impact recognition, measurement or disclosure in the period reported as a result of the change in framework. The financial

statements of Redde Northgate plc have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 applicable to

companies reporting under those standards.

With the exception of new accounting standards outlined below, all other accounting policies have been applied consistently.

The recognition and measurement of assets and liabilities considers the impact of climate-related matters which could reasonably be assumed to impact their value including in the assessment of

potential impairment of assets (Note 13).

Going concern

The financial statements have been prepared on the going concern basis as the Directors have a reasonable expectation that the Group has adequate resources for a period of at least 12 months from

the date of approval, having reassessed the principal and emerging risks facing the Group and determined that there are no material uncertainties to disclose.

The Directors’ assessment of the Group’s ability to continue as a going concern includes an assessment of cash flow forecasts which incorporate an estimated impact of the current macroeconomic

environment on the Group. This includes the consideration of a number of severe but plausible scenarios recognising the degree of uncertainty that continues to exist. Over the COVID period in 2020

and 2021, overall profitability and cash generation of the Group increased due to the resilience of the business model. A separate COVID type scenario has therefore not been included as a downside

case.

In November 2021, the Group issued €375m of loan notes expiring between November 2027 and November 2031 and repaid the existing €100m loan notes. At the same time the Group extended its

banking facilities maturity date from November 2023 to November 2025, which provides committed facilities of £475m. At 30 April 2022, there was £382m of headroom against the Group’s borrowing

facilities.

Changes in accounting policy

The following new standards, interpretations and amendments to standards are mandatory for the Group for the first time for the year ended 30 April 2022:

Amendments to the following standards:

– IFRS 7, IFRS 4 and IAS 16 “Interest rate benchmark reform – phase 2”

– IFRS 4 “Insurance Contracts – deferral of IFRS 9”

– IFRS 16 “Leases – COVID-19 related rent concessions”

The Group has considered the above amendments to published standards and has concluded that these have no impact on the Group.

There are no further standards that have been issued but are not yet effective that would have a material impact on Group.

99 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continuedNotes to the financial statements continued

2 Principal accounting policies continued

Basis of consolidation

Subsidiary undertakings are entities controlled by the Group. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability

to affect those returns through its power over the subsidiary. The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to

30 April 2021 and 30 April 2022.

On acquisition, the assets, liabilities and contingent liabilities ofa subsidiary undertaking are measured at their fair values atthe date of acquisition. Any excess of the cost of acquisition over the fair

values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition)

is credited to the income statement in the period of acquisition.

Where necessary, adjustments are made to the financial statements of subsidiary undertakings to bring the accounting policies used into line with those used by the Group. All intra-Group

transactions, balances, income and expenses areeliminated on consolidation.

Revenue recognition

Hire of vehicles

Revenue from the hire of vehicles is recognised under IFRS16and as such is recognised evenly over the hire period.

Other Group revenue is measured and recognised in accordance with IFRS 15 at the fair value of consideration received or receivable from contracts with customers in respect of sale of used vehicles,

the supply of related goods and services in the normal course of business and claims and services net of value added tax and discounts.

Sale of vehicles

Revenue from the sale of used vehicles is derived from the resale of vehicles for hire purchased by the Group and is recognised at the point in time when the control is transferred. Revenues from the

supply of related goods and services arerecognised at the point which they are provided. Where cashis received in advance of customers collecting or taking delivery of vehicles, revenue is deferred

until such point that the performance obligation within the contract is met.

Claims and services

Revenue is recognised on the basis of contractual performance obligations following the five step model under IFRS 15 and is the consideration to which the Group expects to be entitled based on

contractual terms and customary business practice (after applying the variable consideration constraint), net of VAT and other sales taxes. Where more thanone service is provided under a single

arrangement, theconsideration receivable is allocated to the identifiable services on the basis of a relative stand-alone selling price of the individual service.

Credit hire revenue is recognised from the date a vehicle is placed on hire, over time as the performance obligation is completed. Each performance obligation is the provision of anindividual vehicle

for the needed duration and is satisfied as the hire takes place. Vehicles are only supplied and remain on credit hire after a validation process that assesses to the Group’s satisfaction that liability for

the accident rests with anotherparty. The rates used are based on daily commercial tariffs for particular categories of vehicles and are accrued on a daily basis, by claim, after adjustment for variable

consideration to the expected settlement value, for an estimation of the extent to which insurers are entitled or expected to take advantage of the terms of the protocols that are in place.

The Group also receives late payment fees where relevant claims are not settled within the terms of any protocol arrangements or other agreements. Such charges are not recognised at the time of

the hire transaction as they would beat significant risk of reversal; rather they are recognised onsettlement of the related claim.

Credit repair revenue represents income from the recovery of the costs of repair of customers’ vehicles carried out by third party body shops. Each performance obligation for this service is the repair

of an individual vehicle and is satisfied over time as this repair takes place. Credit repair revenue is recognised based on a reasonable estimate of the cost and stage of completion of the repair services

at the reporting date. Credit repair revenue is reported after adjustment for variable consideration to the expected settlement value. The Group records credit repair revenue on a principal basis as the

service is controlled by the Group, which has primary responsibility for its provision. Managed repair revenue is recorded at a point in time when the repair is started based onthe contractual value of

each repair, net of discounts, VATand other sales related taxes.

Fleet and incident management revenue represents amountschargeable, net of VAT, in respect of fleet and incident management and other related services provided tocustomers. The Group’s

performance obligations include various services related to the management of a fleet of vehicles, and revenue is recognised over time or at a point in time, depending on the individual service, as or

when these obligations are performed. Where more than one service isprovided under a single arrangement, the consideration receivable is allocated to the identifiable services on the basisof the

relative stand-alone selling price of the individual service. In providing fleet and incident management services, the Group acts either as principal or agent. This is differentiated by the extent to which

the Group has controlover the service provided, primary responsibility forproviding the service and discretion in establishing pricing. Where there are circumstances that do not meet the above

criteria, and therefore the Group isnot the principal in providing the service, revenue is accounted for on a net basisand comprises fees for processing services. Where the Group is acting as a

principal,revenue is accounted for gross.

100 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Revenue in respect of legal services represents amounts chargeable, net of VAT, in respect of legal services to customers. The Group’s performance obligation is the provision of legal services, and

revenue is recognised at a point in time when the case is settled or, in the case of interim and processing fees, over time as the legal work required to process the case is completed. Revenue in

respect of cases which are contingent upon future events which are outside the control of the Group is not recognised until the contingent event has occurred and the performance obligation has

been completed. Revenue in relation to legal services is valued atthe expected recoverable amount, after due regard to non-recoverable time. Expected recoverable amount is based on chargeable

time less any anticipated write offs prior to completion. No value is placed on work in progress in respect of contingent fee cases until there is virtual certainty as to the receipt of cash flows, either

through an interim fee or through the outcome of cases, to justify the recognition of an asset. Certain costs incurred and associated with partnerships and directly relating to the activities of the Group’s

legal services are held as prepayments until the corresponding benefits accrue to the business.

Other accident management activities represent ancillary revenue streams, including hire of vehicles other than on acredit hire basis and the provision of outsourced fleet accident management

services. Revenue for other accident management activities is recorded as the performance obligation is completed, over time or at a point in time depending on the nature of the service, at the fair

value oftheconsideration received or receivable, net of discounts, VAT and other sales related taxes.

Expected adjustment arising on settlement of claims

By their very nature, claims against motor insurance companies or self-insuring organisations can be subject todispute, and are therefore considered to be variable consideration. On initial recognition,

thisconsideration is adjusted to exclude any revenue at significant risk of reversal. As described above, the Group records revenue net of potential reversal on the settlement of claims, which reflects

the Group’s estimate of the expected recoverable amounts from insurers. The Group reassesses the amounts of variable consideration at the balance sheet date reflecting the latest information

available on the settlement of claims in the period.

The Group’s estimation of the amounts of revenue arising onsettlement of claims is calculated with reference to a number of factors, including the Group’s historical experience of collection levels,

itsanticipated collection profiles and analysis of the current profile of the claims against insurance companies. Although in principle this is determined by reference to individual cases, in practice the

homogeneous nature of most claims means that the level of adjustment iscalculated by reference to specific categories of claim.

Contract assets – Claims due from insurance companiesand self-insuring organisations

Credit hire and credit repair contract assets and claims in progress are stated at the expected net claim value, which isafter a variable consideration adjustment for an estimation of the extent to which

insurers are entitled or expected to takeadvantage of settlement arrangements afforded under protocol agreements and an estimation of the expected adjustments arising on the settlement of

claims. At the end ofeach reporting period the Group updates the estimated claim values, to reflect the Group’s most recent estimation ofamounts ultimately recoverable. Any further variable

consideration adjustments arising from such subsequent vision of the Group’s expected claim values are recorded inthe income statement against revenue.

Government grants

Government grants are recognised when there is reasonable assurance that we will comply with the conditions attached, and that the grant will be received. Government grants are recognised in the

income statement on a systematic basis over the period in which the related costs, which they are intended to compensate, are recognised as expenses.

In the prior year, the Group had utilised the Coronavirus Job Retention Scheme, in which the UK Government reimbursed 80% of the wages of certain employees who were asked to stop working

(furloughed) during COVID-19, but who were retained as employees. These grants had been credited against Staff costs (Note 7).

Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the

acquisition date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control

of the acquiree. Acquisition related costs are recognised in the income statement as incurred.

At the acquisition date, the provisional identifiable assets acquired and the liabilities assumed are recognised at their fairvalue, except that:

– deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 and IAS 19 respectively; and

– liabilities or equity instruments related to share based payment arrangements of the acquiree or share based payment arrangements of the Group entered into to replace share based payment

arrangements of the acquiree are measured in accordance with IFRS 2 at the acquisition date.

Hindsight adjustments to the provisional identifiable assets acquired and the liabilities assumed are recognised within 12 months from the date of acquisition if necessary.

101 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Goodwill

Goodwill represents amounts arising on acquisition of subsidiary undertakings and is the difference between thefairvalue of consideration of the acquisition and the fair value of the net identifiable

assets and liabilities acquired.

Goodwill is stated at cost less any accumulated impairment losses identified through annual or other tests for impairment. Any impairment is recognised immediately in the income statement and is

not subsequently reversed. Where the fair value of consideration is less than the fair value of the net identifiable assets and liabilities acquired this gain on bargain purchase is recognised immediately

in the income statement.

Intangible assets – arising on business combinations

Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially attheir fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis

asintangible assets that are acquired separately. The estimated useful lives are as follows:

Customer relationships 5 to 13 years

Brands 3 to 15 years

Software 3 to 10 years

Intangible assets – other

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Software assets are amortised on a straight line basis over their

estimated useful lives, which range from 3 to 10 years.

Intangible assets in the course of construction are stated at cost less any impairment losses. Development costs are capitalised after the technical and commercial feasibility of the asset has been

established. Amortisation is not charged on assets in the course of construction. Amortisation commences when the asset is brought into use.

Interest in associates

The Group’s interests in associates, being those entities over which it has significant influence, and which are not subsidiaries, are accounted for using the equity method of accounting. Significant

influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Under the equity method, the interest in

associate is carried in the balance sheet at cost plus post acquisition changes in the Group’s share of net assets of the associate, less distributions received and less any impairment in the value of

individual investments. The Group income statement reflects the share of the associates’ results after tax.

Property, plant and equipment

Property, plant and equipment is stated at historical cost, less accumulated depreciation and any provision for impairment. Certain properties were revalued prior to the adoption of IFRS. These

valuations were treated as deemed cost at the time of adopting IFRS for the first time. Depreciation is provided so as to write off the cost of assets to residual values on a straight line basis over the

assets’ useful estimated lives as follows:

Freehold buildings 50 years

Leasehold buildings

50 years or over the life of the lease, whichever is shorter, unless

the entity expects to use the assets beyond the lease term

Plant, equipment and fittings 3 to 10 years

Vehicles for hire 3 to 12 years

Vehicles for credit hire 1 to 3 years

Motor vehicles 3 to 6 years

Vehicles for hire are depreciated on a straight line basis using depreciation rates that reflect economic lives of between 3 and 12 years, averaging around 6 years. These depreciation rates have been

determined with the anticipation that the net book values at the point the vehicles are transferred into inventories is in line with the open market values for those vehicles.

Notes to the financial statements continued

102 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Vehicles for credit hire are depreciated on a straight line basis using depreciation rates that reflect economic lives of between one and three years. These depreciation rates have been determined

with the anticipation that the net book values at the point the vehicles are sold are in line with the open market values for those vehicles.

The Group is required to review its depreciation rates and estimated useful lives regularly to ensure that the net book values of disposals of tangible assets are broadly equivalent to their market

values net of directly attributable selling costs.

Freehold land is not depreciated. On the subsequent sale or retirement of properties revalued prior to the adoption of IFRS, the attributable revaluation surplus remaining in the revaluation reserve

istransferred directly to retained earnings. The residual value, if not insignificant, is reassessed annually.

Investments in subsidiaries

Investments in subsidiaries are shown at cost less any provision for impairment.

