The directors present their annual report and financial statements for the year ended 31 May 2024.
Software Alliance Limited (“SAL”) is a specialist software house focused on the development of financial modelling and related software primarily for the life insurance industry. Our principal software product is the Mo.net Financial Modelling Platform, which is used by actuaries and other risk professionals to perform a range of critical business activities, including but not limited to product pricing, profit testing, valuation & reserving, capital management, and front / back-office policy illustrations & servicing.
The global marketplace for SAL’s products is dominated by the first generation of financial modelling software released in the mid-1990s. These products are now approaching end-of-life, with many customers actively looking at alternatives to these legacy tools. The flexible, modern & open architecture of the Mo.net platform, together with an increasing range of accelerator tools to help support the migration effort, leaves us well placed to respond to the next generation of financial modelling requirements.
Philosophy
SAL’s business philosophy is encapsulated as follows:
focus on what we’re good at – financial modelling software & related services.
integrate with everything – allowing Mo.net to be used with a range of best-in-class tools already in use at the client.
Strategic Focus
The strategic focus for the business continues to be developing a range of innovative and extensible on-premise, cloud-based and hybrid financial modelling software & associated services appropriate to the current and emerging needs of the global life insurance industry. We continue to target all stages of the life insurance lifecycle, include front-office illustrations & quotations, back-office policy administration calculations, and more traditional actuarial pricing, valuation, and reserving activities. By closely aligning our tools & services to the needs of our strategic markets & territories we can offer a genuine alternative to the traditional tools & vendors.
Growth
Over the last 12 months our recurring annual license revenue has grown by 9.9%. There has also been encouraging growth of new clients in emerging strategic markets, as well as steady interest from the domestic market giving a positive outlook for the coming year.
Cost Management
During the year, we have continued to focus on minimising all operational costs and to streamline many of our key business processes. However, we have also invested in people and initiatives where there are clear and tangible benefits to the business.
Customers
Providing exceptional customer service & support remains a cornerstone of the business, and key to our strategic goal of winning new clients who are considering moving away from legacy platforms & providers. We have continued to increase visibility of our brand across our target markets & segments through a diverse selection of industry events and conferences.
Partners
Since becoming an independent business In April 2023, SAL has developed its own Partner Programme to complement our existing consultancy offering. The primary purpose of the programme is to allow us to better support our international clients, although we have had an encouraging level of interest from domestic partners too.
Products & Services
New versions of the core Mo.net platform continue to be released in line with our strategic product roadmap, which is heavily influenced by customer requirements and our own R&D activity. New features this year include our first steps into generative AI and our first SaaS-based service. This year we have also mobilised our Mo.net Training Academy & Certification Programme to help existing & new clients develop their Mo.net expertise.
Opportunities
The most significant opportunities relate to the replacement of first generation / legacy financial modelling platforms. Many insurers are now actively investigating alternative technologies offering more flexibility, lower cost of ownership, better vendor support, and a clear pathway for migration.
Risks & Challenges
The principal risk to our business is the loss of any of our major clients to a competitor. We are therefore focusing on maintaining client satisfaction and ensuring clients receive exemplary customer service & support. Given the focus on information security & governance, especially with the move to cloud-based services, we are also embarking on a path to ISO-27001 accreditation.
People
The business & culture continues to evolve as the business grows with new members of staff joining when appropriate.
The satisfaction of all staff is monitored through a quarterly satisfaction survey, as well as indirectly through our performance management framework. Staff satisfaction continues to be high.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
Software Alliance Limited is a private company limited by shares incorporated in Scotland.
The registered office is Summit House, 4-5 Mitchell Street, Edinburgh, EH6 7BD.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Share capital
Ordinary shares are classified as equity. equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distributions to the company's ordinary shareholders are recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Fixed dividends to the company's preference shareholders are accrued as a liability over the period they are due, irrespective of when payment is to be made.
Income recognition with regard to licence fees.
The average monthly number of persons (including directors) employed by the company during the year was:
Preference dividends in arrears total £17,500 (2023 - £17,500).