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Registered number: 04134307









MASTERNAUT HOLDINGS LIMITED









FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
Gilson Rodrigues Santiago Freitas 
Djamel Souici 




Company secretary
Djamel Souici



Registered number
04134307



Registered office
Priory Park
Great North Road

Aberford

Leeds

England

LS25 3DF




Independent auditors
Constantin

25 Hosier Lane

London

EC1A 9LQ




Bankers
HSBC Bank plc
3 Rivergate

Temple Quay

Bristol

BS1 6ER






Solicitors
Henmans Freeth (Freeth LLP)
80 Mount Street

Nottingham

NG1 6HH




Page 1

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
CONTENTS



Page
Strategic Report
 
3 - 6
Directors' Report
 
7 - 8
Independent Auditors' Report
 
9 - 11
Statement of Profit or Loss and Other Comprehensive Income
 
12
Statement of Financial Position
 
13 - 14
Statement of Changes in Equity
 
15
Notes to the Financial Statements
 
16 - 43
Page 2

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their Strategic Report and audited financial statements for the year ended 31 December 2022.

Principal activity

The Company is a holding company of the Masternaut Group (“the Group”), the principal activity of which is the provision of sophisticated data and information solutions to customers based on vehicle telematics technology and software applications developed by Masternaut. The Company also engages in some financing activities.

Business review and dividends
 
The Group was acquired by Compagnie Générale des Établissements Michelin SCA, ("Michelin") on 22 May 2019. 
The loss for the year after taxation amounted to £2,201k (2021: £769k). The balance sheet position has worsened, closing with positive net assets of £15,701k (2021: £17,902k).
The Directors do not recommend payment of a dividend (2021: Nil).
The Company did not benefit from any government incentive schemes during the current or previous periods.

Financial risk management

In the normal course of business, the Company is exposed to certain financial risks. These risks are managed in order to minimise any risks on financial performance. None of these risks are considered to be significant due to the nature of the Company as a holding company.

Principal risks and uncertainties
 
The Board has a policy of continuous identification and review of key business risks and uncertainties. It
oversees the development of processes to ensure that these risks are managed appropriately, and operational
management are delegated with the tasks of implementing these processes and reporting to the Board on their
outcomes. The key risks identified by the Board are as follows:
- Failure of information technology systems
- Dependence on key personnel
- Competition and technological change
- Generation of cash to fund operations
- Continuing products and services developments
- Provision of adequate leasing facilities
- Dependence on mobile networks
- Adverse economic and market conditions (e.g. Eurozone sovereign indebtedness)
The above risks are reviewed by the Board and appropriate processes put in place to monitor and mitigate them. If more than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Company. 

Brexit risks

The UK left the EU on 31 January 2020 and the transition period expired on 31 December 2020. The Company continues to monitor the changes as a result of Brexit and any potential risks. Inventory supplies in the UK have increased in order to mitigate any risk to the supply chain. 

Page 3

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Inflation

Management are managing the impact of the current UK inflationary pressures on the Company and its subsidiaries. Where possible the impact is being balanced between suppliers and customers. In some areas costs have been maintained, by renegotiating contracts and fixing prices and controllable costs have been reviewed and adjusted so the cost base has remained under control.. 