Impairment

At each balance sheet date, the Group and Company reviews the carrying amounts of their tangible and intangible assets, including investments in subsidiaries, to determine whether there

isanyindication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairmentloss(ifany).

The recoverable amount is the higher of fair value less selling costs and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

An impairment loss is recognised in the income statement whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses recognised in respect of cash generating

units are allocated first to reduce the carrying amount of any goodwill allocated to cash generating units and then to reduce the carrying amount of other assets in the unit on a pro rata basis.

Where an impairment loss has been recognised in an earlier period, the Group reassesses whether there are any indications that such impairment has decreased or no longer exists. If an impairment

has decreased or no longer exists, an impairment reversal on assets other than goodwill is recognised in the income statement to the extent required.

Inventories

Used vehicles held for resale are valued at the lower of cost and net realisable value. Net realisable value represents the estimated selling price less costs to be incurred in marketing, selling and

distribution.

Other inventories comprise spare parts and consumables and are valued at the lower of cost and net realisable value using the first in, first out (FIFO) costing method.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year and any amounts outstanding in relation to previous years. Taxable profit differs from net profit as reported in the income statement

because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in

the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax

assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised

if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor

the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or

part of the asset to be recovered.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it

is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Current and deferred tax is charged or credited in the income

statement, except when it relates to items charged or credited directly to equity, in which case the current or deferred tax is also dealt with in equity.

103 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Financial instruments and hedge accounting

Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provision of the instrument.

Trade receivables are non-interest bearing and are initially stated at their fair value and subsequently at amortised cost less any appropriate provision for impairment. A provision for impairment of

trade receivables is recognised using a lifetime expected credit loss model which in principal uses objective evidence to justify that the Group will not be able to collect all amounts due according to

the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments

are considered indicators that the trade receivable is impaired. The amount of provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows,

discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income

statement within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts written off are

credited against operating expenses in the income statement.

Trade payables are non-interest bearing and are stated initially at their fair value and subsequently at amortised cost.

Amounts due from subsidiaries are initially stated at their fair value and subsequently at amortised cost less any appropriate provision for impairment.

A provision for impairment of amounts due from subsidiaries is recognised using a lifetime expected credit loss model which in principal uses objective evidence to justify that the Company will not

beable to collect all amounts due according to the original terms of the amounts due. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial

reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of provision is the difference between the asset’s carrying amount

and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the

amount of the loss is recognised in the income statement within operating expenses. When an amount due from a subsidiary is uncollectable, it is written off against the appropriate allowance

account. Subsequent recoveries of amounts written off are credited against operating expenses in the income statement.

The Group uses derivative financial instruments to hedge its exposure to interest and foreign exchange rate risks arising from operational, financing and investment activities. In accordance with its

treasury policy, the Group does not hold nor issue derivative financial instruments for trading purposes.

Derivative financial instruments are stated at fair value. Any gain or loss on remeasurement to fair value is recognised immediately in the income statement except where derivatives qualify for hedge

accounting, where recognition of the resultant gain or loss depends on the nature of the items being hedged.

The fair value of interest rate derivatives is the estimated amount that the Group would receive or pay to terminate the derivative at the balance sheet date, taking into account current interest rates

and the current creditworthiness of the derivative counterparties.

Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised in other comprehensive income and the ineffective portion

is recognised in the income statement. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item

is recognised in profit or loss, in the same line of the income statement as the recognised hedged item.

However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are

transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.

Hedge accounting for cash flow hedges is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, any cumulative

gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain

or loss recognised in equity is transferred to the income statement as a net profit or loss for the period.

Changes in the fair value of derivative financial instruments that are designated, and effective as net investment hedges are recognised directly in equity and the ineffective portion is recognised in the

income statement. Exchange differences arising on the net investment hedges are transferred to the translation reserve.

No derivative assets and liabilities are offset. Certain customer rebates, which will be settled in cash, are offset against the trade receivables balance until such time as these are settled.

Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and bank overdrafts. Cash at bank and in hand and bank overdrafts are shown gross irrespective of where accounts have a right of offset

within the same banking facility.

Notes to the financial statements continued

104 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Bank loans, other loans, loan notes and issue costs

Bank loans, other loans and loan notes are stated initially at fair value – the amount of proceeds after deduction of issue costs – and then subsequently at amortised cost. Finance charges, including

premiums payable on settlement or redemption and direct issue costs, are accounted for in the income statement on an accruals basis.

Foreign currencies

Transactions in foreign currencies other than UK Sterling are recorded at the rate prevailing at the date of the transaction. At each balance sheet date, monetary assets and liabilities that are

denominated in foreign currencies are retranslated at the rates prevailing at that date.

The net assets of overseas subsidiary undertakings are translated into UK Sterling at the rate of exchange ruling at the balance sheet date. The exchange difference arising on the retranslation of

opening net assets is recognised directly in equity. The results of overseas subsidiary undertakings are translated into UK Sterling using average exchange rates for the financial period and variances

compared with the exchange rate at the balance sheet date are recognised directly in equity. All other translation differences are taken to the income statement with the exception of exchange

differences on foreign currency borrowings that provide a hedge against Group equity investments in foreign enterprises, which are recognised directly in equity, together with the exchange

difference on the net investment in these enterprises.

Goodwill and fair value adjustments arising on acquisition of a foreign entity are treated as assets and liabilities of the foreign entity. They are denominated in the functional currency of the foreign

entity and translated at the exchange rate prevailing at the balance sheet date, with any variances reflected directly in equity.

All foreign exchange differences reflected directly in equity are shown in the translation reserve component of equity.

Leased assets

As Lessee:

For any new contracts entered into, the Group considers whether a contract is, or contains a lease.

A lease is defined as “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration”. To apply this definition, the Group

assesses whether the contract meets three key evaluations which are whether:

– the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;

– the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope

ofthecontract;and

– the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to direct “how and for what purpose” the asset

isusedthroughout the period of use.

Measurement and recognition of leases as a lessee

At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet.

The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and

remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Group depreciates the right-of-use assets on a straight line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease

term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is

readily available or the Group’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be

payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in

in-substance fixed payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected to account for short term leases and leases of low value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in

relation to these are recognised as an expense in profit or loss on a straight line basis over the lease term.

105 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

As Lessor:

Motor vehicles and equipment hired to customers are included within property, plant and equipment. Income from such leases is taken to the income statement evenly over the period of the

leaseagreement.

For other assets leased to third parties, like the sub-lease of property, the Group determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the

Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance

lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use

asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short term lease to which the Group applies the exemption described above, then it classifies the

sub-lease as an operating lease.

Retirement benefit costs

The Group operates defined contribution pension schemes. Contributions in respect of defined contribution arrangements are charged to the income statement in the period they fall due. Pension

contributions in respect of one of these arrangements are held in trustee administered funds, independently of the Group’s finances.

The Group also operates Group personal pension plans. The costs of these plans are charged to the income statement as they fall due.

Employee share schemes and share based payments

The Group issues equity settled awards to certain employees.

Equity settled employee schemes, including employee share options and deferred annual bonuses, provide employees with the option to acquire shares of the Company. Employee share options and

deferred annual bonuses are generally subject to performance or service conditions.

The fair value of equity settled payments is measured at the date of grant and charged to the income statement over the period during which performance or service conditions are required to be met

or immediately where no performance or service criteria exist. The fair value of equity settled payments granted is measured using the Black–Scholes or the Monte Carlo model. At the end of each

reporting period, the Group revises its estimate of the number of options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises the impact of the

revision to the original estimates, if any, in the income statement, with a corresponding adjustment to equity.

The Group also operates a share incentive plan under which employees each have the option to purchase an amount of shares annually and receive an equivalent number of free shares. The Group

recognises the free shares as an expense evenly throughout the period over which the employees must remain in employment of the Group in order to receive the free shares.

The Group operates a share save scheme under which employees have the option to convert savings to shares at an agreed exercise price. The Group recognises the option value evenly over the

savings period.

Interest income and finance costs

Interest income and finance costs are recognised in the income statement using the effective interest rate method.

Exceptional items and amortisation of acquired intangible assets

Items are classified as exceptional gains or losses where they are considered to be material or which individually or, if of a similar type, in aggregate, need to be disclosed by virtue of their size or

incidence if the financial statements are to be properly understood. Restructuring and exceptional costs are considered on a case by case basis as to whether they meet the exceptional criteria.

Thepresentation is consistent with the way financial performance is measured by management and reported to the Board.

Amortisation of acquired intangible assets is not classed as an exceptional item as it is recurring in nature. However, it is excluded from underlying results as it is considered non-operational and would

otherwise not present a clear understanding of underlying performance, as growth of the business is achieved organically and inorganically. The revenue and costs attached to those acquisitions are

included within underlying results.

Dividends

Dividends on Ordinary shares are recognised in the period in which they are either paid or formally approved, whichever is earlier.

Notes to the financial statements continued

106 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

2 Principal accounting policies continued

Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be

required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time

value of money and, where appropriate, the risks specific to the liability.

Own shares

The Group makes open market purchases of its own shares in order to satisfy the requirements of the Group’s existing share schemes. Own shares are recognised at cost as a reduction in shareholder

equity. The carrying values of own shares are compared with their market values at each reporting date and adjustments are made to write down the carrying value of own shares when, in the opinion

of the Directors, there is a significant market value reduction.

Treasury shares

The Group makes open market purchases of its own shares in order to fund future investment. When shares recognised as equity are repurchased, the amount of the consideration paid, which

includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. The acquired

sharesare initially recognised at historical cost and then at each reporting date, adjustments are made to write down the carrying value of own shares when, in the opinion of the Directors, there is a

significant market value reduction. When treasury shares are sold, reissued, or transferred to the own shares reserve subsequently, the amount received is recognised as an increase in equity and the

resulting surplus or deficit on the transaction is presented within share premium.

3 Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the Group’s accounting policies, which are described in Note 2, the Directors have made the following judgements that have the most significant effect on the amounts

recognised in the financial statements that will have an impact on the next 12 months.

Depreciation – vehicles for hire

Vehicles for hire are depreciated on a straight line basis using depreciation rates that reflect economic lives of between 3 and 12 years. These depreciation rates have been determined with the

anticipation that the net book values at the point the vehicles are transferred into inventories is in line with the open market values for those vehicles, after taking account of costs required to sell

thevehicles.

Under IAS 16 “Property, Plant and Equipment”, the Group is required to review its depreciation rates and estimated useful lives at least annually, to ensure that the net book value of disposals of

tangible assets are broadly equivalent to their market value.

Depreciation charges reflect adjustments made as a result of differences between expected and actual residual values of used vehicles, taking into account the further directly attributable costs to

sell the vehicles.

The Directors apply judgement in determining the appropriate method of depreciation (straight line) and are required to estimate the future residual value of vehicles with due consideration of market

conditions for sales including age, mileage and condition.

A 5% increase or decrease in the price of vehicles sold in the year would have had a £7.5m impact on the adjustment to depreciation charge for vehicles sold in the year. If the vehicles sold in the year

had been three months older at the point of removing from the fleet for sale, it is estimated that the adjustment to depreciation charge for vehicles sold in the year would have been £2.7m higher.

The impact of changes made to depreciation rates is outlined in the Financial review on pages 21 to 25.

Contract assets – claims due from insurance companies and self-insuring organisations

A key source of estimation uncertainty affecting the Group’s financial statements relates to the expected variable consideration adjustments arising on settlement of insurance claims.

Claims due from insurance companies and self-insuring organisations are stated at the expected net claim value, which is stated after allowance for an estimation of expected adjustments arising on

settlement of such claims.

Where necessary, the estimation of the expected adjustment arising on settlement of claims is revised, at each balance sheet date, to reflect the Group’s most recent estimation of variable

consideration amounts ultimately recoverable, which is constrained to exclude any revenue at significant risk of reversal. The estimation of any such expected adjustment represents a critical

judgement made by the Directors.

107 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

3 Critical accounting judgements and key sources of estimation uncertainty continued

The Group’s estimation of the expected adjustment arising on settlement of claims is calculated with reference to judgements made on a number of factors, including the Group’s historical experience

of collection levels, its anticipated collection profiles and analysis of the current profile of the portfolio of cases. Settlement risk arises on claims due from insurance companies and self-insuring

organisations due to their magnitude and the nature of the claims settlement process. The Group recovers its charges for vehicle hire and the cost of repair of customers’ vehicles from the insurer of

the at-fault party to the associated accident or, in a minority of claims, from the at-fault party direct where they are a self-insuring organisation. However, by their very nature, claims due from motor

insurance companies can be subject to dispute which may result in subsequent adjustment to the Group’s original estimate of the amount recoverable.

The carrying value of contract assets for claims from insurance companies at 30 April 2022 was £193,834,000 (2021: £144,738,000). A 3% difference between the carrying amount of claims in the

balance sheet and the amounts finally settled would lead to a £5.8m charge or credit to the income statement in subsequent periods, which the Directors consider to be the estimation uncertainty

thatwill impact results in the next 12 months.

