MathEngine plc - Limited company accounts 16.1

REGISTERED NUMBER: 03334206 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the period

1 July 2014 to 31 December 2015

for

MATHENGINE PLC

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Profit and Loss Account

8

Statement of Total Recognised Gains and Losses

9

Balance Sheet

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

Directors:

D J N Nabarro

W G Wells

Registered office:

No. 1 The Yard

Burraton Square

Poundbury

Dorset

DT1 3GR

Registered number:

03334206 (England and Wales)

Auditors:

Haines Watts

Chartered Accountants and Statutory Auditor

Sterling House

19/23 High Street

Kidlington

Oxfordshire

OX5 2DH

The directors present their strategic report for the period 1 July 2014 to 31 December 2015.

Review of business and key financial indicators

Value of the Company's portfolio

During the eighteen months period to 31st December 2016, the value of the Company's assets decreased to £294,687, a

forty one, point three per cent (41.3%) reduction on the previous year.

Change of accounting year end

For this most recent accounting period to 31st December 2015, your board extended the accounting period by six

months to 31st December 2015, while awaiting receipt of £150,000 contractually due to MathEngine not later than 24th

December 2015 from the sale of shares in a private UK company.

At the present time, this sum has not yet been received and on our auditor's advice and to be prudent, we have reduced

the carrying value of the sum due to zero, though your directors continue to actively pursue such payment. It is unclear

how long it will take to obtain payment but we will keep shareholders' fully appraised of MathEngine's efforts to recover

this significant sum.

Portfolio policy

While at the 31st December 2015, the portfolio showed a sharp deterioration in value mainly due to the above stated

decision to write down the carrying value of the debt due to the Company from the DHCL director, I am pleased to

report that since then, and despite the Repurchase not having yet completed, the value of the Company's portfolio has

recovered to just over £450,000.

During the period to 31st December 2015 and despite our long-held belief in its promising prospects but in the light of

the oil market collapse, we finally disposed of our shareholding in Bahamas Petroleum ("BPC"). While the final

disposal price was disappointing, overall over the years, MathEngine profited well from investing in BPC.

On the plus side, we were successful in disposing of our shareholding in DJI Holdings, the Chinese lottery operator,

when it listed on AIM, for a three and a half times return. We also continue to hold shares in the dividend paying S&U

PLC, the leading UK motor finance business, and Sun Corp, the major Australian insurer. We also own shares in

Hampden & Co the new UK private bank, which opened successfully in June 2015 and where, as a founder, I serve on

the board as a non-executive director. Hampden's shares have traded recently on a private sale basis at a sixty per cent

premium to our original investment price.

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.

Development and performance

The Company's portfolio is now largely focussed on one major investment, Vena Solutions Inc.

Vena Solutions ("Vena") is a fast growing and successful, Toronto based, multi award winning, unique, CPM (Corporate

Performance Management) software business, which has already gained a significant foothold in financial processes and

we believe represents exciting investment potential for MathEngine.

Vena's software/proposition is especially relevant to major international corporations with complex accounting

requirements (over 250 have already signed up), and provides them with trusted numbers and insights, without

sacrificing the significant investments they've already made in Excel and other models and templates.

Vena is the fastest growing provider of cloud-based CPM software, and the only one to embrace - not replace - Excel

spreadsheets. It has just announced that leading industry analysts, Nucleus Research, has named it a market leader in its

annual CPM Value Matrix report and we are advised that Gartner, another leading industry analyst, are also lauding

Vena.

The primary driver behind Vena's leadership and in our view its main competitive advantage, which first attracted us to

invest in the company, is its use of the globally used Excel as an interface into companies' performance management

data.

Nucleus Research states that it "expects Vena to continue to experience success as customers look for usable and

flexible solutions that will allow for easy adoption."

My colleague, William Wells and I both visited Vena's offices in Toronto, at no expense to MathEngine, and were

suitably impressed.

Most excitingly, Vena announced on 6th May 2016 that it has entered into a term sheet with a private California-based

investment partnership ("Partnership") to become Vena's major funding partner going forward and to have board

representation.

The proposed transaction will involve this Partnership investing a minimum of US$20m into Vena and reflect a

pre-money valuation for the company of C$75m or C$2.92 per share, a 39% premium to our investment price level.

Interested MathEngine shareholders are invited to take a look at Vena's web-site at www.venasolutions.com.

On behalf of the board:

D J N Nabarro - Director

6 June 2016

The directors present their report with the financial statements of the company for the period 1 July 2014 to 31 December 2015.

Principal activity

The principal activity of the company in the period under review was that of an investment company with a long term

perspective.

Dividends

No dividends will be distributed for the period ended 31 December 2015.

Future developments

Our investment approach is now focused more on technology and we will be looking to invest in potentially profitable

opportunities in this sector in the year ahead.

Directors

D J N Nabarro has held office during the whole of the period from 1 July 2014 to the date of this report.

