REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
SEDNA SYSTEMS EUROPE LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
SEDNA SYSTEMS EUROPE LIMITED |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Statement of Profit or Loss | 9 |
Statement of Profit or Loss and Other Comprehensive Income |
10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 13 |
Statement of Cash Flows | 14 |
Notes to the Statement of Cash Flows | 15 |
Notes to the Financial Statements | 16 |
SEDNA SYSTEMS EUROPE LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 May 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
The directors present their strategic report for the year ended 31 May 2024. |
REVIEW OF BUSINESS |
Total revenue includes subscriptions to online software products and professional services which include implementation and consulting services. Revenue is an important measure of growth in the customer base and the success of sales and product development efforts. The Company's operating costs include costs incurred on behalf of other companies within the Sedna Group, such as development and administrative support. |
The Company experienced slight increase during the year, with revenue being £10,557,556 for the 12 months ending 31 May 2024 (2023: £10,091,172).The loss before income tax for the Company was £4,417,025 (2023: £7,815,155). This is after non-cash items related to share based payment charges of £657,373 (2023: £884,632), provision for intercompany balance of £2,256,197 (2024: £3,530,549) and depreciation and amortisation of £503,836 (2023: £473,617). Excluding these non-cash items the loss before tax was £838,325 (2023: Loss £2,724,983). |
Cash and cash equivalents have decreased to £637,200 (2023: £1,652,180) for the year ended 31 May 2024. The directors have forecast that there are sufficient resources in the Company and with the support of its parent company, Sedna Communications Ltd, expect the Company to be able to continue operations and expect the operating loss to narrow over the next two years. |
The directors expect revenue to increase in the next financial year, but do not envisage significant changes to the Company. |
Key performance indicators |
The Company also monitors the average number of full time equivalent employees ("FTEs") as an important non-financial indicator. Monitoring trends in our FTEs count assists the Company in understanding its ability to attract and retain key talent and also provides insight into operating efficiency. During the year the average FTEs count was 84 (2023: 94) and year end FTEs count was 73 (2023:78). |
PRINCIPAL ACTIVITIES |
The Company is part of the Sedna Group. The principal activity of the Company is the provision of a cloud based communication platform for managing the information and communication requirements of customers with complex operations. The Company provides these services directly to customers and also provides services to other group companies in relation to the principal activity of the Group. |
The Sedna Group was formed when Sedna Communications Ltd acquired the entire issued share capital of Sedna Systems Pte Ltd on 8 June 2021, via a paper-for-paper share issue. At the date of acquisition, Sedna Systems Pte Ltd was the parent |
company of Sedna Systems Europe Limited. |
The activities were unchanged during the year and no significant changes to the principal business activities are expected in the forthcoming year. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
PRINCIPAL RISKS AND MITIGATING ACTIVITIES |
The directors consider that the principal risks faced by the Company are as follows: |
- Data security and technology risk |
The loss of confidential data or technology disruption caused by either internal or external factors could result in financial loss or reputational damage. The Company ensures ongoing vulnerability monitoring and completes annual technology |
audits, risk assessments and penetration testing to ensure the robustness of the Sedna platform. |
- Commercial relationships |
The Company is exposed to changes in relationships with both customers and suppliers. It is a key task of operational management to enhance relationships with customers and suppliers. The Company continues to make significant investments in our product and in our sales functions to ensure enhanced relationships with customers and suppliers. |
- Liquidity risks |
The Company's approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities as they fall due. Funding rounds at the Group level and support from Sedna Communications Ltd have mitigated |
this risk. The Company also continues to manage its liquidity risks through focus on cash management, cash preservation and through ensuring sufficient financing is available for current and planned expenditure |
ON BEHALF OF THE BOARD: |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 May 2024 |
The directors present their report with the financial statements of the company for the year ended 31 May 2024. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 May 2024. |