The Group manages this risk by ensuring that vehicles are only supplied and remain on hire and repairs to customers’ vehicles are carried out after a validation process that ensures to the Group’s

satisfaction that liability for the accident rests with another party. In the normal course of its business the Group uses three principal methods to conclude claims: through the use of protocol

agreements, by negotiation with the insurer of the at-fault party where the claim is not covered by a protocol agreement and where a claim fails to settle because negotiations have been fruitless,

bylitigation. The vast majority of these claims settle before or on the threat of litigation, but where they do not, formal proceedings are issued.

In view of the tripartite relationship between the Group, its customer and the at-fault party’s insurer and the nature of the claims process, claims due from insurance companies and self-insuring

organisations do not carry a contractual “due date”, nor does the expected adjustment arising on settlement represent an impairment for credit losses. The circumstances of the insurance companies

with which the Group deals are currently such that no provision for credit risk is considered necessary and so the disclosures required by IFRS 7 on provision for credit loss are not provided.

Instead, the Directors review claims due from insurance companies and self-insuring organisations according to the age of the claim based upon the date that the claim was presented to the relevant

insurer. The Group’s strategy is that claims due should be collected by normal in-house processes including collections made under protocol arrangements with insurers and only then transferred to

the Group solicitor process or other external solicitors as appropriate in specific circumstances pertaining to a case.

4 Acquisitions

On 9 July 2021, the Group acquired 100% of the equity interests of Charged Electric Vehicles Limited. Purchase consideration of £0.6m was transferred for the provisional fair value of net assets

acquired of £0.2m, resulting in goodwill on acquisition of £0.4m recognised in the balance sheet.

On 28 March 2022, the Group acquired 100% of the equity interests of GRG Public Resources Limited. Purchase consideration of £0.3m was transferred for the provisional fair value of net assets

acquired of £0.4m, resulting in a gain on bargain purchase of £0.1m recognised in the income statement.

During the prior year, on 4 September 2020 the Group acquired certain businesses and assets of Nationwide Accident Repair Services by way of a purchase from administrators. Details of this

business combination were disclosed in Note 4 to the Group’s annual financial statements for the year ended 30 April 2021.

Purchase consideration of £11.1m was transferred for the fair value of net assets acquired of £12.6m, resulting in a gain on bargain purchase of £1.5m recognised in the income statement, with a further

£0.3m recognised in the current year in respect of contingent consideration which was not payable. No further adjustments were made to the fair values of net assets acquired during the 12 month

hindsight period following the acquisition.

Notes to the financial statements continued

108 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

5 Segmental reporting

Management have determined the operating segments based upon the information provided to the Board of Directors which is considered to be the chief operating decision maker. The Group

identifies three reportable segments, namely Northgate UK&I, Northgate Spain and Redde. The Group is managed and reports internally on a basis consistent with its three main operating divisions

and is satisfied that the IFRS 8 aggregation criteria have been met. The principal activities of these divisions are set out in the Strategic Report.

Northgate

UK&I

2022

£000

Northgate

Spain

2022

£000

Redde

2022

£000

Corporate

2022

£000

Eliminations

2022

£000

Total

2022

£000

Revenue: hire of vehicles 342,733 220,555 – – – 563,288

Revenue: sale of vehicles 111,802 38,137 – – – 149,939

Revenue: claims and services – – 530,330 – – 530,330

External revenue 454,535 258,692 530,330 – – 1,243,557

Intersegment revenue 3,886 – 13,354 – (17,240) –

Total revenue 458,421 258,692 543,684 – (17,240) 1,243,557

Timing of revenue recognition:

At a point in time 111,802 38,137 178,896 – – 328,835

Over time 342,733 220,555 351,434 – – 914,722

External revenue 454,535 258,692 530,330 – – 1,243,557

Underlying operating profit (loss) 97,957 43,888 31,769 (9,610) – 164,004

Share of net profit of associates accounted for using the equity method – – 3,866 – – 3,866

Underlying EBIT* 97,957 43,888 35,635 (9,610) – 167,870

Exceptional items (Note 29) 2,308

Amortisation on acquired intangible assets (Note 14) (19,778)

Gain on bargain purchase (Note 4) 355

EBIT 150,755

Interest income 34

Finance costs (Note 8) (18,100)

Profit before taxation 132,689

Other information

Capital expenditure 167,514 135,076 121,901 – – 424,491

Depreciation 82,164 88,647 26,351 – – 197,162

Reportable segment assets 651,680 466,485 718,141 – – 1,836,606

Income tax assets 10,607

Total assets 1,846,913

Reportable segment liabilities 253,062 224,994 380,395 – – 858,451

Income tax liabilities 41,701

Total liabilities 900,152

* Underlying EBIT stated before amortisation on acquired intangible assets and exceptional items is the measure used by the Board of Directors to assess segment performance.

109 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

5 Segmental reporting continued

Northgate

UK&I

2021

£000

Northgate

Spain

2021

£000

Redde

2021

£000

Corporate

2021

£000

Eliminations

2021

£000

Total

2021

£000

Revenue: hire of vehicles 310,066 205,500 – – – 515,566

Revenue: sale of vehicles 161,417 68,392 – – – 229,809

Revenue: claims and services – – 364,124 – – 364,124

External revenue 471,483 273,892 364,124 – – 1,109,499

Intersegment revenue 1,530 – 7,6 04 – (9,134) –

Total revenue 473,013 273,892 371,728 – (9,134) 1,109,499

Timing of revenue recognition:

At a point in time 161,417 68,392 140,266 – – 370,075

Over time 310,066 205,500 223,858 – – 739,424

External revenue 471,483 273,892 364,124 – – 1,109,499

Underlying operating profit (loss) 76,800 33,700 3,358 (8,406) – 105,452

Share of net profit of associates accounted for using the equity method – – 4,364 – – 4,364

Underlying EBIT* 76,800 33,700 7,722 (8,406) – 109,816

Exceptional items (Note 29) (8,017)

Amortisation on acquired intangible assets (Note 14) (19,513)

Gain on bargain purchase (Note 4) 1,489

EBIT 83,775

Interest income 164

Finance costs (Note 8) (16,760)

Profit before taxation 67,179

Other information

Capital expenditure 200,845 142,342 64,485 – – 407,672

Depreciation 86,173 87,672 17,764 – – 191,609

Reportable segment assets 639,544 473,626 597,193 – – 1,710,363

Income tax assets 4,826

Total assets 1,715,189

Reportable segment liabilities 262,136 236,051 276,839 – – 775,026

Income tax liabilities 32,034

Total liabilities 807,06 0

* Underlying EBIT stated before amortisation on acquired intangible assets and exceptional items is the measure used by the Board of Directors to assess segment performance.

Segment assets and liabilities exclude current and deferred tax assets and liabilities, since these balances are not included in the segments’ assets and liabilities as reviewed by the chief operating

decision maker.

Notes to the financial statements continued

110 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

5 Segmental reporting continued

Geographical information

Revenues are attributed to countries on the basis of the Company’s location.

Revenue

2022

£000

Non-current

assets

2022

£000

Revenue

2021

£000

Non-current

assets

2021

£000

United Kingdom and Ireland 984,865 988,099 835,607 929,136

Spain 258,692 445,897 273,892 446,164

1,243,557 1,433,996 1,109,499 1,375,300

United Kingdom

and Ireland

2022

£000

Spain

2022

£000

Total

2022

£000

Revenue from contracts with customers 335,802 38,137 373,939

Revenue from other sources 649,063 220,555 869,618

984,865 258,692 1,243,557

United Kingdom

and Ireland

2021

£000

Spain

2021

£000

Total

2021

£000

Revenue from contracts with customers 310,516 68,392 378,908

Revenue from other sources 525,091 205,500 730,591

835,607 273,892 1,109,499

There are no external customers from whom the Group derives more than 10% of total revenue.

6 Operating profit

2022

£000

2021

£000

Operating profit is stated after charging (crediting):

Depreciation of property, plant and equipment (Notes 15)

Owned 165,632 168,478

Relating to IFRS 16 (leases) 27, 285 16,371

Relating to HP (leases) 4,245 6,760

Impairment of property, plant and equipment (Notes 15 and 29) – 4,341

Reversal of previous impairment of property, plant and equipment (Notes 15 and 29) (2,998) (1,304)

Amortisation of intangible assets (Note 14) 20,771 20,198

Staff costs (Note 7) 227,744 195,074

Cost of inventories recognised as an expense 185,611 264,508

Net impairment of trade receivables (Note 31) 8,255 8,722

Auditor’s remuneration for audit services (overleaf) 1,047 1,083

Auditor’s remuneration for non-audit services (overleaf) 57 54

111 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

6 Operating profit continued

2022

£000

2021

£000

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements 385 356

Fees payable to the Company’s auditors and its associates for the audit of the Company’s subsidiaries pursuant to legislation 662 727

Total audit fees 1,047 1,083

Audit related assurance services (Review of interim Financial Statements) 57 54

Total non-audit fees 57 54

Fees payable to PwC and its associates for non-audit services to the Company are not required to be disclosed because the consolidated financial statements disclose such fees on

aconsolidatedbasis.

A description of the work of the Audit Committee is set out on pages 62 to 66 and includes an explanation of how auditor objectivity and independence are safeguarded when non-audit services

areprovided by the auditor.

7 Staff costs

2022

Number

2021

Number

The average monthly number of persons employed by the Group:

By geography:

United Kingdom and Ireland 4,783 5,600

Spain 1,238 1,221

6,021 6,821

By function:

Direct operations 4,880 5,728

Administration 1,141 1,093

6,021 6,821

2022

£000

2021

£000

The aggregate remuneration of Group employees comprised:

Wages and salaries 194,845 166,201

Social security costs 23,401 21,201

Other pension costs – defined contribution plans 5,803 5,154

Share based payments 3,695 2,518

227,744 195,074

Included in the above are amounts credited to the related costs for grants received under the Coronavirus Job Retention Scheme of £nil (2021; £17,191,000).

Wages and salaries include £1,279,000 (2021: £7,324,000) in respect of redundancies and loss of office.

Details of Directors’ remuneration, pension contributions and share options are provided in the Remuneration report on pages 67 to 79.

Notes to the financial statements continued

112 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

8 Finance costs

2022

£000

2021

£000

Interest on bank overdrafts and loans 10,683 11,670

Amortisation of arrangement fees 1,951 1,645

Interest arising on leased assets following adoption of IFRS 16 3,223 2,064

Interest arising on other lease obligations 739 1,058

Preference share dividends 25 25

Other interest 16 298

Finance costs (excluding exceptional items) 16,637 16,760

Costs incurred on termination of loan notes (Note 29) 1,435 –

Amortisation of arrangement fees 28 –

Exceptional finance costs 1,463 –

Finance costs 18,100 16,760

9 Taxation

2022

£000

2021

£000

Current tax:

UK corporation tax 17,413 12,661

UK adjustment in respect of prior years (including exceptional release of uncertain tax provisions) (2,073) (11,196)

Foreign tax (including adjustment in relation to prior year) 7,470 811

22,810 2,276

Deferred tax:

Origination and reversal of timing differences (1,087) (1,346)

Adjustment in respect of prior years 714 683

Movement due to change in tax rates 8,707 –

8,334 (663)

Total tax charge 31,144 1,613

113 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

9 Taxation continued

UK corporation tax is calculated at 19% (2021: 19%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in those respective jurisdictions.

The net charge for the year can be reconciled to the profit before taxation as stated in the income statement as follows:

2022

£000

2022

2021

£000

2021

Profit before taxation 132,689 67,179

Tax at the UK corporation tax rate of 19% (2021: 19%) 25,211 19.0 12,764 19.0

Tax effect of expenses that are not deductible in determining taxable profit 703 0.5 1,337 2.0

Tax effect of income not taxable in determining taxable profit (1,396) (1.1) (1,467) (2.2)

Difference in tax rates in overseas subsidiary undertakings 1,514 1.1 954 1.4

Net movement on uncertain tax provisions (563) (0.4) (9,276) (13.8)

Overseas available reliefs (1,614) (1.2) (1,081) (1.6)

Adjustment to tax charge in respect of prior years (1,418) (1.1) – –

Rate change 8,707 6.6 (1,618) (2.4)

Tax charge and effective tax rate for the year 31,144 23.5 1,613 2.4

In addition to the amount charged to the income statement, a net deferred tax amount of £167,000 has been charged (2021: £12,000) directly to equity.

During the year, £2,508,000 of uncertain tax provisions was released in respect of the Group financing structure (2021: £10,008.000). There are no deferred tax assets which are not recognised in the

balance sheet in the current or prior year.

Based on the expected timing of the reversal of temporary differences, the tax disclosures reflect deferred tax measured at 25% and 19% in the UK, depending on whether the charge is to reverse

within or after 12 months, and 25% in Spain.

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the UK corporation tax rate will increase to 25%. On 24 May 2021, the proposal to increase the rate to 25% had been

substantively enacted, therefore this rate change has been reflected in Group tax balances for the year ended 30 April 2022.

