REGISTERED NUMBER: 13367033 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
SEDNA COMMUNICATIONS LTD |
REGISTERED NUMBER: 13367033 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
SEDNA COMMUNICATIONS LTD |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Consolidated Statement of Profit or Loss | 10 |
Consolidated Statement of Profit or Loss and Other Comprehensive Income |
11 |
Consolidated Statement of Financial Position | 12 |
Company Statement of Financial Position | 14 |
Consolidated Statement of Changes in Equity | 16 |
Company Statement of Changes in Equity | 17 |
Consolidated Statement of Cash Flows | 18 |
Company Statement of Cash Flows | 19 |
Notes to the Statements of Cash Flows | 20 |
Notes to the Consolidated Financial Statements | 22 |
SEDNA COMMUNICATIONS LTD |
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 COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
The directors present their strategic report of the company and the group for the year ended 31 May 2024. |
Principal activities |
The principal activity of the group is the provision of a cloud based communication platform for managing the information and communication requirements of customers with complex operations. |
The group acquired Boxton Inc, a company incorporated in the US, on 22 June 2022 via a share-for-share exchange. |
The Group also conducts business through subsidiaries in the United Kingdom, Canada, Singapore, South Africa and USA. |
- | Sedna Systems Europe Ltd - 10 John Street, London, England, WC1N 2EB |
- | Sedna Systems Canada - Suite 200 2227 St. Johns Street Port Moody, BC Canada V3H 2A6 |
- | Sedna Systems Asia-Pacific - 531A Upper Cross Street #04-98 Singapore 051531 |
- | Boxton Inc - 1037 Hornblend St, San Diego, CA, 92109-4129 United States |
- |
Sedna Systems South Africa Proprietary Limited - Private Bag X60500, Houghton, Johannesburg, Gauteng, 2041, South Africa |
The activities were unchanged during the year and no significant changes to the principal business activities are expected in the forthcoming year. |
REVIEW OF BUSINESS |
Key performance indicators |
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 Group experienced considerable growth during the year and grew revenue finishing the period with revenue of $9,803,061 (2023: $7,026,196). |
The loss before income tax for the Group was $15,801,255 (2023: $22,349,781). This is after non-cash items related to share based payment charges of $804,547 (2023: $1,101,050) and depreciation and amortisation of $662,979 (2023: $702,529). Excluding these non-cash items the loss before tax was $14,333,729 (2023: $20,546,202). |
The Group 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 Group 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 100 (2023: 125) and year end FTEs count was 85 (2023: 94). It should be noted that the number of FTEs was reduced during 2024 in order to decrease costs. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The directors consider that the principal risks faced by the Group 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 Group ensures ongoing vulnerability monitoring on a Group basis and completes annual technology audits, risk assessments and penetration testing to ensure the robustness of the Sedna platform. |
- Commercial relationships |
The Group 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 Group continues to make significant investments in our product and in our sales functions to ensure enhanced relationships with customers and suppliers. |
- Liquidity risks |
The Group'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 have mitigated this risk, and the Group 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 COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 May 2024 |
The directors present their report with the financial statements of the company and the group for the year ended 31 May 2024. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 May 2024. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
CHARITABLE DONATIONS AND EXPENDITURE |
During the year, a charitable donation was made of $771 (2023: $2,917). |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 May 2024 |
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 COMMUNICATIONS LTD |
Opinion |
We have audited the financial statements of Sedna Communications Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the Consolidated Statement of Profit or Loss, 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, the Company Statement of Cash Flows, Notes to the Consolidated Statement of Cash Flows, Notes to the Company Statement of Cash Flows and 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 group's and of the parent company's affairs as at 31 May 2024 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 UK; |
- | the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; 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 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. |
Identifying and assessing potential irregularities, including fraud |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months and one 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 sections 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 Group 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA COMMUNICATIONS LTD |
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 Group 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 Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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 Group Strategic Report or the Report of the Directors that are inconsistent with our overall view of the financial statements. |