Page 4

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

S.172 statement
 
In accordance with the Companies Act 2006 (the ‘Act’) (as amended by the Companies (Miscellaneous
Reporting) Regulations 2018), the Directors provide this statement describing how they have had regard to the
matters set out in section 172(1) of the Act, when performing their duty to promote the success of the Company,
under section 172.
The Board always aims to act in the best interests of the Company, and to be fair and balanced in its approach.
The needs of different stakeholders are always considered as well as the consequences of any decision in the
long-term and the importance of our internally published high standards of business conduct. More specific
information is given in sub-paragraphs (a) to (f), which correspond to the individual factors disclosed under
Section 172(1).
a. Long-term decision making
The Board delegates day-to-day management and decision making to its senior management team, but it
maintains oversight of the Company’s performance, and reserves to itself specific matters for approval. In
addition to this, any major decisions with long-term implications, including significant new business initiatives,
would need shareholder approval, to ensure that the business decisions taken locally are in alignment with the
long-term strategy of the Group. Any decisions approved either locally or by the Shareholder, are then
implemented, with subsequent Board oversight to ensure management act in accordance with the agreed
strategy. Processes are in place to ensure that the Board receives all relevant information to enable it to make
well-judged decisions in support of the Company’s long-term success, including management KPIs, other
financial information, and a robust suite of internal controls.
b. Stakeholders: Employees
Our people are essential to our success, future growth, and our aim to build leading positions in our long-term
markets. We continue to invest substantial time and effort to employ, train, develop and retain employees who
are passionate about our business and have up-to-date knowledge and expertise in our key functional areas.
Hearing their views on what we do well, and what we can do better, is an important driver for improvement and
retaining our best talent. With this in mind, we hold quarterly company-wide informational events with both the
leadership team and all employees spanning the whole business, in order to give employees a coherent insight
into recent business performance and also future plans and expectations; which also acts as a forum for
thoughts, ideas, feedback and suggestions. In addition, we publish regular internal newsletters to ensure they
are kept informed of any personnel changes; business progress and developments, and various team building
events in order to further strengthen cooperation and teamwork across the workforce.
c. Stakeholders: Customers, Suppliers, Others
We aim to be fair and ethical in dealings with all our external stakeholders, including our suppliers, customers
and other business partners, in line with our Code of Conduct and ethical policies. We endeavour to pay
suppliers to agreed terms and be a collaborative and responsive partner. With customers, our goal is to act as
partners in order to understand their needs and collaborate effectively in order to provide the products and
service they need in order to succeed. Each customer has a sales representative, backed by a dedicated sales
administration team in order to facilitate this relationship and ensure the smooth operation day-to-day. The local
sales team report to the Board with regular KPIs, and these assist in maintaining and developing our
understanding of current customer and market trends, issues and likely future needs, and how these can be
addressed.



 
Page 5

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

d. Stakeholders: Community & Environment
Contributing positively to our local and global communities and environments is a responsibility and an
opportunity. As European and UK regulations are reinforced to lower carbon emissions to combat climate
change, companies also have a key role to play in becoming compliant and addressing this issue. We believe
strongly that our product and service offering actively encourages and supports businesses across the UK &
Ireland to reduce the carbon footprints of their fleets. Our complimentary Fleet CO2 Certification programme for
customers, verified by The Energy Saving Trust, rewards businesses’ efforts to improve environmental
performance and reduce their carbon footprint. In addition, we participate in and actively encourage charitable
activities each year in order to raise donations for local worthy causes.
e. Reputation for high standards of business conduct
The Board is responsible for developing the Group corporate culture across the Company, which promotes
integrity and transparency. The Group has established comprehensive systems of corporate governance, and
approves policies and procedures which promote corporate responsibility and ethical behaviour, and these are
implemented within the Company. Central to these policies is the Group’s Code of Conduct. This applies to all
Directors and employees, and is embedded into the Company’s operations. All employees have received these
policies and received full training, to ensure they understand the principles and objectives.
f. Acting fairly as between members of the Company
The Board aims to understand the views of its sole shareholder and always to act in their best interests. In order
to do this, the Board works closely with the shareholder on a daily basis to ensure operations, strategy and
performance are aligned with the long-term objectives of the shareholder, while complying with the Articles of
Association of the Company, and in line with the highest standards of conduct as laid out in Group policies.
 


This report was approved by the board on 15 November 2023 and signed on its behalf.





Djamel Souici
Director

Page 6

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The Directors present their report and the financial statements for the year ended 31 December 2022.
Certain information required to be disclosed in the Directors Report is considered to be of strategic importance to the Company and therefore disclosure is given in the Strategic Report. The specific items disclosed in the Strategic Report are:
- Business Review
- Principal Risks and Uncertainties
- Financial Risk Management
- S172 Statement

Political donations

No political donations were made in the current and previous periods.

Directors Indemnities
The Company has indemnified its directors, by way of directors and officer’s liability insurance, against liability in respect of proceedings brought by third parties, subject to the conditions set out in section 234 of the Companies Act 2006. Such qualifying third party indemnity provision remains in force at the date of approving the directors’ report.



Going concern

The Directors have a reasonable expectation that the Company and Group have adequate resources, to
continue in operational existence for the foreseeable future. The Directors, having considered the current
trading prospects, identifiable risks, working capital requirements and the availability of finance, and having
obtained a letter of support from the parent company, are of the opinion that the Company is a going concern.

Directors

The directors who served during the year were:

Gilson Rodrigues Santiago Freitas 
Djamel Souici 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsConstantinwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 7

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements, in accordance with applicable law.

