TIDMMNO
RNS Number : 6906O
Maestrano Group PLC
12 October 2021
12 October 2021
Maestrano Group PLC
("Maestrano" or the "Company" or the "Group")
Results for the year ended 30 June 2021
Publication of Annual Report and Accounts and Notice of Annual
General Meeting
Maestrano (AIM: MNO), the Artificial Intelligence platform for
transport corridor analytics, today announces its results for the
12 months ending 30 June 2021.
Financial Highlights
GBP 000's Twelve months Twelve months % Change % Change
to 30 June to 30 June constant
2021* 2020** currency
Total Revenue 1,690 872 94% 94%
Cost of sales (604) (335) (80)% (92)%
Total expenses (2,933) (1951) (50)% (41)%
Grant Income 601 442 35.6% 33.8%
Other income 16 - - -
Interest revenue 7 2 250% 324%
Loss before income
tax (1,222) (970) (26)% (12)%
*Constant currency reflects the results had the underlying
transactional currencies been constant in both periods reported.
Revenue for the twelve months to June 2020 was predominantly in
Australian dollars.
** as per FY2020 Financial Statements
Operational Highlights for the Period
-- First US Contract with Union Pacific Railroad, the second largest Class 1 Railroad in the US
-- Network Rail (UK) 12-month gauging automation contract awarded
-- ARTC contract extended in scope and value through to 30 June 2023
-- Cash and cash equivalents at 30 June 2021 of GBP1.54m
Post Period End Highlights
-- Contract with Network Rail High Speed to provide analytics on HS1, the UK's fastest railway
-- Network Rail approves Cordel technology for clearance gauging
-- Partnership with leading US rail inspection company Holland, L.P.
Nick Smith, CEO of Maestrano, commented: "We are confident of
continuing our current growth trend in FY22, acquiring new
customers for Cordel and providing greater levels of service to our
existing customer base. The market is becoming increasingly
receptive to our Cordel solutions and their ability to help rail
operators minimise accidents and delays while significantly
reducing costs and emissions. In addition, we are developing our
distribution network to drive increased Nextcore unit sales. We
look forward to delivering further growth in value for our
shareholders."
Annual Report
The Annual Report and Accounts are being posted to shareholders
today and will be made available on the Group's website:
www.maestrano.com . Key extracts from the report and accounts are
presented below.
The Company also announces that the Annual General Meeting of
the Company will be held at 9.00am on 18 November 2021 at the
offices of Memery Crystal LLP, 165 Fleet Street, London, EC4A 2DY.
A notice of Annual General Meeting has been posted to shareholders
today.
Proposed Resolution to change the Company name
The notice of Annual General Meeting includes a resolution to
change the Company name to Cordel Group PLC. This will be voted on
by shareholders as a special resolution.
Updated Investor Presentation on website
Maestrano will provide a live investor presentation through the
Investor Meet Company platform on 12 October 2021 at 09.00am. The
slide deck for this presentation is available on the Company
website at www.maestrano.com
Enquiries:
Maestrano Group plc
Ian Buddery, Chairman c/o Arden Partners
Nick Smith, CEO c/o Arden Partners
Arden Partners (Broker / Nominated
Adviser)
Ruari McGirr / Richard Johnson +44 (0)20 7614 5900
SEC Newgate (Communications Adviser) +44(0) 7540 106366
Robin Tozer, Bob Huxford, Tom Carnegie maestrano@secnewgate.co.uk
About Maestrano
Maestrano offers a patented cloud-based platform for master data
management and specialist hardware and software for capturing,
analysing and reporting on large datasets within the transport
sector, employing sophisticated artificial intelligence
algorithms.
Further information on the Company is available at:
www.maestrano.com
STRATEGIC REPORT
The directors present their strategic report on the consolidated
entity (referred to hereafter as the 'Group') consisting of
Maestrano Group plc (referred to hereafter as 'Maestrano', 'the
Company' or ' the parent entity') and the entities it controlled at
the end of, or during, the year ended 30 June 2021.
The strategic report includes the following sections:
1. Company Overview
2. Chairman's statement
3. Review of operations by the Chief Executive Officer
4. Principal risks and uncertainties
5. People
Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These
forward-looking statements include references to matters that are
not historical facts or are statements regarding the Company's
intentions, beliefs or current expectations concerning, among other
things, the Group's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in
which the Group operates. Forward-looking statements are based on
the information available to the directors at the time of
preparation of this document and will not be updated subsequent to
the issue of this document. The directors can give no assurance
that these expectations will prove to be correct. Due to inherent
uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may
differ materially from those expressed or implied by these
forward-looking statements.
Principal activities
Maestrano is a United Kingdom ('UK') incorporated software
company with operations in Australia (main country of operation),
USA and the UK. Maestrano offers a patented cloud-based platform
for master data management and specialist hardware and software for
capturing, analysing and reporting on large datasets within the
transport sector, employing sophisticated artificial intelligence
algorithms.
1. COMPANY OVERVIEW
Maestrano's specialist hardware and cloud-based platforms, used
primarily in the rail and road infrastructure industry, capture
data and turn it into actionable insights to help manage vital
assets, improving safety and efficiency while reducing costs and
emissions.
The Maestrano Group operates subsidiaries in the UK, Australia
and the USA, under the brands Cordel, Nextcore and Airsight. These
deliver, respectively, products and services for rail and road
asset management, drone-based LiDAR (Light Detection And Ranging)
systems and aerial surveying.
The Group is a leader in infrastructure monitoring through
automation and machine learning. The flagship Cordel solution is
focused on the rail industry, predicting and identifying
maintenance needs including issues with vegetation, overhead lines
and track ballast. The solution utilises LiDAR sensors and high
resolution video cameras, attached to trains and track maintenance
vehicles, to automate the collection of infrastructure data at
survey-grade accuracy. It then employs Artificial Intelligence to
analyse the huge datasets, providing insights and recommending
actions in near real time.
Cordel is seeking to establish a strong business in rail before
expanding into road and energy infrastructure. The Group has key
'anchor' customers for Cordel in the Australian Rail Track
Corporation (ARTC) and Network Rail in the UK, a growing channel
and customer base for Nextcore and also a small but solid customer
base for Airsight.
The Market
The markets for Cordel and Nextcore, which are large in size and
global in extent, today include the UK, Australia, Japan and the
USA. The aerial surveying market for Airsight is small and
localised in Australia, but provides an important proving base for
our new products and technology.
Cordel
Managing infrastructure assets is a major component of the
overall railway management system market, which is projected to
grow strongly. Global Market Insights Inc estimates that the market
was over US$33 billion in 2017 and set to grow at a CAGR of over
10% between 2018 and 2024 to reach US$64 billion. Within this, the
growth of support and maintenance spend will be higher across the
same period, at 16% CAGR. ( GMI Report, December 2018 ). Technavio
is also reporting strong growth in the railway management system
market, at 9% CAGR between 2019 and 2023. ( Technavio Report,
February 2019 ). More broadly, the global machine learning market
was valued at $1.58 billion in 2017 and is expected to reach $20.83
billion in 2024, growing at a CAGR of 44.06% between 2017 and 2024.
( Roundup Of Machine Learning Forecasts And Market Estimates, 2020
; Forbes, January 2020).
The Cordel offering is a new entrant into this growth
environment and aims to take market share away from older, less
effective approaches to asset infrastructure monitoring, as well as
take advantage of new budgets being allocated, as
innovation-oriented spend grows within the ongoing market
expansion.
Cordel is strongly positioned within its markets with a highly
differentiated offering. It provides a wider range of analytic
outputs than alternative services and can monitor and analyse
infrastructure faster, more often and at lower cost, due in no
small part to the high levels of automation inherent in its
design.
Nextcore
There are multiple ways to measure the large available market
for Nextcore. The drone market itself is growing strongly in the
current period, with a CAGR of 20.5% it is set to reach US$43.1
billion by 2024 ( The Drone Market Report , March 2019). The LiDAR
drone market is projected to grow from US$133 million in 2020 to
US$392 million by 2025, at a CAGR of 24.2%. ( Markets and Markets ,
January 2020). Key factors fuelling the growth include easing of
regulations related to the use of commercial drones in different
applications and growing demand for LiDAR equipped drones for use
in asset infrastructure monitoring, mapping, precision agriculture
and related applications.
The market for Nextcore within these strong overall trends is
based on certain discrete use cases and is harder to quantify
specifically. The specific use cases do have wide global
applicability and given the price points per device achievable, the
effective available market is assumed to be a significant multiple
of US $millions already and growing.
2. CHAIRMAN'S STATEMENT
The financial year 2020-21 saw the continuation of the growth
trajectory established in the previous year, with revenue
increasing by 94%.
The markets in which we operate are becoming increasingly aware
of the competitive advantages of our offering. In addition, with a
growing recognition of the effectiveness of our solution among
existing customers, we are confident that cross-selling and
up-selling opportunities will emerge that extend existing contracts
to cover multiple maintenance issues.
We are seeing evidence of this in our expanding role with
customers in Australia and the UK and also in the unfolding, and
very large, opportunity in the USA. This gives us confidence in our
growth in future years.
In line with our business plan, expenses were driven by
investment in additional people and ongoing product development to
maintain our lead in data capture and machine learning analysis.
The Company will continue to carefully manage expenditures to
ensure a balance between growth and maintaining cash reserves.
From a technology perspective our solution is now well
established, such that future R&D will be focused on
incremental features and updates for increased capacity. Our
emphasis going forward will be raising market awareness and adding
channel partners, to expand customer uptake in the world's largest
markets.
Our team has adapted well to the constraints imposed by the
Covid-19 pandemic, maintaining our ambitious product plan and
excellent customer delivery performance. I would like to express
the Board's appreciation for our people across three continents and
their exceptional dedication and hard work throughout 2020-21.
Our purpose is to build a strong and resilient business, growing
shareholder value through the consistent achievement of business
plan targets and the expansion of our recurring revenue customer
base. We have confidence in the long-term outlook and we thank our
shareholders for their continuing support.
Ian Buddery
Chairman
12 October 2021
3. REVIEW OF OPERATIONS BY THE CHIEF EXECUTIVE OFFICER
The success of our move to international markets is reflected in
the near-doubling of year-on-year revenue and strong demand for our
unique AI capabilities for processing railway LiDAR data.
During the year we signed significant new contracts, including a
12-month gauging automation project with Network Rail UK, where we
are becoming increasingly embedded. The project is progressing
successfully, and customer feedback has been very positive to date.
In addition, we secured a scope and value extension of our track
scanning and analysis contract with the Australian Rail Track
Corporation (ARTC) and our first contracted pilot with Union
Pacific Railroad in the USA.
Overview of results
GBP 000's Twelve months Twelve months % Change % Change constant
to 30 June to 30 June currency
2021 2020
Total Revenue 1,690 872 93.8% 94.1%
Cost of sales (604) (335) (80.3)% (92.1)%
Total expenses (2,933) (1,951) (50.3)% (40.5)%
Grant Income 601 442 35.6% 33.8%
Other income 16 - - -
Interest
revenue 7 2 250% 324%
Loss before
Income tax (1,222) (970) (26.1)% (11.9%)
Gross margin improved from 62% to 64% and expense growth in
constant currency was less than half of the revenue growth. As we
increase the volume of rail miles captured and analysed, margins
will continue to improve.
Strategy
Our plan for the financial year FY21 was focused on
international expansion and all objectives were achieved. In FY22
our focus is further customer acquisition in our key markets and
further growth with existing clients in both miles scanned and the
range of analytical products delivered. More miles under management
and more products provided to each customer will result in organic
growth which will in turn lead to margin improvement owing to the
inherent operational gearing within our business. Furthermore,
higher numbers of scanners running continuously upon a greater
number of trains will result in a greater proportion of future
revenues being of a recurring nature.
A key component of our growth will come from our partner
strategy, as we move to a "product as a service" model, with large
industry partners managing customer engagement. This model has the
potential to dramatically increase our market reach and growth
prospects and we are very pleased by the progress being made in
securing partnerships with major rail engineering and component
suppliers.
The Cordel product development focus will expand processing and
build capability across the dimensions of data capture, data
processing and insights generated, using our innovative machine
learning approach and high levels of automation. The nature of the
machine learning approach means our offering is in a state of
perpetual self-improvement. This is effectively a virtuous circle
in which the datasets added from each new customer and application
refines our solution's knowledge base and recommended actions.
The target market for Nextcore is surveyors focused on the built
environment (bridges, towers and other infrastructure) and terrain
(landscape, mines and other land operations). The company has built
a global distribution network, to enable access to local markets on
a cost-efficient basis. The ongoing focus will be expanding unit
volume and associated revenue with currently active distributors
and in addition recruiting and enabling new distributors worldwide.
A new product, the RN100, was released in late 2020 and development
is well progressed on the next generation, as we continue our theme
of capturing data faster with more accuracy and with greatly
improved levels of data processing automation.
Ongoing operations
As of 30 June 20 21 , the Company had cash of GBP 1,538,150 and
receivables of GBP522,212 .
The Company operates from offices in Newcastle, Australia while
staff in the UK and USA work from home offices, a model which has
become widely accepted in the technology industry following the
Covid-19 pandemic. T he Company will recruit new employees as part
of expanding the business and management will focus on motivating a
strong and committed team whilst ensuring efficient and careful use
of available resources.