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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SEDNA COMMUNICATIONS LTD |
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: |
1. Complying with laws and regulations and whether there were any instances of non-compliance; |
2. Mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud. |
Discussing within 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. Management override; |
2. Revenue recognition; |
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 management override, revenue recognition, and share option valuation as the matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following: |
1. Reviewing all journals posted during the year and the nominal ledger and investigating large or unusual transactions; |
2. Performing a detailed sales test of detail and cut off testing to ensure that revenue is recognised in the correct period; |
3. Obtaining a valuation report from a third party and reviewing the methodology for 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 disclosures in the financial statements through completion of a disclosure checklist and testing disclosures 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 financial statements by a qualified accountant independent of the audit team; |
4. Safeguard review of corporation tax computations by a person qualified as a Chartered Tax Advisor or equivalent, independent of the audit team; |
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 COMMUNICATIONS LTD |
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 COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED 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 | 9,803,061 | 7,026,196 |
Other operating income | 26,656 | 17,243 |
Administrative expenses | (25,547,879 | ) | (29,261,579 | ) |
OPERATING LOSS | (15,718,162 | ) | (22,218,140 | ) |
Finance costs | 5 | (202,985 | ) | (242,879 | ) |
Finance income | 5 | 86,209 | 111,238 |
LOSS BEFORE INCOME TAX | 6 | (15,834,938 | ) | (22,349,781 | ) |
Income tax | 7 | 33,683 | 20,859 |
LOSS FOR THE YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (15,801,255 | ) | (22,328,922 | ) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED 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 | (15,801,255 | ) | (22,328,922 | ) |
OTHER COMPREHENSIVE (LOSS)/INCOME |
Item that will not be reclassified to profit or loss: |
Foreign exchange movements | (721,715 | ) | 61,043 |
Income tax relating to item that will not be reclassified to profit or loss |
- |
- |
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR, NET OF INCOME TAX |
(721,715 |
) |
61,043 |
TOTAL COMPREHENSIVE LOSS FOR THE YEAR |
(16,522,970 |
) |
(22,267,879 |
) |
Total comprehensive loss attributable to: |
Owners of the parent | (16,522,970 | ) | (22,267,879 | ) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
Notes | $ | $ |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 10 | 489,048 | 489,048 |
Owned |
Intangible assets | 11 | 1,165,435 | 1,165,435 |
Property, plant and equipment | 12 | 716,579 | 881,764 |
Right-of-use |
Property, plant and equipment | 12, 20 | 990,366 | 1,353,486 |
Investments | 13 | - | - |
Trade and other receivables | 14 | 674,510 | 465,556 |
4,035,938 | 4,355,289 |
CURRENT ASSETS |
Trade and other receivables | 14 | 6,111,979 | 2,787,696 |
Cash and cash equivalents | 15 | 9,288,835 | 3,887,252 |
15,400,814 | 6,674,948 |
TOTAL ASSETS | 19,436,752 | 11,030,237 |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 16 | 6,772 | 4,888 |
Share premium | 17 | 68,733,498 | 48,782,018 |
Foreign exchange reserve | 17 | (2,298,211 | ) | (1,540,705 | ) |
Share options reserve | 17 | 3,795,854 | 2,991,307 |
Merger reserve | 17 | (3,877,724 | ) | (3,877,724 | ) |
Retained earnings | 17 | (59,643,628 | ) | (43,842,373 | ) |
TOTAL EQUITY | 6,716,561 | 2,517,411 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - continued |
31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
Notes | $ | $ |
LIABILITIES |
NON-CURRENT LIABILITIES |
Contract liabilities | 3 | 791,648 | 240,062 |
Financial liabilities - borrowings |
Lease liabilities | 19, 20 | 842,490 | 1,081,940 |
1,634,138 | 1,322,002 |
CURRENT LIABILITIES |
Trade and other payables | 18 | 5,356,914 | 2,754,271 |
Contract liabilities | 3 | 5,426,190 | 4,021,793 |
Financial liabilities - borrowings |
Lease liabilities | 19, 20 | 302,949 | 414,760 |
11,086,053 | 7,190,824 |
TOTAL LIABILITIES | 12,720,191 | 8,512,826 |
TOTAL EQUITY AND LIABILITIES | 19,436,752 | 11,030,237 |
The financial statements were approved by the Board of Directors and authorised for issue on 7 February 2025 and were signed on its behalf by: |
W F Dobie - Director |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
COMPANY STATEMENT OF FINANCIAL POSITION |
31 May 2024 |
31.5.24 | 31.5.23 |
as restated |
Notes | $ | $ |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 10 |
Owned |
Intangible assets | 11 |
Property, plant and equipment | 12 |
Right-of-use |
Investments | 13 | 4,802,093 | 4,007,936 |
CURRENT ASSETS |
Trade and other receivables | 14 |
Cash and cash equivalents | 15 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 16 |
Share premium | 17 |
Revaluation reserve | 17 | ( |
) |
Foreign exchange reserve | 17 | ( |
) | ( |
) |
Share options reserve | 17 |
Retained earnings | 17 | ( |
) | ( |
) |
TOTAL EQUITY |
LIABILITIES |
NON-CURRENT LIABILITIES |
Contract liabilities | 3 | 306,857 | 240,062 |
CURRENT LIABILITIES |
Trade and other payables | 18 |
Contract liabilities | 3 | 4,646,537 | 1,992,701 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
The financial statements were approved by the Board of Directors and authorised for issue on |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
COMPANY STATEMENT OF FINANCIAL POSITION - continued |