10 Dividends

An interim dividend of 6.0p per Ordinary share was paid in January 2022 (2021: 3.4p). The Directors propose a final dividend for the year ended 30 April 2022 of 15.0p per Ordinary share (2021: 12.0p),

which is subject to approval at the annual general meeting and has not been included as a liability as at 30 April 2022. Based upon the shares in issue at 30 April 2022, this equates to a final dividend

payment of £37m (2021: £29.5m). No dividends have been paid between 30 April 2022 and the date of signing the financial statements.

Notes to the financial statements continued

114 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

11 Earnings per share

2022

£000

2021

£000

Basic and diluted earnings per share

The calculation of basic and diluted earnings per share is based on the following data:

Earnings

Earnings for the purposes of basic and diluted earnings per share, being profit for the year attributable to the owners of the Parent Company 101,545 65,566

Number of shares

Weighted average number of Ordinary shares for the purposes of basic earnings per share 245 ,997, 303 246,091,423

Effect of dilutive potential Ordinary shares – share options 5,242,307 4,081,514

Weighted average number of Ordinary shares for the purposes of diluted earnings per share 251,239,610 250,172,937

Basic earnings per share 41.3p 26.6p

Diluted earnings per share 40.4p 26.2p

The calculated weighted average number of Ordinary shares for the purposes of basic earnings per share includes a reduction of 94,120 shares (2021: nil) relating to treasury shares acquired

duringthe year.

12 Result of the Parent Company

A profit of £47,189,000 (2021: £58,028,000) is dealt with in the financial statements of the Company. The Directors have taken advantage of the exemption available under Section 408(3) of the

Companies Act 2006 and not presented an income statement for the Company alone.

13 Goodwill

£000

At 1 May 2020 116,105

Hindsight adjustment to fair value of assets acquired (1,602)

At 30 April 2021 and 1 May 2021 114,503

Acquired through business combinations (Note 4) 423

At 30 April 2022 114,926

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from the business combination. In the current year, the

acquisition of Charged Electric Vehicles Limited has been included within Northgate Vehicle Hire (UK) CGU. The Group tests goodwill annually for impairment, or more frequently if there are

indications that goodwill might be impaired.

The allocation of goodwill by CGU as follows:

2022

£000

2021

£000

Northgate Vehicle Hire (UK) 4,012 3,589

Auxillis 74,827 74,827

FMG 31,078 31,078

NewLaw 5,009 5,009

114,926 114,503

115 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

13 Goodwill continued

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and

expected changes to selling prices and direct costs during the year. The Directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and

the risks specific to the CGUs. The growth rates are aligned to UK GDP growth rate forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes

in the market.

The current year impairment assessment was based on risk adjusted cash flow forecasts derived from a business plan, approved by the Directors in April 2022. The approved business plan includes

the three year strategic plan of the Group and a forecast for a further two years. It was concluded that there were no indicators of additional impairment or reversal of impairment of other non-current

assets previously charged.

The business plan and growth rate applied to terminal values include management’s assessment of the impacts of climate-related issues which could reasonably be assumed to impact the future

cash generation of each CGU.

The value in use assessment is sensitive to changes in the key assumptions used, most notably the discount rate and growth rates as follows:

Goodwill

2022

£000

Pre-tax

discount

rate

Growth rate

applied to

terminal

values

Impact of 1%

increase in

discount rate on

recoverable

amount

£m

Impact of 1%

reduction in

growth rate

applied to

terminal

values on

recoverable

amount

£m

Northgate Vehicle Hire (UK) 4,012 9.9% 2.0% (96.6) (89.1)

Auxillis 74,827 9.9% 2.0% (65.6) (59.4)

FMG 31,078 9.9% 2.0% (6.9) (6.2)

NewLaw 5,009 9.9% 2.0% (3.3) (3.0)

114,926

The above sensitivity analysis, with no further reasonable changes in assumptions, would not result in an impairment charge to the carrying value of goodwill in any of the recognised CGUs.

In the prior year, impairment assessment was based on risk adjusted cash flow forecasts derived from a business plan approved by the Directors in May 2021 using a pre-tax discount rate of 8.8% and

pre-tax growth rate of 2.0% for all CGUs. It was concluded that there were no indicators of additional impairment or reversal of impairment of other non-current assets previously charged.

Notes to the financial statements continued

116 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

14 Other intangible assets

Group Company

Customer

relationships

£000

Other

software

£000

Brand

names

£000

Total

£000

Other

software

£000

Cost:

At 1 May 2020 169,600 35,706 12,800 218,106 135

Acquisition 1,000 2,100 450 3,550 –

Additions – 1,834 – 1,834 –

Disposals – (15,536) – (15,536) –

Exchange differences – (44) – (44) –

At 30 April 2021 and 1 May 2021 170,600 24,060 13,250 207,910 135

Acquisition (Note 4) 50 – 100 150 –

Additions – 1,373 – 1,373 –

Disposals – (334) – (334) –

Exchange differences – (194) – (194) –

At 30 April 2022 170,650 24,905 13,350 208,905 135

Amortisation:

At 1 May 2020 2,884 29,358 154 32,396 106

Charge for the year 17, 370 1,888 940 20,198 19

Disposals – (15,505) – (15,505) –

Exchange differences – (9) – (9) –

At 30 April 2021 and 1 May 2021 20,254 15,732 1,094 37,080 125

Charge for the year 17,416 2,337 1,018 20,771 10

Disposals – (167) – (167) –

Exchange differences – (91) – (91) –

At 30 April 2022 37,670 17,811 2,112 57, 593 135

Carrying amount:

At 30 April 2022 132,980 7,094 11,238 151,312 –

At 30 April 2021 150,346 8,328 12,156 170,830 10

Weighted average remaining amortisation period (years) 8 3 12 –

2022

£000

2021

£000

Intangible amortisation:

Included within underlying EBIT 993 685

Excluded from underlying EBIT* 19,778 19,513

20,771 20,198

* Amortisation of intangible assets excluded from underlying EBIT relates to intangible assets recognised on business combinations. Amortisation of acquired intangible assets is not classed as an exceptional item as it is recurring

innature. However, it is excluded from underlying results as it is considered non-operational and would otherwise not present a clear understanding of underlying performance as growth of the business is achieved organically

andinorganically. The revenue and costs attached to those acquisitions are included within underlying results.

117 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

15 Property, plant and equipment

Group

Vehicles for hire

£000

Vehicles for

credit hire

£000

Land &

buildings

£000

Plant,

equipment &

fittings

£000

Motor

vehicles

£000

Total

£000

Cost:

At 1 May 2020 1,263,488 52,384 147,8 45 40,750 3,030 1, 507,497

Acquisition – – 6,828 3,117 – 9,945

Additions 329,377 38,983 30,446 4,653 2,379 405,838

Exchange differences (795) – (65) (90) – (950)

Transfer 357 – – – (357) –

Transfer to inventories (276,153) – – – – (276,153)

Disposals – (36,910) (6,871) (1,285) (1,371) (46,437)

At 30 April 2021 and 1 May 2021 1,316,274 54,457 178,183 47,145 3,681 1,599,740

Acquisition – – – 3 – 3

Additions 294,739 83,784 37,747 5,025 1,823 423,118

Exchange differences (22,498) – (2,346) (969) – (25,813)

Transfer 168 – – – (168) –

Transfer to inventories (190,761) – – – – (190,761)

Disposals – (10,969) (4,728) (837) (1,603) (18,137)

At 30 April 2022 1 ,397,922 127,272 208,856 50,367 3,733 1,788,150

Depreciation:

At 1 May 2020 378,777 1,344 38,872 25,479 1,265 445,737

Charge for the year 161,247 11,898 11,352 6,116 996 191,609

Impairment (Note 29) – – 4,341 – – 4,341

Impairment reversal (Note 29) – – (1,036) (268) – (1,304)

Exchange differences (630) – (105) (56) – (791)

Transfer 192 – – – (192) –

Transfer to inventories (116,654) – – – – (116,654)

Disposals – (2,783) (2,772) (751) (812) (7,118)

At 30 April 2021 and 1 May 2021 422,932 10,459 50,652 30,520 1,257 515,820

Charge for the year 158,666 15,971 15,409 5,831 1,285 197,162

Impairment reversal (Note 29) – – (2,998) – – (2,998)

Exchange differences (7,708) – (693) (626) – (9,027)

Transfer 77 – – – (77) –

Transfer to inventories (64,989) – – – – (64,989)

Disposals – ( 7,247 ) (826) (519) (1,141) (9,733)

At 30 April 2022 508,978 19,183 61,544 35,206 1,324 626,235

Carrying amount:

At 30 April 2022 888,944 108,089 147,312 15,161 2,409 1,161,915

At 30 April 2021 893,342 43,998 127,531 16,625 2,424 1,083,920

At 30 April 2022, the Group had entered into total contractual commitments amounting to £25,561,000 (2021: £26,189,000).

Notes to the financial statements continued

118 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

15 Property, plant and equipment continued

Land & buildings include the following:

2022

£000

NBV

2021

£000

NBV

Land and buildings by category:

Freehold and long leasehold 50,988 54,114

Short leasehold 96,324 73,417

147, 31 2 127,531

Short leasehold properties include £90,016,000 of leases following the adoption of IFRS 16 (2021: £66,158,000). Property, plant and equipment include the following right of use leased assets:

Group

Vehicles for hire

£000

Vehicles for

credit hire

£000

Other property.

plant and

equipment

£000

Total

£000

Cost:

At 1 May 2020 – 52,384 62,311 114,695

Additions 11,860 38,983 30,018 80,861

Exchange differences – – (43) (43)

Disposals – (36,910) (4,738) (41,648)

At 30 April 2021 and 1 May 2021 11,860 54,457 87,548 153,865

Additions 6,077 37, 5 86 38,191 81,854

Reclassification to owned assets (not held under leases) – ( 7,3 68) – (7, 36 8)

Exchange differences – – (842) (842)

Disposals (190) (9,659) (4,562) (14,411)

At 30 April 2022 17,747 75,016 120,335 213,098

Depreciation:

At 1 May 2020 – 1,344 8,053 9,397

Charge for the year 1,411 11,898 9,822 23,131

Impairment – – 3,305 3,305

Exchange differences – – (80) (80)

Disposals – (2,783) (1,481) (4,264)

At 30 April 2021 and 1 May 2021 1,411 10,459 19,619 31,489

Charge for the year 3,810 13,842 13,878 31,530

Impairment reversal – – (2,998) (2,998)

Reclassification to owned assets (not held under leases) – (2,254) – (2,254)

Exchange differences – – (228) (228)

Disposals (36) (6,912) (1,400) (8,348)

At 30 April 2022 5,185 15,135 28,871 49,191

Carrying amount:

At 30 April 2022 12,562 59,881 91,464 163,907

At 30 April 2021 10,449 43,998 67,929 122,376

119 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

16 Investments

Company

Shares in

subsidiary

undertakings

£000

Loans in

subsidiary

undertakings

£000

Total

£000

Cost and carrying amount:

At 1 May 2020 394,895 47,000 441,895

Capital contribution 1,651 – 1,651

At 30 April 2021 and 1 May 2021 396,546 47,000 443,546

Capital contribution 2,054 – 2,054

At 30 April 2022 398,600 47,000 445,600

At 30 April 2022, a full list of subsidiaries of the Group, for all of which the Ordinary shares were wholly owned, was as follows:

Name Company number + Registered office

Angel Assistance Limited*^ 03902646 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Auxillis Limited*^ 02948256 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Auxillis Services Limited* 02686430 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Cab Aid Limited*^ 05013600 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Car Monster Limited (formerly HHFS Limited)*^ 03217696 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Charged Electric Vehicles Limited 12702971 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

FMG Finance Limited*^ 9347579 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Group Holdings Limited*^ 9341508 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Legal LLP*^ OC378834 Helmont House, Churchill Way, Cardiff, CF10 2HE

FMG Repair Services Ltd *^ 05120241 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

FMG Support (FIM) Limited*^ 2658067 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Support (HO) Limited*^ 3576057 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Support (RRRM) Limited*^ 2762997 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Support Group Limited*^ 6489429 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

FMG Support Limited*^ 3813859 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

Goode Durrant Administration Limited*^ 00059051 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

GRG Public Resources Limited* 2946432 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

HAS Accident Management Solutions Limited*^ 03198299 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Helphire EBT Trustee Limited*^ 03852243 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Moco Group Limited (formerly Rose Bidco Limited)*^ 9713395 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

NewLaw Legal Limited* 07200038 Helmont House, Churchill Way, Cardiff, CF10 2HE

NewLaw Trustees Limited*^ 08702402 Helmont House, Churchill Way, Cardiff, CF10 2HE

NG Finance Limited* 00545062 (Ireland) 6th Floor, South Bank House, Barrow Street, Dublin 4, Ireland

NLS Trustees Limited*^ SC427064 7th Floor Delta House, 50 West Nile Street, Glasgow, G1 2NP

Notes to the financial statements continued

120 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

Name Company number + Registered office

Northgate (CB) Limited*^ 07233528 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Northgate (CB2) Limited*^ 07983969 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Northgate (Europe) Limited^ 05932194 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Northgate (Malta) Limited* C39845 (Malta) Office 1, Verdala Business Centre, LM Complex, Brewery Street, Mriehel, Birkirkara BKR3000, Malta

Northgate (MT) Limited* C39847 (Malta) Office 1, Verdala Business Centre, LM Complex, Brewery Street, Mriehel, Birkirkara BKR3000, Malta

Northgate España Renting Flexible S.A.* CIF) A-28659423 (Spain) Avd Isaac Newton, 3 Parque Empresarial La Carpetania, 28906 Getafe, Madrid, Spain

Northgate Holdings Limited^ 12366193 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Northgate Vehicle Hire (Ireland) Limited* 00333586 (Ireland) 6th Floor, South Bank House, Barrow Street, Dublin 4, Ireland

Northgate Vehicle Hire Limited 01434157 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Northgate Vehicle Sales Limited*^ 02337128 Northgate Centre, Lingfield Way, Darlington, DL1 4PZ

Principia Law Limited* 08305964 Bowland House, Gadbrook Business Centre, Rudheath, Northwich, Cheshire, CW9 7TN

Recovery Management Services Limited* 2948091 Broad Lea House, Dyson Wood Way, Bradley, Huddersfield, West Yorkshire, HD2 1GZ

Redde Limited^ 03120010 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

Total Accident Management Limited*^ 03156157 Pinesgate, Lower Bristol Road, Bath, BA2 3DP

* Interest held indirectly by the Company.