The directors believe that no dividend should be paid during the financial year. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2023 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with UK-adopted international accounting standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Oury Clark Chartered Accountants, are deemed to be re-appointed under Section 487 (2) of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA SYSTEMS EUROPE LIMITED |
Opinion |
We have audited the financial statements of Sedna Systems Europe Limited (the 'company') for the year ended 31 May 2024 which comprise the Statement of Profit or Loss, the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the UK. |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its loss for the year then ended; |
- | have been properly prepared in accordance with IFRSs as adopted by the UK; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least 12 months and 1 day from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant section of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors and the Strategic Report, 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA SYSTEMS EUROPE LIMITED |
Matters on which we are required to report by exception |
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any matters in the 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 director was not entitled to prepare the financial statements in accordance with the small companies regime and 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 four, 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA SYSTEMS EUROPE LIMITED |
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: |
- Considering the nature of the industry, sector, control environment and current business activities, including possible performance targets and subsequent remuneration. |
- Enquiring of management concerning policies and procedures relating to complying with laws and regulations and whether there were any instances of non-compliance. |
- Enquiring of management concerning policies and procedures relating to mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud. |
Discussing with the engagement team 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: |
1. Revenue recognition; |
2. Management override; |
3. Share option valuation. |
Discussing with the engagement team 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, UK tax legislation and UK employment law. |
Audit response to the risks identified |
As noted above, we identified revenue recognition, management override and share option valuation as matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following: |
1. Performing a sales test of detail to ensure revenue is recognised correctly; |
2. Reviewing the nominal ledger and journals posted during the year to ensure there is no evidence of management override; |
3. Obtain a valuation report from a third party and review the methodology of supporting calculations. |
Further, we also identified compliance with the Companies Act 2006, UK tax legislation and UK employment law as being key areas where there may be possible non-compliance. Our procedures to respond to these risks included the following: |
1. Review the financial statement disclosures with completion of a disclosure checklist and testing to supporting documentation to assess compliance with the Companies Act 2006; |
2. Review the corporation tax return to ensure it complies with UK tax legislation and completion of our detailed corporation tax checklist; |
3. Safeguard review of the financial statements by a qualified accountant independent of the audit team; |
4. Safeguard review of the corporation tax computation by someone independent of the audit team and CTA qualified; |
5.Checking a sample of compliance with right to work checks and reviewing legal fees for indications of material issues arising out of non-compliance with employment law. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA SYSTEMS EUROPE LIMITED |
The above matters and identified laws and regulations and potential fraud risks were communicated to all engagement team members, 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. |
for and on behalf of |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF PROFIT OR LOSS |
for the Year Ended 31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
Notes | £ | £ |
CONTINUING OPERATIONS |
Revenue | 3 |
Administrative expenses | ( |
) | ( |
) |
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS |
(1,999,534 |
) |
(4,083,232 |
) |
Exceptional items | 5 | ( |
) | ( |
) |
OPERATING LOSS | ( |
) | ( |
) |
Finance costs | 6 | (161,294 | ) | (201,374 | ) |
LOSS BEFORE INCOME TAX | 7 | ( |
) | ( |
) |
Income tax | 8 |
LOSS FOR THE YEAR | ( |
) | ( |
) |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
LOSS FOR THE YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF FINANCIAL POSITION |
31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
Notes | £ | £ |
ASSETS |
NON-CURRENT ASSETS |
Owned |
Property, plant and equipment | 10 |
Right-of-use |
Property, plant and equipment | 10, 17 |
Trade and other receivables | 11 |
CURRENT ASSETS |
Trade and other receivables | 11 |
Cash and cash equivalents | 12 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 13 |
Capital contribution reserve | 14 |
Retained earnings | 14 | ( |
) | ( |
) |
TOTAL EQUITY | ( |