Company law requires the directors to prepare financial statements for each financial year. Under that law they 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 101 'Reduced Disclosure Framework'. 

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 the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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 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, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

This report was approved by the board on 15 November 2023 and signed on its behalf.
 



................................................
Djamel Souici
Director
Page 8

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MASTERNAUT HOLDINGS LIMITED
 

Independent auditor's report to the members of Masternaut Holdings Limited
Report on the audit of the financial statements

Opinion
In our opinion the financial statements of Masternaut Holdings Limited (the ‘company’):
give a true and fair view of the state of the company’s affairs as at 31 December 2022 and of its loss for the year then ended; 
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:
the statement of profit or loss and other comprehensive income;
the statement of financial position;
the statement of changes in equity; and
the related notes 1 to 22 which include the statement of 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 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. 

We 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 Financial Reporting Council’s (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
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. 

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 company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.


Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
Page 9

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MASTERNAUT HOLDINGS LIMITED
 

misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 

We considered the nature of the company’s industry and its control environment, and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company’s business sector. 

We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that: 
had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act and tax legislation; and
do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.


In addition to the above, our procedures to respond to the risks identified included the following:
Page 10

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MASTERNAUT HOLDINGS LIMITED
 

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; 
enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations.

Report on other legal and regulatory requirements

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 directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.

Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters 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.

We have nothing to report in respect of these matters.

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 an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.




Thierry de Gennes ACA (Senior statutory auditor)

For and on behalf of Constantin Chartered Accountants and Statutory Auditor

 
25 Hosier Lane
London
EC1A 9LQ

15 November 2023

Page 11

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022


2022
2021
Note
£000
£000

  

Revenue
 6 
599
86

Cost of sales
  
(584)
(82)

Gross profit
  
15
4

  

Other operating income
 7 
197
230

Administrative expenses
  
(586)
(743)

Exceptional expenses
 9 
(23,646)
(2,019)

Exceptional income
9
21,809
1,284

Loss from operations
 8 
(2,211)
(1,244)

  

Finance income
 10 
374
709

Finance expense
 10 
(364)
(234)

Loss before tax
  
(2,201)
(769)

  

Loss for the year
  
(2,201)
(769)


Items that will not be reclassified to profit or loss:
  

Total comprehensive income
  
(2,201)
(769)

The notes on pages 17 to 43 form part of these financial statements.


All amounts derive from continuing operations.

Page 12

 
MASTERNAUT HOLDINGS LIMITED
REGISTERED NUMBER: 04134307
 
 
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022


2022
2021
Note
£000
£000


Assets

Non-current assets
  

Property, plant and equipment
 12 
1
420

Investment in subsidiaries
 13 
26,740
26,740

  
26,741
27,160

Current assets
  

Trade and other receivables
 15 
334
873

Derivative financial assets
 16 
-
216

Cash and cash equivalents
  
47
53

  
381
1,142

  

Total assets

  

27,122
28,302

Liabilities

Non-current liabilities
  

Provisions
 18 
523
523

  
523
523

Current liabilities
  

Trade and other liabilities
 17 
10,898
9,877

  
10,898
9,877

  

Total liabilities
  
11,421
10,400

  

  

Net assets
  
15,701
17,902
Page 13

 
MASTERNAUT HOLDINGS LIMITED
REGISTERED NUMBER: 04134307
 
 
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022


2022
2021
Note
£000
£000


Issued capital and reserves
  

Share capital
 19 
44,282
44,282

Share premium reserve
  
50,924
50,924

Merger reserve
  
2,949
2,949

Other reserves
  
194
194

Retained earnings
  
(82,648)
(80,447)

TOTAL EQUITY
  
15,701
17,902

The financial statements on pages 12 to 43 were approved and authorised for issue by the board of directors on 15 November 2023 and were signed on its behalf by:




Djamel Souici
Director

The notes on pages 17 to 43 form part of these financial statements.