31 May 2024 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 May 2024 |
Called up |
share | Retained | Share |
capital | earnings | premium |
$ | $ | $ |
Balance at 1 June 2022 | 3,120 | (21,513,451 | ) | 27,635,748 |
Changes in equity |
Issue of share capital | 1,768 | - | 21,146,270 |
Total comprehensive loss | - | (22,328,922 | ) | - |
Balance at 31 May 2023 | 4,888 | (43,842,373 | ) | 48,782,018 |
Changes in equity |
Issue of share capital | 1,884 | - | 19,951,480 |
Total comprehensive loss | - | (15,801,255 | ) | - |
Balance at 31 May 2024 | 6,772 | (59,643,628 | ) | 68,733,498 |
Foreign | Share |
exchange | options | Merger | Total |
reserve | reserve | reserve | equity |
$ | $ | $ | $ |
Balance at 1 June 2022 | (1,601,748 | ) | 1,890,257 | (3,877,724 | ) | 2,536,202 |
Changes in equity |
Issue of share capital | - | - | - | 21,148,038 |
Total comprehensive loss | 61,043 | 1,101,050 | - | (21,166,829 | ) |
Balance at 31 May 2023 | (1,540,705 | ) | 2,991,307 | (3,877,724 | ) | 2,517,411 |
Changes in equity |
Issue of share capital | - | - | - | 19,953,364 |
Total comprehensive loss | (757,506 | ) | 804,547 | - | (15,754,214 | ) |
Balance at 31 May 2024 | (2,298,211 | ) | 3,795,854 | (3,877,724 | ) | 6,716,561 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 May 2024 |
Called up |
share | Retained | Share |
capital | earnings | premium |
$ | $ | $ |
Balance at 1 June 2022 | ( |
) |
Changes in equity |
Issue of share capital | - |
Total comprehensive loss | - | (22,609,828 | ) | - |
Balance at 31 May 2023 | ( |
) |
Changes in equity |
Issue of share capital | - |
Total comprehensive loss | - | (16,351,157 | ) | - |
Balance at 31 May 2024 | ( |
) |
Foreign | Share |
Revaluation | exchange | options | Total |
reserve | reserve | reserve | equity |
$ | $ | $ | $ |
Balance at 1 June 2022 | ( |
) |
Changes in equity |
Issue of share capital | - | - | - |
Total comprehensive loss | ( |
) | (21,182,906 | ) |
Balance at 31 May 2023 | ( |
) | ( |
) |
Changes in equity |
Issue of share capital | - | - | - |
Total comprehensive loss | ( |
) | (15,612,222 | ) |
Balance at 31 May 2024 | ( |
) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
CONSOLIDATED 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 | (12,881,992 | ) | (17,380,526 | ) |
Lease interest paid | (202,985 | ) | (242,879 | ) |
Tax paid | 33,683 | 20,859 |
Net cash from operating activities | (13,051,294 | ) | (17,602,546 | ) |
Cash flows from investing activities |
Purchase of goodwill | - | (453,520 | ) |
Purchase of intangible fixed assets | - | (589,041 | ) |
Purchase of tangible fixed assets | (143,267 | ) | (212,665 | ) |
Sale of tangible fixed assets | 379 | - |
Interest received | 86,209 | 111,238 |
Net cash from investing activities | (56,679 | ) | (1,143,988 | ) |
Cash flows from financing activities |
Payment of lease liabilities | (351,261 | ) | (410,601 | ) |
Amount withdrawn by directors | (1,092,547 | ) | (82,415 | ) |
Share issue | 19,953,364 | 21,148,038 |
Net cash from financing activities | 18,509,556 | 20,655,022 |
Increase in cash and cash equivalents | 5,401,583 | 1,908,488 |
Cash and cash equivalents at beginning of year |
2 |
3,887,252 |
1,978,764 |
Cash and cash equivalents at end of year | 2 | 9,288,835 | 3,887,252 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
COMPANY 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 | ( |
) | ( |
) |
Increase in intercompany indebtedness | (307,108 | ) | 1,790,663 |
Net cash from operating activities | ( |
) | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Purchase of fixed asset investments | - | (1,057,982 | ) |
Interest received |
Net cash from investing activities | ( |
) |
Cash flows from financing activities |
Share issue |
Net cash from financing activities |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
359,037 |
Effect of foreign exchange rate changes | (55,223 | ) | 364,099 |
Cash and cash equivalents at end of year | 2 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE STATEMENTS OF CASH FLOWS |
for the Year Ended 31 May 2024 |
1. | RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
Group |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Loss before income tax | (15,834,938 | ) | (22,349,781 | ) |
Depreciation charges | 662,979 | 678,221 |
Loss on disposal of fixed assets | 2,601 | 15,401 |
Share based payments | 804,547 | 1,101,050 |
Foreign exchange reserve | (751,893 | ) | 61,043 |
Finance costs | 202,985 | 242,879 |
Finance income | (86,209 | ) | (111,238 | ) |
(14,999,928 | ) | (20,362,425 | ) |
(Increase)/decrease in trade and other receivables | (2,440,690 | ) | 2,757,515 |
Increase/(decrease) in trade and other payables | 2,602,643 | (1,057,298 | ) |
Increase in contract liabilities | 1,955,983 | 1,281,682 |
Cash generated from operations | (12,881,992 | ) | (17,380,526 | ) |
Company |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Loss before income tax | ( |
) | ( |
) |
Depreciation charges |
Finance income | (83,375 | ) | (111,238 | ) |
(16,430,602 | ) | (22,720,092 | ) |
(Increase)/decrease in trade and other receivables | ( |
) |
Increase in trade and other payables |
Increase in contract liabilities | 2,720,631 | 1,085,855 |
Cash generated from operations | ( |
) | ( |
) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE STATEMENTS OF CASH FLOWS |
for the Year Ended 31 May 2024 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Group | Company |
Year ended 31 May 2024 |
31.5.24 | 1.6.23 | 31.5.24 | 1.6.23 |
$ | $ | $ | $ |
Cash and cash equivalents | 9,288,835 | 3,887,252 | 6,083,167 | 1,456,355 |
Year ended 31 May 2023 |
31.5.23 | 1.6.22 | 31.5.23 | 1.6.22 |
as restated | as restated |
$ | $ | $ | $ |