) | ( |
) |
LIABILITIES |
NON-CURRENT LIABILITIES |
Contract liabilities | 3 | 1,789 | - |
Financial liabilities - borrowings |
Lease liabilities | 16, 17 |
CURRENT LIABILITIES |
Trade and other payables | 15 |
Contract liabilities | 3 | 991,412 | 1,014,957 |
Financial liabilities - borrowings |
Lease liabilities | 16, 17 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF FINANCIAL POSITION - continued |
31 May 2024 |
The financial statements were approved by the Board of Directors and authorised for issue on |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 May 2024 |
Called up | Capital |
share | Retained | contribution | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 June 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | (7,815,155 | ) | (6,930,523 | ) |
Balance at 31 May 2023 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | (4,417,025 | ) | (3,759,653 | ) |
Balance at 31 May 2024 | ( |
) | ( |
) |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
STATEMENT OF CASH FLOWS |
for the Year Ended 31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) | ( |
) |
Lease interest paid | (161,294 | ) | (201,374 | ) |
Tax paid |
Net cash from operating activities | ( |
) | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Change in group balances | 3,879,186 | 6,374,391 |
Intercompany debt impairments | (2,256,197 | ) | (3,530,549 | ) |
Payment of lease liabilities | ( |
) | ( |
) |
Amount introduced by directors | - | 17,381 |
Amount withdrawn by directors | (843,780 | ) | - |
Cash payments for interest on leases | (161,294 | ) | (201,374 | ) |
Movement on restoration provision | - | 71,523 |
Net cash from financing activities |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
756,278 |
Cash and cash equivalents at end of year | 2 |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE STATEMENT OF CASH FLOWS |
for the Year Ended 31 May 2024 |
1. | RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Depreciation charges |
(Profit)/loss on disposal of fixed assets | ( |
) |
Share based payment movement | 657,373 | 884,632 |
Impairment of intercompany debt | 2,256,197 | 3,530,549 |
Finance costs | 161,294 | 201,374 |
(839,631 | ) | (2,722,211 | ) |
(Increase)/decrease in trade and other receivables | ( |
) |
Increase/(decrease) in trade and other payables | ( |
) |
Decrease in contract liabilities | (21,756 | ) | (81,878 | ) |
Cash generated from operations | ( |
) | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 May 2024 |
31.5.24 | 1.6.23 |
£ | £ |
Cash and cash equivalents | 637,200 | 1,652,180 |
Year ended 31 May 2023 |
31.5.23 | 1.6.22 |
as restated |
£ | £ |
Cash and cash equivalents | 1,652,180 | 756,278 |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
1. | STATUTORY INFORMATION |
Sedna Systems Europe Ltd (the 'Company') is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page. The Company's trading address during the year was 65 Buckingham Gate, London, SW1E 6AS. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
Going concern |
The Company has obtained a letter of support from its parent company, Sedna Communications Limited. The directors of Sedna Communications Limited have provided a commitment to provide any financial support which may be necessary in order that the Company can meet its liabilities, as they fall due, for the foreseeable future being for a period of at least 12 months and 1 day following the signing of the audit report. As a result of this commitment the directors have continued to adopt the going concern basis in preparing these financial statements. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Key sources of estimation uncertainty |
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: |
As described in the accounting policies of the financial statements, depreciation of tangible assets has been based on estimated useful lives and residual values deemed appropriate by the directors. Estimated useful lives and residual values are reviewed annually and revised as appropriate. Revisions take into account actual asset lives and residual values as evidenced by disposals during current and prior accounting periods. |
Management also use judgement in relation to the interest rate used to discount the cash payments associated with the IFRS 16 lease.The rate implicit in the lease cannot be readily determined therefore the rate used is equivalent to the incremental borrowing rate for the Group at the inception of the lease. |
Current versus non-current classification |
The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: |
- | Expected to be realised or intended to be sold or consumed in the normal operating cycle |
- | Held primarily for the purpose of trading |
- | Expected to be realised within 12 months after the reporting period, or |
- | Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least |
twelve months after the reporting period |
All other assets are classified as non-current. |
A liability is current when it is: |
- | Expected to be settled in the normal operating cycle |
- | Held primarily for the purpose of trading |
- | 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 twelve months after the |
reporting period |
The Company classifies all other liabilities as non-current. |