^ The members of the Company have elected to take the exemption from audit available under S479A of the Companies Act 2006 relating to subsidiary companies for the year ended 30 April 2022. A guarantee has or will be

provided by Redde Northgate plc as the ultimate parent company.

+ UK unless stated otherwise.

16 Investments continued

121 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

17 Interest in associates

The Group has interest in associates, which comprise a minority participation in five (2021: five) active Limited Liability Partnerships (LLPs) registered and situated in the United Kingdom. All of the LLPs

are engaged in the processing of legal claims and are regulated by the Solicitors Regulation Authority. The LLPs are businesses over which the Group is deemed to have significant influence but which

it does not control.

Interest in associates is as follows:

£000

At 1 May 2020 6,008

Group’s share of:

Profit from continuing operations 4,364

Distributions from associates (4,325)

At 30 April 2021 and 1 May 2021 6,047

Group’s share of:

Profit from continuing operations 3,866

Distributions from associates (4,070)

At 30 April 2022 5,843

Details of the Group’s associates, being interests in the following LLPs of which a Group company is a designated Principal Member, at 30 April 2022 are as follows:

Name Registered office

Ageas Law LLP Helmont House, Churchill Way, Cardiff, CF10 2HE

Carol Nash Legal Services LLP Helmont House, Churchill Way, Cardiff, CF10 2HE

H&R Legal LLP Helmont House, Churchill Way, Cardiff, CF10 2HE

Interresolve Law LLP (Dormant) Helmont House, Churchill Way, Cardiff, CF10 2HE

RCN Law LLP Helmont House, Churchill Way, Cardiff, CF10 2HE

Your Law LLP Helmont House, Churchill Way, Cardiff, CF10 2HE

The Group, through NewLaw Legal Limited (NewLaw), is a designated member of each of the above LLPs (which are considered to be joint operations) and has contributed 50% of the capital for each

ofthose LLPs (usually amounting to £1 for each LLP). NewLaw supplies legal processing services to each LLP. Each member firm of the LLPs is required to appoint individuals to the management

board of the LLPs but NewLaw does not appoint or control the majority of individuals to these boards who are ultimately responsible for the day to day operations, decision making and strategic

development of the LLPs and therefore NewLaw is not considered to have overall control of the LLPs. Accordingly, the Group only accounts for the results of these joint operations as associated

company income based upon the (variable) share of the net income generated by way of profit share after the deduction of any other fixed allocations of such income.

Notes to the financial statements continued

122 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

18 Inventories

Group

2022

£000

2021

£000

Vehicles held for resale 11,926 14,762

Spare parts and consumables 6,770 6,783

18,696 21,545

Replacement cost is considered not to significantly differ from carrying value as stated above.

19 Receivables and contract assets

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Trade receivables 97, 223 98,391 – –

Contract assets – claims due from insurance companies and self-insuring organisations 193,834 144,738 – –

Amounts due from subsidiary undertakings – – 1,053,582 995,192

Other taxes – – 114 426

Other receivables and prepayments 67,996 59,220 356 495

359,053 302,349 1,054,052 996,113

Allowances for estimated irrecoverable amounts and the Group’s credit risk are considered in Note 31.

The Directors consider that the carrying amount of receivables and contract assets approximates to their fair value due to their short term nature. Amounts due from subsidiary undertakings are

non-interest bearing and repayable on demand.

Contract assets – claims due from insurance companies and self-insuring organisations

An analysis of claims from insurance companies is given below:

Group

2022

£000

2021

£000

2022

2021

Pending claims 23,985 3,902 13 3

Between 1 and 120 days old 70,451 42,647 36 29

More than 120 days old 99,398 98,189 51 68

Total 193,834 144,738 100 100

Risk is spread primarily across the major UK based motor insurance companies in proportion to their respective share of the market. No credit insurance is taken out, given the regulated nature of

these entities. The Group does not have a significant concentration of credit risk, with exposure spread across a large number of insurer counterparties. The most significant five insurers represented

38% (2021: 27%) of contract assets. The measurement of contract assets changes from period to period due to the estimation uncertainty.

The carrying value of contract assets, in relation to insurance claims of £193,834,000 (2021: £144,738,000), has increased mainly as a result of new business volumes recovering to approximately 90%

of pre-COVID-19 levels. An adjustment of £2.0m was made in the 12 months to 30 April 2022 for claims that were settled at a higher net amount than the carrying value at 30 April 2021 (2021: £1.0m for

claims that were settled at a lower net amount than the carrying value at 30 April 2020).

123 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

20 Trade and other payables

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Trade payables 99,122 96,187 55 438

Amounts due to subsidiary undertakings – – 362,308 328,318

Social security and other taxes 16,106 29,227 215 178

Accruals and deferred income 136,114 108,100 6,513 3,804

251,342 233,514 369,091 332,738

Less than one year 246,833 229,666 369,091 332,738

In one year to five years 3,070 3,077 – –

More than five years 1,439 771 – –

Total due in more than one year 4,509 3,848 – –

The Directors consider that the carrying amount of trade and other payables approximates to their fair value due to their short term nature.

Amounts due to subsidiary undertakings includes £221,230,000 (2021: £197,496,000) non-interest bearing and repayable on demand, a term loan repayable in June 2023 of £131,009,000

(2021: £130,822,000) which bears interest at 1.95% above SONIA (2021: 1.85% above LIBOR) and a loan repayable in April 2025 of £10,069,000 (2021: £nil) which bears interest at a fixed rate of 3.25%.

21 Borrowings

The Directors consider that the carrying amounts of the Group’s borrowings approximate to their fair value.

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

Bank loans and overdrafts 127,365 325,339 115,323 317, 9 11

Loan notes 314,264 86,817 314,264 86,817

Cumulative Preference shares 500 500 500 500

Confirming facilities 700 388 – –

442,829 413,044 430,087 405,228

Notes to the financial statements continued

124 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

21 Borrowings continued

The borrowings are repayable as follows:

Group Company

2022

£000

2021

£000

2022

£000

2021

£000

On demand or within one year (shown within current liabilities)

Bank loans and overdrafts 20,307 11,771 8,265 4,200

Confirming facilities 700 388 – –

21,007 12,159 8,265 4,200

In the second year

Bank loans – 77,79 5 – 7 7,795

Loan notes – 86,863 – 86,863

– 164,658 – 164,658

In the third to fifth years

Bank loans 114,563 240,069 114,563 240,069

114,563 240,069 114,563 240,069

Due after more than five years

Loan notes 314,655 – 314,655 –

Cumulative Preference shares 500 500 500 500

315,155 500 315,155 500

Unamortised finance fees relating to the bank loans and loan notes (7,89 6) (4,342) (7,896) (4,199)

Total borrowings 442,829 413,044 430,087 405,228

Less: Amounts due for settlement within one year (shown within current liabilities) 21,007 12,159 8,265 4,200

Amounts due for settlement after more than one year 421,822 400,885 421,822 401,028

The UK bank loans and overdrafts, totalling £134,870,000 (gross of unamortised fees) at 30 April 2022, would become repayable in full in the event of a change in control of the Group. The holders of

the loan notes, totalling £314,655,000 (gross of unamortised fees) at 30 April 2022, would have to be offered full repayment in the event of a change in control of the Group.

Bank loans and overdrafts

Bank loans and overdrafts are unsecured and bear interest at rates of 0.90% to 1.95% (2021: 0.90% to 1.85%) above the relevant interest rate index, being SONIA for Sterling denominated debt and

EURIBOR for Euro denominated debt, subject to a floor of 0%. Bank loans and overdraft facilities mature in November 2025.

Loan notes

The Company has €375,000,000 (2021: €100,000,000) of loan notes which bear interest at a blended rate of 1.32% (2021: 2.38%). These are unsecured and are repayable in November 2027,

November 2029 and November 2031.

Cumulative Preference shares

The cumulative Preference shares of 50p each entitle the holder to receive a cumulative preferential dividend at the rate of 5% on the paid up capital and the right to a return of capital at either winding

up or a repayment of capital. The cumulative Preference shares do not entitle the holders to any further or other participation in the profits or assets of the Company. These shares have no voting rights

other than in exceptional circumstances.

The total number of authorised cumulative Preference shares of 50p each is 1,300,000 (2021: 1,300,000), of which 1,000,000 (2021: 1,000,000) were allotted and fully paid at the balance sheet date.

125 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

21 Borrowings continued

Confirming facilities

Spanish confirming facilities of £700,000 (2021: £388,000) are unsecured and all fall due within one year. The Group pays no interest on confirming.

Total borrowing facilities

The Group has various borrowing facilities available to it. The undrawn facilities (not including cash available to offset) at the balance sheet date, in respect of which all conditions precedent had been

met at that date, are as follows:

2022

£000

2021

£000

Less than one year 6,071 10,606

In one year to five years 360,437 287,431

366,508 298,037

The above undrawn amounts exclude £15,769,000 (2021: £6,821,000) of net cash and overdraft balances available to offset against those facilities. The total amount permitted to be borrowed by the

Company and its subsidiary undertakings in terms of the Articles of Association shall not exceed six times the aggregate of the issued share capital of the Company and Group reserves, as defined in

those Articles.

Analysis of consolidated net debt

An analysis of movements in the Group’s consolidated net debt is as follows:

At 1 May

2021

£000

Cash flow

£000

Other

non-cash

changes

£000

Foreign

exchange

movements

£000

At 30 April

2022

£000

Bank loans 320,991 (198,481) (3,163) (774) 118,573

Bank overdrafts 4,348 5,025 – (581) 8,792

Loan notes 86,817 238,919 (391) (11,081) 314,264

Leases arising following adoption of IFRS 16 92,469 (27,959) 66,562 (628) 130,444

Leases arising under HP obligations 35,999 (15,700) 13,536 – 33,835

Cumulative Preference shares 500 – – – 500

Confirming facilities 388 – 329 (17) 700

541,512 1,804 76,873 (13,081) 607,108

Cash at bank and in hand (11,169) (13,825) – 433 (24,561)

Consolidated net debt 530,343 (12,021) 76,873 (12,648) 582,547

There is no material difference between the carrying amount of borrowings and their fair value. Borrowings are designated as financial liabilities carried at amortised cost.

Notes to the financial statements continued

126 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

21 Borrowings continued

At 1 May

2020

£000

Cash flow

£000

Other

non-cash

changes

£000

Foreign

exchange

movements

£000

At 30 April

2021

£000

Bank loans 400,847 (82,517) 1,135 1,526 320,991

Bank overdrafts 51,063 (46,630) – (85) 4,348

Loan notes 86,868 – (9) (42) 86,817

Leases arising following adoption of IFRS 16 62,999 (16,994) 46,432 32 92,469

Leases arising under HP obligations 40,953 (37,814) 32,860 – 35,999

Cumulative Preference shares 500 – – – 500

Confirming facilities 479 – (93) 2 388

643,709 (183,955) 80,325 1,433 541,512

Cash at bank and in hand (67, 843 ) 56,307 – 367 (11,169)

Consolidated net debt 575,866 (1 27,6 48) 80,325 1,800 530,343

The Group calculates gearing to be net borrowings (including lease obligations) as a percentage of shareholders’ funds less goodwill and the net book value of intangible assets, where net borrowings

comprise borrowings and lease obligations less cash and bank balances. At 30 April 2022, the gearing of the Group amounted to 85.6% (2021: 85.2%) where net borrowings (including lease obligations)

are £582,547,000 (2021: £530,343,000) and shareholders’ funds less goodwill and the net book value of intangible assets are £680,523,000 (2021: £622,796,000).

Financial assets

The Group’s principal financial assets are cash and bank balances, and receivables and contract assets.

The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made

where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has credit insurance policies in place to partially

mitigate this risk.

