The directors present the strategic report for the period ended 31 January 2025.
The group delivers effective sales analytics software for manufacturers, distributors and wholesalers. It offers a sales intelligence tool, which provides customers with better data insights to create further sales opportunities by connecting to their ERP software and offering real time suggestions to drive smarter selling. Customers benefit from increased revenue and profits from the new opportunities identified by the sales intelligence tool. Revenue is based on an initial services fee, and monthly recurring revenue over an annual contract. Contracts range from 12 month – 48 months, with many customers auto-renewing on a 12-month agreement.
Key revenue drivers include new customers, selling into our previously successful industries, such as manufacturing, wholesale and beverages, and customer upsell, through additional user licences and provision of training.
The business was acquired in May 2024 by SugarCRM Inc, a US based software company that sells CRM software. It is based in California, and has subsidiaries across the UK, Mexico, Australia, and various countries within Europe. The sales-I product complements the CRM software items that SugarCRM offers, and so the acquisition goal was to fully integrate the Sales-I software within the SugarCRM current product offering. In June 2024 Sales-I Inc was distributed via a dividend in specie and as a result was disposed of from the group.
Future developments for the business include enhancement of the Sales-I product to include the introduction of AI technology, to provide customers with more advanced suggestions of how to maximise their revenue growth based on the customer’s data. Furthermore, integration of the software into the SugarCRM suite will allow for further scalability and better offerings for customers. The business also wishes to expand into other countries, which it hopes to achieve by developing new regional infrastructures to be able to operate within more countries.
The business has considered the principal risks and uncertainties that could affect the business operations, and future financial performance, and monitors them carefully on a continuing basis.
One of the principal risks the business faces is customer churn. Retaining customers and maintaining the existing customer relationships is a significant focus for the business. As one of the key metrics for the business is annual recurring revenue, too much customer churn can result in unpredictability for both revenue and cashflows. To mitigate the risks, the business monitors customer satisfaction through sought out customer feedback and regular product updates to ensure that customer needs are being addressed.
Another risk the business faces is the implementation of the new iteration of the Sales-I product. The new iteration features advanced AI capabilities to improve upon the opportunity recommendations the current version of the product offers, which has been under development for multiple years. There is a risk that the product may not meet the expectations of current customers, which could lead to an unwillingness to migrate to the new version of the product. The risk is managed through a controlled testing and migration process, seeking out customer feedback so any concerns can be addressed before the product is fully implemented.
As a SaaS business which handles sensitive customer data, Sales-I faces high risks related to cyber-attacks, unauthorised data access, and privacy breaches. A breach could have significant negative consequences to customer relationships, which could cause reputation damage. To mitigate this risk, the business utilises advanced and robust cyber security measures, along with ensuring employees are trained on recognising risks to data protection. Additionally, the overarching business has a dedicated resource to information security, which ensures the business is robustly managing security risks.
The business went through a change of ownership within the financial year through an acquisition to a larger, multinational company. Consequently, the business is going through a process of integrating into the new company structure, including their processes, systems, and culture. There is a risk that the business’ operations could be affected, through process modifications or executive staffing changes. The integration process has been carefully considered and slowly phased with given timelines to reduce the risk of operational disruption, with regular communication offered to employees and customers. Employee engagement meetings are regularly offered to allow them the opportunity to provide feedback and training provided to bring in the new company culture.
The business uses various metrics to assess and monitor the business performance, which help identify areas of growth and potential concern. The below metrics are not an exhaustive list of those used within the business, but a small sample.
Turnover is a KPI monitored by the business, as it shows the business’ ability to generate income and is a clear objective measure that can be used for comparison across other companies. Growth shows that the business model is operating effectively.
Annual recurring revenue (ARR) is a critical KPI the business monitors to measure revenue growth. It recognises the annual contracted recurring revenue from ongoing customer subscriptions. It is important to the business to show that the company is growing and there is demand for the product and is a standard metric measured by SaaS companies.