Page 14

 
MASTERNAUT HOLDINGS LIMITED

 
 
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022



Share capital
Share premium
Merger reserve
Equity reserves
Retained earnings
Total equity


£000
£000
£000
£000
£000
£000

At 1 January 2021
44,282
50,924
2,949
194
(79,678)
18,671

Comprehensive income for the year




Loss for the year
-
-
-
-
(769)
(769)

Total comprehensive income for the year
-
-
-
-
(769)
(769)

At 31 December 2021
44,282
50,924
2,949
194
(80,447)
17,902

At 1 January 2022
44,282
50,924
2,949
194
(80,447)
17,902

Comprehensive income for the year




Loss for the year
-
-
-
-
(2,201)
(2,201)

Total comprehensive income for the year
-
-
-
-
(2,201)
(2,201)

At 31 December 2022
44,282
50,924
2,949
194
(82,648)
15,701

The notes on pages 17 to 43 form part of these financial statements.

Page 15

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022




Page
1.
Accounting policies
17
2.
Reporting entity
27
3.
Basis of preparation
28
4.
Functional and presentation currency
30
5.
Accounting estimates and judgments
31
6.
Revenue
31
7.
Other operating income
31
8.
Expenses by nature
32
9.
Exceptional income/(expenses)
32
10.
Finance income and expense
33
11.
Tax expense
34
12.
Property, plant and equipment
35
13.
Investment in subsidiaries
36
14.
Subsidiaries
37
15.
Trade and other receivables
38
16.
Derivative financial instruments
39
17.
Trade and other payables
40
18.
Provisions
40
19.
Share capital
41
20.
Reserves
42
21.
Leases
42
22.
Controlling party
43






























Page 16

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies


1.1

Going concern

The Directors have a reasonable expectation that the Company and Group have adequate resources, to
continue in operational existence for the foreseeable future. The Directors, having considered the current
trading prospects, identifiable risks, working capital requirements and the availability of finance, and having obtained a letter of support from the parent company, are of the opinion that the Company is a going concern.

 
1.2

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.


Rental income

The Company's policy for recognition of revenue from operating leases is described in note 1.3.

Page 17

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)

  
1.3

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.


(i) The Company as a lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Company's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company's net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Page 18

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.3
Leasing (continued)


(ii) The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. [Provide an explanation how the incremental borrowing rate is determined].

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is included in the 'Trade and other liabilities' line in the Statement of Financial Position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.

a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, Plant and Equipment' line, in the Statement of Financial Position.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.6.

Page 19

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.3
Leasing (continued)


(ii) The Company as a lessee (continued)

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient.

Page 20

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)

 
1.4

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see  for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these financial statements, the assets and liabilities of the Company's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Company's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

Page 21

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.5

Investments

Fixed asset investments, including investments in subsidiaries and associates, are shown at cost less provision for impairment. 
At each balance sheet date, the Company reviews the carrying amounts of its investment assets 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 to determine the extent of the impairment loss (if any). 
Recoverable amount is the higher of fair value less costs to sell 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.  
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. 
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

 
1.6

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Land is not depreciated. Depreciation on assets under construction does not commence until they are complete and available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:

Right of use assets
-
10
years or lease term is shorter
Leasehold improvements
-
10
years or lease term is shorter
Fixtures and fittings
-
4
years
Computer equipment
-
3
years

Page 22

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)

 
1.7

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

 
1.8

Financial instruments

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 
1.9

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

 
1.10

Financial liabilities and equity instruments


(i) Classification as debt or equity

Debt and equity instruments issued by an entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Page 23

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.10
Financial liabilities and equity instruments (continued)


(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by an entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.


(iii) Compound instruments

The component parts of compound instruments (convertible notes) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date.

A conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognised in equity will be transferred to share premium/other equity (describe). When the conversion option remains unexercised at the maturity date of the convertible note, the balance recognised in equity will be transferred to retained profits/other equity (describe). No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option.

Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortised over the lives of the convertible notes using the effective interest method.

Page 24

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.10
Financial liabilities and equity instruments (continued)


(iv) Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term;
on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument.

A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a business combination may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss to the extent that they are not part of a designated hedging relationship (see note ). The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘fair value gains/losses' line item.

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of the liability is recognised in profit or loss. Changes in fair value attributable to a financial liability's credit risk that are recognised in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained earnings upon derecognition of the financial liability.

Page 25

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)


1.10
Financial liabilities and equity instruments (continued)


(iv) Financial liabilities (continued)

Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at FVTPL are recognised in profit or loss.

Fair value is determined in the manner described in note.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.

See note  regarding the recognition of exchange differences where the foreign currency risk component of a financial liability is designated as a hedging instrument for a hedge of foreign currency risk.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Page 26

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.Accounting policies (continued)

  
1.11

Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps and cross currency swaps.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.