We will ensure effective global communications across time zones
by using communications technology particularly video conferencing.
Ensuring alignment across functional teams will be critical and we
will work hard to preserve and enhance the current culture of
energy, hard work, commitment, enjoyment and fulfillment . We have
deployed robust systems and processes for financial management,
customer support and product development management , in
preparation for scaling the Company.
Outlook
We are confident of continuing our current growth trend in FY22,
acquiring new customers for Cor del and providing greater levels of
service to our existing customer base. The market is becoming
increasingly receptive to our Cordel solutions and their ability to
help rail operators minimise accidents and delays while
significantly reducing costs and emissions. In addition, we are
developing our distribution network to drive increased Nextcore
unit sales. We look forward to delivering further growth in value
for our shareholders.
Nicholas Smith
Chief Executive Officer
12 October 2021
4. PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Group's
growth strategies are subject to a number of risks which could
adversely affect the Group's future development. The following is
not an exhaustive list or explanation of all risks and
uncertainties associated with the Group but those considered by
management to be the principal risks:
Risks relating to the Group and the industry in which it
operates:
Dependence on major clients
The Group's future growth relies on new sales to rail and road
network owners in multiple countries. These owners typically have
complex procurement arrangements which include product trials and
competitive tenders. This risk is mitigated by the Group's plan to
enter into reseller agreements with Engineering Consulting firms,
who will in effect become the clients.
Business strategy
Although the Group has a clearly defined strategy, there can be
no guarantee that its objectives will be achieved or that the Group
will achieve the level of success that the Company's directors
expect. Therefore, the Group may decide to change aspects of its
strategy as needed. The Group's ability to implement its business
strategy successfully may be adversely impacted by factors that the
Group cannot currently foresee, such as unanticipated market
forces, costs and expenses or technological factors. Should it be
unsuccessful in implementing its strategy or should it take longer
than expected to implement, the future financial results of the
Group could be negatively impacted. This risk is mitigated by the
continual review of the business performance to its plan and that
changes are made to ensure the Group has sufficient liquidity to
pursue its current plan.
Technological changes
Generally, product markets are exposed to rapid technological
change, changes in use, changes to customer requirements and
preferences; and services employing new technologies and the
emergence of new industry standards and practices. The Group
operates in a market with such changes which have the potential to
render the Group's existing technology and products competitively
impaired.
To successfully remain competitive, the Group will ensure
continued product improvement and the development of new markets
and capabilities to maintain a pace congruent with changing
technology. This added strain may stretch the Group's capital
resources which may adversely impact the revenues and profitability
of the Group. The Group's success is dependent on the ability to
effectively respond and adapt to technological changes and changes
to customer preferences. There can be no assurance that the Group
will be able to effectively anticipate future technological changes
or changes in customer preferences. Furthermore, there is also no
assurance that the Group will have sufficient financial resources
to effectively respond in a timely manner if such a change is
anticipated.
Competition
There is no guarantee against new entrants or current
competitors providing superior technologies, products or services
to the market. There is no certainty that new entrants or current
competitors will not provide equivalent products for a lower price.
The Group may be forced to make changes to one or more of its
products or to its pricing strategy to effectively respond to
changes in customer preferences in order to remain competitive.
This may impact negatively on the Group's financial performance.
The Group will continue to review its competitive position and
adjust its business plan to maintain relevance to its customers'
requirements.
Inability to contract with customers on the most favourable
terms to the Group
The Group contracts with a wide variety of companies and
partners, many of which are in strong negotiating positions and
have greater financial resources than the Group. The Group may in
the
future have limited scope for negotiation of the price or
contract terms with some of its major clients.
The Group's software may not perform as expected and the Group
could be at risk of defects which adversely affect its
customers
There is no guarantee that the Group's platforms will perform as
intended. Costs spent on developing the Platform may therefore not
be recouped and this may result in reduced profitability for the
Group. As the Group's platforms are complex, they may contain
defects or vulnerabilities which may not be detected until after
its deployment to major customers. To mitigate this risk the Group
has implemented applicable internal code review and testing
processes. The software is then subject to customer acceptance
testing and an ongoing high level of technical support.
Data security and data privacy
The Group is subject to data and privacy regulations,
particularly General Data Protection Regulation ('GDPR'). Failure
to comply with legal or regulatory requirements relating to data
security or data privacy in the course of the Group business
activities, results in reputational damage, fines or other adverse
consequences, including criminal penalties and consequential
litigation, adverse impact on the Group's financial results or
unfavourable effects on the Group's ability to do business. To
mitigate this risk the Group has implemented policies and processes
to ensure data is held securely and privacy is maintained.
Dependence on key executives and personnel
The Group is dependent on a small number of key executives. In
addition, the future performance of the Group will, to some extent,
be dependent on its ability to retain the services and personal
connections or contacts of key executives and to attract, recruit,
motivate and retain other suitably skilled, qualified and industry
experienced personnel to form a high calibre management team. Such
key executives are expected to play an important role in the
development and growth of the Group in particular, by maintaining
good business relationships with regulatory and governmental
departments and essential partners, contractors and suppliers. The
failure to appoint or retain such people could adversely affect the
Group.
Ability to recruit and retain skilled personnel
The Group believes that it has the appropriate incentive
structures to attract and retain the calibre of employees necessary
to ensure the efficient management and development of the Group.
However, any difficulties encountered in hiring appropriate
employees and the failure to do so, or a change in market
conditions that renders current incentive structures ineffective,
may have a detrimental effect upon the trading performance of the
Group. The ability to attract new employees with the appropriate
expertise and skills cannot be guaranteed.
Financial controls and internal reporting procedures
The Group's future growth and prospects will depend on its
ability to manage growth and to continue to maintain, expand and
improve operational, financial and management information systems
on a timely basis, whilst at the same time maintaining effective
cost controls. Any damage to, failure of or inability to maintain,
expand and upgrade effective operational, financial and management
information systems and internal controls in line with the Group's
growth, could have a material adverse effect on the Group's
business, financial condition and results of operations. The Group
mitigates this through the implementation of internal controls as
well as the review of monthly financial performance by the
Board.
Economic uncertainty
Any economic downturn either globally or locally in any area in
which the Group operates may have an adverse effect on demand for
the Group's products. A more prolonged downturn may lead to an
overall decline in sales. Economic uncertainty might have an
adverse impact on the Group's operations and business results. To
mitigate this risk the Group will monitor both the Group's
performance and general market conditions on a monthly basis. The
Group will also maintain adequate liquidity to sustain short term
fluctuations in market conditions.
Brexit
Brexit is the withdrawal of the UK from the European Union
('EU'), which came into force on 31 January 2020. To date, the
Board has not seen any material adverse impact to the business as a
result of Brexit or change in the level of engagement with
prospective EU clients and believes this is unlikely to change in
the coming year.
Covid -19
During the financial year, Covid-19 has had minimal impact on
the operations and revenue growth of the business. Corridor
Holdings Pty Ltd has received benefits from the Australian
Commonwealth Government, with respect to Job Keeper and the
Economic Boost, and New South Wales Government in relation to
payroll tax. Staff have been able to effectively work from home
during the Phase 1 of the pandemic with minimal impact on
productivity and product delivery. Procedures have been put in
place to ensure the safety of staff upon return to the office.
Despite travel restrictions to local and overseas conferences,
teleconferencing has been an effective tool in continuing to market
the product range. Some supply chain problems have been
encountered, however alternative suppliers and increased inventory
holdings have mitigated business impact.
5. PEOPLE
Equal opportunity
The Group is committed to an active equal opportunities policy.
It is the Group's policy to promote an environment free from
discrimination, harassment and victimisation, where everyone
receives equal treatment regardless of gender, colour, ethnic or
national origin, disability, age, marital status, sexual
orientation or religion. Employment practices are applied which are
fair, equitable and consistent with the skills and abilities of the
employees and the needs of the Group.
Disabled employees
Applications for employment by disabled persons are always fully
considered, bearing in mind the aptitudes of the applicant
concerned. In the event of members of staff becoming disabled,
every effort is made to ensure that their employment with the Group
continues and that appropriate re-training is arranged. It is the
policy of the Group that the training, career development and
promotion of disabled persons should, as far as possible, be
identical with that of other employees.
This report is made in accordance with a resolution of
directors.
On behalf of the directors
Ian Buddery
Chairman
12 October 2021
CORPORATE GOVERNANCE
The directors acknowledge the importance of high standards of
corporate governance and intend, given the Group's size and the
constitution of the Board, to comply with the principles set out in
the QCA Corporate Governance Code published by the Quoted Companies
Alliance in April 2019 (the 'QCA Code') and, where it does not
comply with any of its recommendations, to explain the reasons
therefor.
In the Board's opinion, the Group currently complies with the
ten principles of the QCA Code which, together, are designed to
deliver growth, maintain a dynamic management framework and build
trust. As the Group expands, the Board will review its corporate
governance framework and will consider adoption of additional
principles and practices including from the UK Corporate Governance
Code 2018 published by the Financial Reporting Council (the 'UK
Corporate Governance Code').
Read more in our Corporate Governance Statement of Compliance
with the QCA Corporate Governance Code at the following website
link:
https://maestrano.com/wp-content/uploads/2021/09/Maestrano-Statement-of-QCA-compliance-2021.pdf
On behalf of the directors
Ian Buddery
Chairman
12 October 2021
DIRECTORS' REPORT
The directors present their report, together with the financial
statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Maestrano Group plc (referred to
hereafter as the 'Company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June
2021.
Directors
The following persons were directors of Maestrano Group plc
since incorporation on 6 December 2017 and up to the date of this
report, unless otherwise stated:
Ian Buddery Non-Executive Chairman
Andrew Pearson Executive Director and Chief Executive Officer
(resigned 9 January 2021)
Nicholas Smith Executive Director and Chief Executive Officer
(appointed as director on 1 November 2019
and CEO 1 February 2021)
John Davis Independent Non-Executive Director
Jonathan Macleod Independent Non-Executive Director
Nicholas McInnes Independent Non-Executive Director
Robert Lojszczyk Executive Director and Chief Financial Officer
Ian Buddery, aged 64 - Non-Executive Chairman
Ian has extensive public company experience and a long
background in the telecommunications and financial services
industries in both international and local markets. Ian has founded
multiple companies; obtained venture capital and angel funding,
performed two IPOs, six acquisitions and two significant trade
sales. Ian was the founder, CEO and Executive Chair of eServGlobal,
founded in 1991 and listed on the Australian Securities Exchange
('ASX') in 2000 and the AIM in 2004. (LSE: ESG).
Ian was appointed a Director of Maestrano Pty Ltd in October
2013.
Nicholas Smith , aged 36 - Executive Director and Chief
Executive Officer
Results focused with an outstanding record of founding, growing
and scaling technical businesses, Nick has a demonstrated ability
to lead and manage geographically dispersed teams while maintaining
the culture of the organisation. He has strong strategic business
development attributes with the ability to build a loyal following
though the practice of strong technical awareness and open
communication.
Nicholas was appointed as Chief Executive Officer on 1 February
2021. Nicholas was previously Vice President Sales and Executive
Director of Maestrano Group plc being appointed on 6 November
2019.
John Davis, aged 51 - Independent Non-Executive Director
John has been working with banks and SMBs for more than 20
years. Based in London, John was the Marketing and Product Director
for Barclays Business from 2005-2010 before setting out on an
entrepreneurial career as the co-owner and Managing Director of
Business Centric Services Group Limited, an award winning, high
growth business, helping banks and telecommunication companies to
enhance their digital engagement with and propositions for small
and medium sized businesses. He also acted as Chair and co-owner of
two other London based FinTech start-ups. John completed the sales
of all three of these companies during 2016 and 2018.
Jonathan Macleod, aged 64 - Independent Non-Executive
Director
Jonathan is a practising Chartered Accountant and Financial
Adviser with over 30 years of experience in the Financial Services
and Software industries in both NZ and Australia. He has held
senior executive positions within the National Bank of NZ and
Rabobank Australia/NZ. Jonathan was the Chief Financial Officer of
ASX listed company eServGlobal from 2008 to 2010.
Nicholas McInnes, aged 67 - Independent Non-Executive
Director
Nick McInnes has been a United Kingdom diplomat through much of
his career, focusing on international trade and investment in such
key positions as the British Consul General, Sydney and Director
General Trade & Investment for Australia and New Zealand; and
Director Trade & Investment USA and Deputy Consul General New
York.
Nicholas was appointed to the Board of Maestrano Group plc on 13
March 2020.
Robert Lojszczyk , aged 64 - Executive Director, Chief Financial
Officer and Company Secretary
Robert is a widely experienced senior finance executive with a
blue chip organisational and commercial background. He has operated
in finance roles of increasing seniority, scope and complexity. In
many cases operating with small to medium sized profit centres
making up the business across multinational boundaries.
Robert is a Fellow Certified Practicing Accountant and joined
Maestrano Group plc as Chief Financial Officer and Executive
Director on 13 March 20 20 .
Principal activities
Information on the Group's principal activities are disclosed in
the strategic report.
Results and dividends
The loss for the Group after providing for income tax and
non-controlling interest amounted to GBP970,372 (30 June 2020:
GBP854,298).