Cash and cash equivalents | 3,887,252 | 1,978,764 | 1,456,355 | 359,037 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
1. | STATUTORY INFORMATION |
Sedna Communications 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 is 65 Buckingham Gate, London, SW1E 6AS. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
Going concern |
The financial statements have been prepared on a going concern basis due to the group having net current assets. |
The directors believe that this basis is appropriate as the group has historically been able to raise funding when required, and that the group will continue to operate for at least twelve months and one day from the date of signing of the financial statements. |
Basis of consolidation |
The consolidated financial statements include the accounts of the company and those of it subsidiaries, all of which are prepared to the 31 May 2024. |
The subsidiary companies, based in overseas jurisdictions, do not require an audit under their respective home legislation. |
The consolidated financial statements do not include any revenue or expenses derived from inter-company trading. In addition, all inter-company indebtedness has been eliminated. |
The functional currencies of the group's entities are the currency of the country in which the enitities are incorporated. The consolidated financial accounts are reported in United States of America dollars. |
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 their judgement in relation to the interest rate implicit in the IFRS16 lease liability. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Changes in accounting policies |
During the year it was determined that the acquisition of Sedna Communications Asia Pacific Pte Ltd and Sedna Systems Inc were initially recorded using the acquisition method. This has now been amended to use the book value method as the Directors feel this more accurately reflects the position of the group at incorporation. This change in accounting policy has resulted in a reduction of goodwill by $4,527,312 and a reduction in retained earnings by $649,588. This net amount of $3,877,724 is now recognised in a merger reserve. The prior year figures have been restated to reflect this change in policy. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED 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 the 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 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. |
Determination of the transaction price |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
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 amount 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. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Summary of significant accounting policies |
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 31 May 2024 where the directors do not believe the Company will be required to make any repayments within 12 months. |
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 Group determined the three-year period by taking into consideration the products sold, expected customer life, expected contract renewals, technology life cycle and other factors. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
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. |
Goodwill |
Goodwill arising on an acquisition of a business is carried at cost less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to the cash-generating units that are expected to benefit from the synergies of the combination. |
A cash-generating unit to which goodwill has been allocated is tested for impairment annually. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is recognised. Any impairment loss is recognised as an expense in the profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. On the disposal of a business, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. |
Intangible assets |
Intangible assets are reviewed annually by the directors for indications of possible impairment. Where impairment is identified the asset is reduced to its fair value with the resultant charge being taken to the Statement of profit or loss in the year the impairment is identified. Intangible assets are deemed to have an indefinite useful life as there is no foreseeable time period where the assets are expected to generate cash flows. |
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. |
Short leasehold | - over remaining term of lease |
Improvements to property | - over remaining term of lease |
Fixtures and fittings | - Straight line over 3 years |
Computer equipment | - Straight line over 3 years |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial instruments are recognised in the group's balance sheet when the group 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. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will not be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is expensed in the year in which it is incurred. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
The functional currency of the Group is Great British pounds (£) and its presentational currency is United States of America dollars ($). The Directors have elected for the presentational currency to be USD because this is the currency which sales prices for its services are denominated and settled in. |
The financial statements comply with IFRS as they comply with all requirements of the translation method as set out in IAS 21. |
Transactions in foreign currencies are initially recorded by the Group 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 Group 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 Group 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. |
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. |
