MathEngine plc - Limited company accounts 20.1

REGISTERED NUMBER: 03334206 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 31 December 2019

for

MATHENGINE PLC

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Income Statement

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Cash Flow Statement

15

Notes to the Cash Flow Statement

16

Notes to the Financial Statements

17

Directors:

D J N Nabarro

W G Wells

Registered office:

Sterling House

19/23 High Street

Kidlington

Oxfordshire

OX5 2DH

Registered number:

03334206 (England and Wales)

Auditors:

Haines Watts

Chartered Accountants and Statutory Auditor

Sterling House

19/23 High Street

Kidlington

Oxfordshire

OX5 2DH

We have pleasure in publishing our Company’s latest Strategic Report, the Report of the Directors and the Financial

Statements for the year ended 31st December 2019 on our MathEngine PLC (“MathEngine”) web-site, at

www.mathengineplc.com.

You will also find on our updated web-site, Notice of the twenty-second (22nd) MathEngine AGM to be held at the

Company’s registered office at Sterling House, 19-23 High Street, Kidlington, Oxford OX5 2DH at Noon (12.00) on

Monday 29th June 2020, a downloadable and printable Attendance Card, and a Form of Proxy in respect of the

forthcoming AGM.

Review of business and key financial indicators

Value of the Company's portfolio

During the twelve months period to 31st December 2019, the value of our Company's assets decreased by a marginal

point seven per cent (-0.71%) to £769,498.

This was net of our requirement to reserve £51,444 for payment of UK corporation tax levied on our substantial

capital gain realised in the previous year on our shareholding in Vena Solutions.

At the year-end, we held cash amounting to 15.8% of our net assets, and on a per share basis, MathEngine’s Ordinary

Shares had an approximate net asset value of 3.18 pence per share.

Investments

We continue to hold a significant investment in Vena and, despite the extraordinary impact of Covid-19 on so many of

our lives, Vena, according to recent reports from its management, as a tech company continues to prosper.

During the year we backed an impressive Australian management team by making a substantial investment in

Balamara Resources, their Polish coking (metallurgical) coal mining venture, and I look forward to reporting further

on their progress during the coming months.

We also made two loans to undoubted individuals at an average annual interest rate of 14.4%, one of which has been

repaid in full since the year-end and the other one of which is current and will be repaid later in the year.

Portfolio policy

MathEngine has no debt and with significant cash in hand, we continue to seek other interesting and potentially

profitable investment opportunities for our Company.

New Articles of Association

We recently reviewed our Company’s Articles of Association and in doing so realised that document was last amended

in November 1999 and refers to the now out of date UK Companies Acts of 1985-1989. We therefore propose to

update our articles in line with modern best practice and are submitting a special resolution at our forthcoming AGM

on Monday 29th June to replace our existing old articles with a modern and relevant version..

Your board have been careful to ensure that all our shareholders will continue to benefit from the same protections as

before and intend to vote in favour of the special resolution in respect of their own shareholdings of 5,963,300

ordinary shares (27.12%) in MathEngine.

Repurchase of shares

During the year, the El Oro Group, a long-time shareholder in MathEngine was liquidated, and we were able, by

moving quickly, to repurchase the 3,939,282 MathEngine ordinary shares it owned (circa 15.17%) for just £14,950 or

circa 0.38p per share. That purchase price was a discount of circa 88% to our Company’s Net Asset Value. These

purchased shares have been subsequently cancelled making the transaction materially value accretive for all of

MathEngine’s shareholders and we are now seeking retrospective approval for this purchase. Again, your board intend

to vote in favour of this special resolution in respect of their own shareholdings in MathEngine.

Principal risks and uncertainties

The Company's internal controls are designed to meet its particular needs and the financial risks to which it is

exposed.

In this context, the controls can only provide reasonable, not absolute, assurance against material errors, losses or

fraud by third parties.

The directors take an active role in assessing the potential financial risks in all areas of the business by reviewing the

investments regularly and also through day to day management control.

The Company's principle financial assets are investments and cash which are monitored daily.

Section 172(1) statement

Under Section 172 of the Companies Act 2006, the Directors have a duty to promote the success of the Company

over the long term for the benefit of shareholders as a whole, having regard to a range of other key stakeholders and

interests.

The Board is responsible for the overall direction of the company. It is responsible for the company' s long-term

success. It sets the company's strategy and monitors the performance of the company to ensure that it is prepared for

the challenges and opportunities of the future.

In performance of these duties, the Board is focused on the sustainability of the company in the long term. The Board

recognises the need for the company to have effective engagement with, and encourage participation from, all key

stakeholders to promote these long-term interests.

Engagement with employees

The company has no paid employees on the payroll and so there was no requirement to conduct an employee

engagement survey during the year.

Engagement with suppliers, customers and others

We ensure that all suppliers are paid in accordance with the terms agreed and work to ensure that our investors have a

clear understanding of our strategy, performance and objectives.