Other changes in directors holding office are as follows:

W G Wells - appointed 30 July 2014

I will look forward to meeting as many of you as possible at the AGM on Friday 8th July 2016.

Our registrars

In consultation with our registrars, Capita, and to reduce printing and postage costs and be more environmentally

conscious, we will shortly be seeking Shareholder approval by resolution at the forthcoming Annual General Meeting to

approve new articles setting out how we communicate with shareholders in future.

Therefore, with this letter and the audited accounts, we also attach an individual shareholder consent letter detailing

communication preference options with a reply slip enclosed.

In essence, shareholders will need to respond if they wish to continue to receive hard copies of company

communications including annual accounts, and non-responders will be deemed to have elected to in future receive only

electronic "web communications".

Following this communication, shareholders who have elected to continue to receive hard copy communications will

continue to receive all documents in paper format via post as previously.

Non-responders who will be deemed to have received communication via the company's website, will still receive a

proxy card which will include a 'Notice of Availability' (NOA). The NOA will advise that the documents (the annual

report and accounts and the notice of meeting) are available on the company's web-site.

To effect future electronic communication with our shareholders, we have registered the domain name

"MathEnginePLC.com" and intend shortly that shareholders will be able to access the Company's accounts and other

shareholder communications on this web-site.

Statement of directors' responsibilities

The directors are responsible for preparing 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). 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

6 June 2016

We have audited the financial statements of MathEngine plc for the period ended 31 December 2015 on pages eight to

seventeen. The financial reporting framework that has been applied in their preparation is applicable law and United

Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and

have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by

the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2015 and of its loss for the period 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.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion 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.

Matters on which we are required to report by exception

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.

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

15 June 2016

Turnover

-

-

Administrative expenses

(53,018

)

(27,952

)

(53,018

)

(27,952

)

Other operating income

5,500

-

Operating loss

3

(47,518

)

(27,952

)

Income from fixed asset investments

3,455

3,876

Interest receivable and similar income

116

5

(43,947

)

(24,071

)

Amounts written off investments

4

(67,682

)

(54,242

)

Loss on ordinary activities before taxation

(111,629

)

(78,313

)

Tax on loss on ordinary activities

5

(6,134

)

-

Loss for the financial period

(117,763

)

(78,313

)

Continuing operations

None of the company's activities were acquired or discontinued during the current period or previous year.

Loss for the financial period

(117,763

)

(78,313

)

Unrealised (deficit)/surplus on revaluation of other items

(89,509

)

40,535

Total recognised gains and losses relating to the period

(207,272

)

(37,778

)

Note of Historical Cost Profits and Losses

for the period 1 July 2014 to 31 December 2015

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Reported loss on ordinary activities before taxation

(111,629

)

(78,313

)

Realisation of investment gains

157,040

3,136

Historical cost profit/(loss) on ordinary activities before taxation

45,411

(75,177

)

Historical cost profit/(loss) for the period retained after taxation

39,277

(75,177

)

Fixed assets

Investments

6

306,817

474,746

Current assets

Debtors

7

-

12,348

Cash at bank

13,827

27,865

13,827

40,213

Creditors

Amounts falling due within one year

8

25,957

13,000

Net current (liabilities)/assets

(12,130

)

27,213

Total assets less current liabilities

294,687

501,959

Capital and reserves

Called up share capital

9

2,422,003

2,422,003

Share premium

10

12,249,614

12,249,614

Revaluation reserve

10

13,490

260,039

Profit and loss account

10

(14,390,420

)

(14,429,697

)

Shareholders' funds

13

294,687

501,959

The financial statements were approved by the Board of Directors on 6 June 2016 and were signed on its behalf by:

D J N Nabarro - Director

Net cash outflow

from operating activities

1

(19,159

)

(40,365

)

Returns on investments and

servicing of finance

2

3,571

3,881

Capital expenditure

and financial investment

2

727

15,750

(14,861

)

(20,734

)

Financing

2

823

-

Decrease in cash in the period

(14,038

)

(20,734

)

Reconciliation of net cash flow

to movement in net funds

3

Decrease in cash in the period

(14,038

)

(20,734

)

Change in net funds resulting

from cash flows

(14,038

)

(20,734

)

Movement in net funds in the period

(14,038

)

(20,734

)

Net funds at 1 July

27,865

48,599

Net funds at 31 December

13,827

27,865

1.	Reconciliation of operating loss to net cash outflow from operating activities

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Operating loss

(47,518

)

(27,952

)

Loss/(profit) on disposal of fixed assets

10,359

(412

)

Interest accrued previously but now w/o

(348

)

-

Decrease/(increase) in debtors

12,348

(12,001

)

Increase in creditors

6,000

-

Net cash outflow from operating activities

(19,159

)

(40,365

)

2.	Analysis of cash flows for headings netted in the cash flow statement

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Returns on investments and servicing of finance