No dividend has been paid during the financial year and the
directors do not recommend a final dividend in respect of the year
ended 30 June 2021 (30 June 2020: GBPnil).
Further commentary on the financial results are disclosed in the
financial review by the Chief Financial Officer within the
strategic report.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and financial
position are given in the strategic review and this directors'
report. In addition, the notes to the financial statements include
details on the Group's borrowing facilities and its objectives,
policies and processes for managing its capital; its financial risk
management objectives; and its exposures to credit risk and
liquidity risk.
The Group has considerable financial resources together with a
member base split across different geographic areas. The Group's
forecasts and projections, taking into account reasonably possible
changes in trading performance and the newly acquired business,
show that the Group should be able to operate for the foreseeable
future with the current working capital. As a consequence, the
directors believe that the Group is well placed to manage its
business risks successfully.
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Likely future developments
Information on likely future developments of the Group are
disclosed in the strategic report.
Financial instruments
Information on the Group's financial instruments are disclosed
in the strategic report and note 25 to the financial
statements.
Charitable and political donations
No charitable or political donations were made during the
financial year.
Disabled employees
Due to the size of the Group, no formal policy for the
employment of disabled persons has been established. However, the
Group gives full consideration to employment applications from
disabled persons where the candidate's particular aptitudes and
abilities are consistent with adequately meeting the requirements
of the job.
Indemnity of directors
The Company has indemnified the directors of the Company for
costs incurred, in their capacity as a director, for which they may
be held personally liable, except where there is a lack of good
faith.
Substantial shareholdings
The substantial shareholders in the Company as at 30 June 2021
were as follows:
Nicholas Smith 15.17%
Aaron Hoye 15.17%
Disclosure of information to the auditors
So far as each person who was a director at the date of
approving this report is aware, there is no relevant audit
information, being information needed by the auditor in connection
with preparing its report, of which the auditor is unaware. Having
made enquiries of fellow directors and the Group's auditor, each
director has taken all the steps that they are obliged to take as a
director in order to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
Auditor
Oury Clark was appointed auditor during the financial year and
pursuant to section 487 of the Companies Act 2006 will be deemed to
be re-appointed and therefore continue in office.
This report is made in accordance with a resolution of
directors.
On behalf of the directors
Ian Buddery
Chairman
12 October 2021
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the strategic
report, directors' report and the financial statements in
accordance with applicable law and regulation.
UK Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the Group financial statements in
accordance with International Financial Reporting Standards
('IFRS') as adopted by the United Kingdom and financial statements
of the Company in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law) including FRS 101 'Reduced Disclosure Framework'.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and the
profit or loss of the Group for that year.
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 IFRS as adopted by the United
Kingdom and applicable United Kingdom Accounting Standards have
been followed for the Group and the Company respectively, subject
to any material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The directors confirm they have complied with all the above
requirements in preparing the financial statements.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Company's transactions and disclose with reasonable accuracy at any
time, the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and Company and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Ian Buddery
Chairman
12 October 2021
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF MAESTRANO GROUP
PLC
Opinion
We have audited the group financial statements of Maestrano
Group PLC (the 'parent company') and its subsidiaries (the 'group')
for the year ended 30 June 2021 which comprise the Consolidated
Statement of Profit or Loss and Other Comprehensive Income, the
Consolidated Statement of Financial Position, the Company Statement
of Financial Position, the Consolidated Statement of Changes in
Equity, the Company Statement of Changes in Equity, the
Consolidated Statement of Cash Flows and Notes to the Statement of
Cash Flows, Notes to the Consolidated Financial Statements and
Notes to the Company Financial Statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the United Kingdom, including FRS101 "Reduced Disclosure Framework"
(United Kingdom Generally Accepted Accounting Practice).
In our opinion:
- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 30
June 2021 and of the group's loss for the year then ended;
- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the United Kingdom;
- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
- the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditors' responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed public
entities, 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.
Material uncertainty relating to going concern
The group is in a growth phase and believes it has identified a
niche market area to exploit.
During the prior year the group began product commercialisation
and revenues have increased 94% year on year. The group have put a
significant effort into expanding their sales pipeline to increase
their ability to achieve their targeted growth.
A substantial amount of work has been undertaken in preparing
the forecasts, there appears to be a robust forecasting process,
and the forecasts appear reasonable. There is a proportion of
contractual revenue which has a usage element. This usage element,
while not being contractual in itself, is effectively certain.
The nature of the business is such that a significant proportion
of forecast revenues are non-contractual. As a result, there is a
material uncertainty related to whether future revenues will
crystalise to a level sufficient to confirm that the company will
be able to meet all liabilities as they fall due. There is an
element of costs in the forecasts which would not be incurred if
revenue targets were not met. Further costs could be curtailed if
needed to assist the business to meet its liabilities as they fall
due.
The group's ability to continue as a going concern is dependent
on them securing sufficient business and managing their cost base
accordingly.
Our opinion is not modified in this regard.
Overview of our audit approach
Key audit matters
1. Going concern
Audit scope
1. We performed an audit of the parent company and the consolidated entity.
2. We did not audit the components located in Australia, though
our consolidated audit included direction of those component
audits, a review of the procedures and work undertaken on these by
the local authorised auditors together with an assessment of those
auditors.
3. We did not audit the component located in America. This
component did not need a local audit. We undertook audit work in
relation to elements that were material to the group, utilising
local expertise where needed.
4. We did not audit the 100% UK subsidiary, as this was not
required to be audited. However, we did undertake audit work on the
elements that were material to the group financial statements.
Materiality
1. Overall group materiality of GBP102,000, which represents 10%
of the consolidated loss for the year
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements, as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these
matters.
Going concern
Risk
1. The group recorded a loss of GBP1,021,821 in the year
2. The Covid-19 pandemic has caused significant issues for many
businesses, it is not considered to be significantly impacting the
group currently
3. There is a risk that given the significant losses and the
uncertainty around new contracts being won that the company does
not have sufficient funds to meet its debts as they fall due for
the foreseeable future
4. Maestrano Pty Limited disclosed material uncertainty relating
to going concern in the prior year, and Corridor Holdings Pty Ltd
disclosed material uncertainty relating to going concern in the
current year.
Our response to the risk
1. We inspected management's going concern assessment and
challenged the forecast assumptions provided, particularly in
respect of future sales both directly and through distributors
2. We discussed and assessed the progress of discussions for prospective projects
3. We discussed and enquired further with management over the
assumptions used to produce the forecasts
4. We assessed the appropriateness of the going concern
disclosure in the financial statements in light of the above
5. We discussed this basis with the firm's internal Ethical and
Technical Committee who were in agreement
Key observations communicated to the audit committee
1. Based on our audit procedures we agreed with management that
it is appropriate to adopt the going concern basis for the
financial statements for the year to 30 June 2021
2. We concluded that the going concern basis appears appropriate
with material uncertainty relating to the uncertainty around
generation of the forecast sales, given that a significant amount
of the forecast revenues are non-contractual
An overview of the scope of our audit
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit scope
for each entity within the group. Taken together, this enables us
to form an opinion on the consolidated financial statements. We
take into account size, risk profile, the organisation of the group
and effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results
when assessing the level of work to be performed at each
entity.
In assessing the risk of material misstatement to the group
financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements, we
selected all components covering entities within Australia, United
States of America and the United Kingdom, which represent the
principal business units within the Group.
Of all the components selected, we performed an audit of the
complete financial information of the UK parent entity. We reviewed
the work undertaken by component auditors of the Australian
entities. We also performed audit testing on the material elements
of the United States of America entity, utilising experts where
needed and the UK subsidiary entity.
The reporting components where we performed audit procedures or
reviewed component auditor procedures undertaken accounted for 100%
of the Group's loss before tax, 100% of the Group's revenue and
100% of the Group's total assets.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Group to be GBP102,000 (2020:
GBP97,000) which is 10% of the operating loss for the year (2020:
10% of the operating loss for the year). We believe that losses are
the most appropriate basis for materiality as the group is still in
the early stages of development and is still incurring significant
losses. During the course of the audit, we reassessed initial
materiality and materiality was therefore updated to reflect the
latest loss figure for the year.
Performance materiality
The application of materiality at the individual account or
balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Group's overall control environment, our
judgement was that performance materiality was 90% (2020: 90%) of
our planning materiality, being GBP91,800 (2020: GBP87,300). We
have set performance materiality at this level as we consider the
overall control environment to be good and the risk of the audit to
be low.
Reporting threshold
The amount below which identified misstatements are considered
as being clearly trivial
It was decided that we would report all audit differences in
excess of GBP5,000 (2020: GBP5,000), which is set as 5% of
materiality, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our
opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information set out in pages 4 to
17, but does not include the financial statements and our Report of
the Auditors thereon.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is inconsistent with the
financial statements, or our knowledge obtained in the audit or
otherwise appears to be misstated. If we identify such
inconsistencies or apparent misstatements, we are required to
determine whether there is a material misstatement in the financial
statements or a misstatement of the other information. If, based on
the work we have performed, we conclude that there is a
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
- the information given in the Report of the Directors for the
financial year for which the financial statements are prepared is
consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance
with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified any matters in the Group
Strategic Report or the Report of the Directors that are
inconsistent with our overall view of the financial statements.
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; or
- the directors were not entitled to take advantage of the small
companies' exemption from the requirement to prepare a Strategic
Report or in preparing the Report of the Directors.
Responsibilities of directors
As explained more fully in the Statement of Directors'
Responsibilities set out on page seventeen, the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue a Report
of the Auditors that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
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:
Identifying and assessing potential irregularities, including
fraud
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, our procedures included the following:
1. Considering the nature of the industry, sector, control
environment and current business activities, including possible
performance targets and subsequent remuneration;
2. Enquiring of management concerning policies and procedures
relating to:
- complying with laws and regulations and whether there were any
instances of non-compliance; and
- mitigating, detecting and responding to fraud risk and whether
there has been any actual or possible instances of fraud;
3. Discussing with the engagement team and internal specialists
where necessary, regarding how and where fraud may occur in the
financial statements along with the possible indicators of fraud.
We identified the following areas most likely to be susceptible to
fraud:
- false suppliers;
- false expense claims;
- false employees;
- misappropriation of fixed assets;
- limited segregation of duties;
4. Discussing with the engagement team and internal specialists
where necessary, the legal and regulatory framework in which the
company operates and in particular those which would have an impact
on the financial statements. The key laws and regulations
considered were the Companies Act 2006, tax legislation, employment
law and AIM Rules for Companies.
Audit response to the risks identified
As noted above, we identified false suppliers, false expense
claims, false employees, misappropriate of assets and limited
segregation of duties as matters that would most likely be
susceptible to fraud. Our procedures to respond to these risks
included the following:
- Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
- Testing a sample of suppliers to check that they offer
appropriate services for the company and that fees charged appear
reasonable;
- Undertaking detailed testing on purchases to confirm they are
valid business expenses;
- Testing an expense claim for a high level employee to check
that the expenses claimed are reasonable and related to the
business;
- Vouching employees to employment contracts and passport
copies;
- Existence testing of fixed assets held at the year end and
reviews for possible impairment;
- Detailed testing of wages including walkthrough of the system
to ensure the country specific risks are covered in each of the
different jurisdictions.
Further, we also identified compliance with the Companies Act
2006, tax legislation, employment law and AIM Rules for Companies
as key areas where there may be possible non-compliance. Our
procedures to respond to these risks included the following:
- Review the financial statement disclosures and testing to
supporting documentation to assess compliance with the Companies
Act 2006;
- Reviewing expenses codes for any items not allowable for the
tax computations;
- Vouching employees to employment contracts and passport
copies;
- Review of correspondence between the entity and the AIM.