The group applies the short-term lease recognition exemption to its short-term leases (ie. lease term of less than 12 months). Lease payments on such leases are recognised as an expense on a straight-line basis over the lease term. |
In determining the present value of the lease liability, the following rates were used for additions in the respective years: |
Year to June 2024 - 15%, being based upon the interest rate on issuing a convertible loan note. |
Employee benefit costs |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the income statement in the period to which they relate. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
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. |
Cash flow |
The cash flow statement is prepared on the indirect basis. |
Investments |
Investments in group undertakings are held at cost. Annual reviews are performed to ascertain whether an impairment is required. Where consideration is contingent on future performance, such consideration is taken at fair value. |
3. | REVENUE |
Revenue from contracts with customers |
The total revenue from contracts with customers is required to be disaggregated into categories which depict the nature, amount, timing and uncertainty of revenue. Please see note 2 which includes detailed descriptions on the type and nature of services the group provides. |
A breakdown of revenue by geographical market for the year ended 31 May 2024 is given below: |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Europe | 5,408,656 | 3,867,639 |
Asia | 2,348,572 | 1,245,800 |
North America | 1,666,272 | 1,360,953 |
South America | 82,150 | 98,799 |
Africa | 54,669 | 92,223 |
Australia | 242,742 | 360,782 |
9,803,061 | 7,026,196 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | REVENUE - continued |
Contract balances |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Contract liabilities |
Current |
Contract liabilities | 5,426,190 | 4,021,793 |
Non-current |
Contract liabilities | 791,648 | 240,062 |
6,217,838 | 4,261,855 |
The Group recognised liabilities of $6,217,838 (2023:$4,261,855) in relation to contracts with customers, with $4,953,393 (2023: $2,232,763) being recognised in Sedna Communications Ltd. These represent invoices issued to/payments received from customers in advance of the delivery of services. |
4. | EMPLOYEES AND DIRECTORS |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Wages and salaries | 13,264,950 | 16,374,844 |
Social security costs | 1,347,021 | 1,318,296 |
Other pension costs | 113,661 | 116,528 |
14,725,632 | 17,809,668 |
The average number of employees during the year was as follows: |
31.5.24 | 31.5.23 |
as restated |
Support | 16 | 31 |
Sales and marketing | 38 | 44 |
Research and development | 38 | 34 |
General and administrative | 8 | 16 |
During the year retirement benefits were accruing to 1 director (2023: 1) in respect of defined contribution pension schemes. |
The highest paid director received remuneration of $271,374 (2023: $271,374). |
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to $1,593 (2023: $1,593). |
No directors exercised share options in current or prior year and no directors received shares in respect of their services in the current or prior year under long term incentive schemes. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
5. | NET FINANCE COSTS |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Finance income: |
Interest received | 86,209 | 111,238 |
Finance costs: |
Leasing | 202,985 | 242,879 |
Net finance costs | 116,776 | 131,641 |
6. | LOSS BEFORE INCOME TAX |
The loss before income tax is stated after charging: |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Depreciation - owned assets | 305,472 | 246,044 |
Depreciation - assets on hire purchase contracts or finance leases | 363,120 | 432,176 |
Loss on disposal of fixed assets | 2,601 | 32,596 |
Auditors' remuneration | 211,322 | 159,539 |
Other non- audit services | 23,719 | 20,997 |
Foreign exchange differences | 562,951 | 113,584 |
7. | INCOME TAX |
Analysis of tax income |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Current tax: |
Tax | (33,683 | ) | (20,859 | ) |
Total tax income in consolidated statement of profit or loss | (33,683 | ) | (20,859 | ) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
7. | INCOME TAX - continued |
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 | (15,834,938 | ) | (22,349,781 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 25 % (2023 - 19 %) |
(3,958,735 |
) |
(4,246,458 |
) |
Effects of: |
Expenses not eligible for relief | 842,600 | 1,817,446 |
Difference between depreciation and capital allowances | 124,831 | 88,039 |
Share based payments | 273,500 | 203,820 |
Losses utilised | (5,856 | ) | (1,840,225 | ) |
Losses carried forwards | 2,723,660 | 3,977,378 |
Over-provision income taxes | (33,683 | ) | (20,859 | ) |
Tax income | (33,683 | ) | (20,859 | ) |
8. | LOSS OF PARENT COMPANY |
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was $(16,351,157) (2023 - $(22,609,828)). |
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 the individual company accounts to increase both amounts owed by group undertakings and amounts owed to group undertakings by $20,813,017, there is no effect to the consolidated financial statements. The adjustments have had no impact on the company's individual net asset position or profit and loss account, nor on the consolidated statement of financial position or statement of profit and loss. |
Please see the change in accounting policies in note 2 which outlines further changes to the prior year results. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
10. | GOODWILL |
Group |
$ |
COST |
At 1 June 2023 |
and 31 May 2024 | 489,048 |