The directors have classified those interest-bearing loans and borrowings as non-current at the balance sheet date where the directors do not believe the Company will be required to make any repayments within 12 months. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Revenue recognition |
REVENUE FROM CONTRACTS WITH CUSTOMERS |
The Company provides a cloud-based communication platform for the maritime and shipping industries. Revenue is primarily derived from contracts that encompass subscriptions to the Company's online software products and professional services including implementation and consulting. Customers do not have the right to take possession of the online software products. |
The Company recognises revenue from contracts with customers using a five-step model, which is described below: |
- | identify the contract with a customer; |
- | identify the performance obligations in a contract; |
- | determination of the transaction price; |
- | allocate the transaction price to the performance obligations identified in the contract; and |
- | recognize revenue when (or as) performance obligations are satisfied. |
Identify the contract with a customer |
A customer contract is identified when the Company and a customer have executed an agreement or online acceptance that requires the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer. |
A signed customer order form is generally regarded as a contract with a customer. |
Identify the performance obligations in a contract |
A performance obligation is a promise to provide a distinct service or a series of distinct services. A service that is promised to a customer is distinct if the customer can benefit from the service either on its own or together with other readily available resources, and a company's promise to transfer the service to the customer is separately identifiable from other promises in the contract. |
The main subscription-based services provided to customers are: |
-Stream |
The provision of the cloud-based communication platform, Stream, is the main revenue source for the Company. Customers generally enter into a contract for a specific number of seat subscriptions. Additional services not considered as distinct from Stream include implementation, data storage and technical support. Management have determined that a typical contract only to provide said services contains one combined performance obligation. |
-Pulse |
The provision of an AI-driven subscription-based service that consolidates various data sources into a unified actionable data view. Management have determined that the provision of Pulse is distinct from Stream, therefore contracts that include both Stream and Pulse have multiple performance obligations. |
-Shelly |
The provision of a subscription-based service that integrates various data sources to build and streamline workflows. Management have assessed that the provision of Shelly is distinct from Stream, therefore contracts that include both Stream and Shelly have multiple performance obligations. |
-Other professional services |
The provision of services is assessed by management as being distinct from Stream, Pulse and Shelly if the customer can benefit from the service without any of the subscription-based services. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Determination of the transaction price |
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for providing services to a customer. Generally, the total transaction price is the amount stated on the signed order form. |
The Company estimates any variable consideration it will be entitled to at contract inception and will reassess as circumstances change, when determining the transaction price. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognised will occur when any uncertainty associated with the variable consideration is resolved. Therefore, the Company does not recognise revenue for Stream seat overages at contract inception, as it is not possible to determine with certainty the number of overages a customer will utilize. Accrued income is accounted for in the financial statements where a customer has utilised overages which have not been invoiced for by the balance sheet date. |
Allocate the transaction price to the performance obligations identified in the contract |
If the contract contains a single performance obligation, the Company allocates the entire transaction price to the single performance obligation. For contracts containing multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price ("SSP") of the services provided to the customer. Given the highly variable nature of the Company's subscription-based services, management have assessed that the SSPs are taken to be the amounts stated on the signed order forms as this is a faithful representation of the amount the Company can expect to receive for satisfying a specific performance obligation. |
Recognise revenue when (or as) performance obligations are satisfied |
Revenues are recognised as and when the Company satisfies its contractual performance obligations. |
Revenues for subscription-based services are recognised evenly over the subscription period beginning on the later of the date the Group's software products are made available to customers or the subscription start date stated in the contract. |