The Board is committed to communicating with shareholders and other stakeholders in a clear and open manner and

seeks to ensure effective engagement through the AGM and the company’s website.

Statement of corporate governance arrangements

This year, for the first time, we are reporting compliance against the new 2018 UK Corporate Governance Code issued

by the Financial Reporting Council.

The Board is committed to maintaining high standards of governance and I am pleased to confirm that your Company

is fully compliant with the Principles and Provisions of the Code for the year ended 31 December 2019. As a Board,

we remain committed to applying the highest standards of corporate governance, recognising that robust governance

and culture underpin business success.

Our registrars

We continue to receive good service from our registrars, Link Asset Services, and any Shareholder having a query re.

their shareholding in MathEngine PLC should write to or e-mail Aydin Djemal at Link as follows:

Mr. Aydin Djemal

Link Asset Services Registrars

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

e-mail address: aydin.djemal@linkgroup.co.uk

Our advisers

I record my gratitude to my boardroom colleague, William Wells, for his sound and entrepreneurial counsel during the

year, and to Rodney Style and his team, our auditors at Haines Watts Oxford, Chartered Accountants, for their help

and advice with our Company’s accounts.

Shareholders communication

In the interests of carefully husbanding our resources, we communicate with you our shareholders via our detailed and

disclosing www.mathengineplc.com web-site, which we endeavour to keep both informative and up to date.

On behalf of the board:

D J N Nabarro - Director

2 June 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

Principal activity

The principal activity of the Company in the year under review was that of an investment company aiming to achieve

capital appreciation over a long-term perspective.

Dividends

No dividends will be distributed for the year ended 31 December 2019.

Future developments

The Company has no debt and now significant cash in hand and the board will continue to seek other interesting and

potentially profitable investment opportunities for the Company.

Directors

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this

report.

D J N Nabarro

W G Wells

Statement of directors' responsibilities

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting

Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law

the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of

the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these

financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject to any material departures disclosed and

explained in the financial statements;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company

will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible

for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of

fraud and other irregularities.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the

Company's auditors are aware of that information.

Auditors

The auditors, Haines Watts, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

D J N Nabarro - Director

2 June 2020

Opinion

We have audited the financial statements of MathEngine plc (the 'company') for the year ended 31 December 2019

which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity,

Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary

of significant accounting policies. The financial reporting framework that has been applied in their preparation is

applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted

Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable

law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of

the financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical

Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe

that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report

to you where:

- the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not

appropriate; or

- the directors have not disclosed in the financial statements any identified material uncertainties that may cast

significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period

of at least twelve months from the date when the financial statements are authorised for issue. However, not all future

events or conditions can be predicted. The COVID-19 viral pandemic is one of the most significant economic events

for the UK with unprecedented levels of uncertainty of outcomes. It is therefore difficult to evaluate all of the potential

implications on the company’s investmemts and wider economy. The Directors’ view on the impact of COVID-19 is

disclosed in the Strategic Report.

Other information

The directors are responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the

Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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 such material

inconsistencies or apparent material misstatements, we are required to determine whether there is a material

misstatement in 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 in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the

audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to

you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view,

and for such internal control as the directors determine 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 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 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial

Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of

the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

Rodney Style ACA (Senior Statutory Auditor)

for and on behalf of Haines Watts

Chartered Accountants and Statutory Auditor

Sterling House

19/23 High Street

Kidlington

Oxfordshire

OX5 2DH

4 June 2020

Turnover

-

-

Administrative expenses

(21,989

)

(16,225

)

(21,989

)

(16,225

)

Other operating income

560

-

Operating loss

4

(21,429

)

(16,225

)

Profit/loss on sale of invest

5

15,008

-

(6,421

)

(16,225

)

Interest receivable and similar income

40,019

1,132

33,598

(15,093

)

Gain/loss on revaluation of assets

(27,986

)

165,614

Profit before taxation

5,612

150,521

Tax on profit

6

3,856

(31,700

)

Profit for the financial year

9,468

118,821

Profit for the year

9,468

118,821

Other comprehensive income

Profit and Loss

32

167,092

Revaluation reserve

(32

)

(167,092

)

Income tax relating to components of other comprehensive income

-

-

Other comprehensive income for the year, net of income tax

-

-

Total comprehensive income for the year

9,468

118,821

Fixed assets

Investments

7

331,451

782,803

Current assets

Debtors

8

388,793

20,277

Cash at bank

121,623

47,570

510,416

67,847

Creditors

Amounts falling due within one year

9

58,869

6,823

Net current assets

451,547

61,024

Total assets less current liabilities

782,998

843,827

Provisions for liabilities

10

13,500

68,800

Net assets

769,498

775,027

Capital and reserves

Called up share capital

11

2,382,141

2,422,003

Share premium

12

12,274,479

12,249,614

Retained earnings

12

(13,887,122

)

(13,896,590

)

Shareholders' funds

769,498

775,027

The financial statements were approved by the Board of Directors and authorised for issue on 2 June 2020 and were signed on its behalf by:

D J N Nabarro - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2018

2,422,003

(14,015,411

)

12,249,614

656,206

Changes in equity

Total comprehensive income

-

118,821

-

118,821

Balance at 31 December 2018

2,422,003

(13,896,590

)

12,249,614

775,027

Changes in equity

Issue of share capital

(39,862

)

-

24,865

(14,997

)

Total comprehensive income

-

9,468

-

9,468

Balance at 31 December 2019

2,382,141

(13,887,122

)

12,274,479

769,498

Cash flows from operating activities

Cash generated from operations

1

(394,684

)

(12,613

)

Net cash from operating activities

(394,684

)

(12,613

)

Cash flows from investing activities

Purchase of fixed asset investments

(200,824

)

-

Sale of fixed asset investments

639,537

15,000

Interest received

40,019

1,132

Net cash from investing activities

478,732

16,132

Cash flows from financing activities

Amount introduced by directors

5,001

-

Amount withdrawn by directors

-

(5,000

)

Share buyback

(14,996

)

-

Net cash from financing activities

(9,995

)

(5,000

)

Increase/(decrease) in cash and cash equivalents

74,053

(1,481

)

Cash and cash equivalents at beginning of year

2

47,570

49,051

Cash and cash equivalents at end of year

2

121,623

47,570

1.	Reconciliation of profit before taxation to cash generated from operations

31/12/19

31/12/18

£

£

Profit before taxation

5,612

150,521

Loss/(gain) on revaluation of fixed assets

12,639

(165,614

)

Finance income

(40,019

)

(1,132

)

(21,768

)

(16,225

)

(Increase)/decrease in trade and other debtors

(373,516

)

3,612

Increase in trade and other creditors

600

-

Cash generated from operations

(394,684

)

(12,613

)

2.	Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of

these Balance Sheet amounts:

Year ended 31 December 2019

31/12/19

1/1/19

£

£

Cash and cash equivalents

121,623

47,570

Year ended 31 December 2018

31/12/18

1/1/18

£

£

Cash and cash equivalents

47,570

49,051

3.	Analysis of changes in net funds

At 1/1/19

Cash flow

At 31/12/19

£

£

£

Net cash

Cash at bank

47,570

74,053

121,623

47,570

74,053

121,623

Total

47,570

74,053

121,623

1.	Statutory information

MathEngine Plc is a public company, limited by shares, registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Significant judgements and estimates

The preparation of the financial statements in conformity with FRS 102 requires management to use

accounting estimates and exercise judgement in the process of applying the company's accounting policies.

There were no areas which required significant judgement or measurement uncertainty.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different

from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and

laws that have been enacted or substantively enacted by the year end and that are expected to apply to the

reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange

ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating

result.

Going concern

The directors have considered the potential impact of the Covid-19 virus on the company's financial

performance for the period of twelve months from the date of approval of the financial statements and have

identified no material uncertainties that may cast a significant doubt on the ability of the company to continue

as a going concern for the foreseeable future.

3.	Employees and directors

31/12/19

31/12/18

£

£

Wages and salaries

5,000

5,000

The average number of employees during the year was as follows:

31/12/19

31/12/18

Directors

2

2

Gillian Hedger is MathEngines's Company Secretary and both collates information for you for the annual audit

and also from time-to-time liaises with Aydin Djemal at Link Asset Services, who are our registrars, but

Cato Strategic remunerates her entirely.

31/12/19

31/12/18

£

£

Directors' remuneration

5,000

5,000

4.	Operating (loss)/profit

The operating loss (2018 - operating profit) is stated after charging:

31/12/19

31/12/18

£

£

Auditors' remuneration

4,000

3,500

Foreign exchange differences

-

20

5.	Exceptional items

31/12/19

31/12/18

£

£

Profit/loss on sale of invest

15,008

-

6.

Taxation

Analysis of the tax (credit)/charge

The tax (credit)/charge on the profit for the year was as follows:

31/12/19

31/12/18

£

£

Current tax:

UK corporation tax

51,444

-

Deferred tax

(55,300

)

31,700

Tax on profit

(3,856

)

31,700

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

31/12/19

31/12/18

£

£

Profit before tax

5,612

150,521

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

1,066

28,599

Effects of:

Expenses not deductible for tax purposes

14

-

Other tax adjustments

69,728

-

Revaluation of investments

2,401

(31,467

)

Prior year losses used this year

(21,765

)

-

Current year losses carried forward

-

2,868

Deferred tax charge

(55,300

)

31,700

Total tax (credit)/charge

(3,856

)

31,700

Tax effects relating to effects of other comprehensive income

31/12/19

Gross

Tax

Net

£

£

£

Profit and Loss

32

-

32

Revaluation reserve

(32

)

-

(32

)

-

-

-

31/12/18

Gross

Tax

Net

£

£

£

Profit and Loss

167,092

-

167,092

Revaluation reserve

(167,092

)

-

(167,092

)

-

-

-