NET BOOK VALUE |
At 31 May 2024 | 489,048 |
At 31 May 2023 | 489,048 |
Company |
$ |
COST |
At 1 June 2023 |
and 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
11. | INTANGIBLE ASSETS |
Group |
Patents |
and | Computer |
licences | software | Totals |
$ | $ | $ |
COST |
At 1 June 2023 |
and 31 May 2024 | 18,210 | 1,147,225 | 1,165,435 |
NET BOOK VALUE |
At 31 May 2024 | 18,210 | 1,147,225 | 1,165,435 |
At 31 May 2023 | 18,210 | 1,147,225 | 1,165,435 |
Directors had intangibles valued at the period end to see if impairment is required. No impairment was deemed necessary. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
11. | INTANGIBLE ASSETS - continued |
Company |
Patents |
and | Computer |
licences | software | Totals |
$ | $ | $ |
COST |
At 1 June 2023 |
and 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
12. | PROPERTY, PLANT AND EQUIPMENT |
Group |
Improvements | Fixtures |
Short | to | and | Computer |
leasehold | property | fittings | equipment | Totals |
$ | $ | $ | $ | $ |
COST |
At 1 June 2023 | 2,134,721 | 877,674 | 44,253 | 369,990 | 3,426,638 |
Additions | - | 112,752 | - | 30,515 | 143,267 |
Disposals | - | - | - | (9,645 | ) | (9,645 | ) |
At 31 May 2024 | 2,134,721 | 990,426 | 44,253 | 390,860 | 3,560,260 |
DEPRECIATION |
At 1 June 2023 | 781,235 | 243,687 | 15,799 | 150,667 | 1,191,388 |
Charge for year | 363,120 | 188,703 | 11,851 | 104,918 | 668,592 |
Eliminated on disposal | - | - | - | (6,665 | ) | (6,665 | ) |
At 31 May 2024 | 1,144,355 | 432,390 | 27,650 | 248,920 | 1,853,315 |
NET BOOK VALUE |
At 31 May 2024 | 990,366 | 558,036 | 16,603 | 141,940 | 1,706,945 |
At 31 May 2023 | 1,353,486 | 633,987 | 28,454 | 219,323 | 2,235,250 |
Directors reviewed the register for any capital assets which were no longer in use. No such assets were identified. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
12. | PROPERTY, PLANT AND EQUIPMENT - continued |
Company |
Computer |
equipment |
$ |
COST |
At 1 June 2023 |
Additions |
At 31 May 2024 |
DEPRECIATION |
At 1 June 2023 |
Charge for year |
At 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
13. | INVESTMENTS |
Company |
Shares in |
group |
undertakings |
$ |
COST OR VALUATION |
At 1 June 2023 | 4,007,936 |
Additions | 760,508 |
Revaluations | 33,649 |
At 31 May 2024 | 4,802,093 |
NET BOOK VALUE |
At 31 May 2024 | 4,802,093 |
At 31 May 2023 | 4,007,936 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
13. | INVESTMENTS - continued |
Company |
The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Subsidiaries |
Registered office: 10 John Street, London, England, WC1N 2EB |
Nature of business: |
% |
Class of shares: | holding |
31.5.24 | 31.5.23 |
$ | $ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year | ( |
) | ( |
) |
Registered office: 1037 Hornblend St, San Diego, CA, 92109-4129 United States |
Nature of business: |
% |
Class of shares: | holding |
31.5.24 | 31.5.23 |
$ | $ |
Aggregate capital and reserves | ( |
) |
Profit for the year |
Registered office: Suite 200, 2227 St. Johns Street, Port Moody, BC Canada, V3H 2A6 |
Nature of business: |
% |
Class of shares: | holding |
31.5.24 | 31.5.23 |
$ | $ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year | ( |
) | ( |
) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
13. | INVESTMENTS - continued |
Company |
Registered office: 531A Upper Cross Street 04-98 Singapore, 051531 |
Nature of business: |
% |
Class of shares: | holding |
31.5.24 | 31.5.23 |
$ | $ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year | ( |
) | ( |
) |
Registered office: Private Bag X60500, Houghton, Johannesburg, Gauteng, 2041, South Africa |
Nature of business: |
% |
Class of shares: | holding |
31.5.24 |
$ |
Aggregate capital and reserves |
14. | TRADE AND OTHER RECEIVABLES |
Group | Company |
31.5.24 | 31.5.23 | 31.5.24 | 31.5.23 |
as restated | as restated |
$ | $ | $ | $ |
Current: |
Trade debtors | 2,579,856 | 1,176,474 |
Amounts owed by group undertakings | - | - |
Other debtors | 657,862 | 76,921 | 20,561 | 26,175 |
Directors' loan accounts | 1,220,286 | 127,739 |
VAT | 155,012 | 192,809 |
Prepayments and accrued income | 1,498,963 | 1,213,753 | 1,116,915 | 821,172 |
6,111,979 | 2,787,696 |
Non-current: |
Other debtors | 448,287 | 436,303 |
Prepayments and accrued income | 226,223 | 29,253 |
674,510 | 465,556 |
Aggregate amounts | 6,786,489 | 3,253,252 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
15. | CASH AND CASH EQUIVALENTS |
Group | Company |
31.5.24 | 31.5.23 | 31.5.24 | 31.5.23 |
as restated | as restated |
$ | $ | $ | $ |
Bank accounts | 9,288,835 | 3,887,252 |
16. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.05.24 |
value: | $ |
5,740 | G-1 | $0.01 | 57 |
116,251 | Ordinary | $0.01 | 1,163 |
160,272 | Preferred A | $0.01 | 1,603 |
12,535 | Preferred B-1 | $0.01 | 125 |
136,936 | Preferred B-2 | $0.01 | 1,369 |
77,978 | Preferred B-3 | $0.01 | 780 |
167,487 | Preferred C | $0.01 | 1,675 |
677,199 | 6,772 |
Shares were issued at par or for a premium, the premiums varying from $0.25 to $292.16 per share. The aggregate share premium received amounted to $68,733,498. |
All 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. |
17. | RESERVES |
Group |
Foreign |
Retained | Share | exchange |
earnings | premium | reserve |
$ | $ | $ |
At 1 June 2023 | (43,842,373 | ) | 48,782,018 | (1,540,705 | ) |
Deficit for the year | (15,801,255 | ) |
Premium on share issue | - | 19,951,480 | - |
Movement on foreign exchange reserve in year |
- |
- |
(757,506 |
) |
At 31 May 2024 | (59,643,628 | ) | 68,733,498 | (2,298,211 | ) |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
17. | RESERVES - continued |
Group |
Share |
options | Merger |
reserve | reserve | Totals |
$ | $ | $ |