The Company recognises revenue from other professional services as the services are provided where they are distinct from the subscription arrangement. |
-Contract liabilities |
Invoices are generally raised in advance of the contract commencement date for no longer than 1 year of services, with 1 month payment terms. The invoices are initially recorded as contract liabilities that are then recognised as revenue as the performance obligations are satisfied. |
The Company has elected to use the practical expedient available under IFRS 15, which allows entities to disregard the effects of a significant financing component if the period between the transfer of goods or services and payment is one year or less. |
The Group does not offer an option to purchase a warranty. However, it does offer an assurance-type warranty that provides guarantee of the quality. Assurance-type warranties do not result in a change to current practice for the recognition of revenue. |
TRANSFER PRICING REVENUE |
The Company also generates revenue that falls outside the scope of IFRS 15 relating to the services it provides to the parent company and fellow group undertakings. A transfer pricing study is undertaken annually using the Transactional Net Margin Method (TNMM) to determine appropriate adjustments, in order to comply with OECD guidelines. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
The functional and presentational currency of the Company is Great British pounds (£). |
Transactions in foreign currencies are initially recorded by the Company at its respective functional currency spot rate at the date the transaction first qualifies for recognition. |
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. Differences arising on settlement of monetary items are recognised in profit or loss. |
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration. |
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. |
Cash and cash equivalents |
Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value. |
In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position. |
Trade and other receivables |
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due). |
The Company's financial assets at amortised cost includes trade receivables and loans to employees. |
Capitalised contract acquisition costs |
The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and amortised on a straight-line basis over a period of three years. Sales commissions are paid on initial contracts with new customers and for expansion of contracts with existing customers. Commissions are not paid on customer renewals. Where other commissions are paid that are not directly attributable to the acquisition of a customer contract, these commissions are expensed as incurred. |
The Company determined the three-year period by taking into consideration the products sold, expected customer life, expected contract renewals, technology life cycle and other factors. |
Trade and other payables |
Trade and other payables are carried at amortised cost and, due to their short-term nature, they are not discounted. They represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Property, plant and equipment |
Fixed assets are initially measured at cost and are reviewed annually for signs of impairment. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is shorter. |
Improvements to property - over remaining term of lease |
Fixtures and fittings - Straight line over 3 years |
Computer equipment - Straight line over 3 years |
Financial instruments |
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. |
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Basic financial assets |
Basic financial assets, which include debtors, cash and bank balances, are initially measured at transaction price, and are substantially carried at amortised cost using the effective interest method. Unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. |
Basic financial liabilities |
Basic financial liabilities, including creditors and bank loans, are initially recognised at transaction price. Unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
Debt instruments are subsequently carried at amortised cost, using the effective interest method. |
Taxation |
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Leases |
Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract. |
Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term. |
Employee benefit costs |
The Company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. |
Cash flow |
The cash flow statement is prepared on the indirect basis. |
Share-based payments |
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. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | REVENUE |
Revenue from contracts with customers |
An analysis of turnover by source is given below: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Contracts with customers | 1,538,261 | 1,769,362 |
Intercompany | 9,019,295 | 8,321,810 |
10,557,556 | 10,091,172 |
A further analysis of revenue generated from contracts with customers by geographical market is given below: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Europe | 1,357,149 | 1,396,157 |
