The directors present the strategic report for the year ended 31 December 2024.
On 29 October 2024, Nagarro Software Limited acquired FWD View Limited by way of a share purchase agreement, as a result, became a parent company forming a group.
Fiscal year 2024 marked a period of growth and resilience for Nagarro Software Ltd, as we navigated through unprecedented challenges while capitalising on emerging opportunities in the dynamic technology landscape. Increased demand for our services, coupled with strategic market expansion, contributed to this remarkable achievement.
Streamlining processes, optimising resource allocation, and leveraging automation tools enhanced our operational efficiency. This enabled us to improve service delivery timelines, reduce costs, and maintain profitability amidst challenging market conditions.
As part of its growth strategy, the company completed the acquisition of FWD View Limited during the year. This acquisition is regarded as a strategic step towards strengthening the group’s service offering and enhancing the development of its UK operations. FWD View Limited brings additional technical expertise, sector knowledge, and client relationships that are expected to complement and expand the group’s existing capabilities. The acquisition supports the group’s ambition to increase its footprint in the UK market, broaden its service portfolio, and accelerate innovation across its consultancy and software development activities.
In conclusion, fiscal year 2024 was a testament to Nagarro Software Ltd’s resilience, innovation, and customer-centric approach.
Nagarro Software Ltd is a direct subsidiary of Nagarro SE which is a listed company in Germany and is bound by compliances that oversee activities of publicly listed company in the EU region. Nagarro Software Ltd is subjected to regular internal audits to maintain and comply with regulation at various levels.
The company carefully considers its principal risks and manages these risks by continual monitoring and assessment, policy-setting, and compliance with all legal and statutory obligations. Policies and safeguards are set to limit various risks to negligible levels. The main principal risks can be identified as follows:
Talent Acquisition:
The competitive talent landscape and increasing demand for specialised skills presented challenges in recruiting and retaining top talent. Efforts to address this included intensified recruitment drives and talent development programs.
Cybersecurity Threats:
With the proliferation of cyber threats, ensuring robust cybersecurity measures became paramount. We proactively invested in enhancing our cybersecurity infrastructure and implementing stringent security protocols to safeguard client data and maintain trust.
Technology Risk:
We operate in dynamic industries that are characterised by rapid technological change, frequent product and service innovation and evolving industry standards. Our future success will depend on our ability to adapt and innovate to keep up with technological developments. As a result, we need to invest significant resources in research and development on the group level.
Acquisition and Integration Risk
While the acquisition presents significant opportunities for revenue enhancement and operational synergies, it also introduces a number of strategic and operational risks. These include the risk that anticipated synergies and cost efficiencies may not be realised within the expected timeframe, or at all, due to unforeseen integration challenges. There is also a risk of disruption to existing operations during the transition period, as well as potential cultural and procedural differences between the businesses that may affect performance or employee retention. The company has established a detailed integration plan, with oversight from senior management, to manage the consolidation process and monitor performance against key integration milestones. Ongoing assessment of post-acquisition performance, stakeholder communication, and alignment of systems, controls and reporting structures remain a priority to ensure that the strategic objectives of the acquisition are achieved.
Revenue Growth: Nagarro Software Ltd achieved good revenue growth and expanded market share. Increased demand for services, particularly in digital transformation and cloud computing, drove this remarkable performance. During the year ended 31 December 2024, revenue increased from £19.79 million to £21.88 million, representing growth of approximately 11%. Profit before tax was £1.02 million (2023: £1.20 million), reflecting a modest decrease due to a planned strategic increase in sales and marketing expenditure aimed at supporting long-term growth. Despite broader economic impacts such as events in Ukraine and Israel/Palestine, global tariff policies, the group reports no direct financial consequences at present. However, they recognise the potential significance of ongoing factors such as rising energy costs and general inflationary pressures.
The performance of the subsidiary over the initial two-month period since acquisition has been satisfactory and broadly in line with management’s expectations at the time of the transaction. As anticipated, the full benefits of integration and the realisation of operational synergies have not yet materialised, given the short period since completion. These are expected to become more evident in the next financial year. Management remains confident in the strategic rationale for the acquisition and is committed to a structured and effective consolidation process to support long-term growth and value creation.
Client Satisfaction: Maintaining our commitment to delivering exceptional service, we achieved high levels of client satisfaction. Our ability to understand and address client needs, coupled with responsive support and timely delivery, strengthened client relationships and fostered loyalty.
Operational Efficiency: We improved operational efficiency through process optimisation, automation, and resource utilisation enhancements. These efforts enabled us to streamline workflows, reduce costs, and enhance service delivery quality while maintaining profitability.