At 1 June 2023 | 2,991,307 | (3,877,724 | ) | 2,512,523 |
Deficit for the year | (15,801,255 | ) |
Premium on share issue | - | - | 19,951,480 |
Movement on share options reserve | 804,547 | - | 804,547 |
Movement on foreign exchange reserve in year |
- |
- |
(757,506 |
) |
At 31 May 2024 | 3,795,854 | (3,877,724 | ) | 6,709,789 |
Company |
Retained | Share | Revaluation |
earnings | premium | reserve |
$ | $ | $ |
At 1 June 2023 | ( |
) | ( |
) |
Deficit for the year | ( |
) |
Premium on share issue | - | 19,951,480 | - |
Revaluation adjustment | - | - | 33,649 |
At 31 May 2024 | ( |
) |
Company |
Foreign | Share |
exchange | options |
reserve | reserve | Totals |
$ | $ | $ |
At 1 June 2023 | ( |
) | 4,015,555 |
Deficit for the year | ( |
) |
Premium on share issue | - | - | 19,951,480 |
Movement on share options reserve | - | 760,508 | 760,508 |
Revaluation adjustment | - | - | 33,649 |
Movement on foreign exchange reserve in year |
(55,222 |
) |
- |
(55,222 |
) |
At 31 May 2024 | ( |
) | 8,354,813 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
18. | TRADE AND OTHER PAYABLES |
Group | Company |
31.5.24 | 31.5.23 | 31.5.24 | 31.5.23 |
as restated | as restated |
$ | $ | $ | $ |
Current: |
Trade creditors | 838,229 | 495,258 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 425,791 | 405,570 |
Other creditors | 629,112 | 531,083 |
Accruals and deferred income | 3,463,782 | 1,322,360 |
5,356,914 | 2,754,271 |
19. | FINANCIAL LIABILITIES - BORROWINGS |
Group |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Current: |
Leases (see note 20) | 302,949 | 414,760 |
Non-current: |
Leases (see note 20) | 842,490 | 1,081,940 |
Terms and debt repayment schedule |
Group |
1 year or |
less | 1-2 years | 2-5 years | Totals |
$ | $ | $ | $ |
Leases | 302,949 | 597,717 | 244,773 | 1,145,439 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
20. | LEASING |
Group |
Right-of-use assets |
Property, plant and equipment |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
COST |
At 1 June 2023 | 2,134,721 | 2,046,100 |
Additions | - | 88,621 |
2,134,721 | 2,134,721 |
DEPRECIATION |
At 1 June 2023 | 781,235 | 349,059 |
Charge for year | 363,120 | 432,176 |
1,144,355 | 781,235 |
NET BOOK VALUE | 990,366 | 1,353,486 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
20. | LEASING - continued |
Group |
Lease liabilities |
Minimum lease payments fall due as follows: |
31.5.24 | 31.5.23 |
as restated |
$ | $ |
Gross obligations repayable: |
Within one year | 448,287 | 581,737 |
Between one and five years | 937,284 | 1,267,532 |
1,385,571 | 1,849,269 |
Finance charges repayable: |
Within one year | 145,338 | 166,977 |
Between one and five years | 94,794 | 185,592 |
240,132 | 352,569 |
Net obligations repayable: |
Within one year | 302,949 | 414,760 |
Between one and five years | 842,490 | 1,081,940 |
1,145,439 | 1,496,700 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
21. | FINANCIAL INSTRUMENTS |
The statement of financial position is set out on page 12, with financial instruments being valued at amortised cost. |
Risk management |
The Group 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 Group has high exposure to currency risk through selling services worldwide with customers denominating prices in their currency. The Group mitigates these exchange rate risks by maintaining at least three months of payroll in the local currency of the entity. The Group does not enter into foreign currency forward contracts for speculative purposes. |
The Group also manages foreign currency risk by holding bank balances denominated in different currencies according to the expected trade of the various Group members. An increase in the value of US dollar against the Pound of 5%, with all other variables held constant, would decrease the cash value held by $463,357 at the year end. |
Credit risk |
In order to minimise credit risk, the Group 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 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. |
Liquidity risk |
The Group 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 Group and 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 COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
Group |
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 | 838,229 | - | - | - | 838,229 |
Social security and other taxes |
425,791 |
- |
- |
- |
425,791 |
Other creditors | 629,112 | - | - | - | 629,112 |
Accruals and deferred income |
3,463,782 |
- |
- |
- |
3,463,782 |
Total non-derivatives | 5,356,914 | - | - | - | 5,356,914 |
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 | 495,259 | - | - | - | 495,259 |
Social security and other taxes |
405,570 |
- |
- |
- |
405,570 |
Other creditors | 531,083 | - | - | - | 531,083 |
Accruals and deferred income |
1,322,360 |
- |
- |
- |
1,322,360 |
Total non-derivatives | 2,754,272 | - | - | - | 2,754,272 |
Company |
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 | 627,684 | - | - | - | 627,684 |
Amounts owed to group undertakings |
32,145,750 |
- |
- |
- |
32,145,750 |
Other creditors | - | - | - | - | - |
Accruals and deferred income |
332,334 |
- |
- |
- |
332,334 |
Total non-derivatives | 33,105,768 | - | - | - | 33,105,768 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED 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 |
31.05.23 | $ | $ | $ | $ | $ |
Non-derivatives |
Non-interest bearing |
Trade creditors | 335,260 | - | - | - | 335,260 |
Amounts owed to group undertakings |
21,769,206 |
- |
- |
- |
21,769,206 |
Other creditors | - | - | - | - | - |
Accruals and deferred income |
380,661 |
- |
- |
- |
380,661 |
Total non-derivatives | 22,485,127 | - | - | - | 22,485,127 |
22. | PENSION COMMITMENTS |