The above matters and identified laws and regulations and
potential fraud risks were communicated to all engagement team
members and internal specialists where necessary, in order to
enable the team to have the ability to identify such risks. The
whole team remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described
above and the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our Report of the Auditors.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Rachel Lockwood (Senior Statutory Auditor)
for and on behalf of Oury Clark Chartered Accountants
Statutory Auditors
Herschel House
58 Herschel Street
Slough
Berkshire
SL1 1PG
30/9/2021
Notes:
1. The maintenance and integrity of the Maestrano Group PLC
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
2. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEARED 30 JUNE 2021
Note 2021 2020
GBP GBP
Revenue from contracts with customer 5 1,689,998 872,270
Other income 6 616,760 441,617
Interest revenue calculated using
the effective interest method 7,057 1,725
Expenses
Hosting fees and other direct costs (649,274) (254,430)
Employee benefits expense 9 (1,711,384) (1,169,112)
Occupancy expense 8 (21,898) (106,174)
Depreciation and amortisation expense 8 (113,068) (36,104)
Initial public offering ('IPO') and
other non-operating costs 8 - (84,990)
Other expenses 8 (1,029,451) (625,289)
Finance costs 8 (11,112) (9,462)
------------ ---------------
Loss before income tax expense (1,222,372) (969,949)
Income tax expense 12 200,551 -
------------ ---------------
Loss after income tax expense for
the year (1,021,821) (969,949)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Share option reserve 72,148 -
Foreign currency translation (20,699) 115,651
------------ ---------------
Other comprehensive income for the
year, net of tax 51,449 115,651
------------ ---------------
Total comprehensive income for the
year (970,372) (854,298)
============ ===============
Loss for the year is attributable
to:
Non-controlling interest - -
Owners of Maestrano Group plc (1,021,821) (969,949)
------------ ---------------
(1,021,821) (969,949)
============ ===============
Total comprehensive income for the
year is attributable to:
Non-controlling interest - -
Owners of Maestrano Group plc (970,372) (854,298)
(970,372) (854,298)
============ ===============
Pence Pence
Basic earnings per share 33 (0.61) (0.66)
Diluted earnings per share 33 (0.61) (0.66)
The above consolidated statement of profit or loss and other
comprehensive income should be read in conjunction with the
accompanying notes
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2021
Note 2021 2020
GBP GBP
Non-current assets
Goodwill 13 1,223,403 1,223,403
Right to Use Asset 14 132,518 138,963
Property, plant and
equipment 15 126,831 80,175
Total non-current assets 1,482,752 1,442,541
------------ ------------
Current assets
Inventories 16 190,154 135,172
Trade and other receivables 17 522,212 181,843
Other 19 723,324 311,889
Cash and cash equivalents 1,538,150 1,564,267
Total current assets 2,973,840 2,193,171
------------ ------------
Non-current liabilities
Lease Liabilities 29 96,588 84,788
Total non-current liabilities 96,588 84,788
------------ ------------
Current liabilities
Trade and other payables 20 340,185 253,414
Employee benefits 126,559 149,687
Unearned Income 10,680 103,091
Contingent consideration 28 - 127,834
Lease Liabilities 29 40,680 70,875
Total current liabilities 518,104 704,901
------------ ------------
Net current assets 2,455,736 1,488,270
------------ ------------
Total assets less current
liabilities 3,938,488 2,930,811
------------ ------------
Net assets 3,841,900 2,846,023
============ ============
Equity
Share capital 21 1,687,661 1,460,854
Share premium account 22 9,520,634 7,781,192
Other reserves 23 2,331,622 2,280,174
Accumulated losses (9,698,017) (8,676,197)
Total equity 3,841,900 2,846,023
============ ============
The financial statements of Maestrano Group plc (company number
11098701 (England and Wales)) were approved by the Board of
Directors and authorised for issue on 12 October 2021.
They were signed on its behalf by:
Ian Buddery Nicholas Smith
Chairman Director
12 October 2021
The above consolidated balance sheet should be read in
conjunction with accompanying notes
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
Share Share premium Other Accumulated Total equity
capital account* reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2019 800,403 7,583,057 2,164,523 (7,706,248) 2,841,735
Loss after income
tax expense for the
year - - - (969,949) (969,949)
Other comprehensive
income for the year,
net of tax - - 115,651 - 115,651
Total comprehensive
income for the year - - 115,651 (969,949) (854,298)
Share issue 660,451 198,135 - - 858,586
--------- ------------- --------- ----------- -------------
Balance at 30 June
2020 1,460,854 7,781,192 2,280,174 (8,676,197) 2,846,023
========= ============= ========= =========== ============
v The share premium account is used to recognise the difference
between the issued share capital at nominal value and the capital
received, net of transaction costs.
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2020 1,460,854 7,781,192 2,280,174 (8,676,197) 2,846,023
Loss after income
tax expense for the
year - - - (1,021,821) (1,021,821)
Other comprehensive
income for the year,
net of tax - - 51,449 - 51,449
Total comprehensive
income for the year - - 51,449 (1,021,821) (970,372)
Share issue 226,807 1,739,442 - - 1,966,248
Balance at 30 June
2021 1,687,661 9,520,634 2,331,622 (9,698,017) 3,841,900
========= ============= ========= =========== ============
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2021
Note 2021 2020
GBP GBP
Cash flows from operating activities
Loss before income tax expense for the year (1,021,821) (969,949)
Adjustments for:
Depreciation and amortisation 113,068 36,104
Loss/(Gain) on disposal of equipment 1,272 -
Foreign exchange differences (14,791) (150,141)
Share option reserve 72,148 -
Interest received (7,057) (1,725)
Interest and other finance costs 11,112 9,462
(846,069) (1,076,249)
Change in operating assets and liabilities:
Increase in inventories (54,982) (122,473)
Decrease/(increase) in trade and other receivables (340,369) 391,245
Decrease in contract assets - -
Decrease/(increase) in other operating assets (411,435) 101,510
(Decrease)/increase in trade and other payables 86,771 (148,630)
Decrease in contract liabilities - -
Decrease in other liabilities (243,373) (33,114)
------------- ------------
(1,809,457) (887,711)
Interest received 7,057 1,725
Interest and other finance costs paid (3,366) (3,280)
Income taxes paid - -
Net cash used in operating activities (1,805,765) (889,266)
------------- ------------
Cash flows from investing activities
Aggregate cash flow on acquisition
of subsidiary - 18,310
Proceeds from disposal of fixed asset 2,712
Payments for plant and equipment 15 (158,496) (71,589)
Net cash used in investing activities (155,784) (53,279)
------------- ------------
Cash flows from financing activities
Proceeds from issue of shares 1,966,248
Cash payments for leases (18,394) -
Interest on lease payments (7,747) (6,181)
Net cash from financing activities (1,940,107) (6,181)
------------- ------------
Net (decrease)/increase in cash and cash equivalents (21,442) (948,726)
Cash and cash equivalents at the beginning of the
financial year 1,564,267 2,247,201
Effects of exchange rate changes on cash and cash
equivalents (4,675) 265,792
Cash and cash equivalents at the end of the financial
year 1,538,150 1,564,267
============= ============
Included in the decrease of trade and other payables during the
year were lease payments of GBP37,093 (2020: GBP25,410).
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes
ACQUISITION OF BUSINESS
Refer to note 13 to these consolidated financial statements for
details of the acquisition of business that occurred in the year
ended 30 June 2020. The consolidated statement of cash flow has
been adjusted for assets and liabilities acquired on acquisition of
business detailed in note 13.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION
The financial statements cover Maestrano Group plc ('Company')
and the entities it controlled at the end of, or during, the
financial year (referred to as the 'Group'). The financial
statements are presented in Pound Sterling, which is Maestrano
Group plc's functional and presentation currency. The group's
functional currency in Australia is Australian Dollars and in the
United States of America it is US Dollars.
The Company was incorporated on 6 December 2017 as a private
company, Maestrano Group Limited. On 19 April 2018, as part of a
Group reorganisation, the Company acquired 100% of the ordinary
shares of Maestrano Pty Ltd from the existing shareholders and
became the immediate and ultimate parent of the Group. On 11 May
2018, the Company converted to a public company, Maestrano Group
plc and on 30 May 2018 was admitted onto the Alternative Investment
Market ('AIM'). On 31 October 2019, Maestrano Group plc acquired
the shares in Corridor Holdings Pty Ltd (previously Airsight
Holdings Pty Ltd).
Maestrano Group plc is a listed public company limited by
shares, incorporated and domiciled in England and Wales. Its
registered office and principal place of business are:
Registered office Principal place of business
10 John Street 2/2 Frost Drive
London WC1N 2EB Mayfield West NSW 2304
United Kingdom Australia
A description of the nature of the Group's operations and its
principal activities are included in the strategic report, which is
not part of the financial statements.
The financial statements were authorised for issue, in
accordance with a resolution of directors, on 12 October 2021. The
directors have the power to amend and reissue the financial
statements.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
New or amended Accounting Standards and Interpretations
adopted
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the International
Accounting Standards Board ('IASB') that are mandatory for the
current reporting period.
Any new or amended Accounting Standards or Interpretations that
are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations
did not have any significant impact on the financial performance or
position of the Group.
The following Accounting Standards and Interpretations are most
relevant to the Group:
IFRS 16 Leases
The group adopted IFRS 16 on 1 July 2019 replacing IAS 17
Leases. The standard introduced a new classification of right of
use assets whereby all leases other than those that are short term
leases or immaterial leases are classified as assets on the balance
sheet.
All existing leases at 1 July 2020 had a commitment term of less
than 12 months and the Group has used the transitional election to
continue to account for leases as operating leases. The leases
acquired as part of the business acquisition have been recognised
on the cumulative catch-up method. This effected the equity of the
business acquisition and therefore there is no impact on Group
equity from the initial adoption of IFRS 16.
Impact of adoption
The impact of adoption on opening accumulated losses as at the
transition date of 1 July 2019 was GBPnil due to the reasons
mentioned above.
The adoption has led to a recognition of a right to use asset
and a lease liability in the prior year with further information
detailed in note 15 and 29 respectively.
Going concern
The financial statements have been prepared assuming the Group
will continue as a going concern. Under the going concern
assumption, an entity is ordinarily viewed as continuing in
business for the foreseeable future.
The directors consider that the Group is in a growth phase and
believe it has identified a niche market area to exploit. During
the year ended 30 June 2020 the group acquired the Airsight group,
and made further investment in the pre-existing technology and
intellectual property owned by Airsight. This enabled the Group to
begin product commercialisation in the year to 30 June 2021.
As a result of this business model, there is a proportion of
contractual revenue which has a non-contractual usage element.
Whilst this usage element is not contractual in itself, it is
effectively certain. However, the group's ability to continue as a
going concern is dependent on them securing sufficient business and
managing their cost base accordingly.
The directors have considered the Group's existing working
capital and are of the opinion that the Group has adequate
resources to undertake its planned programme of activities for the
12 months from the date of approval of these financial
statements.
Basis of preparation
The consolidated financial statements are prepared in accordance
with International Financial Reporting Standards ('IFRS' or
'IFRSs') as adopted for use in the United Kingdom and IFRS
Interpretations Committee interpretations (together 'UK IFRS') and
the UK Companies Act 2006.
Historical cost convention
The consolidated financial statements are prepared under the
historical cost convention.
Critical accounting estimates
The preparation of the consolidated financial statements
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's and Company's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Group reorganisation and comparative information
Maestrano Group plc (previously known as Maestrano Group
Limited) was incorporated on 6 December 2017. Shareholders of the
former parent company Maestrano Pty Ltd (the 'legal subsidiary'),
approved a formal business entity reorganisation, whereby Maestrano
Group plc ('the legal parent') became the parent of the Group,
effective 19 April 2018, by acquiring all the outstanding shares of
the Group's previous ultimate holding company Maestrano Pty Ltd in
exchange for the issue of its own shares. This share for share
transaction is not a business combination and does not result in
any economic substance from the perspective of the Group. The
substance of the Group reorganisation is a continuation of the
existing Group, as a result the financial statements reflect that
fact. This share for share transaction is hereafter referred to as
the Group reorganisation and accounted for as follows:
-- the consolidated financial statements of Maestrano Group plc
are a continuation of the existing Group;
-- the difference in share capital is reflected as an adjustment
directly to the capital reorganisation reserve in equity;
-- retained earnings and other equity balances in the financial
statements at acquisition date are those of Maestrano Pty Ltd;
-- no 'new' goodwill was recognised as a result of the combination;
Therefore, the consolidated financial statements are presented
as if Maestrano Group plc had been the parent company of the
existing Group throughout the periods presented. No
reclassifications or adjustments to previously reported figures and
no changes in the operations of the Group resulted from this
change.
-- the results for the financial year ended 30 June 2020
comprise the consolidated results for the financial year of the
Maestrano Group plc together with the results of Corridor Holdings
Pty Ltd, formerly Airsight Holdings Pty Ltd, and its subsidiaries
from 1 November 2019 to 30 June 2020.
Principles of consolidation
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Maestrano Group plc as at the
balance sheet dates presented and the results of all subsidiaries
for the year then ended.
Subsidiaries are all those entities over which the Group has
control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
The acquisition of common control subsidiaries is accounted for
at book value. The acquisition of other subsidiaries is accounted
for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for
as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises
the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair
value of the consideration received and the fair value of any
investment retained together with any gain or loss in profit or
loss.
Operating segments
Operating segments are presented using the 'management
approach', where the information presented is on the same basis as
the internal reports provided to the Chief Operating Decision
Makers ('CODM'). The CODM is responsible for the allocation of
resources to operating segments and assessing their
performance.
Foreign currency translation
The consolidated financial statements are presented in Pound
Sterling, which is Maestrano Group plc's presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Pound Sterling
using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated
into Pound Sterling using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into
Pound Sterling
using the average exchange rates, which approximate the rates at
the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss
when the foreign operation or net investment is disposed of.
Revenue recognition
Revenue is recognised at an amount that reflects the
consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each
contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates
of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on
the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue
when or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or services
promised.
Variable consideration within the transaction price, if any,
reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the
customer and any other contingent events. Such estimates are
determined using either the 'expected value' or 'most likely
amount' method. The measurement of variable consideration is
subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised
will not occur.
The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining
principle are recognised as a refund liability. Revenue is not
recognised in line with when the revenue is received. Revenue is
received prior to the delivery of a good or service.
Grants from government
Grants from government are recognised at their fair value where
there is a reasonable assurance that the grant will be received and
the Group will comply with all attached conditions. Government
grants which
represent compensation for expenses or losses already incurred
are included in other income in profit or loss statement in the
year in which expenses or losses were incurred.