Asia | 168,776 | 200,317 |
North America | 12,336 | 172,888 |
1,538,261 | 1,769,362 |
Contract balances |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Contract liabilities |
Current |
Contract liabilities | 991,412 | 1,014,957 |
Non-current |
Contract liabilities | 1,789 | - |
993,201 | 1,014,957 |
The total revenue recognised in the reporting period that was included as a contract liability balance at the beginning of the period was £1,014,957. |
Performance obligations associated with contract liabilities are expected to be fully met within 12 months of the accounting period as invoices are raised over such a subscription period. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
4. | EMPLOYEES AND DIRECTORS |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.5.24 | 31.5.23 |
as restated |
Sales and marketing | 36 | 30 |
Research and development | 31 | 34 |
Support | 11 | 18 |
General and administrative | 6 | 12 |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Directors' remuneration |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Emoluments etc |
5. | EXCEPTIONAL ITEMS |
The exceptional items relate to the impairment of intercompany debtors. Intercompany debtors totalling £2,256,197 (2023: £3,530,549) were impaired and charged to the profit and loss account. Further details on related party transactions can be found in note 21. |
6. | NET FINANCE COSTS |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Finance costs: |
Leasing | 161,294 | 201,374 |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
7. | LOSS BEFORE INCOME TAX |
The loss before income tax is stated after charging/(crediting): |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts or finance leases |
(Profit)/loss on disposal of fixed assets | ( |
) |
Auditors' remuneration | 29,768 | 65,500 |
Auditors' remuneration for non audit work |
Foreign exchange differences | ( |
) | ( |
) |
8. | INCOME TAX |
Analysis of tax expense |
No liability to UK corporation tax arose for the year ended 31 May 2024 nor for the year ended 31 May 2023. |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2023 - |
( |
) |
( |
) |
Effects of: |
Expenses not allowable for tax | 551,982 | 788,492 |
Capital allowances in excess of depreciation | 120,706 | 73,001 |
Losses not utilised | 431,681 | 623,435 |
Unpaid pension contributions | (113 | ) | (49 | ) |
Tax expense |
9. | PRIOR YEAR ADJUSTMENT |
During the year it was determined that entities within the Sedna Group do not possess the right to set-off amounts payable or receivable in respect of transfer pricing revenue charged between certain entities within the Sedna Group against the respective intercompany balances. Consequently, adjustments have been made to increase both amounts owed by group undertakings and amounts owed to group undertakings by £8,965,241. The adjustments have had no impact on the company's net asset position or profit and loss account. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
10. | PROPERTY, PLANT AND EQUIPMENT |
Improvements | Fixtures |
Short | to | and | Computer |
leasehold | property | fittings | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 June 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 May 2024 |
DEPRECIATION |
At 1 June 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
11. | TRADE AND OTHER RECEIVABLES |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Current: |
Trade debtors |
Amounts owed by group undertakings |
Other debtors | 332,013 | 39,523 |
Directors' loan accounts |
VAT |
Prepayments and accrued income | 238,677 | 198,708 |
Non-current: |
Other debtors |
Prepayments and accrued income | 177,694 | - |
Aggregate amounts |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
12. | CASH AND CASH EQUIVALENTS |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Bank accounts |
13. | CALLED UP SHARE CAPITAL |
Allotted and issued: |
Number: | Class: | Nominal | 31.5.24 | 31.5.23 |
value: | as restated |
£ | £ |
Ordinary | £10 | 100 | 100 |
Ordinary shares carry full and equal rights to participate in voting in all circumstances, in dividends, and in capital distributions, whether on a winding up or otherwise. Ordinary shares are not redeemable. |
14. | RESERVES |
Capital |
Retained | contribution |
earnings | reserve | Totals |
£ | £ | £ |
At 1 June 2023 | ( |
) | (7,129,622 | ) |
Deficit for the year | ( |
) | ( |
) |
Share-based payments | - | 657,372 | 657,372 |
At 31 May 2024 | ( |
) | (10,889,275 | ) |
The capital contribution reserve has arisen from the issue of options over shares of the parent company to employees of Sedna Systems Europe Limited. See note 22 for further information. |
15. | TRADE AND OTHER PAYABLES |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Current: |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
VAT | 11,455 | - |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
16. | FINANCIAL LIABILITIES - BORROWINGS |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Current: |
Leases (see note 17) | 237,962 | 334,737 |
Non-current: |
Leases (see note 17) | 661,762 | 873,191 |
Terms and debt repayment schedule |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£ | £ | £ | £ |