Net Retention Rate (NRR) measures the percentage of revenue retained from existing customers, including any growth from those existing customers. It does not include new growth. The value of this metric is that it can indicate the satisfaction of current customers and shows whether the business is growing if there are not any new customers. If NRR is too low, it suggests a significant problem with customer churn.
| FY25 | FY23 |
Turnover | £3.87m | £3.39m |
ARR | £3.32m | £3.27m |
NRR (%) | 90.2% | 88.9% |
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 January 2025.
The results for the period are set out on page 10.
Dividends in specie were paid as part of a group restructure amounting to £179,443. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Details of directors' share options are as follows:
The group manages liquidity and cash flow risks by retaining sufficient cash to ensure it has adequate funds available for operations. The group would have access to additional funding from its parent if required.
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The group manages foreign exchange risk by monitoring its operating cashflow requirements in order to ensure that it has sufficient foreign currency reserves available to meet its local currency cashflow requirements in the territories in which it currently operates. The group maintains local currency bank accounts in the countries in which it operates in order to meet its short term cashflow requirements.
Credit risk arises when customers fail to discharge their obligations thus causing the group a financial loss. The group's credit control policies are aimed at minimising such losses and deferred payment terms are only granted to customers who demonstrate appropriate payment history and satisfy credit worthiness checks.
On 19th June 2024 the company extinguished £158,093 ordinary A shares and 11,350 ordinary B shares held by the ultimate parent company SugarCRM Inc. The nominal value was £1 per share which was credited to distributable reserves.
On 11 March 2026, a date after the reporting period but prior to the signing of these financial statements, the company was named as a respondent in a settlement agreement relating to a claim brought by a former employee, who was also a director.
Under the terms of the agreement, the ultimate parent company is required to pay compensation to the claimant, via any of the respondent companies, totalling £830,000. This amount includes up to a maximum of £135,000 in respect of legal fees incurred by the claimant.
The directors aim to maintain the management policies which have resulted in the group's growth in previous years. The directors expect to see a continued growth in the group’s results adjusting for the disposal of Sales-I Inc during the period.
Azets Audit Services were re-appointed auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
At the time of approving the financial statements, after reviewing the latest management information, and making enquiries, the directors have a reasonable expectation that the parent company and the group that the parent company heads, have adequate resources to continue in operational existence for at least 12 months from the approval of the financial statements. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors have assessed the liquidity of the parent company for at least 12 months from the date of approval of these financial statements. As a holding company, the company has very few cash transactions and as such, combined with the going concern status of its main trading subsidiary, the directors are confident that the company and group can meet their liabilities as they fall due, and as such have prepared the accounts on the going concern basis.
A letter of support has been received by Sugarai UK Limited from the US parent company, which provides continued support if required for at least 12 months from the date of approval of the financial statements including the non-recall of intergroup balances. The directors have made enquiries to assess the ability of the parent company to provide such support if it was required, and have assessed that the counterparty can provide such support.
For the reasons set out above, the directors have prepared the financial statements on a going concern basis and have concluded that there are no material uncertainties relating to going concern.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to include the group's future developments in the Director's Report.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Sales-I Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 January 2025 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 period 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 £22,348 (2023 - £0 profit).
The notes on pages 17 to 40 form part of these financial statements.
Sales-i Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales . The registered and trading office is 4th Floor, St James House, St James Square, Cheltenham, United Kingdom, GL50 3PR.
The group consists of Sales-i Limited and all of its subsidiaries which are detailed at note 15.
The reporting period has been extended to the thirteen month period ended 31st January 2025. The reason for this is to align the reporting period with the wider group. Therefore, the comparatives to the year ended 31st December 2023 are not entirely comparable.
These consolidated 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 Company's 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 functional currency of the subsidiaries are the Sterling and US Dollar. All balances have been translated into Sterling for the purposes of consolidation.
The financial statements have been prepared under the historical cost convention.
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not presented a statement of comprehensive loss for the company alone.
In accordance with FRS102, the parent company has taken advantage of the exemption to prepare a company only statement of cashflows, as the parent company's cashflows are included within the Group Statement of Cash Flows.