Treasury policies and the management of risk

The function of Group Treasury is to mitigate financial risk, to ensure sufficient liquidity is available to meet foreseeable requirements, to secure finance at minimum cost and to invest cash assets

securely and profitably. Treasury operations manage the Group’s funding, liquidity and exposure to interest rate risks within a framework of policies and guidelines authorised by the Board of Directors.

The Group uses derivative financial instruments for risk management purposes only. Consistent with Group policy, Group Treasury does not engage in speculative activity and it is policy to avoid using

more complex financial instruments.

The policy followed in managing credit risk permits only minimal exposures, with banks and other institutions meeting required standards as assessed normally by reference to major credit rating

agencies. Deals for material deposits are authorised only with banks with which dealing mandates have been agreed and which maintain an A rating. Individual aggregate credit exposures are

limitedaccordingly.

Financing and interest rate risk

The Group’s policy is to finance operating subsidiary undertakings by a combination of retained earnings and medium term bank loans and loan notes.

Cash at bank, and on deposit, yields interest based principally on interest rate indices applicable to periods of less than three months, those indices being SONIA for Sterling denominated cash and

EURIBOR for Euro denominated cash. The Group’s exposure to interest rate fluctuations on its borrowings is limited by having fixed rate financial instruments covering a significant proportion of

borrowings. At 30 April 2022, 76.0% (2021: 27.6%) of net borrowings (including leases arising under HP obligations) were at fixed rates of interest comprising loan notes of €375,000,000, £500,000

ofPreference shares, £700,000 of confirming facilities and leases arising under HP obligations of £33,835,000 (30 April 2021: loan notes of €100,000,000, £500,000 of Preference shares, £388,000

of confirming facilities and leases arising under HP obligations of £35,999,000).

127 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

21 Borrowings continued

Foreign currency exchange risk

The Group maintains borrowings in the same currency as its cash requirements, with the exception of borrowings maintained in Euros as net investment hedges against its Euro denominated

investments (Note 23).

An analysis of the Group’s borrowings and lease obligations by currency is given below:

Group

Sterling

£000

Euro

£000

Total

£000

At 30 April 2022

Bank loans 75,417 43,156 118,573

Bank overdrafts 526 8,266 8,792

Loan notes – 314,264 314,264

Leases arising following adoption of IFRS 16 114,350 16,094 130,444

Leases arising under HP obligations 33,835 – 33,835

Cumulative Preference shares 500 – 500

Confirming facilities – 700 700

224,628 382,480 607,108

Sterling

£000

Euro

£000

Total

£000

At 30 April 2021

Bank loans 61,153 259,838 320,991

Bank overdrafts 4,185 163 4,348

Loan notes – 86,817 86,817

Leases arising following adoption of IFRS 16 73,216 19,253 92,469

Leases arising under HP obligations 35,999 – 35,999

Cumulative Preference shares 500 – 500

Confirming facilities – 388 388

175,053 366,459 541,512

Notes to the financial statements continued

128 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

22 Leases

As lessee

Lease liabilities are presented in the statement of financial position as follows:

2022

£000

2021

£000

Current 52,524 32,375

Non-current 111,755 96,093

164,279 128,468

The tables below describe the nature of the Group’s leasing activities by the type of right-of-use asset recognised:

At 30 April 2022

Number of

right-of-use

assets leased

Range of

remaining

term

(years)

Average

remaining lease

term

(years)

Carrying value

30 April 22

£000

Depreciation

expense for

period to

30 April 22

£000

Land and buildings 183 1-99 4 90,016 12,824

Own use vehicles 172 1-3 2 1,449 1,054

Vehicles for hire and vehicles for credit hire (IFRS 16) 6,566 1-4 2 33,232 13,407

Vehicles for hire and vehicles for credit hire (HP) 2,731 1-2 1 39,210 4,245

At 30 April 2021

Number of

right-of-use

assets leased

Range of

remaining

term

(years)

Average

remaining lease

term

(years)

Carrying value

30 April 21

£000

Depreciation

expense for

period to

30 April 21

£000

Land and buildings 127 1-99 9 66,158 9,163

Own use vehicles 318 1-3 1 1,771 658

Vehicles for hire and vehicles for credit hire (IFRS 16) 3,599 1-4 2 18,424 6,550

Vehicles for hire and vehicles for credit hire (HP) 2,308 1-3 1 36,023 6,760

129 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

22 Leases continued

The lease liabilities are secured by the related underlying assets. Future minimum lease payments are as follows:

<1 year

£000

1-2 years

£000

2-5 years

£000

>5 years

£000

Total

£000

At 30 April 2022

Lease payments:

Arising following adoption of IFRS 16 32,320 30,103 39,329 47, 574 149,326

Arising under HP obligations 23,743 10,731 – – 34,474

Total lease payments 56,063 40,834 39,329 47,574 183,800

Finance charges:

Arising following adoption of IFRS 16 3,098 2,325 4,049 9,409 18,881

Arising under HP obligations 441 199 – – 640

Total finance charges 3,539 2,524 4,049 9,409 19,521

Net present values 52,524 38,310 35,280 38,165 164,279

At 30 April 2021

Lease payments:

Arising following adoption of IFRS 16 21,366 17, 223 30,704 38,857 108,150

Arising under HP obligations 14,166 20,844 2,798 – 37,808

Total lease payments 35,532 38,067 33,502 38,857 145,958

Finance charges:

Arising following adoption of IFRS 16 2,291 1,795 3,275 8,320 15,681

Arising under HP obligations 866 852 91 – 1,809

Total finance charges 3,157 2,647 3,366 8,320 17,490

Net present values 32,375 35,420 30,136 30,537 128,468

The total cash outflow for leases in 2022 was £65,000,000 (2021: £68,741,000).

Lease payments not recognised as a liability

The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases

totalling £17,379,000 (2021: £10,811,000) were expensed on a straight line basis over the lease term.

As lessor

The revenue of the Group is principally generated from the hire of vehicles under operating lease arrangements. For the majority of vehicles hired, there is no minimum contracted rental period.

Therevenue of the Group under these arrangements is as shown in the income statement. There are no contingent rentals recognised in income.

Notes to the financial statements continued

130 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

23 Derivative financial instruments

Net investment hedges

The Group manages its exposure to currency fluctuations on retranslation of the balance sheets of those subsidiary undertakings whose functional currency is in Euros by maintaining a proportion

ofits borrowings in the same currency. The hedging objective is to reduce the risk of spot retranslation of the Euro subsidiaries from Euros to Sterling at each reporting date.

At 30 April 2022, the nominal amount attributable to the hedging instrument equated to £348,218,000 (2021: £342,727,000). Exchange differences arising on the borrowings and net investment

hedges have been recognised directly within equity along with the exchange differences on retranslation of the net assets of the Euro subsidiaries. The hedges are considered highly effective

inthecurrent and prior year.

24 Deferred tax

The following are the major deferred tax liabilities and (assets) recognised by the Group and movements thereon during the current and prior year:

Group

Accelerated

capital

allowances

£000

Revaluation

of buildings

£000

Share based

payments

£000

Intangible

assets

£000

Losses

£000

Other

temporary

differences

£000

Total

£000

At 1 May 2020 (5,724) 348 (537) 34,828 (1,135) (599) 27,181

Acquisition – – – 276 – – 276

Acquisition hindsight adjustments (170) – – 27 – – (143)

Charge (credit) to income 4,395 – (468) (3,681) (756) (153) (663)

(Credit) charge to equity – – (12) – – 35 23

Exchange differences (16) – – – (16) 4 (28)

At 30 April 2021 and 1 May 2021 (1,515) 348 (1,017) 31,450 (1,907) (713) 26,646

Acquisitions (6) – – 29 (80) – (57)

Charge (credit) to income 3,544 – (713) 5,109 634 (240) 8,334

Charge to equity – – 167 – – – 167

Exchange differences 39 (12) – 1 16 66 110

At 30 April 2022 2,062 336 (1,563) 36,589 (1,337) (887) 35,200

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The analysis of the deferred tax balances after offset is as follows:

Total

£000

At 30 April 2022

Deferred tax assets (3,175)

Deferred tax liabilities 38,375

Net deferred tax liabilities 35,200

At 1 May 2021

Deferred tax assets (4,826)

Deferred tax liabilities 31,472

Net deferred tax liabilities 26,646

It is expected that a £326,000 credit of the net deferred tax liability recognised at 30 April 2022 of £35,200,000 will reverse to the income statement in FY2023.

131 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

24 Deferred tax continued

In the current year, the net charge to equity of £nil (2021: £23,000 charge) in respect of other temporary differences related to derivative financial instruments recognised in the hedging reserve

(Note28).

Net deferred tax assets classified as other temporary differences are £938,000 (2021: £768,000). The following are the major deferred tax assets recognised by the Company and movements thereon

during the current and prior year:

Company

Share based

payments

£000

Other

temporary

differences

£000

Total

£000

At 1 May 2020 (537) (55) (592)

(Credit) to income (468) (31) (499)

Charge to equity (12) 35 23

At 30 April 2021 and 1 May 2021 (1,017) (51) (1,068)

(Credit) to income (713) 25 (688)

Charge to equity 167 – 167

At 30 April 2022 (1,563) (26) (1,589)

25 Share capital

Group and Company

Number of

shares £000

At 1 May 2020, 1 May 2021 and at 30 April 2022 246,091,423 123,046

26 Share premium account

Group and Company £000

At 1 May 2020, 1 May 2021 and at 30 April 2022 113,510

27 Treasury shares and own shares reserve

Movements on the treasury shares reserve and own shares reserve are shown in the Statements of changes in equity, which can be seen on page 98. Further information on these reserves

isgivenbelow:

Treasury shares reserve

The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the Group. At 30 April 2022, the Group held 1,825,991 of the Company’s shares (2021: nil).

Thetotalnumber of shares held in treasury represents 0.7% (2021: nil%) of the allotted and fully paid share capital of the Group.

Own shares reserve

The own shares reserve represents shares held by employee trusts in order to meet commitments under the Group’s various share schemes (Note 30). At 30 April 2022, the Guernsey Trust held

4,540,552 (2021: 2,245,434) 50p Ordinary shares and the YBS Trust held 77,592 (2021: 24,855) 50p Ordinary shares. The total number of shares held by these employee trusts represents 1.9%

(2021: 0.9%) of the allotted and fully paid share capital of the Group.

The results of the trusts are consolidated into the results of the Group in accordance with IFRS 10 “Consolidated Financial Statements”.

Notes to the financial statements continued

132 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

28 Other reserves

Group

Capital

redemption

reserve

Revaluation

reserve

£000

Merger

reserve

£000

Other

reserve

£000

At 1 May 2020 40 1,143 67,463 261,831

Foreign exchange differences – (1) – –

At 1 May 2021 40 1,142 67,463 261,831

Foreign exchange differences – (41) – –

At 30 April 2022 40 1,101 67, 463 261,831

Company

Capital

redemption

reserve

Revaluation

reserve

£000

Merger

reserve

£000

Other

reserve

£000

At 1 May 2020, 1 May 2021 and at 30 April 2022 40 – 63,159 261,831

The above shows the movements on the reserves classified as “Other reserves” on the Group’s Statement of changes in equity. Movements on the hedging reserve and translation reserve are shown

in the Statements of changes in equity, which can be seen on page 98. Further information on certain of these reserves is given below:

Hedging reserve

The hedging reserve represents the cumulative amount of changes in fair values of hedged interest rate derivatives that are deferred in equity, as explained in Note 2, less amounts transferred to the

income statement and other components of equity.

Translation reserve

The translation reserve represents the aggregate of the cumulative exchange differences arising from the retranslation of the balance sheets of the Euro based subsidiary undertakings and the

cumulative exchange differences arising from long term borrowings held as hedges.

The management of the Group’s foreign exchange translation risks is detailed in Note 21.

Merger reserve

The merger reserve in the Company and Group arose from acquisitions in previous years.

Other reserve

In the year ended 30 April 2020, the consideration for the acquisition of Redde plc was settled though the issue of 112,858,905 Ordinary shares of the Company. Holders of Redde plc shares

received0.3669 shares in the Company for each Redde plc share held by them. 112,858,197 shares were issued to holders of Redde plc shares, and where there were fractions of shares that could

notbe allocated to the holders of Redde plc shares, the total of these fractions of shares was sold in the market. The number of these shares was 708. The other reserve represents the excess of

theshare price on 21 February, 282p over the nominal share price of 50p. The share premium represents the excess of the share price of 251p at the time of the sale of these shares over the nominal

share price of 50p. The Company has recorded the premium for the issue of shares for the acquisition of Redde in other reserves in accordance with Section 612 of the Companies Act 2006 in respect

of merger relief.