2.


Reporting entity

MASTERNAUT HOLDINGS LIMITED (the 'Company') is a limited company incorporated in England and Wales. The Company's registered office is at Priory Park, Great North Road, Aberford, Leeds, LS25 3DF. The Company's principal activity is set out in the Strategic Report..

Page 27

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Basis of preparation

The financial statements have been prepared in accordance with FRS 101 'Reduced Disclosure Framework', as issued by the Financial Reporting Council.

As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to financial instruments, capital management, presentation of comparative information in respect of certain assets, presentation of cash-flow statement, standards not yet effective, impairment of assets and related party transactions. 
Details of the Company's accounting policies including changes during the year, are included.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements. 
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. 
The areas where judgements and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.
The company proposes to continue to adopt the reduced disclosure framework of FRS101 in its next financial statements.
The company has taken advantage of the exemption under s401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual and not about its group. 

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.

Page 28

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.Basis of preparation (continued)


3.1 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.


Items


Revaluation of financial instruments measured at fair value at the end of each reporting date.


3.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 January 2022

Amendments to IAS 1 and IAS 8 Definition of Material

The adoption of this standard has not had any material impact on the accounts or the disclosures reported in these financial statements.

Amendments to IFRS 3 Business Combinations: Definition of a Business

The adoption of this standard has not had any material impact on the accounts or the disclosures reported in these financial statements.

Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform - Phase 1

The adoption of this standard has not had any material impact on the accounts or the disclosures reported in these financial statements.

Amendments to references to the Conceptual Framework in IFRS Standards

The adoption of this standard has not had any material impact on the accounts or the disclosures reported in these financial statements.

The following tables summarise the impacts of adopting new accounting standards on the Company's financial statements.

ii) 

New standards, interpretations and amendments not yet effective

The following standards and interpretations to published standards are not yet effective:


New standard or interpretation

EU Endorsement status

Mandatory effective date (period beginning)


IFRS 17 Insurance Contracts
Not yet endorsed
1 January 2023

Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
Not yet endorsed
1 January 2023

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statament 2: Disclosure of Accounting Policies
Not yet endorsed
1 January 2023
Page 29

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.Basis of preparation (continued)


ii) New standards, interpretations and amendments not yet effective (continued)


Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates
Not yet endorsed
1 January 2023

Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
Endorsed
1 January 2022

Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a Contract
Endorsed
1 January 2022

Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework
Endorsed
1 January 2022

Annual Improvements to IFRS Standards 2018-2020
Endorsed
1 January 2022

The Directors expect that the adoption of these Standards in future periods will not have an impact on the results and net assets of the Company.




4.


Functional and presentation currency

These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

Page 30

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Accounting estimates and judgments

5.1 Judgment

Critical judgements in applying the company’s accounting policies

There are no critical judgements in applying the company’s accounting policies.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Carrying value of investments

Impairment reviews are based on estimated recoverable amounts of subsidiary undertakings based on value in use calculations. This is calculated using cash flow projections based on financial forecasts. Cash flows are discounted using a pre-tax discount rate which reflects current market assessments. 


6.


Revenue


The following is an analysis of the Company's revenue for the year from continuing operations:


2022
2021
£000
£000


Sale of services (All turnover is generated in UK)
599
86

599
86


7.


Other operating income

2022
2021
£000
£000


Other operating income
197
230

197
230

Page 31

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Expenses by nature

2022
2021
£000
£000

Profit from operations is after charging / (crediting):

Depreciation on right of use assets
354
510

Depreciation on fixed assets
28
49

Foreign exchange (gain)/loss
(13)
10




9.


Exceptional income/(expenses)

2022
2021
£000
£000



Intercompany debt write off
-
(47)

Intercompany provision
21,809
1,284

Investment impairment
(23,646)
(1,963)

Litigation Costs
-
(9)

(1,837)
(735)

Auditors remuneration
The audit fee for the year ended 31 December 2022 was £10,900 (2021 - £10,200)
Exceptional income and expenses
Amounts due to and from group undertakings were waived during the year as part of an ongoing project of the Group.

Page 32

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Finance income and expense

Recognised in profit or loss


2022
2021
£000
£000
Finance income

Interest on:

- Loans and receivables
374
709


Total finance income

374
709

Finance expense

Interest on lease liabilities
(3)
(17)

Loans from group undertakings
(361)
(217)

Total finance expense
(364)
(234)


Net finance income recognised in profit or loss
10
475




Page 33

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

11.