Leases | 237,962 | 469,497 | 192,265 | 899,724 |
17. | LEASING |
Right-of-use assets |
Property, plant and equipment |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
COST |
At 1 June 2023 | 1,426,127 | 1,354,604 |
Additions | - | 71,523 |
1,426,127 | 1,426,127 |
DEPRECIATION |
At 1 June 2023 | 454,551 | 169,326 |
Charge for year | 285,225 | 285,225 |
739,776 | 454,551 |
NET BOOK VALUE | 686,351 | 971,576 |
The lease was signed on 14 December 2021 and relates to the lease of an office premises. The lease can be terminated by serving 6 months written notice on the landlord from the break date. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
17. | LEASING - continued |
Lease liabilities |
Minimum lease payments fall due as follows: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Gross obligations repayable: |
Within one year | 352,123 | 469,497 |
Between one and five years | 736,221 | 1,022,975 |
1,088,344 | 1,492,472 |
Finance charges repayable: |
Within one year | 114,161 | 134,760 |
Between one and five years | 74,459 | 149,784 |
188,620 | 284,544 |
Net obligations repayable: |
Within one year | 237,962 | 334,737 |
Between one and five years | 661,762 | 873,191 |
899,724 | 1,207,928 |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
18. | FINANCIAL INSTRUMENTS |
The statement of financial position is set out on page 11, with financial instruments being valued at amortised cost. |
Risk management |
The Company is exposed to market risk, credit risk and liquidity risk in the normal course of business. These risks are limited by the Company's financial management policies and practices described below. There has been no change to the Company's exposure to financial risk or the manner in which these risks are managed and measured. |
Market risk - currency risk |
The Company has high exposure to currency risk through selling services worldwide with customers denominating prices in their currency. The Company mitigates these exchange rate risks by maintaining at least three months of payroll in the local currency of the entity. The Company does not enter into foreign currency forward contracts for speculative purposes. |
The Company also manages foreign currency risk by holding bank balances denominated in different currencies according to the expected trade. An increase in the value of the US Dollar against the Pound of 5%, with all other variables held constant would decrease cash holdings by £24,121. |
Credit risk |
In order to minimise credit risk, the Company adopts a policy of only dealing with creditworthy counterparties and employs a strict 30 day payment policy. The most significant credit risk relates to customer that may default in making payments for services that have been provided. The Company 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 Company does not hold any collateral. |
Liquidity risk |
The Company manages liquidity risk by maintaining adequate cash reserves by monitoring actual and forecast cashflows and matching the maturity profiles of financial assets and liabilities. |
The following tables detail the Company'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 statement of financial position. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
1 year or less |
Between 1 and 2 years |
Between 2 and 5 years |
Over 5 years |
Remaining contractual liabilities |
31.05.24 | £ | £ | £ | £ | £ |
Non-derivatives |
Non-interest bearing |
Trade creditors | 59,746 | - | - | - | 59,746 |
Amounts owed to group undertakings |
27,351,140 |
- |
- |
- |
27,351,140 |
Social security and other taxes |
316,069 |
- |
- |
- |
316,069 |
Other creditors | 214,741 | - | - | - | 214,741 |
Accruals and deferred income |
651,071 |
- |
- |
- |
651,071 |
VAT | 11,455 | - | - | - | 11,455 |
Total non-derivatives | 28,604,222 | - | - | - | 28,604,222 |
1 year or less |
Between 1 and 2 years |
Between 2 and 5 years |
Over 5 years |
Remaining contractual liabilities |
31.05.23 | £ | £ | £ | £ | £ |
Non-derivatives |
Non-interest bearing |
Trade creditors | 82,221 | - | - | - | 82,221 |
Amounts owed to group undertakings |
16,647,039 |
- |
- |
- |
16,647,039 |
Social security and other taxes |
308,287 |
- |
- |
- |
308,287 |
Other creditors | 245,833 | - | - | - | 245,833 |
Accruals and deferred income |
552,435 |
- |
- |
- |
552,435 |
Total non-derivatives | 17,835,815 | - | - | - | 17,835,815 |
19. | PENSION COMMITMENTS |
The total employee contributions for the period ended 31 May 2024 were £90,317 (2023: £96,615) and directors contributions were £1,321 (2023: £1,321). There were outstanding pension contributions payable of £18,658 (2023: £17,347) at the balance sheet date. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
20. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the years ended 31 May 2024 and 31 May 2023: |
31.5.24 | 31.5.23 |
as restated |
£ | £ |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid | ( |
) | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
The director's loan amount outstanding to the company is interest-free and is repayable in full on or before 4 February 2025. |
21. | RELATED PARTY DISCLOSURES |