The board receives periodic updates from all divisions across the company to track and assess KPIs against targets set each year. Non-financial KPIs include satisfaction levels from customers. Financial KPIs include turnover, gross profit, and profit before taxes.
For the year under review, the consolidated results for Nagarro Software Ltd including its subsidiary i.e., FWD View Limited were as follows:
- Turnover £21,877,232 (2023: £19,785,208)
- Gross profit £2,712,894 (2023: £1,886,557)
- Profit Before Taxes £1,015,781 (2023: £1,195,854)
Nagarro Software Ltd is a provider of high-quality consultancy and software services solutions with clientele based worldwide. The group has considerable financial resources, with substantial working capital cash balances available to invest in developing new innovative solutions and maintaining the supply of exceptional services, and innovative solutions for its clients. The company is dedicated to developing services that will consistently enhance customer satisfaction and expectations.
As of now, the directors have a reasonable expectation that the company has more than adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing Consolidated Financial Statements. The company is confident that it can continue to operate in a stable condition for the foreseeable future.
The directors are mindful of their responsibility to act fairly between members of the company. All decisions are made in a manner that ensures the equitable treatment of shareholders and the protection of long-term stakeholder value.
Our employees, our clients, our suppliers
The group's directors prioritise employee involvement, development, and well-being, striving to be an employer of choice. Commitment to diversity and career progression is highlighted, alongside efforts to promote a healthy work-home balance.
Directors emphasise building long-term relationships with suppliers and delivering exceptional service to clients, which has earned the company a strong reputation for quality and reliability. The board ensures regular engagement with stakeholders through employee feedback channels, client satisfaction reviews, supplier evaluations, and where relevant, community outreach. The directors receive regular updates on stakeholder interests to inform decision-making at board level.
Through investments in employee development and fostering strong supplier relationships, the company remains competitive in its sector. The emphasis on quality, pricing strategy, and technical expertise underscores its commitment to providing value to clients.
The group is committed to conducting its operations in a socially responsible and environmentally sustainable manner. It recognises the importance of minimising its environmental footprint and supporting the communities in which it operates. During the year, the company continued to implement energy-efficient practices across its offices, including measures to reduce electricity consumption and promote recycling. Where possible, suppliers with strong environmental credentials are prioritised. Management remains focused on identifying further opportunities to enhance its positive impact on both the environment and local communities as part of its broader sustainability objectives.
The group is also committed to maintaining high standards of business conduct across all aspects of its operations. Policies on ethics, data protection, anti-bribery and corruption, and compliance with applicable laws and regulations are regularly reviewed by the board to ensure the company continues to operate responsibly and with integrity.
The directors carefully considered the interests of stakeholders when evaluating key strategic decisions, including the acquisition of FWD View Limited. These decisions were made with a long-term view, having regard to the likely consequences for employees, clients, suppliers, and the wider community.
Overall, the group maintains a proactive approach to navigate challenges while prioritising the well-being and development of its employees.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024. These consolidated financial statements include the financial statements of Nagarro Software Limited and its newly acquired subsidiary FWD View Limited.
The results for the year are set out on page 9.
No ordinary dividends were paid.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities. The group’s principal financial instruments may include bank overdrafts, loans and corporate bonds, the main purpose of which is to raise finance for the group’s operations. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
The group manages its cash requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
The group is exposed to cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
The group’s principal foreign currency exposures arise from trading with overseas companies and billing in other currencies.
Investments of cash surpluses and borrowings are made through banks and companies made through banks and companies of high credit rating.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
In accordance with the company's articles, a resolution proposing that be reappointed as auditor of the group will be put at a General Meeting.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
We have audited the financial statements of Nagarro Software Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the group through discussions with the directors and from our commercial knowledge and experience of the sector; we focused on those laws and regulations which we considered may have a direct material effect on the financial statements or the group's operations, including the Companies Act 2006, taxation legislation, data protection, anti-bribery and employment;We assessed the extent of compliance with the laws and regulations identified above through enquiries of management;
Identified laws and regulations were communicated within the audit team who remained alert to instances of non-compliance throughout the audit;
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud; and
We considered the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
Based on our understanding of the group and the industry in which it operates, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks were in relation to:
Management override of controls and risk of fraud and error;
Revenue recognition for the year ended 31 December 2024;
The risk of not identifying related party transactions;
Accuracy and completeness of expenditure in relation to direct costs;
The risk related to transfer pricing including establishing and performing transactions at arm's length;
Compliance with laws and regulations;
Risk of misstatement due to management’s estimation of contingent consideration in a business combination, and
Completeness and accuracy of component entity financial information consolidated into the group financial statements and the consolidation journals.