Tax expense

11.1 Income tax recognised in profit or loss



Current tax

Current tax on profits for the year


Deferred tax expense

Origination and reversal of timing differences




Total tax expense


The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:


2022
2021
£000
£000


Loss for the year
(2,201)
(769)

Loss before income taxes
(2,201)
(769)


Tax using the Company's domestic tax rate of 19% (2021:19%)
(418)
(146)

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
349
142

Other tax charge/(relief) on exceptional items
69
7

Group relief
-
(3)

Total tax expense
-
-


A potential deferred tax asset of £5,413k (2021 - £5,323k) relating to tax losses carried forward and other timing differences has not been recognised on the grounds that there is uncertainty over its recoverability.

Page 34

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Property, plant and equipment





Right of use assets
Leasehold improvements
Computer equipment
Fixtures and fittings
Total

£000
£000
£000
£000
£000



Cost or valuation







At 1 January 2021
1,884
327
8
88
2,307



At 31 December 2021
1,884
327
8
88
2,307


Disposals
(1,884)
(327)
-
-
(2,211)



At 31 December 2022
-
-
8
88
96


Right of use assets
Leasehold improvements
Computer equipment
Fixtures and fittings
Total

£000
£000
£000
£000
£000



Accumulated depreciation and impairment







At 1 January 2021
1,020
229
6
73
1,328


Charge owned for the year
511
32
2
14
559



At 31 December 2021
1,531
261
8
87
1,887


Charge owned for the year
353
28
-
-
381


Disposals
(1,884)
(289)
-
-
(2,173)



At 31 December 2022
-
-
8
87
95



Net book value


At 1 January 2021
864
98
2
15
979


At 31 December 2021
353
66
-
1
420


At 31 December 2022
-
-
-
1
1

Page 35

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Investment in subsidiaries





Investment in subsidiaries

£000



Cost



At 1 January 2021 (restated)
106,176


Additions – external (restated)
4,747



At 31 December 2021
110,923


Additions - external
23,646



At 31 December 2022
134,569


Investment in subsidiaries

£000



Accumulated amortisation and impairment



At 1 January 2021 (restated)
82,220


Impairment charge (restated)
1,963



At 31 December 2021
84,183


Impairment charge
23,646


At 31 December 2022
107,829



Net book value


At 1 January 2021
23,956


At 31 December 2021
26,740


At 31 December 2022
26,740

The 2022 opening positions for the investment and the impairment were actually incorrect by an equal and opposite amount, the comparable year in the 2021 financial statements had the additions and impairment figures netted off, this has now been split out in the comparable period.

Page 36

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Subsidiaries

Details of the Company's material subsidiaries at the end of the reporting period are as follows:

Name of subsidiary

Principal activity
Place of incorporation and operation
Proportion of ownership interest and voting power held by the Company (%)



2022
2021








1Masternaut Limited

Provision of vehicle telematic solutions

Great Britain
 
100

100

2Easy Sailing Limited

Liquidated in 2022

Great Britain
 
-

100

3Masternaut ITS Ltd

Liquidated in 2022

Great Britain
 
-

100

4Telefleet Limited

Liquidated in 2022

Great Britain
 
-

100

5Old World Limited

In liquidation

Great Britain
 
100

100

6Masternaut Risk Solutions Limited

Dormant

Great Britain
 
100

100

7Masternaut International SAS

Non-trading intermediate holding company

France
 
100

100

8Masternaut SAS

Provision of vehicle telematic solutions

France
 
100

100

9Masternaut GmbH

Provision of vehicle telematic solutions

Germany
 
100

100

10Masternaut AB

Provision of vehicle telematic solutions

Sweden
 
100

100

11Masternaut Iberica SL

Provision of vehicle telematic solutions

Spain
 
100

100

12Masternaut BV

Provision of vehicle telematic solutions

Netherlands
 
100

100

13Webraska US, Inc

Dormant

US
 
100

100

14Webraska Italia SRL

Suspended

Italy
 
100

100

153X (Australia) Pty Ltd

Provision of vehicle telematic solutions

Australia
 
49

49

16Masternaut LDA

In administration

Portugal
 
34

34

17Michelin Connected Fleet South Africa Pty Ltd

Provision of vehicle telematic solutions

South Africa
 
100

100


14) Webraska Italia SRL

Masternaut SAS owns 98% and 2% owned by Masternaut International SAS

Page 37

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Trade and other receivables


2022
2021
£000
£000


Trade receivables
10
52

Trade receivables - net
10
52

Receivables from related parties
190
549

Total financial assets other than cash and cash equivalents classified as loans and receivables
200
601

Prepayments and accrued income
7
118

Other receivables
127
154

Total trade and other receivables
334
873

Total current portion
(334)
(873)

The amounts owed by group undertakings are unsecured and payable on demand.