Interest income
Interest income is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right
to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax
payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in
deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for
prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to be applied when the assets
are recovered or liabilities are settled, based on those tax rates
that are enacted or substantively enacted, except for:
-- When the deferred income tax asset or liability arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting nor taxable
profits; or
-- When the taxable temporary difference is associated with
interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax
assets is reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable
that future taxable profits will be available for the carrying
amount to be recovered. Previously unrecognised deferred tax assets
are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there
is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred
tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which
intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based
on current and non-current classification.
An asset is classified as current when: it is either expected to
be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected
to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled
within 12 months after the reporting
period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the
reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are always classified as
non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade
receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables
have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred
goods or services to the customer but where the Group is yet to
establish an unconditional right to consideration. Contract assets
are treated as financial assets for impairment purposes.
Plant and equipment
Equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line/diminishing value
basis to write off the depreciable amount of each item of equipment
over their expected useful lives as follows:
Office equipment 2 years straight line
Furniture and fixtures 2 years straight line
Leasehold improvements 4 years straight line
Flight equipment 2 years straight line
Motor vehicles 8 years diminishing value
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Equipment under lease are depreciated over the unexpired period
of the lease or the estimated useful life of the assets, whichever
is shorter.
An item of equipment is derecognised upon disposal or when there
is no future economic benefit to the Group. Gains and losses
between the carrying amount and the disposal proceeds are taken to
profit or loss.
Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of manufactured products includes direct part
costs. Net realisable value is estimated selling price in the
ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
Intangible assets
Intangible assets acquired as part of a business combination,
are initially measured at their fair value at the date of the
acquisition. Intangible assets acquired separately are initially
recognised at cost. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or
losses recognised in profit or loss arising from the derecognition
of intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible asset.
The amortisation method and useful lives of finite life intangible
assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
An annual impairment review is conducted annually to assess
whether the goodwill recognised in respect of acquisition
accounting is in need of impairment. The Directors have reviewed
and endorsed a Strategic Business and Financial Plan prepared by
the Management Team for the next 2-3 years. Based on those
assumptions and forecasts, the Directors believe that at this stage
the Goodwill from the Corridor Holdings acquisition (previously
Airsight Holdings) has an indefinite life.
Software
Significant costs associated with purchased software are
deferred and amortised on a reducing balance basis over the period
of their expected benefit, being their finite useful life of two
years.
Research and development
Research costs are expensed in the period in which they are
incurred. Development costs are capitalised when it is probable
that the project will be a success considering its commercial and
technical feasibility; the Group is able to use or sell the asset;
the Group has sufficient resources; and intent to complete the
development and its costs can be measured reliably. Capitalised
development costs are amortised on a straight-line basis over the
period of their expected benefit. Amortisation commences when the
asset is available for use, i.e. when it is in the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised at the amount
by which the asset's carrying amount exceeds its recoverable
amount.
Recoverable amount is the higher of an asset's fair value less
costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a
cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured
at amortised cost and are not discounted. The amounts are unsecured
and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to
transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a
receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods
or services to the customer.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured
at the amounts expected to be paid when the liabilities are
settled.
Share-based payments
Equity-settled share-based compensation benefits are provided to
employees.
Equity-settled transactions are awards of shares, or options
over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions is measured at fair
value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the
impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether
the Group receives the services that entitle the employees to
receive payment. No account is taken of any other vesting
conditions.
The cost of equity-settled transactions is recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to vest and the expired portion of
the vesting period. The amount recognised in profit or loss for the
period is the cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining
fair value. Therefore, any awards subject to market conditions are
considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the Group
or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the
Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the
remaining vesting period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated as if it
has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new award is
treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an
asset or paid to transfer a
liability in an orderly transaction between market participants
at the measurement date; and assumes that the transaction will take
place either: in the principal market; or in the absence of a
principal market, in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For
non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements,
external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant.
External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs
applied in the latest valuation and a comparison, where applicable,
with external sources of data.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends
Dividends are recognised when declared during the financial
year.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of Maestrano Group plc, excluding any
costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs
associated with dilutive
potential ordinary shares and the weighted average number of
shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
Value-Added Tax ('VAT')/Goods and Services Tax ('GST') and other
similar taxes
Revenues, expenses and assets are recognised net of the amount
of associated VAT/GST, unless the VAT/GST incurred is not
recoverable from the tax authority. In this case it is recognised
as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of
VAT/GST receivable or payable. The net amount of VAT/GST
recoverable from, or payable to, the tax authority is included in
other receivables or other payables in the balance sheet.
Cash flows are presented on a gross basis. The VAT/GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax
authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of
VAT/GST recoverable from, or payable to, the tax authority.
Leases
The Group assesses at contract inception whether a contract is,
or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration
Group as a lease
The group applies a single recognition and measurement approach
for all leases, except for short-term leases and leases of
low-value assets. The group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to
use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commitment date
of the lease (ie. The date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any measurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the shorter of
the lease term and estimated useful life of the assets, as
follows:
Property 10 years
If ownership of the leased asset transfers to the Group at the
end of the lease term or the cost reflects the exercise of a
purchased option, depreciation is calculated using the estimated
useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating the lease, if
the lease terms reflects the Group exercising the option to
terminate. Variable lease payments that do not depend on an index
or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the interest rate implicit in the lease. After the
commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments (e.g., changes to
future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset.
The Group's lease liabilities are presented separately in the
statement of financial position.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets
are recognised as an expense on a straight-line basis over the
lease term.
A depreciation charge for the leased asset and an interest
expense on the lease liability is recognised the profit and loss in
accordance with IFRS 16. For classification within the statement of
cash flows, the lease payments are separated into both a principal
(financing activities) and interest (either operating or financing
activities) component.
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including
expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and
estimates will seldom equal the related actual results.
The accounting judgements, estimates and assumptions that have a
significant risk of causing an adjustment to the carrying amounts
of assets and liabilities (refer to the respective notes) within
the next financial year are discussed below.
Cashflow statement
The cash flow statement is prepared under the indirect
method.
NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
Estimates:
Revenue recognition where contracts are in progress
In accordance with the revenue recognition policy detailed in
note 2, in measuring revenue relating to fixed agreements the Group
measures the stage of completion with reference to costs incurred
and the total costs estimated for each contract. The total
estimated costs for each contract are reviewed monthly to ascertain
the current stage of completion and requires reasonable judgments
to be made. Judgement
includes allocating transaction prices to each of the
performance obligations. Refer to note 19 for the accrued revenue
asset and the balance sheet for the deferred revenue liability.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
by using the Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact
profit or loss and equity. Refer to note 33 for valuation model
inputs.
NOTE 4. OPERATING SEGMENTS
Identification of reportable operating segments
The Group operates in one segment being provision of data
integration and analytic services. This operating segment is based
on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision
Makers ('CODM')) in assessing performance and in determining the
allocation of resources.
The operating segment information is the same information as
provided throughout the consolidated financial statements and are
therefore not duplicated. Given the research and development
expenditure for all types of product, the board have determined
that reportable operating segments would be too difficult to
determine.
Major customers
There are 2 customers contributing external revenue of more than
10% amounting to GBP452,967 and GBP421,895 respectively (2020: 3
customers amounting to GBP193,216, GBP179,572 and GBP93,614
respectively).
Revenue by geographical area
Revenue from the principal activities of the Group is
attributable to the following geographical areas:
2021 2020
GBP GBP
United Kingdom 421,895 8,150
Australia/New Zealand 1,035,136 763,65
United States of America (9,828) 20,221
Middle East and Africa - -
Asia 220,368 80,243
Europe 22,427 -
Total revenue 1,689,998 872,270
========= =======
It was not possible to determine profit or loss by geographical
region during the period.
NOTE 5. REVENUE FROM CONTRACTS WITH CUSTOMER
2021 2020
GBP GBP
Enterprise implementation - 179,572
Enterprise subscriber - 4,338
Airsight 345,663 186,058
Nextcore 462,849 287,971
Cordel 881,486 214,331
Revenue from contracts with customer 1,689,998 872,270
========= =======
NOTE 6. OTHER INCOME 2021 2020
GBP GBP
Government grants and rebates 600,819 441,617
Other income 15,941 -
------- -------
Other income 616,760 441,617
======= =======
Government grants and rebates predominately relates to research
and development rebates
NOTE 7. EBITDA RECONCILIATION (EARNINGS BEFORE INTEREST EXPENSE,
TAXATION, DEPRECIATION AND AMORTISATION) 2021 2020
GBP GBP
EBITDA reconciliation
Loss before income tax (1,222,372) (969,949)
Less: Interest revenue (7,057) (1,725)
Add: Interest expense 11,112 9,462
Add: Depreciation and amortisation 113,067 36,104
EBITDA (1,105,248) (926,108)
=========== =========
Underlying EBITDA represents EBITDA adjusted for significant,
unusual and other one-off items.
2021 2020
GBP GBP
Underlying EBITDA reconciliation
EBITDA and Underlying EBITDA (1,105,248) (926,108)
========== =========
The financial statements include both the statutory financial
statements and additional performance measures of EBITDA and
Underlying EBITDA. The directors believe these additional measures
provide useful information on the underlying trend in operational
performance going forward without these unusual and other one-off
items.
NOTE 8. EXPENSES
2021 2020
GBP GBP
Loss before income tax includes the following
specific expenses:
Depreciation
Leasehold improvements 4,110 869
Office equipment 24,684 8,540
Furniture and fixtures 3,083 -
Motor Vehicles 3,335 3,034
Flight Equipment 32,350 2,245
R&D Assets 1,474 -
------- -------
Total depreciation 69,036 14,688
------- -------
Amortisation
Right to Use Asset 44,032 21,415
Total depreciation and amortisation 113,068 36,103
======= =======
IPO and other non-operating costs
Restructuring costs and Enterprise Investment
Scheme set-up costs, acquisition costs - 84,990
------- -------
Total IPO and other non-operating costs - 84,990
======= =======
Occupancy expense
Minimum lease payments - 93,938
Other occupancy expense 21,898 12,236
------- -------
Total occupancy expense 21,898 106,174
======= =======
Finance costs
Interest and finance charges paid/payable 11,112 9,462
------- -------
Total finance costs expensed 11,112 9,462
======= =======
Other expenses
Travel and entertainment 25,500 30,649
Marketing services 88,156 75,165
IT infrastructure 60,692 17,976
Professional fees 541,990 390,504
Net foreign exchange (gain)/loss (15,575) (150,141)
Other 328,688 261,135
Total other expenses 1,029,451 625,289
========= =========
Research and development costs recorded in the consolidated statement
of profit and loss and other comprehensive income were GBP983,032
in 2021 and GBP734,945 in 2020. These costs are spread across
all the expenses in the year.
NOTE 9. STAFF COSTS
The average number of employees during the year was as follows:
2021 2020
Sales and marketing 6 3
Technical 18 12
Finance and administration 3 2
---- ----
Average number of employees 27 17
==== ====
The employee benefits expense during the year was as follows:
2021 2020
GBP GBP
Wages and salaries 1,474,428 1,046,744
Social security costs 50,342 54,520
Other pension costs 121,362 60,952
Share-based payments 65,252 6,896
Total employee benefits expense 1,711,384 1,169,112
============ ===========
Included in other creditors at the period end there was unpaid
pension costs of GBPnil (2020: GBP12,106)
NOTE 10. DIRECTORS' REMUNERATION
Details of directors' remuneration is set out below: 2021 2020
Number of directors accruing benefits under money
purchase schemes in respect of qualifying services 5 5
The total remuneration in respect of the year ended 30 June 2021
and paid to each director who held office during the year as follows:
Salary Share option Post-employment
and fees charge Bonus benefits Total
2021 GBP GBP GBP GBP GBP
Non-Executive
Directors:
Ian Buddery 84,000 - - - 84,000
John Davis 45,600 3,485 - 1,368 50,453
Jonathan Macleod 40,555 3,485 - 3,852 47,892
Nicholas McInnes 44,000 2,609 - - 46,609
Executive
Directors:
Andrew Pearson 94,761 6,974 - 2,564 104,299
Nicholas Smith 105,132 2,510 - 4,287 111,929
Robert Lojszczyk 83,265 1,565 - 7,910 92,740
Total directors'
remuneration 497,313 20,628 - 19,981 537,922
========= ============ ===== =============== =======
Salary Share option Post-employment
and fees charge Bonus benefits Total
2020 GBP GBP GBP GBP GBP
Non-Executive Directors:
Ian Buddery 59,828 - - - 59,828
John Davis 33,730 1,722 - 1,012 36,464
Jonathan Macleod 31,839 1,722 - - 33,561
Nicholas McInnes (appointed
13 March 2020)* 12,534 178 - - 12,712
Executive Directors:
Stephane Ibos (resigned
30 December 2019) 21,500 - - - 21,500
Andrew Pearson 165,597 1,743 29,745 815 197,900
.
Craig Holden (resigned 31
August 2019) 18,718 - - - 18,718
Nicholas Smith (appointed
6 November 2019)* 55,132 249 - 5,238 60,619
Robert Lojszczyk (appointed
13 March 2020)* 43,709 107 - 4,024 47,840
Total directors' remuneration 442,587 5,720 29,745 11,089 489,141
========= ============ ====== =============== =======
*Remuneration from date of appointment as director of the
Company.