The consolidated group financial statements consist of the financial statements of the parent company Sales-I Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 January 2025. 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, after reviewing the latest management information, and making enquiries, the directors have a reasonable expectation that the parent company and the group that the parent company heads, have adequate resources to continue in operational existence for at least 12 months from the approval of the financial statements. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors have assessed the liquidity of the parent company for at least 12 months from the date of approval of these financial statements. As a holding company, the company has very few cash transactions and as such, combined with the going concern status of its main trading subsidiary, the directors are confident that the company and group can meet their liabilities as they fall due, and as such have prepared the accounts on the going concern basis.
A letter of support has been received by Sugarai UK Limited from the US parent company, which provides continued support if required for at least 12 months from the date of approval of the financial statements including the non-recall of intergroup balances. The directors have made enquiries to assess the ability of the parent company to provide such support if it was required, and have assessed that the counterparty can provide such support.
For the reasons set out above, the directors have prepared the financial statements on a going concern basis and have concluded that there are no material uncertainties relating to going concern.
Turnover is recognised at the fair value of the consideration received or receivable for 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.
Subscriptions are recognised in equal instalments over the period of the customer is entitled to access the company's software. Services revenue is recognised when the service is rendered. Training fees are recognised when the training has been delivered.
Consideration received prior to the performance of or delivery of the services is recognised on Group balance sheet as deferred income.
Research expenditure is written off against profits in the year in which it is incurred.
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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
On disposal of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary at their carrying amounts at the date when control is lost. The results of the subsidiary are included in the Group income statement up to the date of disposal.
The resulting gain or loss on disposal is recognised in profit or loss and is calculated as the difference between the fair value of the consideration received and the carrying amount of the subsidiary’s net assets at the date of disposal.
At each reporting period end date, the group reviews the carrying amounts of its tangible 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.
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.
Until 20th May 2024, the group participated in a share-based payment arrangement granted to its employees.
Equity-settled share-based payments were measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the black-scholes model. The fair value determined at the grant date was expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment was made to equity.
Amounts credited to the reserve are transferred to the Profit and Loss account upon the exercise of the related options.
Cancellations or settlements (including those resulting from employee redundancies) were treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period was recognised immediately.
The expense in relation to options over the parent company’s shares granted to employees of a subsidiary was recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
Discontinued operations
A discontinued operation is a component of the Group that represents a separate major line of business or geographical area of operations.
The results of discontinued operations are presented separately from continuing operations in the consolidated Profit and Loss for all periods presented.
Assets and liabilities relating to discontinued operations are measured in accordance with the relevant provisions of FRS 102. Any gain or loss arising on disposal is recognised in the consolidated Profit or Loss at the date control passes to the acquirer.
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.
Critical judgements and estimates
The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.
Share option valuation
Until 20th May 2024, the group implemented a share option scheme for group employees.
Subsidiary companies recognised and measured their share-based payment expense on the basis of a reasonable allocation of the expense recognised for the group. The allocation was based on the number of employees benefiting from the share-based payment plan employed by each group entity.
Calculation of the expense relied on calculating the value of the options at the grant date. This was subject to uncertainty and management used the widely accepted Black-Scholes model to estimate this.
During the year, an exit event occurred which caused the share options to vest, therefore there was no uncertainty over the expected vesting period or expected options to vest.
Dilapidations provision
Dilapidations provisions represent an estimate of the liability to be incurred by the group in respect of operating leases pertaining to buildings that need to be returned to their original condition. The dilapidations provision is made using management's best estimate of costs to be incurred through consultation with building contractors.
Research and development tax credits include tax grants receivable from the UK government in respect of qualifying research and development expenditure incurred.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
Redundancy payments in the period include statutory redundancy and compensation payments totalling £268,907 (2023: £nil), inclusive of employer national insurance contributions.
Included in the remuneration of the highest paid director is £51,875 (2023: £134,287) of expense in relation to the group share option scheme.
During the period but until 21st May 2024, the number of directors who were entitled to receive shares under long term incentive schemes was 1 (2023 - 1).
During the period but until the 21st May 2024, the number of directors for whom retirement benefits accrued under defined contribution schemes amounted to 3 (2023 - 2).