In response to the risk of irregularities, including fraud and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
Performing analytical procedures to identify any unusual or unexpected relationships and transactions;
Auditing the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
Assessing whether judgments and assumptions made in determining the accounting estimates were indicative of potential bias;
Agreeing disclosures within the financial statements to underlying supporting documentation;
Requesting the minutes of meetings of those charged with governance;
Enquiring of management, those charged with governance and the entity’s legal staff around actual and potential litigation and claims;
For an appropriate sample of transactions, identifying the revenue recognition point for the sales of services, and testing for completeness by ensuring the transaction was properly recorded in the sales nominal ledger account;
Performing cut off testing carried out to ensure correct calculation of work in progress at the year end;
Enquiring of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
Reviewing correspondence with HM Revenue and Customs, bankers and the company’s relevant legal costs;
Discussing the existence of related parties with management and obtaining confirmation of inter-company balances on sample basis;
Reviewing the existing pricing transfer arrangement and agreement with the related party, ensuring transactions are conducted at arm's length;
Evaluating the reasonableness of management’s assumptions and reviewed supporting evidence to assess whether the recognition and measurement of contingent consideration complied with FRS 102; and
Evaluating whether all component entities have been included within the group financial statements and ensuring completeness and accuracy of consolidation journals.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £671,054 (2023 - £903,476 profit).
Nagarro Software Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1 Parkshot, Richmond, Surrey, TW9 2RD.
The group consists of Nagarro Software Ltd and its subsidiary FWD View Limited.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Nagarro SE. These consolidated financial statements are available from the company's website: www.nagarro.com.
The consolidated group financial statements consist of the financial statements of the parent company Nagarro Software Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Revenue from the resale of computer software licences is recognised when the significant risks and rewards of ownership of the licence have passed to the buyer (usually on delivery of the license), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and the company has no further obligation as the licence is provided directly to the customer by the supplier.
Dividend income from investments is recognised when the shareholder's right to receive payment has been established.
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its 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 and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments 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 rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The company participates in a group share option scheme administered by its ultimate parent undertaking. Under this arrangement, certain employees of the company are granted either equity-settled share options over the parent company’s shares or cash-settled share-based payment awards.
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At each succeeding financial reporting period end and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the period.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Binomial model. The fair value determined at the grant date is expensed on a straight-line basis over the graded vesting period of 4 years and a total term of 10 years, based on the estimate of shares that will eventually vest. When a parent grants a share-based payment to employees of a subsidiary, the parent may require the subsidiary to make a payment to reimburse it for granting the share-based payment. The cost of equity-settled transactions is recognised as employee benefits expense with corresponding payable to Nagarro SE being the amount cross charged by Nagarro SE over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised at the beginning and end of that period.
In accordance with the disclosure exemptions available under FRS 102, the company has not disclosed the information required by Section 26 in respect of share-based payment arrangements, including:
- The expense recognised in profit or loss;
- Reconciliation of the number and weighted average exercise price of share options;
- Details of the fair value measurement of options granted;
- Information relating to any cash-settled share-based payment liabilities;
- Any modifications to existing arrangements;
- The amount outstanding at the beginning and end of the period.
These disclosures are included in the consolidated financial statements of the parent company, which are publicly available.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Comparative information
During the year ended 31 December 2024, the company acquired 100% of the share capital of FWD View Limited and, as a result, became a parent company forming a group. The comparative figures presented in these financial statements relate to the company as a standalone entity prior to the acquisition, and are therefore not directly comparable with the current year’s figures, which reflect its status as a parent company within a group.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
During the year ended 31 December 2024, the company acquired 100% of the share capital of FWD View Limited. The purchase agreement includes an earn-out arrangement, under which additional payments may become payable to the former shareholders of FWD View Limited, contingent upon the achievement of certain post-acquisition performance targets.
Management has exercised significant judgment in determining the accounting treatment of the earn-out arrangement, which could be classified as either contingent considerations or employment benefits. Based on the contractual terms, it has been determined that the earn-outs form part of the contingent consideration and should be accounted for under Section 19, Business Combinations.
Management has also exercised significant judgement in assessing the fair value of the contingent consideration forming part of the consideration arising from the business combination. This involved evaluating both the likelihood and estimated amount of future payments, which are dependent on the achievement of specified performance conditions and other contractual terms. The valuation of the contingent consideration is based on management’s current forecasts, historical performance, and other relevant assumptions concerning future financial and operational outcomes.
A discount factor has been applied to reflect the time value of money, as the settlement of the contingent consideration is expected to occur over a future period. The selected discount rate of 5.6% is a key assumption, reflecting the risk profile of the liability and the timing of expected payments.