The defined contribution pension scheme relates to the UK subsidiary. The total contributions for the period ended 31 May 2024 were £90,317 (2023:£96,615) and there were outstanding pension contributions of £18,658 (2023: £17,347) at the balance sheet date. |
23. | 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 |
$ | $ |
W F Dobie |
Balance outstanding at start of year | 6,214 | 23,594 |
Amounts advanced | 1,185,143 | 140,083 |
Amounts repaid | - | (157,463 | ) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 1,191,357 | 6,214 |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
24. | RELATED PARTY DISCLOSURES |
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are disclosed in this note. |
During the year Sedna Systems Europe Ltd made sales of $11,350,601 (2023: $10,037,005) to the Company. At 31 May 2024 Sedna Systems Europe Ltd owed Sedna Communications Ltd $25,261,137 (2023: $11,111,302) and was owed $20,102,446 (2023: $11,111,302). |
During the year Sedna Systems Inc made sales of $nil (2023: $4,725,178) to the Company. At 31 May 2024 Sedna Systems Europe Ltd owed Sedna Communications Ltd $11,379,682 (2023: $9,701,715) and was owed $12,031,649 (2023: $10,448,387). |
During the year Sedna Communications Asia Pacific Pte Ltd made sales of $1,300,433 (2023: $1,244,587 ) to the Company. At 31 May 2024 Sedna Communications Asia Pacific Pte Ltd owed Sedna Communications Ltd $379,367 (2023: $nil ) and was owed $11,650 (2023: $209,517). |
Stage 3 Systems Pte Ltd and its subsidiary companies, Stage 3 Systems Europe Ltd and Stage 3 Systems Inc, (together the 'S3S Group') are related parties as the CEO of the Company, William Dobie, has significant influence over the S3S group by virtue of his shareholding in Stage 3 Systems Pte Ltd. |
Balances between the Group and the S3S Group arose through shared expenses in the ordinary course of business and general funding between various entities. At the year-end balances due to S3S Group amounting to $537,690 (2023: $570,376) were outstanding. |
Stage 3 Systems Pte Ltd owns less than fifty percent of the shares and voting interests of Sedna Communications Ltd. |
True Bearing Insights LLC (TBI) is related to the Group as a result of William Dobie having significant influence over both TBI and the Group. During the year TBI provided $70,000 (2023: $60,000) of software development services to the Group. At the year end the Group owed TBI $nil (2023: $10,000). |
Monsoon Agencies Australia Pty Ltd (MAA) was related to the Group as a result of Travis Monson previously having significant influence over MAA and the Group. Travis Monson sold his interest in MAA and resigned as director in the period to 31 May 2023. During the year Travis also resigned as director of Sedna Communications Ltd but remains a director of Sedna Systems Europe Limited. During the year Sedna Communications Ltd provided $105,721 (2023: $101,721) of services to MAA. At the year end, there was no outstanding balance. |
The 2023 figures above have been restated. |
25. | EVENTS AFTER THE REPORTING PERIOD |
After the year end date Sedna Communications Ltd acquired the entire share capital of Nordic IT, LLC, a company incorporated in USA. This acquisition was funded by a capital raise from existing shareholders. |
26. | ULTIMATE CONTROLLING PARTY AND PARENT COMPANY |
The ultimate parent company is Insight Venture Management LLC, a company incorporated in the United States of America. Insight Venture Management LLC's financial statements are not available to the public. The only transactions between the Sedna Group and Insight Venture Management LLC and entities it has an interest in were those related to share issues during the year, with more information available in note 16. |
There is no ultimate controlling party. |
SEDNA COMMUNICATIONS LTD (REGISTERED NUMBER: 13367033) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
27. | SHARE-BASED PAYMENT TRANSACTIONS |
During the year, employees, consultants and directors of the Group benefited from participating in an Employee Share Option Plan ("ESOP") put in place by the Group at a general meeting. The Group may grant options over equity settled ordinary shares in the Group to employees, consultants and directors of the Group. 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, consultant or director ceases to be employed or contracted by the Group 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 Company'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: |
Year ended |
May 31, 2024 |
Balance at 1 June 2023 | 52,395 |
Granted during the year | 0 |
Options exercised during the year | (11,492) |
Options cancelled during the year | (1,101) |
Options expired during the year | (1,663) |
Balance at 31 May 2024 | 38,139 |
The total charge for share based payment recognised is $804,547 (2023: $1,090,313). |
Weighted average exercise price | Year ended |
May 31, 2024 |
Balance at 1 June 2023 | $35.46 |
Granted during the year | - |
Options exercised during the year | $0.47 |
Options cancelled during the year | $38.67 |
Options expired during the year | $96.65 |
Balance at 31 May 2024 | $43.24 |
The weighted average remaining contractual life of the plan is 5.0 years. |
The number of options exercisable at the end of the year was 13,118. |
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 share when the share option vests is unknown. |
28. | CONTINGENT LIABILITIES |
As mentioned in note 27, the Company expects to have a future liability in relation to employers' National Insurance if and when employee share options are exercised. It is impracticable to estimate the financial effect or the timing of any potential outflow as it is unclear when employees will choose to exercise their share options. |