133 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

29 Exceptional items

2022

£000

2021

£000

Impairment of property, plant and equipment – 4,341

Reversal of previous impairment of property, plant and equipment (2,998) (1,304)

Other costs 690 4,980

Exceptional administrative expenses (2,308) 8,017

Restructuring expenses (3,545) 2,754

Acquisition expenses – 1,088

FMG RS set up and integration costs 1,237 5,728

Legal settlement – (1,553)

Exceptional administrative expenses (2,308) 8,017

Gain on bargain purchase (355) (1,489)

Total exceptional items included within EBIT (2,663) 6,528

Exceptional finance costs: refinancing expenses 1,463 –

Total pre-tax exceptional items (1,200) 6,528

Tax charge (credits) relating to exceptional items 228 (1,286)

Cash expenses 2,125 9,557

Non-cash (credits) expenses (3,325) (3,029)

Total pre-tax exceptional items (1,200) 6,528

Details of exceptional items recognised in the income statement are as follows:

Restructuring expenses

The Group recognised a credit in respect to total exceptional restructuring credits of £3,545,000 (2021: cost of £2,754,000) of which a credit of £3,280,000 arose in Redde (2021: £2,151,000), a credit of

£265,000 in Northgate UK&I (2021: £169,000 credit) and £nil in Northgate Spain (2021: £772,000). These costs were incurred in relation to restructuring activities that were undertaken during the period

as part of the integration and reorganisation of the combined Group.

The restructuring expenses incurred during the year largely related to credits relating to reorganisation of sites of £3,653,000 offset by costs of £108,000 associated with reductions in headcount.

Intheprior year, there were costs associated with reduction in headcount totalling £2,734,000 and net costs incurred in relation to the closure and reorganisation of sites of £20,000, including net

impairments of property, plant and equipment.

Closure and reorganisation of sites

Included within the £3,653,000 credits (2021: £20,000 cost) in relation to the closure and reorganisation of sites are credits for the reversal of previous impairments of £2,998,000 (2021: £1,304,000)

due to the sublease of previously vacant properties, other credits of £655,000 (2021: £nil), provisions release credits in relation to properties of £nil (2021: £4,577,000), expenses incurred by the Group

during the year of £nil (2021: £1,560,000) and impairments of property, plant and equipment of £nil (2021: £4,341,000).

Acquisition expenses

During the prior year, the Group incurred acquisition expenses of £1,088,000. These related to professional services expenses directly attributable to the acquisition of the trade and assets

ofNationwide of £1,078,000 and £10,000 in relation to the Merger.

FMG RS set up and integration costs

The Group incurred costs of £1,237,000 (2021: £5,728,000) in relation to the set up of FMG RS and integration of the business, including redundancies.

Notes to the financial statements continued

134 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

29 Exceptional items continued

Legal settlement

During the prior year the Group settled a legal dispute in relation to a provider of certain IT and software development services to the Group. This resulted in a credit of £1,553,000 relating to expected

costs no longer payable.

Gain on bargain purchase

A gain on bargain purchase of £355,000 (2021: £1,489,000) has been recognised to the extent that the fair value of net assets acquired from acquisitions were lower than the fair value of consideration.

Refinancing expenses

During the year, the Group incurred exceptional financing costs of £1,463,000 (2021: £nil) attributable costs incurred on termination of loan notes and amortisation of arrangement fees as a result of the

refinancing which took place in November 2021.

Amortisation on acquired intangible assets

Amortisation on acquired intangible assets of £19,778,000 (2021: £19,513,000) is not classified as an exceptional item as it is recurring. However, it is excluded from underlying results in order to provide

a better comparison of results between periods as the group grows through a combination of organic and inorganic growth. The revenue and operating costs of these acquisitions are included within

underlying results. Amortisation of intangible assets of £993,000 (2021: £685,000) which does not relate to acquisitions is included within underlying profit.

30 Share based payments

The Group’s and Company’s various share incentive plans are explained in the Remuneration report on pages 67 to 79.

All options granted under the DABP, MPSP, EPSP and EAB are nil cost options. Options granted under the SAYE Scheme have exercise prices ranging from £2.12 to £4.01.

The All Employee Share Scheme (AESS) has a 12 month accumulation period. Partnership shares are purchased by the employee at the end of the accumulation period from the amount contributed

by the employee during that period. The Company allocates an amount of free matching shares equivalent to the number of partnership shares purchased. The vesting period for matching shares is

three years.

Matching shares are forfeited if the employee either sells the related partnership shares or leaves the Group before the three years have lapsed.

The Board may make discretionary awards of free shares to eligible employees. Employees must remain in employment of the Group during the vesting period of three years in order to receive the

freeshares.

The SAYE Scheme has a three year savings period where employees save at an agreed rate. At the end of the savings period, employees can to choose to either exercise options or withdraw

theirsavings.

Details regarding the plans in the year ended 30 April 2022 are outlined below:

DABP

Numberof

shareoptions

MPSP

Numberof

shareoptions

Free shares

Number of

freeshares

EPSP

Number of

shareoptions

AESS

Number of

matching

SAYE

Number of

shareoptions

At 1 May 2021 62,616 16,272 174,979 3,328,326 341,790 2,711,092

Granted/allocated during the year – – – 747,752 – –

Exercised/vested during the year (19,762) (6,866) (2,499) (75,100) (81,621) (61,396)

Forfeited/lapsed during the year (3,721) – (23,520) (265,351) (37,912) (298,452)

At 30 April 2022 39,133 9,406 148,960 3,735,627 222,257 2,351,244

Exercisable at the end of the year 39,133 9,406 – 85,725 – 13,447

135 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

30 Share based payments continued

DABP

2022

MPSP

2022

Free Shares

2022

EPSP

2022

AESS

2022

SAYE

2022

Weighted average remaining contractual life at the end of the year 4.4 years 0.3 years 0.3 years 8.5 years 1.3 years 1.4 years

Weighted average share price at the date of exercise of options in the year £4.11 £4.34 £4.07 £4.12 £4.22 £3.97

Date options granted/allocated during the year August 2021

Aggregate estimated fair value of options at the date of grant £2,408,000

The inputs into the Black-Scholes/Monte Carlo model were as follows:

Weighted average share price £4.30

Weighted average exercise price £nil

Expected volatility 75.06%

Expected life 3 years

Risk free rate 0.31%

Expected dividends 5.44%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years.

Details regarding the plans in the year ended 30 April 2021 are outlined below:

DABP

Numberof

shareoptions

MPSP

Numberof

shareoptions

Free shares

Number of

freeshares

EPSP

Number of

shareoptions

AESS

Number of

matching shares

SAYE

Number of

shareoptions

At 1 May 2020 126,737 16,272 206,094 3 87,039 312,249 1,027,83 9

Granted/allocated during the year – – – 3,120,864 158,218 2,003,552

Exercised/vested during the year (62,645) – (11,564) (104,924) (97, 25 3) (30,421)

Forfeited/lapsed during the year (1,476) – (19,551) (74,653) (31,424) (289,878)

At 30 April 2021 62,616 16,272 174,979 3,328,326 341,790 2,711,092

Exercisable at the end of the year 48,419 16,272 – – – –

DABP

2021

MPSP

2021

Free Shares

2021

EPSP

2021

AESS

2021

SAYE

2021

Weighted average remaining contractual life at the end of the year 5.2 years 1.3 years 1.3 years 9.2 years 1.9 years 2.4 years

Weighted average share price at the date of exercise of options in the year £2.08 – £2.30 £1.96 £2.54 £2.22

Date options granted/allocated during the year

August/

October 2021

January

2021

February

2021

Aggregate estimated fair value of options at the date of grant £4,718,000 £263,000 £1,805,000

The inputs into the Black-Scholes/Monte Carlo model were as follows:

Weighted average share price £1.89 £2.54 £2.75

Weighted average exercise price £nil £nil £2.12

Expected volatility 71.7% 75.0% 75.0%

Expected life 3 years 3 years 3 years

Risk free rate (0.04%) 0.00% 0.14%

Expected dividends 5.46% 6.6% 6.6%

Notes to the financial statements continued

136 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

30 Share based payments continued

In addition, 129,346 options were awarded under the EAB in July 2019, a further 59,393 options were awarded in September 2019 and a further 61,789 options were awarded in July 2021. These all

vested immediately and were valued based on the share price at the grant date for each grant. The shares will be held in trust for the required three year holding period or until the employee leaves

employment with the Group, whichever is sooner.

31 Financial instruments

The following disclosures and analysis relate to the Group’s financial instruments.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and

equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 21, cash and cash equivalents and equity attributable to equity holders of the

Parent, comprising issued share capital, reserves and retained earnings as disclosed in Notes 25 to 28.

Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise.

Net investment hedges

The Group manages its exposure to currency fluctuations on retranslation of the balance sheets of those subsidiary undertakings whose functional currency is in Euros by maintaining a proportion of

its borrowings in the same currency. The hedging objective is to reduce the risk of spot retranslation of the Euro subsidiaries from Euros to Sterling at each reporting date. Exchange differences arising

on the borrowings and net investment hedges have been recognised directly within equity along with the exchange differences on retranslation of the net assets of the Euro subsidiaries.

The hedges are considered highly effective in the current and prior year.

Foreign currency sensitivity analysis

During the year, the Group has been exposed to movements in the exchange rate between Euro and Sterling, where Sterling is the functional currency of the Group.

The following tables detail the Group’s sensitivity to a €0.20 (2021: €0.20) increase and decrease in the Euro/Sterling exchange rate.

A €0.20 (2021: €0.20) movement in the rate in either direction is management’s assessment of the reasonably possible change in foreign exchange rates in the near term. The sensitivity analysis only

includes any outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a €0.20 (2021: €0.20) change in foreign currency rates.

2022

As stated in

Annual Report

£000

As would be

stated if

€0.20increase

£000

As would be

stated if

€0.20decrease

£000

Profit before taxation 132,689 126,728 141,084

Total equity 946,761 926,968 974,537

2021

As stated in

Annual Report

£000

As would be

stated if

€0.20increase

£000

As would be

stated if

€0.20decrease

£000

Profit before taxation 67,179 62,897 73,320

Total equity 908,129 889,357 934,793

137 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

31 Financial instruments continued

Interest rate risk management

The Group is exposed to interest rate risk, as entities within the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix

between fixed and floating rate borrowings and by the use of interest rate swap contracts if necessary. Hedging activities are reviewed regularly to align with interest rate views and defined risk

appetite, ensuring optimal hedging strategies are applied.

The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined on the exposure to interest rates for floating rate liabilities and related derivatives. For the floating rate liabilities, the analysis is prepared on the

basis of both the average liability outstanding over the year and the average rate applicable for the year. In all instances it is assumed that any derivatives designated in hedging relationships are

100%effective.

A 1.0% (2021: 1.0%) increase or decrease has been used in the analysis and represents management’s best estimate of a reasonably possible change in interest rates in the near term.

2022

As stated in

Annual Report

£000

As would be

stated if

1.0%increase

£000

As would be

stated if

1.0%decrease

£000

Profit before taxation 132,689 130,145 135,232

Total equity 946,761 944,701 948,821

2021

As stated in

Annual Report

£000

As would be

stated if

1.0%increase

£000

As would be

stated if

1.0%decrease

£000

Profit before taxation 67,179 63,863 70,495

Total equity 908,129 905,442 910,816

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group’s short,

medium and long term funding and liquidity requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities by continuously monitoring

forecast and actual cash flows and matching the maturity profiles of financial assets and financial liabilities. Included in Note 21 is a description of additional undrawn facilities that the Group has at its

disposal to further reduce liquidity risk.

Notes to the financial statements continued

138 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

31 Financial instruments continued

Liquidity and interest risk tables

The following tables detail the Group’s and Company’s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows

of financial liabilities based on the earliest date on which the Group and Company can be required to pay. The tables include both interest and principal cash flows. All interest cash flows and the

weighted average effective interest rate have been calculated using interest rate conditions prevailing at the balance sheet date.

Group 2022

Weighted

average

effective

interest rate

<1 year

£000

2nd year

£000

3–5 years

£000

>5 years

£000

Total

£000

Non-interest bearing 0.00% 108,201 – – – 108,201

Fixed interest rate instruments 1.33% 4,181 4,181 12,542 326,095 346,999

Variable interest rate instruments 2.32% 14,344 2,831 119,051 – 136,226

126,726 7,01 2 131,593 326,095 591,426

Group 2021

Weighted

average

effective

interestrate

<1 year

£000

2nd year

£000

3–5 years

£000

>5 years

£000

Total

£000

Non-interest bearing 0.00% 100,923 – – – 100,923

Fixed interest rate instruments 2.40% 2,093 87,411 75 500 90,079

Variable interest rate instruments 1.84% 13,398 83,166 242,717 – 339,281

116,414 170,577 242,792 500 530,283

Company 2022

Weighted

average

effective

interest rate

<1 year

£000

2nd year

£000

3–5 years

£000

>5 years

£000

Total

£000

Non-interest bearing 0.00% 229,551 – – – 229,551

Fixed interest rate instruments 1.33% 4,181 4,181 12,542 326,095 346,999

Variable interest rate instruments 2.58% 6,600 6,602 260,759 – 273,961

240,332 10,783 273,301 326,095 850,511

Company 2021

Weighted

average

effective

interestrate

<1 year

£000

2nd year

£000

3–5 years

£000

>5 years

£000

Total

£000

Non-interest bearing 0.00% 202,134 – – – 202,134

Fixed interest rate instruments 2.40% 2,093 87,411 75 500 90,079

Variable interest rate instruments 1.87% 8,457 85,648 373,954 – 468,059

212,684 173,059 374,029 500 760,272

139 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

31 Financial instruments continued

Fair value of financial instruments

The Group is required to analyse financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

– Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

– Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. prices) or indirectly

(i.e.derived from prices).

– Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

All the financial instruments below are categorised as Level 2. The fair values of financial assets and financial liabilities are determined as follows:

– Derivative financial instruments are measured at the present value of future cash flows estimated and discounted based on applicable yield curves derived from quoted interest rates.

– The fair values of other non-derivative financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values or, in the case of interest rate and cross currency

swaps, are held at fair value.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

The Group’s credit risk is primarily attributable to its trade receivables. The trade receivables amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for

impairment is made using the simplified model applicable to trade receivables as per IFRS 9.

2022

£000

2021

£000

Trade receivables

Trade receivables (maximum exposure to credit risk) 126,169 125,668

Allowance for doubtful receivables (28,946) (27,277)

97, 223 98,391

Ageing of trade receivables not impaired

Not overdue 59,422 64,244

Past due not more than two months 24,734 20,344

Past due more than two months but not more than four months 5,944 5,402

Past due more than four months but not more than six months 7,123 8,401

Total 97, 223 98,391

Before accepting any new customers, the Group will perform credit analysis to assess the credit risk on an individual basis. This enables the Group only to deal with creditworthy customers, therefore

reducing the risk of financial loss from defaults. Of the trade receivables balance at the end of the year, £2,764,000 (2021: £3,268,000) is due from the Group’s largest customer. There are no

customers which represent more than 5% of the total balance of trade receivables.

Notes to the financial statements continued

140 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

31 Financial instruments continued

The Group has no significant concentration of credit risk as trade receivables consist of a large number of customers, spread across diverse industries and geographic areas in Northgate UK&I and

Northgate Spain.

2022

£000

2021

£000

Movement in the allowance for doubtful receivables

At 1 May 27,277 22,884

Impairment losses recognised 12,069 10,654

Amounts written off as uncollectable (6,048) (4,262)

Impaired losses reversed (3,814) (1,932)

Exchange differences (538) (67)

At 30 April 28,946 27,277

Net impairment of trade receivables as at 30 April 2022 totalled £8,255,000 (2021: £8,722,000). In determining the recoverability of a trade receivable, the Group considers any change in the credit

quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and mainly unrelated.

Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful receivables.

Included in the allowance for doubtful receivables are trade receivables with customers which have been placed under liquidation of £1,563,000 (2021: £1,120,000).

2022

£000

2021

£000

Ageing of impaired trade receivables

Not overdue 1,868 1,115

Past due not more than two months 1,704 1,441

Past due more than two months but not more than four months 3,807 2,927

Past due more than four months but not more than six months 1,628 1,300

Past due more than six months 19,939 20,494

28,946 27,277

The Directors consider that the carrying amount of receivables and contract assets approximates their fair value. The Company has no trade receivables and no intercompany receivables past

duedate.

141 Redde Northgate plc Annual Report and Accounts 2022

Notes to the financial statements continued

32 Related party transactions

Transactions with subsidiary undertakings

Transactions between the Company and its subsidiary undertakings, which are related parties, are £2,703,000 (2021: £2,516,000) interest payable and £8,151,000 (2021: £7,470,000) royalty

chargesreceivable.

Balances with subsidiary undertakings at the balance sheet date are shown in Notes 19 and 20.

Transactions with associates

Details of the Group’s interests in associates, which are regarded as related parties, are provided in Note 17. The Group made sales and recharges of expenses to these associates amounting to

£8,448,000 (2021: £9,448,000) and made purchases of £20,000 (2021: £374,000) from those associates. At the year end, the Group was owed £1,353,000 (2021: £3,072,000) by these associates,

included in trade receivables.

Transactions with other related parties

There were no transactions with other related parties in the current or prior years.

Remuneration of key management personnel

In the current and prior year, the Directors of the Company are determined to be the key management personnel of the Group. There are other senior executives in the Group who are able to influence

the Company in the achievement of its goals. However, in the opinion of the Directors, only the Directors of the Company have significant authority for planning, directing and controlling the activities

of the Group.

In respect of the compensation of key management personnel, the short term employee benefits, post employment (pension) benefits, termination benefits and details of share options granted are

set out in the Remuneration report on pages 67 to 79.

The fair value charged to the income statement in respect of equity settled share based payment transactions with the Directors is £672,000 (2021: £563,000). There are no other long term benefits

accruing to key management personnel, other than as set out in the Remuneration report.

33 Events after the reporting period

On 2 July 2022, the Group acquired 100% of the equity interests of Blakedale Limited for an initial consideration of £11m.

Notes to the financial statements continued

142 Redde Northgate plc Annual Report and Accounts 2022

Glossary

Term Definition

AGM Annual general meeting of the Company

Annual report on

remuneration

That section of the Remuneration report which is subject to an advisory

shareholdervote

Average capital employed A two point average of capital employed at last day of the current and previous

financial years

Auxillis A business within the Redde operating segment providing fault and non-fault

accident management assistance and related services

B2B Business to business

B2C Business to consumer

BEIS Department for Business Energy & Industrial Strategy, a UK government department

BVRLA A UK trade association representing companies engaged in vehicle rental, leasing

and fleet management

Capex Capital expenditure

Capital employed Net assets excluding net debt, goodwill and acquired intangible assets.

Car parc Refers to the number of cars and other vehicles registered for use in a

particularcountry

CDP An organisation running a global disclosure system for investors, companies and

other organisations

CEO Chief Executive Officer

CFO Chief Financial Officer

ChargedEV Charged Electric Vehicles Limited, a business within the Group providing EV charging

infrastructure and solutions

Contract hire IFRS 16 (leases) relating to vehicles where the funder retains the residual value risk

DABP Deferred Annual Bonus Plan, a senior management share award scheme

DfT Department for Transport, a UK government department

Disposal profit(s) This is a non-GAAP measure used to describe the adjustment in the depreciation

charge made in the year for vehicles sold at an amount different to their net book

value at the date of sale (net of attributable selling costs)

EAB Executive Annual Bonus scheme, a senior management share award scheme

eAuction The part of the Group which generates vehicles sales revenue through the Group’s

online sales platforms

EBIT Earnings before interest and taxation. Underlying unless otherwise stated

EBITDA Earnings before interest, taxation, depreciation and amortisation

EPS Basic earnings per share. Underlying unless otherwise stated

EPSP Executive Performance Share Plan, a senior management share award scheme

Term Definition

ESG Environmental, social and governance

EV(s) Electric vehicle(s)

Facility headroom Calculated as facilities of £711m less net borrowings of £406m. Net borrowings

represent net debt of £530m excluding lease liabilities of £128m and unamortised

arrangement fees of £4m and are stated after the deduction of £7m of net cash and

overdraft balances which are available to offset against borrowings

FCA Financial Conduct Authority, a UK regulatory body

FMG A business within the Redde operating segment providing fleet

managementservices

FMG RS The trading part of the Redde operating segment that was acquired from Nationwide

providing vehicle repair services

FNOL First notice of loss

FRC Financial Reporting Council

Free cash flow Net cash generated after principal lease payments and before the payment of

dividends

FY2020 The year ended 30 April 2020

FY2021 The year ended 30 April 2021

FY2022 The year ended 30 April 2022

FY2023 The year ending 30 April 2023

GAAP Generally Accepted Accounting Practice: meaning compliance with IFRS

Gearing Calculated as net debt divided by net tangible assets

GRG Resources GRG Public Resources Limited and its subsidiary undertaking

Growth capex Growth capex represents the cash consumed in order to grow the total owned rental

fleet or the cash generated if the fleet size is reduced in periods of contraction

H1/H2 Half year period: H1 being the first half and H2 being the second half of the

financialyear

HP (leases) Leases recognised on the balance sheet that would previously have been classified

as finance leases prior to the adoption of IFRS 16

ICE vehicles Vehicles powered by an internal combustion engine

IEA The International Energy Agency providing data analysis and solutions on all fuels

and technologies

IFRS International Financial Reporting Standards

IFRS 16 (leases) Leases recognised on the balance sheet that would previously have been classified

as operating leases prior to the adoption of IFRS 16

Income from associates The Group’s share of net profit of associates accounted for using the equity method

143 Redde Northgate plc Annual Report and Accounts 2022

Glossary continued

Term Definition

ISO 45001 An international standard for health and safety at work

KPIs Key performance indicators

LCV Light commercial vehicle: the official term used within the European Union for a

commercial carrier vehicle with a gross vehicle weight of not more than 3.5 tonnes

Lease principal payments Includes the total principal payment on leases including those recognised before and

after adoption of IFRS 16

Listing Rules The Listing Rules of the FCA

LTIP Long term incentive plan, including the EPSP

MPSP Management Performance Share Plan, a senior management share award scheme

(closed to new awards from 2013)

MSCI An investment research firm providing stock indexes, portfolio risk and

performanceanalytics

Nationwide Nationwide Accident Repair Services Limited trade and certain assets acquired by the

Group on 4 September 2020

Net replacement capex Net capital expenditure other than that defined as growth capex

Net zero As defined under The Paris Agreement, a legally binding international treaty on

climate change

NewLaw A business within the Redde operating segment providing legal services

Non-GAAP A financial metric used which is not defined under GAAP

Non-ICE Vehicles not powered by an internal combustion engine

Net tangible assets Net assets less goodwill and other intangible assets

Northgate The Northgate Spain operating segment located in Spain and providing commercial

vehicle hire and ancillary services

Northgate Spain The Northgate UK&I operating segment located in the United Kingdom and the

Republic of Ireland providing commercial vehicle hire and ancillary services

Northgate UK&I The Northgate UK&I operating segment representing the commercial vehicle hire

part of the Group located in the United Kingdom and the Republic of Ireland

OEM(s) Original equipment manufacturer(s): a reference to our vehicle suppliers

OZEV Office for Zero Emission Vehicles, a UK government department

PBT Profit before taxation. Underlying unless otherwise stated

PPU Profit per unit/loss per unit – this is a non-GAAP measure used to describe disposals

profits (as defined), divided by the number of vehicles sold

PwC PricewaterhouseCoopers LLP

Term Definition

Redde The Redde operating segment representing the insurance claims and services part of

the providing a range of mobility solutions Group or the Redde plc company and its

subsidiaries prior to the Merger.

Redde Northgate The Group

Rental margin Calculated as rental profit divided by revenue (excluding vehicle sales)

Rental profits EBIT excluding disposal profits

ROCE Underlying return on capital employed: calculated as underlying EBIT (see GAAP

reconciliation) divided by average capital employed

RTA Road traffic accident

Section 172 Referring to Section 172 of the Companies Act 2006

SASB Sustainability Accounting Standards Board, an organisation providing standards for

ESG reporting

SAYE The Company’s all employee share saving scheme

SECR Streamlined Energy & Carbon Reporting

SIP The Company’s HMRC approved share incentive plan, also known as the All

Employee Share Scheme (AESS)

Steady state cash

generation

Underlying EBITDA less net replacement capex

TCFD The Task Force on Climate-related Financial Disclosures

The Code The UK Corporate Governance Code

The combined Group The Company and its subsidiaries following the Merger

The Company Redde Northgate plc

The Group The Company and its subsidiaries

The Merger The acquisition by the Company of 100% of the share capital of Redde plc on

21 February 2020

Underlying free cashflow Free cash flow excluding growth capex

Utilisation Calculated as the average number of vehicles on hire divided by average rentable

fleet in any period

VOH Vehicles on hire. Average unless otherwise stated

WACC Weighted average cost of capital calculated using the capital asset pricing model

ZEV Zero emission vehicle

144 Redde Northgate plc Annual Report and Accounts 2022

Shareholder information

Classification

Information concerning day to day movements in the price of the Company’s Ordinary shares can

be found on the Company’s website at: www.reddenorthgate.com

The Company’s listing symbol on the London Stock Exchange is REDD.

The Company’s joint corporate brokers are Barclays Bank plc and Numis Securities Limited and

the Company’s Ordinary shares are traded on SETSmm.

The Company is registered in England and Wales.

Company number 00053171

Financial calendar

December

Publication of interim statement

January

Payment of interim dividend

July

Announcement of year end results

Report and financial statements available to shareholders

September

Annual general meeting

Payment of final dividend

Secretary and registered office

James Kerton

Northgate Centre

Lingfield Way

Darlington

DL1 4PZ

Tel: 01325 467558

Registrars

Link Group

10th Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

Tel: 0371 664 0391

Calls are charged at the standard geographic rate and will vary by provider.

Calls outside the United Kingdom will be charged at the applicable international rate.

Redde Northgate plc

Northgate Centre

Lingfield Way

Darlington

DL1 4PZ

Tel: 01325 467558

www.reddenorthgate.com

145 Redde Northgate plc Annual Report and Accounts 2022