Based on the above, the management carried out an assessment of the earn-out arrangement, with potential payments ranging between £nil and £10,033,567. As at 31 December 2024, the company recognised £3,776,135, discounted to £3,299,552, as the fair value of the contingent consideration relating to the additional purchase consideration. This valuation was determined using a Monte Carlo simulation, providing a reliable estimate of the probable outcome. The remaining balance of the potential contingent consideration, being up to £6,257,432, has not been recognised, as it is contingent on future performance conditions. This amount is subject to significant estimation uncertainty and will be re-assessed at each reporting date.
The directors have assessed the useful economic lives of intangible assets, including goodwill, and determined the appropriate amortisation periods. This includes considering the expected duration over which the acquired assets will contribute to the group's future economic benefits. In the case of goodwill, a 10-year amortisation period has been selected based on the nature of the acquired business, its integration into the group, and the projected long-term benefits. For other intangible assets, the amortisation periods have been determined in alignment with expected contractual terms and market conditions.
Management has also applied judgement in assessing whether any indicators of impairment exist for goodwill and intangible assets. This includes evaluating factors such as the performance of the acquired business, integration progress, market conditions, and projected future cash flows. As of the reporting date, no impairment indicators were identified, and thus no impairment charge has been recognised.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
On 29 October 2024 the group acquired 100% of the issued share capital of FWD View Limited. The resulting goodwill of £10,733,167 is amortised over 10 years. In addition, identifiable intangible assets amounting to £619,742 were recognised and are being amortised over one year.
The total investment cost, amounting to £12,739,165 (2023: £nil), relates to the company’s acquisition of 100% of the share capital of FWD View Limited on 29 October 2024. The investment cost comprises:
Cash consideration of £8,665,120;
A working capital adjustment of £491,980;
Acquisition-related costs totalling £282,513; and
Contingent consideration of £3,299,552, representing the fair value measurement at the reporting date of the earn-out arrangement, which is subject to key estimates and judgments as disclosed in Note 2.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Audit exemptions
In accordance with the Companies Act 2006 Section 479c, FWD View Limited (company registration number 10619822) is exempted from an audit for the financial year ended 31 March 2025. The parent company, Nagarro Software Ltd, has issued a statement of guarantee for the outstanding liabilities of FWD View Limited.
The company's long-term loans are unsecured.
During the year, the company received a loan from the parent company Nagarro SE totalling €10,811,850 with an interest at the rate of 6% per annum payable monthly in arrears. The loan and the accrued interest is repayable in full by October 2029. As at 31 December 2024, the outstanding loan balance amounted to £8,958,807 (2023: £Nil)
As at 31 December 2024, the group’s loans consist of a Bounce Back Loan of £15,660, which bears interest at 2.5% per annum and is repayable by June 2026, and a Market Finance Loan of £92,918, carrying interest at 8.33% per annum, repayable by December 2027.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The company has one class of ordinary shares which have attached to them full voting, dividend and capital distribution rights. They do not carry any rights of redemption.
On 29 October 2024 the group acquired 100% of the issued capital of FWD View Limited.
The adjustment totalling £282,513 is arising on Investment acquisition cost in respect of the following:
(a) Stamp duty paid of £90,035
(b) Other professional fees of £192,478
The goodwill arising on the acquisition of the business is attributable to the anticipated profitability of the distribution of the company's services in new markets and the future operating synergies from the combination.
The company, along with other direct and indirect subsidiaries of Nagarro SE, is a guarantor under a €350 million credit facility. As at 31 December 2024, the outstanding balance under the credit facility was €319.50 million (2023: €267.05 million) which approximates to £264.74 million (2023: £231.64 million) based on the year-end exchange rate on that date.
In accordance with the Companies Act 2006 Section 479C, FWD View Limited (company registration number 10619822) is exempted from an audit for the financial year ended 31 March 2025. The parent company, Nagarro Software Ltd, has issued a statement of guarantee for the outstanding liabilities of FWD View Limited.
As at 31 December 2024, the contingent liability relating to the maximum potential earn-out payments, which has not been included in the cost of the subsidiary investment, amounted to £6,257,432 (2023: £Nil).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company
The operating lease represent lease of office from third party. The lease commitment represents 7 monthly fees of £6,750 payable as per the office lease agreement. The current office lease agreement ends on 31 July 2025.
The company and the group have taken advantage of exemptions under FRS 102 paragraph 33.1A from disclosing transactions entered into between two or more members of a group, provided that any subsidiary involved in the transaction is wholly owned by such a member.
On 19 February 2025, the board of directors of Nagarro Software Ltd proposed to pay an interim dividend for the year ended 31 December 2025 of £3,380,663 (€4,000,000) to the company's shareholder Nagarro SE (parent company).