Page 38

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Derivative financial instruments

2022
2021
£000
£000
Derivative financial assets

Derivatives not designated as hedging instruments

Forward foreign exchange contracts
-
216

Total derivatives not designated as hedging instruments
-
216

Derivatives designated as hedging instruments


Total derivative financial assets
-
216

2022
2021
£000
£000

Current and non-current

Current
-
216

Total derivative financial assets
-
216

Derivative financial liabilities

Derivatives not designated as hedging instruments

Derivatives designated as hedging instruments


Total derivative financial liabilities


Current and non-current

Total derivative financial liabilities

Page 39

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

17.


Trade and other payables


2022
2021
£000
£000


Trade payables
15
40

Payables to related parties
10,557
9,105

Other payables
-
369

Accruals
326
363

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
10,898
9,877

Total current portion
(10,898)
(9,877)

The amounts owed to group undertakings are unsecured and payable on demand.



18.


Provisions


Other provision

£000





At 1 January 2022
523



At 31 December 2022
523



Due after more than one year
523



523


The employee benefit trust ("EBT") provision relates to PAYE taxes due plus interest and penalties for a scheme used in the period 2004 - 2006 following an adverse decision in a test case brought by HMRC. The provision is based upon correspondence received from HMRC. 

Page 40

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
19.


Share capital

Authorised

2022
2022
2021
2021
Number
£000
Number
£000

Shares treated as equity
Ordinary shares of £0.050 each

764,589,559

38,229

764,589,559
 
38,229
 
Deferred shares of £0.009 each

672,544,350

6,053

672,544,350
 
6,053
 
1,437,133,909

44,282

1,437,133,909
 
44,282
 

Issued and fully paid


2022
2022
2021
2021
Number
£000
Number
£000

Ordinary shares of £0.050 each

At 1 January and 31 December
764,589,559

38,229

764,589,559
 
38,229
 

2022
2022
2021
2021
Number
£000
Number
£000

Deferred shares of £0.009 each

At 1 January and 31 December
672,544,350

6,053

672,544,350
 
6,053
 

Page 41

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Reserves


The deferred shares rank pari passu with the Ordinary shares and A Ordinary shares, with the exception that the Deferred shares shall not entitle the holders thereof to receive notice of, or to attend or vote at, any general meeting of the company.
The ordinary shares and A Ordinary share have attached to them full voting, dividend and capital distribution rights.

Share premium

The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.

Merger Reserve

The merger and equity reserve represents the value of its own shares purchased by the Group.
The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

Retained earnings

The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.


21.


Leases




(i) Leases as a lessee



The Company has previously entered into two property leases for use as offices. 


Lease liabilities are due as follows:

2022
2021
£000
£000

Not later than one year
-
369

-
369



The Company does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities alongside liquidity risk are monitored by the Directors of the Company.

Page 42

 
MASTERNAUT HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

22.


Controlling party

Masternaut Group Holdings Limited, whose registered address is Priory Park, Great North Road, Aberford, Leeds, LS25 3DF owns the entire issued share capital of the Company.
 
Masternaut Bidco Limited is the Company’s ultimate holding company whose registered office is Lynton House, 7-12 Tavistock Square, London, WC1H 9LT.
As at 31 December 2021, the ultimate controlling party was Compagnie Générale des Établissements Michelin SCA (“Michelin”), incorporated in France, registered at 23, Place des Carmes, Dechaux, CEDEX 9, 63040, Clermont Ferrand, France. Michelin owns 100% of the voting share capital of Masternaut Bidco Limited, the Company’s ultimate parent company.
The largest and smallest group in which the results of the Company are consolidated is that headed by Compagnie Générale des Établissements Michelin SCA. The consolidated accounts are publicly available and also may be obtained from the stated address above.






Page 43