There were no key management personnel other than the directors.
During the year the Group disposed of one of its subsidiaries Sales-I Inc via a dividend in specie to another company in the wider group. The results of Sales-I Inc are consolidated in these financial statements up to the date of disposal from the group.
The actual credit for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
The group has tax losses to carry forward for relief against future taxable profits totalling £308,848.
A deferred tax asset has been included on the tax losses on the basis that it is probable that these will become realised in the next 12 months.
During the year, on 20th June 2024, as part of the group reconstruction, the company disposed of its entire interest in its subsidiary Sales-I Inc.
The company transferred the asset and liabilities of Sales-i Inc at book value to its parent company by way of a dividend in specie totalling £179,443.
Details of the company's subsidiaries at 31 January 2025 are as follows:
The group’s activities expose it to a number of financial risks: foreign currency risk, credit risk and liquidity risk. The group’s overall risk management approach focuses on minimising the potential adverse effects of these risks on its financial performance. Information on how the group manages these risks is included within the Directors Report.
There were no financial instruments held at fair value by the group in either the current or previous accounting period.
Trade debtors are stated net of provisions totalling £nil (2023: £129,343).
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
Amounts owed to group undertakings are interest free, unsecured and repayable on demand.
Dilapidations provisions represent an estimate of the liability to be incurred by the group in respect of operating leases pertaining to buildings that need to be returned to their original condition. The dilapidations provision is made using management's best estimate of costs to be incurred through consultation with building contractors.
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 month and relates to the utilisation of tax losses against future expected profits of the same period and retirement benefits, net of accelerated capital allowances.
Deferred income is included in the financial statements as follows:
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.
At the balance sheet date the group owed £15,396 to the pension provider (2023: £15,024).
Until the 20th May 2024, the group had a share based remuneration plan with employees of its subsidiaries.
The share option plan was an equity settled plan over shares in the company. The option could only be exercised if the option holder remained an employee or officer of the group. The option could terminate in the event of the employees leaving employment, death or termination for cause.
The options were exercisable in the event of a company takeover, listing on a regulated stock exchange or in the event of a raising capital.
The maximum term of the options granted was 10 years.
The options represented small minority shareholdings.
On the 20th May 2024, an exit event occurred and all options were exercised, the scheme closed on this date.
The share based payment expense was spread systematically over the expected vesting period. The share based charge was included within investment in subsidiary undertakings in the parent company financial statements.
The share premium reserve includes the excess of consideration received over the nominal value of share issues in current and prior periods.
During the period, on 20 June 2024 the group disposed of its entire investment in its direct subsidiary Sales-I Inc as part of a group restructure.
The company transferred the asset and liabilities of Sales-i Inc at book value to its parent company by way of a dividend in specie totalling £179,443.
Included in these financial statements are profits of £147,096 arising from the Group's interest in Sales-I Inc up to the date of its disposal.
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 has taken advantage of the exemption available per paragraph 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
Until 21st May 2024, the Technology and Innovation Fund LP was a shareholder in the company. Up to the date of acquisition, the fund provided the group with consultancy services as requested under a consultancy agreement. During the period, the company paid £13,222 for consultancy services (year ended 31 December 2023: £35,000). There was no balance payable or receivable at the balance sheet date, (2023: £0).
Until 21st May 2024, Phaistos Management Limited was a related party due to being under control of a then director of the company. The director resigned on 21 May 2024, upon the acquisition of sales-I UK by SugarCRM Inc, and consultancy services ceased after this point. During the period, the group paid £22,500 for consultancy services (year ended 31 December 2023: £36,138). There was no balance payable or receivable at the balance sheet date, (2023: £0).
On 11 March 2026, a date after the reporting period but prior to the signing of these financial statements, the company was named as a respondent in a settlement agreement relating to a claim brought by a former employee, who was also a director.
Under the terms of the agreement, the ultimate parent company is required to pay compensation to the claimant, via any of the respondent companies, totalling £830,000. This amount includes up to a maximum of £135,000 in respect of legal fees incurred by the claimant.