Number of directors accruing benefits under money purchase
schemes in respect of qualifying services were five.
The number of directors who exercised share options in the year
ended 30 June 2021 was none (2020: none).
NOTE 11. KEY MANAGEMENT PERSONNEL DISCLOSURES
Compensation
The aggregate compensation made to directors and other members
of key management personnel of the Group is set out below:
2021 2020
GBP GBP
Short-term employee benefits 497,313 472,332
Post-employment benefits 19,981 11,089
Share-based payment 20,628 5,720
537,922 489,141
======= =======
NOTE 12. INCOME TAX
2021 2020
GBP GBP
Income tax expense
Adjustment recognised for prior periods - -
Aggregate income tax expense - -
Numerical reconciliation of income tax expense
and tax at the statutory rate
Loss before income tax expense (1,222,372) (969,949)
Tax at the statutory tax rate of 23% (2020: 23%) (284,639) (223,088)
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Income not taxable (30,701) -
Research and development expenditure, net of
tax credits (108,704) 15,925
Movement in accruals 74,458 (8,923)
Movement in prepayments (40,697)
Movement in annual leave provision 23,633
Movement in LSL provision (11,264)
Movement in superannuation provision (18,400)
Capital allowances in excess of depreciation (20,598) -
Other items (12,428) 47,346
Prior year tax adjustment (58) -
Current year tax losses not recognised 444,737 168,740
Temporary differences not recognised (215,890) -
Income tax expense (200,551) -
=========== =========
Tax at the statutory tax rate represents the effective rate of
income tax across the jurisdictions in which each of the Group
entities are domiciled.
The tax rates of the main jurisdictions are Australia 26% (2020:
27.5%), United Kingdom 19.0% (2020: 19.0%), United States of
America 21.0% (2020: 21.0%).
2021 2020
GBP GBP
Tax losses not recognised
Unused tax losses for which no deferred tax asset
has been recognised 1,876,685 4,533,886
--------- ---------
Potential deferred tax asset at domestic tax rates
applicable in the countries concerned 356,570 1,007,238
--------- ---------
The above potential tax benefit for tax losses has not been
recognised in the balance sheet due to a lack of certainty as to
when the losses will reverse. A deferred tax asset has been
recognised on losses which are expected to reverse of
GBP213,802.
2021 2020
GBP GBP
Deferred tax assets/(liabilities) not recognised
Deferred tax assets/(liabilities) not recognised
comprises temporary differences attributable to:
Employee benefits - 21,586
Accrued expenses - 6,283
Prepayments and work in progress - (13,382)
- 14,487
==== ========
The above potential tax benefit for deductible temporary
differences have not been recognised in the balance sheet as the
recovery of the benefit is uncertain.
NOTE 13. GOODWILL
2021 2020
GBP GBP
Goodwill 1,223,403 1,223,403
1,223,403 1,223,403
=============== ===============
Acquisition
Goodwill relates to the purchase of the Corridor Holdings Pty
Ltd group, formerly Airsight Holdings Pty Ltd group, on November 1,
2019. The acquisition was funded by a share issue of 66,045,038
shares as described in note 21. Further consideration was payable
dependent upon the sales performance of the group acquired. Further
details of this contingent consideration can be found in note 28.
The purchase was accounted for under the acquisition method of
accounting, whereby the identifiable assets acquired are recorded
at fair value. The Group recognises goodwill for the excess of the
purchase price over the fair value of the assets acquired and
liabilities assumed. As a result of the acquisition, goodwill of
GBP1,223,403 was generated.
The goodwill was recognised in the year ended 30 June 2020 and
no impairments have been recognised to date.
Consideration paid:
GBP
Share issue 858,585
Fair value of contingent
consideration 127,834
986,419
=============
Assets and liabilities acquired are as follows:
GBP
Cash and cash equivalents 18,310
Trade and other receivables 80,303
Inventory 12,699
Trade payables (142,708)
Other liabilities (237,316)
Property, Plant and Equipment 31,728
Goodwill 1,223,403
986,419
===============
The acquisition of Airsight Holdings Pty Ltd occurred during the
year ended 30 June 2020. In the year ended 30 June 2020 the entity
generated revenue of GBP662,385 and a loss of GBP76,945. If the
entity was consolidated in the results of the Group for the whole
year ended 30 June 2020, the loss for that year would have been
GBP231,547.
NOTE 14. NON-CURRENT ASSETS - RIGHT TO USE ASSET
2021 2020
GBP GBP
Right to Use Asset 197,967 160,378
Less: Accumulated depreciation (65,448) (21,415)
132,519 138,963
========= =========
The following non-cancellable lease commitments existed at the
period end:
2021 2020
GBP GBP
0-1 Year 40,062 38,115
1-5 Years 98,210 114,343
138,272 152,458
======== =============
The GBP197,967 right to use asset represents the prior year
asset and an addition in the year of a motor vehicle lease of
GBP37,589 and the GBP65,448 depreciation represents GBP44,033 of
depreciation charged in the year. There were no further additions
or disposals.
NOTE 15. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT
2021 2020
GBP GBP
Leasehold improvements - at cost 17,073 20,462
Less: Accumulated depreciation (4,956) (5,738)
12,117 14,723
Office equipment - at cost 67,185 49,909
Less: Accumulated depreciation (39,361) (17,613)
27,824 32,296
Furniture and fixtures - at cost 15,133 3,504
Less: Accumulated depreciation (3,083) (3,504)
12,050 -
Motor vehicles - at cost 31,328 32,155
Less: Accumulated depreciation (21,324) (18,464)
10,004 13,691
R&D Assets - at cost 7,664 -
Less: Accumulated depreciation (1,474) -
--------- ---------
6,190 -
--------- ---------
Flight equipment - at cost 199,687 133,041
Less: Accumulated depreciation (141,041) (113,576)
--------- ---------
58,646 19,465
--------- ---------
126,831 80,175
========= =========
Reconciliations
Reconciliations of the written down values at the beginning and
end of the current and previous financial years are set out
below:
Leasehold Office Furniture Right
Motor Flight to use
improvements equipment and Total
fixtures Vehicles equipment assets
GBP GBP GBP GBP GBP GBP GBP
Balance at
1 July 2019 - 12,961 - - - - 12,961
Additions 11,992 25,092 - 8,265 23,421 - 68,770
Acquisition
on business
combination 3.600 20.135 - 23.890 109.620 - 157.245
Disposals - (1,848) - - - - (1,848)
Depreciation
disposed - 823 - - - - 823
Depreciation
acquired on
business
combination - (16,327) - (15,430) (111,331) - (143,088)
Depreciation
expense (869) (8,540) - (3,034) (2,245) - -(14,688)
Balance at
30 June 2020 14,723 32,296 - 13,691 19,465 - 80,175
Additions 1,883 23,033 15,133 - 73,197 7,664 120,910
Disposals - (5,757) - - (3,126) - (8,883)
Exchange
differences (379) - - (352) (502) - (1,233)
Depreciation
disposed - 2,936 - - 1,963 - 4,899
Depreciation
expense (4,110) (24,684) (3,083) (3,335) (32,351) (1,474) (69,037)
Balance at
30 June 2021 12,117 27,824 12,050 10,004 58,646 6,190 126,831
============= ========== ========== ========= ========== ======== ==========
Non-current assets by geographical location
All property plant and equipment is located in Australia other
than office equipment with a net book value of GBP4,881 which is
located in the United Kingdom and plant and equipment with a net
book value of GBP12,554 which is located in the United States of
America.
NOTE 16. CURRENT ASSETS - INVENTORIES
2021 2020
GBP GBP
Inventories 190,154 135,172
190,154 135,172
======= =======
The amount of inventories expensed during the period was
GBP562,063 (2020: GBP127,566).
NOTE 17. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
2021 2020
GBP GBP
Trade receivables 456,929 132,946
Other receivables 65,283 48,897
522,212 181,843
======= =======
Allowance for expected credit losses
The Group has recognised a loss of GBPnil (2020: GBPnil) in
profit or loss in respect of the expected credit losses for the
year ended 30 June 2021. The ageing of the receivables and
allowance for expected credit losses provided for above are as
follows:
Expected credit Allowance for expected
loss rate Carrying amount credit losses
2021 2020 2021 2020 2021 2020
% % GBP GBP GBP GBP
Not overdue - - 448,842 112,969 - -
0 to 3 months overdue - - 7,337 19,977 - -
3 to 6 months overdue - - 750 - - -
Over 6 months overdue - - - - - -
456,929 132,946 - -
======== ======= =========== ===========
The Company has virtually no experience of bad debts and credit
losses and the directors do not expect any future credit losses to
arise as contracts come to termination and as a result no expected
credit loss provision was recorded as it was deemed immaterial.
NOTE 18. CURRENT ASSETS - CONTRACT ASSETS
There were no contract assets as at 30 June 2021 or 30 June
2020.
NOTE 19. CURRENT ASSETS - OTHER
2021 2020
GBP GBP
Prepayments 95,420 52,072
R&D tax offset refundable 414,102 259,817
Deferred tax asset 213,802 -
-------- -------
723,324 311,889
======== =======
The comparative income tax debtor of GBP259,817 has been
amalgamated with other assets for consistency of presentation.
NOTE 20. CURRENT LIABILITIES -TRADE AND OTHER PAYABLES
2021 2020
GBP GBP
Trade payables 139,616 85,692
Accrued expenses 166,546 121,132
Other payables 34,023 46,590
340,185 253,414
======= =======
Refer to note 25 for further information on financial
instruments.
There were no contract liabilities as at 30 June 2021 or 30 June
2020.
NOTE 21. EQUITY - SHARE CAPITAL
Capital reconstruction - Group reorganisation
Maestrano Group plc was incorporated on 6 December 2017 and was
admitted to the Alternative Investment Market ('AIM') on 30 May
2018. Prior to AIM admission, the Group undertook a reorganisation
such that Maestrano Group plc was established as Maestrano Pty
Ltd's parent/holding entity. Maestrano Group plc determined that
the acquisition of Maestrano Pty Ltd did not represent a business
combination as defined by IFRS 3 'Business Combinations'. The
appropriate accounting treatment for recognising the new Group
structure has been determined to be a continuation of the financial
statements of Maestrano Pty Ltd Group. Refer to basis of
preparation in note 2 for further details. The number of shares in
issue shown below therefore reflects those of Maestrano Group
plc.
2021 2020 2021 2020
Shares Shares GBP GBP
Ordinary shares of GBP0.01 each
- issued and fully paid 168,766,075 146,085,369 1,687,661 1,460,854
=========== =========== ========= =========
Movements in ordinary share capital
Details Date Shares GBP
Balance 1 July 2019 80,040,331 800,403
Issue of shares of GBP0.01 each in
Maestrano Group plc on acquisition
of Corridor Holdings Pty Ltd, formerly
Airsight Holdings Pty Ltd 01 Nov 2019 66,045,038 660,451
Balance 30 June 2020 146,085,369 1,460,854
Issue of shares of GBP0.01 each in
Maestrano Group plc on Holdback shares
as part of Airsight Holdings acquisition 30 Sep 2020 7,338,336 73,383
Issue of shares of GBP0.01 each in
Maestrano Group plc on Equity placement 03 Mar 2021 15,342,370 153,424
Balance 30 June 2021 168,766,075 1,687,661
=========== =========
Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The Company does
not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall
have one vote.
Capital risk management
The Group's objectives when managing capital is to safeguard its
ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimum capital structure to reduce the cost of
capital.
Capital is regarded as total equity, as recognised in the
balance sheet, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents. If net debt is negative,
then the net debt adjustment is limited to zero.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debt.
The Group would look to raise capital when an opportunity to
invest in a business or company is seen as value adding relative to
the current Company's share price at the time of the investment.
The Group is not actively pursuing additional investments in the
short term as it continues to integrate and grow its existing
businesses in order to maximise synergies.
The Group is not subject to any financing arrangement covenants
and there have been no events of default on the financing
arrangements during the financial year.
The capital risk management policy remains unchanged throughout
the periods presented.
NOTE 22. EQUITY - SHARE PREMIUM ACCOUNT
2021 2020
GBP GBP
Share premium account 9,520,634 7,781,192
========= =========
Movements in share premium account
Detail Date GBP
Balance 01 July 2019 7,583,057
Capital received on acquisition 01 November 2019
of Corridor Holdings PTY, formerly
Airsight Holdings Pty Ltd GBP198,135
Balance 01 July 2020 7,781,192
Issue of shares in Maestrano
Group plc on Holdback shares
as part of Airsight Holdings
acquisition 30 Sep 2020 54,451
Issue of shares of in Maestrano
Group plc on Equity placement 3 Mar 2021 1,684,991
----------
9,520,634
==========
The share premium account is used to recognise the difference
between the issued share capital at nominal value and the capital
received, net of transaction costs.
NOTE 23. EQUITY - OTHER RESERVES
2021 2020
GBP GBP
Foreign currency reserve 369,635 390,334
Share option reserve 72,148 -
Capital reorganisation reserve 1,889,840 1,889,840
2,331,623 2,280,174
========= =========
Foreign currency reserve
The reserve is used to recognise exchange differences arising
from the translation of the financial statements of foreign
operations to Pound sterling.