Sedna Communications Limited and its subsidiary companies, Sedna Systems Pte Ltd and Sedna Systems Inc are related parties of Sedna Systems Europe Limited ("the Company") as a result of Sedna Communications Limited's ownership in the Company, Sedna Systems Pte Ltd and Sedna Systems Inc. |
During the year, intercompany balances between the Company and the Sedna Group arose on transfer pricing revenue totalling £9,019,294 (2023: £8,321,810), net expenses incurred on behalf of the Company by related parties totalling £4,755,864 (2023: net expenses incurred by the Company on behalf of the Group £2,441,402), commissions totalling £nil (2023: £66,911), foreign exchange movements totalling £414,536 (2023: £139,313) and intra group balance payments received totalling £6,300,957 (2023:£13,679,456). |
At the reporting date the Company owed the group £27,351,140 (2023 as restated: £16,647,039) and was owed £15,790,155 (2023 as restated: £8,965,241) by the group. Intercompany debtors tolling £2,256,197 (2023: 3,520,549) were impaired and charged to the profit and loss account. |
Stage 3 Systems Pte Ltd and its subsidiary companies, Stage 3 Systems Europe Ltd and Stage 3 Systems Inc, ("S3S Group") are related parties of the Company as a result of Stage 3 Systems Pte Ltd's ownership interest in the parent of the Company, Sedna Communications Ltd. The CEO of Sedna Communications Ltd, William Dobie, is also a director and shareholder of Stage 3 Systems Pte Ltd. During the year the S3S Group provided various software consulting services to the Company at a discount to the market value of the services of between 50% - 100%. At the year end, the Company owed S3S Group £169,141 (2023: £186,935) and is shown within other creditors. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
22. | SHARE-BASED PAYMENT TRANSACTIONS |
During the year, employees and directors of the Company benefited from participating in an Employee Share Option Plan ("ESOP") put in place by the Group at a general meeting. The options become fully vested at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria, and restrictions as shall be determined by the Board of Directors and set forth in each stock option notice. All options vest over a period no longer than four years. Options expire 90 days after an employee, or director ceases to be employed or contracted by the Company unless the Board in its discretion allows the individual to extend the exercise period for all or some of their options. Options expire 10 years after the grant date. The fair value of share options granted is estimated at the date of grant using a Black-Scholes model, taking into account the terms and conditions on which the share options were granted. It takes into account historical and expected dividends and the share price volatility of the Group. |
Management utilised third party valuations to assist with the determination of the Group's estimated fair market value and ordinary share price. The following information is relevant to the determination of the fair value of options granted under the equity settled share based remuneration schemes operated by the Group. |
A summary of the share-based incentive activity for employees of the Company under the share-option plan in the year was as follows: |
Number of share options | Weighted average exercise price |
Outstanding at 1 June 2023 | 43,398 | $16.96 |
Forfeited during the year | (792 | ) | $0.01 |
Expired during the year | (401 | ) | $48.89 |
Exercised during the year | (11,389 | ) | $0.47 |
Outstanding at 31 May 2024 | 30,816 | $23.07 |
An expense to the profit and loss of £657,373 (2023: £884,632) has been recognised as a staff cost; being the fair value of the options expected to vest, time apportioned over the vesting period. |
The weighted average remaining contractual life of the plan is 6.0 years. |
Volatility was determined by reviewing peer companies. |
The group will be liable to employer's national insurance contributions when the share options vest. The value of this is currently unknown as the value of the shares when the share options vests is unknown. |
23. | SECURITY AND COLLATERAL |
As of 15 October 2024 HSBC Innovation Banking held a first charge over the Company's bank accounts. This charge serves as security under the agreement with HSBC Innovation Banking to provide the Company with credit card facilities. |
Additionally, as of 19 December 2024 Canadian Imperial Bank of Commerce also held a fixed charge over the Company's bank accounts. This charge serves as security for an agreement to provide the parent company with a revolving credit facility. |
SEDNA SYSTEMS EUROPE LIMITED (REGISTERED NUMBER: 11756188) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
24. | ULTIMATE PARENT COMPANY AND CONTROLLING PARTY |
The immediate parent company is Sedna Communications Ltd, a company incorporated in the United Kingdom, with a registered office address being 10 John Street, London, WC1N 2EB. Sedna Communications Ltd is also the smallest and largest group to consolidate the results and financial position of the company. Copies of the consolidated financial statements are available from Companies House. |
The ultimate parent company is Insight Venture Management LLC. |
There is no ultimate controlling party. |