Interest received

116

5

Dividends received

3,455

3,876

Net cash inflow for returns on investments and servicing of finance

3,571

3,881

Capital expenditure and financial investment

Purchase of fixed asset investments

(381,874

)

-

Sale of fixed asset investments

382,601

15,750

Net cash inflow for capital expenditure and financial investment

727

15,750

Financing

Amount introduced by directors

823

-

Net cash inflow from financing

823

-

3.	Analysis of changes in net funds

At 1/7/14

Cash flow

At 31/12/15

£

£

£

Net cash:

Cash at bank

27,865

(14,038

)

13,827

27,865

(14,038

)

13,827

Total

27,865

(14,038

)

13,827

1.	Accounting policies

Accounting convention

The financial statements have been prepared under the historical cost convention as modified by the revaluation

of certain assets and are in accordance with applicable accounting standards.

Deferred tax

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

sheet date.

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 made an assessment of the company's ability to continue as a going concern and have

indentified 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.

2.	Staff costs

There were no staff costs for the period ended 31 December 2015 nor for the year ended 30 June 2014.

3.	Operating loss

The operating loss is stated after charging/(crediting):

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Loss/(profit) on disposal of fixed assets

10,359

(412

)

Auditors' remuneration

9,633

4,650

Foreign exchange differences

2,206

3,778

Directors' remuneration

-

-

4.	Amounts written off investments

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Amounts w/o invs

67,682

54,242

5.

Taxation

Analysis of the tax charge

The tax charge on the loss on ordinary activities for the period was as follows:

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Current tax:

UK corporation tax

6,134

-

Tax on loss on ordinary activities

6,134

-

Factors affecting the tax charge

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

Period

1/7/14

to

Year ended

31/12/15

30/6/14

£

£

Loss on ordinary activities before tax

(111,629

)

(78,313

)

Loss on ordinary activities

multiplied by the standard rate of corporation tax

in the UK of 20% (2014 - 20%)

(22,326

)

(15,663

)

Effects of:

Utilisation of tax losses

(2,219

)

4,187

Other tax adjustments

17,903

11,476

Temporary diminution of value in investments

13,467

-

Dividends received

(691

)

-

Current tax charge

6,134

-

6.	Fixed asset investments

Listed

Unlisted

investments

investments

Totals

£

£

£

Cost or valuation

At 1 July 2014

224,954

437,365

662,319

Additions

161,682

220,192

381,874

Disposals

(233,405

)

(217,101

)

(450,506

)

Revaluations

3,737

(93,246

)

(89,509

)

At 31 December 2015

156,968

347,210

504,178

Provisions

At 1 July 2014

151,759

35,814

187,573

Provision for period

9,099

58,235

67,334

Eliminated on disposal

(57,546

)

-

(57,546

)

At 31 December 2015

103,312

94,049

197,361

Net book value

At 31 December 2015

53,656

253,161

306,817

At 30 June 2014

73,195

401,551

474,746

Cost or valuation at 31 December 2015 is represented by:

Listed

Unlisted

investments

investments

Totals

£

£

£

Valuation in 2014

-

102,999

102,999

Valuation in 2015

3,737

(93,246

)

(89,509

)

Cost

153,231

337,457

490,688

156,968

347,210

504,178

The original cost of the fixed asset investments amounts to £490,688 (2014 - £402,280).

Not included in investments above are option positions which at 31 December 2015 amounted to

an unrealised profit of £19,836 (2014 - £173).

7.

Debtors: amounts falling due within one year

2015

2014

£

£

Other debtors

-

9,450

Prepayments

-

2,898

-

12,348

8.

Creditors: amounts falling due within one year

2015

2014

£

£

Corporation tax

6,134

-

Directors' current accounts

823

-

Accrued expenses

19,000

13,000

25,957

13,000

9.	Called up share capital

Allotted, issued and fully paid:

Number:

Class:

Nominal

2015

2014

value:

£

£

25,975,467

Ordinary

1p

259,755

259,755

216,224,820

Deferred

1p

2,162,248

2,162,248

2,422,003

2,422,003

10.

Reserves

Profit and

loss

Share

Revaluation

account

premium

reserve

Totals

£

£

£

£

At 1 July 2014

(14,429,697

)

12,249,614

260,039

(1,920,044

)

Deficit for the period

(117,763

)

(117,763

)

Revaluation in the year

-

-

(89,509

)

(89,509

)

Transfer from revaluation

reserve to profit and loss

157,040

-

(157,040

)

-

At 31 December 2015

(14,390,420

)

12,249,614

13,490

(2,127,316

)

No tax has been provided for in respect of the amounts allocated to the revaluation reserve.

11.	Related party disclosures

During the year the company paid £5,000 (2014 - £3,000) in management charges to Cato Strategic Limited.

Cato Strategic Limited is a company that is 60% owned by D J N Nabarro, who is a Director of Mathengine Plc.

12.	Ultimate controlling party

There is no controlling party.