NOTE 23. EQUITY - OTHER RESERVES (continued)
Share-based payments reserve
The reserve is used to recognise the value of equity benefits
provided to employees and directors as part of their remuneration,
and other parties as part of their compensation for services.
Capital reorganisation reserve
As explained in note 2, the Group is a continuation of the
original Maestrano Pty Limited group. Maestrano Group plc has
therefore recorded the net assets of Maestrano Pty Limited group at
their historic carrying value at the date of acquisition as a
capital reorganisation. The reserve is used to recognise the
difference between the shares issued to effect the transaction
(GBP200,000) and the share capital acquired (GBP2,089,840).
Movements in reserves
Movements in each class of reserve during the current and
previous financial years are set out below:
Foreign Share based Capital
currency payments reorganisation Total
GBP GBP GBP GBP
Balance at 1 July 2019 274,683 - 1,889,840 2,176,191
Foreign currency translation 115,651 - - 115,651
Balance at 30 June 2020 390,334 - 1,889,840 2,280,174
Foreign currency translation (20,699) - - (20,699)
Equity settled share based transactions 72,148 72,148
-------- ----------- -------------- ----------
Balance at 30 June 2021 369,635 72,148 1,889,840 2,331,623
======== =========== ============== ==========
NOTE 24. EQUITY - DIVIDS
There were no dividends paid, recommended or declared during the
current or prior financial years.
NOTE 25. FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's activities expose it to a variety of financial
risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's
overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the financial performance of the Group. The Group uses different
methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest
rate and foreign exchange risks and ageing analysis for credit
risk.
Risk management is carried out by senior finance executives
('finance') under policies approved by the Board of Directors ('the
Board'). These policies include identification and analysis of the
risk exposure of the Group and appropriate procedures, controls and
risk limits. Finance identifies and evaluates financial risks
within the Group's operating units. Finance reports to the Board on
a regular basis.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign
currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions
and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional
currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
The Group had net assets denominated in foreign currencies of
GBP1,220,649 as at 30 June 2021 (2020: GBP288,853). Based on this
exposure, had the Pound sterling weakened by 10%/strengthened by
10% against these foreign currencies with all other variables held
constant, the Group's profit before tax for the year would have
been GBP122,065 lower / GBP122,065 higher (2020: GBP28,885 lower /
GBP28,885 higher). The actual foreign exchange gain for the year
ended 30 June 2021 was GBP15,575 (2020: gain of GBP150,141).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
Most of the cash and cash equivalents are held in banks in the UK
where the current interest rate is negligible and unlikely to
fluctuate in the foreseeable future.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit and setting
appropriate credit limits. The maximum exposure to credit risk at
the reporting date to recognised financial assets is the gross
carrying amount, as disclosed in the balance sheet and notes to the
financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in
estimating expected credit losses to trade receivables through the
use of a provisions matrix using fixed rates of credit loss
provisioning. These provisions are considered representative across
all customers of the Group based on recent sales experience,
historical collection rates and forward-looking information that is
available.
Generally, trade receivables are written off when there is no
reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active
enforcement activity and a failure to make contractual payments for
a period greater than 1 year.
Except for cash and cash equivalents, the Group has no other
concentration of credit risk exposure as at 30 June 2021 and 2020.
No expected credit loss is recorded for cash and cash equivalents
as the Group and Company only deal with at least "A" rated
financial institutions.
Liquidity risk
Vigilant liquidity risk management requires the company to
maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due
and payable.
The Group manages liquidity risk by maintaining adequate cash
reserves by continuously monitoring actual and forecast cash flows
and matching the maturity profiles of financial assets and
liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual
maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both
interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from
their carrying amount in the balance sheet.
Between Between Remaining
1 year 1 and 2 2 and 5 Over 5 contractual
or less years years years maturities
2021 GBP GBP GBP GBP GBP
Non-derivatives
Non-interest bearing
Trade payables 139,616 - - - 139,616
Other payables 34,023 - - - 34,023
Total non-derivatives 173,639 - - - 173,639
-------- -------- -------- ------ ------------
Between Between Remaining
1 year 1 and 2 2 and 5 Over 5 contractual
or less years years years maturities
2020 GBP GBP GBP GBP GBP
Non-derivatives
Non-interest bearing
Trade payables 85,692 - - - 85,692
Other payables 46,591 - - - 46,591
Total non-derivatives 132,283 - - - 132,283
-------- -------- -------- ------ ------------
The cash flows in the maturity analysis above are not expected
to occur significantly earlier than contractually disclosed above.
The Group has more than adequate cash reserves to meet the
remaining contractual maturities.
NOTE 26. FAIR VALUE MEASUREMENT
The carrying amounts of trade and other receivables and trade
and other payables approximate their fair values due to their
short-term nature.
The fair value of financial liabilities is estimated by
discounting the remaining contractual maturities at the current
market interest rate that is available for similar financial
liabilities.
NOTE 27. AUDITOR REMUNERATION
During the financial year ended 30 June 2021, the following fees
were paid or payable for services provided by Oury Clark Chartered
Accountants, the auditor of the Company, and its associates.
2021 2020
GBP GBP
Audit services
Audit or review of the financial statements 53,000 46,000
Other services
Accounting assistance 49,887 43,813
102,804 89,813
======= ======
NOTE 28. CONTINGENT LIABILITIES
2021 2020
GBP GBP
Contingent consideration - 127,834
---- -------
The contingent consideration related to the purchase of Airsight
Holdings Pty Ltd now Corridor Holdings Pty Ltd. The consideration
was in the form of a share issue by Maestrano Group PLC and was
dependent on the total revenue achieved by the Airsight Holdings
Pty Ltd group for the financial year ending 30 June 2020. The
consideration was calculated dividing the total revenue achieved by
the Airsight Holdings Pty Ltd group in the year ended 30 June 2020
by AU$1,500,000, multiplied by 7,338,337, to determine how many
shares were to be issued by Maestrano Group PLC. The shares were
issued on 30 September 2020.
The contingent consideration recognised in the accounts in the
period ending 30 June 2020 was calculated using the fair value on
the date of acquisition. This is recognised in the cost of
investment in subsidiaries.
NOTE 29. LEASES
Right-of-use assets
Right-of-use assets related to leased properties that do not
meet the definition of investment property are presented as
property, plant and equipment.
The Group leases premises with a lease term of 5 years ending 29
May 2024. There is no option to purchase and there are no variable
payments.
Cost b/fwd Depreciation Depreciation Carrying
Additions b/fwd amount c/fwd
Buildings 160,378 37,589 (21,415) (44,033) 132,519
160,378 37,589 (21,415) (44,033) 132,519
=========== ================= ============== ============= ==============
Lease liabilities
Included within current liabilities is a lease liability of
GBP40,680. Included within non-current liabilities is a lease
liability of GBP96,588.
As at 30 June 2021 the Group had not committed to any further
lease liabilities that had not yet commenced.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for
short-term leases (leases of expected term of 12 months or less) or
for leases of low value assets. Payments made under such leases are
expenses on a straight-line basis.
The total cash outflow in respect of leases in the year was
GBP37,093 and the interest expense for leasing arrangements was
GBP7,747.
NOTE 30. RELATED PARTY TRANSACTIONS
Parent entity and ultimate controlling party
The parent entity and ultimate parent entity is Maestrano Group
plc. There is no ultimate controlling party.
Key management personnel
Disclosures relating to key management personnel are set out in
note 11.
Transactions with related parties
Ian Buddery was remunerated through his personal service company
during the year. Total amounts paid during the year ended 30 June
2021 were GBP84,000 (2020: GBP59,828) and these amounts are
included within the directors remuneration shown in note 10.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to
related parties at the current and previous reporting dates.
Loans to/from related parties
There were no loans to or from related parties at the current
and previous reporting dates.
NOTE 31. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets,
liabilities and results of the following subsidiaries held by the
Company in accordance with the accounting policy described in note
2:
Address and country Holding
Name of incorporation %
2/2 Frost Drive, Mayfield
Maestrano Pty Ltd West NSW 2304, Australia 100%
10 John Street, London
Cordel Limited WC 1N 2EB United Kingdom 100%
1734 E. Boston Street,
Suite 103, Gilbert AZ
85295, United States
Cordel Technology Inc. of America 100%
Corridor Holdings Pty 2/2 Frost Drive, Mayfield
Ltd West NSW 2304, Australia 100%
The Corridor Holdings Pty Ltd group which includes, Corridor
Holdings Pty Ltd, Cordel Pty Ltd and Airsight Australia Pty Ltd
have been included in the consolidation from the date of
acquisition being 1 November 2019.
NOTE 32. EARNINGS PER SHARE
2021 2020
GBP GBP
Loss after income tax (1,021,821) (969,949)
Non-controlling interest - -
Loss after income tax attributable to the owners
of Maestrano Group plc (1,021,821) (969,949)
=========== =========
Number Number
Weighted average number of ordinary shares used in
calculating basic earnings per share 168,766,075 146,085,369
Weighted average number of ordinary shares used in
calculating diluted earnings per share 168,766,075 146,085,369
=========== ===========
Pence Pence
Basic earnings per share (0.61) (0.66)
Diluted earnings per share (0.61) (0.66)
Options and convertible notes have not been included in the
diluted earnings per share in the prior year as they were
anti-dilutive.
NOTE 33. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and
approved by shareholders at a general meeting, whereby the Group
may, at the discretion of the Board of Directors, grant options
over equity settled ordinary shares in the Company to certain key
management personnel of the Group. The options are issued for nil
consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than three years and
may have other vesting conditions. Options expire when an employee
ceases to be employed or contracted by a Group company unless the
Board in its discretion allows the employee to retain all or some
of their options. Options do not have a fixed expiry date.
During the previous financial year, there were 9,964,722 equity
settled share options granted. The share-based payment expense
during the prior financial year was recorded as GBP6,896.
During the current financial year, there were 3,000,000 equity
settled share options granted. The share-based payment expense
during the financial year recorded as GBP65,252. No shares were
exercised during the year and all 12,964,722 were outstanding.
The fair value of the options granted was calculated using the
Black Scholes Model. The inputs used for the shares granted on
01/07/2019 were as follows. Weighted average share price GBP0.01,
exercise price GBP0.013, expected volatility of 50%, a risk-free
interest rate of 1% and an option life of two and three years as
appropriate. The volatility was calculated using the entity's share
price over the previous 12 months and the valuations were
undertaken by an independent organisation.
The inputs used for the shares granted on 13/03/2020 were as
follows. Weighted average share price GBP0.01, exercise price
GBP0.020, expected volatility of 80%, a risk-free interest rate of
0.5% and an option life of two years. The volatility was calculated
using the entity's share price over the previous 12 months and the
valuations were undertaken by an independent organisation.
The inputs used for the shares granted on 17/04/2020 were as
follows. Weighted average share price GBP0.01, exercise price
GBP0.018, expected volatility of 80%, a risk-free interest rate of
0.5% and an option life of one year. The volatility was calculated
using the entity's share price over the previous 12 months and the
valuations were undertaken by an independent organisation.
The inputs used for the shares granted on 04/05/2020 were as
follows. Weighted average share price GBP0.01, exercise price
GBP0.019, expected volatility of 80%, a risk-free interest rate of
0.5% and an option life of three years. The volatility was
calculated using the entity's share price over the previous 12
months and the valuations were undertaken by an independent
organisation.
The inputs used for the shares granted on 03/11/2020 were as
follows. Weighted average share price GBP0.01, exercise price
GBP0.10, expected volatility of 75%, a risk-free interest rate of
0.5% and an option life of three years. The volatility was
calculated using the entity's share price over the previous 12
months and the valuations were undertaken by an independent
organisation.
The inputs used for the shares granted on 24/11/2020 were as
follows. Weighted average share price GBP0.01, exercise price
GBP0.10, expected volatility of 75%, a risk-free interest rate of
0.5% and an option life of three years. The volatility was
calculated using the entity's share price over the previous 12
months and the valuations were undertaken by an independent
organisation.
Balance Balance
at at
Nominated Position Exercise Vesting the start the end
Person Period of of
Grant price the year Granted Exercised Cancelled the year
date
Over
01/07/2019 J Macleod Director GBP0.013 2 years 1,411,111 - - - 1,411,111
Over
01/07/2019 J Davis Director GBP0.013 2 years 1,411,111 - - - 1,411,111
Over
01/07/2019 A Pearson CEO GBP0.013 3 years 1,760,000 - - - 1,760,000
Former Over
01/07/2019 W Pickup Director GBP0.013 3 years 500,000 - - - 500,000
R Over
13/03/2020 Lojszczyk CFO GBP0.020 2 years 300,000 - - - 300,000
Over
13/03/2020 N McInnes Director GBP0.020 2 years 500,000 - - - 500,000
After
17/04/2020 A Pearson CEO GBP0.018 1 year 612,500 - - - 612,500
After
17/04/2020 N Smith CEO GBP0.018 1 year 490,000 - - - 490,000
After
17/04/2020 A Hoye CTO GBP0.018 1 year 490,000 - - - 490,000
After
17/04/2020 A Cox COO GBP0.018 1 year 490,000 490,000
VP Over
04/05/2020 N Wayne Americas GBP0.018 3 years 2,000,000 - - - 2,000,000
Former
Airsight Leaving
David Holdings concert
03/11/2020 Israel Director GBP0.10 party - 2,000,000 - - 2,000,000
Global
Head
Erik of Rail Over
24/11/2020 Hendersen Solutions GBP0.10 3 years - 1,000,000 - - 1,000,000
9,964,722 3,000,000 - - 12,964,722
---------- ---------- ---------- ---------- -----------
Weighted average exercise GBP0.016 GBP0.100 - - GBP0.035
price since July 2019
The weighted average share price during the financial year was
GBP0.013 (2020: GBP0.18).
The weighted average remaining contractual life of options
outstanding at the end of the financial year was 1.17 (2020: 1.44
years).
At the period end, there were 8,344,722 (2020: 2,826,076)
exercisable shares.
There is no agreement in place between the Company and its
employees for the Company to pay taxes on behalf of its employees.
The company will be liable for any National Insurance due.
NOTE 34. EVENTS AFTER THE REPORTING PERIOD
No matter or circumstance has arisen since 30 June 2021 that has
significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state
of affairs in future financial years.
COMPANY BALANCE SHEET
30 June 2021
Note 2021 2020
GBP GBP
Non-current assets
Investment in subsidiary 5 986,419 858,585
--------- ---------
Total non-current assets 986,419 858,585
--------- ---------
Current assets
Receivables - amounts due within one year 6 2,128,677 1,678,409
Prepayments - -
Cash and cash equivalents 1,082,959 414,150
--------- ---------
Total current assets 3,211,636 2,092,559
--------- ---------
Current liabilities
Trade and other payables - amounts due within
one year 7 117,223 176,107
Total current liabilities 117,223 176,107
--------- ---------
Net current assets 3,094,413 1,916,452
--------- ---------
Total assets less current liabilities 4,080,832 2,775,037
--------- ---------
Net assets 4,080,832 2,775,037
--------- ---------
Equity
Share capital 8 1,687,661 1,460,854
Share premium account 9 9,520,634 7,781,192
Other reserves (55,205) -
Accumulated losses (7,072,258) (6,467,009)
Total equity 4,080,832 2,775,037
=========== ============
The Company has taken advantage of the exemption under Section
408 of the Companies Act from presenting its own profit and loss
account. The loss for the year to 30 June 2021 amounted to
GBP605,249 (2020: GBP614,793).
The financial statements of Maestrano Group plc (company number
11098701 (England and Wales)) were approved by the Board of
Directors and authorised for issue on 12 October 2021
They were signed on its behalf by:
Ian Buddery Nicholas Smith
Chairman Director
12 October 2021
Company statement of changes in equity
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July 2019 800,403 7,583,057 - (5,852,216) 2,531,244
Loss after income tax expense
for the period - - - (614,793) (614,793)
Share issue 660,451 198,135 - - 858,586
Other comprehensive income
for the period, net of tax - - - - -
Total comprehensive income
for the period - - - (614,793) (614,793)
Balance at 30 June 2020 1,460,854 7,781,192 - (6,467,009) 2,775,037
========= ============= ======== =========== ============
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July 2020 1,460,854 7,781,192 - (6,467,009) 2,775,037
Loss after income tax expense
for the period - - - (605,249) (605,249)
Share issue 226,807 1,739,442 - - 1,966,249
Foreign currency translation - - (127,353) - (127,353)
Share option reserve - - 72,148 - 72,148
Other comprehensive income
for the period, net of tax - - - - -
Total comprehensive income
for the period - - - (605,249) (605,249)
Balance at 30 June 2021 1,687,661 9,520,634 (55,205) (7,072,258) 4,080,832
========= ============= ========= =========== ============
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION
The Company was incorporated on 6 December 2017 as a private
company, Maestrano Group Limited. On 19 April 2018, as part of a
group reorganisation, the Company acquired 100% of the ordinary
shares of Maestrano Pty Ltd (the 'original parent') from the
existing shareholders and became the immediate and ultimate parent
of the Group. On 11 May 2018, the Company converted to a public
company, Maestrano Group plc and on 30 May 2018 was admitted onto
the Alternative Investment Market ('AIM').
The financial statements are presented in Pound Sterling, which
is Maestrano Group plc's functional and presentation currency.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of
the financial statements are set out below.
New or amended Accounting Standards and Interpretations
adopted
The Company has adopted all of the new and amended Accounting
Standards and Interpretations issued by the Financial Reporting
Council ('FRC') that are mandatory for the current reporting
period. The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the
financial performance or position of the Company because there is
no revenue in the company and no expected credit losses as
explained in the notes to the financial statements.
Basis of preparation
These financial statements were prepared in accordance with FRS
101 'Reduced Disclosure Framework' and the Companies Act 2006.
As permitted by FRS 101, the Company has taken advantage of all
of the disclosure exemptions available to it, including (where
applicable): statement of cash flows, new Accounting Standards not
yet mandatory, presentation of comparative information for certain
assets, impairment of assets, capital risk management, financial
instruments, fair value measurement, key management personnel,
related party transactions, business combinations and share-based
payments.
Historical cost convention
The financial statements have been prepared under the historical
cost convention and under the going concern assumption.
Further details of the directors' considerations in relation to
going concern are included in the directors' report.
Interest income
Interest income is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Income tax
Current tax is provided at amounts expected to be paid or
recovered using the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future
have occurred at the balance sheet date. Timing differences are
differences between the company's taxable profits and its results
as stated in the financial statements that arise from the inclusion
of gains and losses in tax assessments in periods different from
those in which they are recognised in the financial statements. A
net deferred tax asset is regarded as recoverable and therefore
recognised only when, on the basis of all available evidence, it
can be regarded as more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying
timing differences can be deducted. Deferred tax is measured at the
average tax rates that are expected to apply in the periods in
which the timing differences are expected to reverse, based on tax
rates and laws that have been enacted or substantively enacted by
the balance sheet date. Deferred tax is measured on a
non-discounted basis. The taxation liabilities are reduced wholly
or in part by the surrender of tax losses by fellow Group
undertakings for which payment is made.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
No expected credit loss is recorded for cash and cash
equivalents as the Group and Company only deal with at least "A"
rated financial institutions.
Other receivables
Receivables from controlled entities and other receivables are
initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method, less any
provision for impairment.
The Company has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables
have been grouped based on days overdue.
Investment in subsidiary
Investment in subsidiary is shown at initial cost plus any
subsequent contributions, less accumulated impairment.
In a Group reorganisation, initial cost is measured at the
carrying amount of the Company's share of the equity items shown in
the separate financial statements of the original parent at the
date of the reorganisation. If the original parent has net
liabilities, the initial cost is recognised as nil.
The difference between the capital contributed to effect the
transaction and the initial cost recognised as the investment in
subsidiary is reflected as an adjustment directly to the capital
reorganisation reserve in equity.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured
at amortised cost and are not discounted. The amounts are unsecured
and are usually paid within 30 days of recognition.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Profit and loss account
The Company has elected not to present its own profit and loss
account for the period. The Company reported a loss for the
financial year ended 30 June 2021 of GBP605,249 (2020:
GBP614,793).
NOTE 3. EMPLOYEES AND DIRECTORS' INFORMATION
The only employees of the Company are the directors whose
emoluments are disclosed in note 10 to the consolidated financial
statements.
NOTE 4. KEY MANAGEMENT PERSONNEL DISCLOSURES
The aggregate compensation made to directors and other members
of key management personnel of the Group is set out in note 11 to
the consolidated financial statements.
NOTE 5. NON-CURRENT ASSETS- INVESTMENT IN SUBSIDIARY
2021 2020
GBP GBP
Investment in Corridor Holdings Pty Ltd - 100% of
issued capital held 986,419 858,585
Investment in Maestrano Pty Ltd - 100% of issued
capital held - -
======= =======
Acquisition
The company purchased 100% of the share capital of Airsight
Holdings Pty Ltd, now Corridor Holdings Pty Ltd on November 1,
2019. The acquisition was funded by a share issue of 66,045,038
shares. Further consideration was payable dependent upon the sales
performance of the group acquired. The fair value of consideration
agrees to the investment in the accounts. No impairment has been
recognised at the balance sheet date.
A full list of the subsidiaries controlled by the Company is
disclosed in note 31 to the consolidated financial statements.
NOTE 6. CURRENT ASSETS - RECEIVABLES - AMOUNTS DUE WITHIN ONE
YEAR
2021 2020
GBP GBP
Receivable from controlled entities 2,077,805 1,631,229
Prepayments 46,998 38,705
Other receivables - representing VAT/GST 3,874 8,475
2,128,677 1,678,409
========= =========
Interest is being charged on loans between the Australian
entities at 5%. Loans between other group entities and between
Australian and non Australian group entities are interest free. The
receivables from controlled entities are repayable on demand. No
expected credit loss provision is recorded on the remaining
receivable from the controlled entities as directors believe the
receivable from controlled entities will be fully recovered from
amounts recently received by the controlled entities of grant
monies due from the government.
NOTE 7. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
2021 2020
GBP GBP
Trade payables 953 19,465
Payable to controlled entities - 35,432
Accrued expenses 116,270 121,210
117,223 176,107
======= =======
NOTE 8. EQUITY - SHARE CAPITAL
2021 2020 2021 2020
Shares Shares GBP GBP
Ordinary shares of GBP0.01 each -
issued and fully paid 168,766,075 146,085,369 1,687,661 1,460,854
=========== =========== ========= =========
Movements in ordinary share capital
Details Date Shares GBP
Balance 1 July 2019 80,040,331 800,403
Issue of shares of GBP0.01 each in
Maestrano Group plc on acquisition
of Corridor Holdings Pty Ltd, formerly
Airsight Holdings Pty Ltd 01 Nov 2019 66,045,038 660,451
Balance 30 June 2020 146,085,369 1,460,854
Issue of shares of GBP0.01 each in
Maestrano Group plc on Holdback shares
as part of Airsight Holdings acquisition 30 Sep 2020 7,338,336 73,383
Issue of shares of GBP0.01 each in
Maestrano Group plc on Equity placement 03 Mar 2021 15,342,370 153,424
--- ----------- ----------
Balance 30 June 2021 168,766,075 1,687,661
Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The Company does
not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall
have one vote.
NOTE 9. EQUITY - SHARE PREMIUM ACCOUNT
2021 2020
GBP GBP
Share premium account 9,520,634 7,781,192
========= =========
Movements in share premium account
Detail Date GBP
Balance 01 Jul 2020 7,781,192
Issue of shares in Maestrano
Group plc on Holdback shares
as part of Airsight Holdings
acquisition 30 Sep 2020 54,451
Issue of shares of in Maestrano
Group plc on Equity placement 03 Mar 2021 1,684,991
-----------
9,520,634
===========
The share premium account is used to recognise the difference
between the issued share capital at nominal value and the capital
received, net of transaction costs.
NOTE 10. EQUITY - DIVIDENDS
There were no dividends paid, recommended, or declared during
the current or previous financial period.
NOTE 11. AUDITOR REMUNERATION
The auditor's remuneration for audit and other services is
disclosed within note 27 to the consolidated financial
statements.
NOTE 12. CONTINGENT LIABILITIES
The Company had a contingent liability as at 30 June 2020 which
is detailed in note 28 of the consolidated notes to the financial
statements. The company had no contingent liabilities as at 30 June
2021.
NOTE 13. RELATED PARTY TRANSACTIONS
The following balances are outstanding at the reporting date in
relation to loans with related parties:
2021 2020
GBP GBP
Current receivables:
Loans to commonly controlled entity 2,077,805 1,631,229
Current payables:
Loans from commonly controlled entity - 35,432
Interest is being charged between the Australian entities at 5%.
Loans between other group entities and between Australian and non
Australian group entities are interest free. The receivables from
controlled entities are repayable on demand. Details of related
party transactions are provided in note 30 to the consolidated
financial statements.
NOTE 14. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and
approved by shareholders at a general meeting, whereby the Group
may, at the discretion of the Board of Directors, grant options
over equity settled ordinary shares in the Company to certain key
management personnel of the Group. The options are issued for nil
consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than three years and
may have other vesting conditions. Options expire when an employee
ceases to be employed or contracted by a Group unless the Board in
its discretion allows the employee to retain all or some of their
options. Options do not have a fixed expiry date.
During the prior financial year, there were 9,964,722 equity
settled share options granted. The share-based payment expense
during the prior financial year was recorded as GBP6,869.
During the current financial year, there were 3,000,000 equity
settled share options granted. The share-based payment expense
during the financial year recorded as GBP65,252. No shares were
exercised during the year and all 12,964,722 were outstanding.
NOTE 15. PARENT ENTITY AND ULTIMATE CONTROLLING PARTY
The parent entity and ultimate parent entity is Maestrano Group
plc. There is no ultimate controlling party.
NOTE 16. EVENTS AFTER THE REPORTING PERIOD
No matter or circumstance has arisen since 30 June 2021 that has
significantly affected, or may significantly affect the Company's
operations, the results of those operations, or the Company's state
of affairs in future financial years.
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END
FR DKDBBBBDDKKD
(END) Dow Jones Newswires
October 12, 2021 02:00 ET (06:00 GMT)
Maestrano (LSE:MNO)
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