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Registered number: 06221457
SAGE PEOPLE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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SAGE PEOPLE LIMITED
CONTENTS
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Statement of Directors' Responsibilities in respect of the Annual Report and Financial Statements for the year ended 30 September 2025
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Independent Auditor's Report to the Members of Sage People Limited
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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SAGE PEOPLE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The Directors present their Strategic Report for Sage People Limited (the “Company") for the year ended 30 September 2025. The Directors of The Sage Group plc., the ultimate parent company, set the strategy for the whole Sage group of companies (“Sage”, or the “Group"), including Sage People Limited. This is set out within The Sage Group plc. Annual Report and Accounts for the year ended 30 September 2025 (the “Plc Annual Report and Accounts”), which does not form part of this report. The business has a clearly defined strategy to respond to the changes taking place in technology and in the markets in which it operates in a way that leverages the strengths of the business model and delivers organic revenue and margin growth.
Sage People Limited provides cloud HR software to mid-size companies, enabling them to acquire, manage and retain their people. HR software is a fast-growing market, with the move to cloud very well established and still accelerating.
The Company made a profit before taxation of £6,252,000 (2024: profit of £6,746,000) on revenue of £30,829,000 (2024: £31,384,000).
Key performance indicators
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The directors of The Sage Group plc. manage and measure the Group's operations on a regional and segmental basis. For this reason, the Directors believe that analysis using other key performance indicators, in addition to the revenue and profit set out above, for the Company is not necessary or appropriate for an understanding of the development, performance or position of the Company’s business. The key performance indicators used by the directors of The Sage Group plc. to manage and measure the performance of the Group are discussed within the Plc Annual Report and Accounts.
The external commercial environment is expected to remain competitive during the next financial year. The Directors remain confident that the Company will be able to accelerate its growth in the future by utilising the distribution channels and other resources of The Sage Group plc.
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SAGE PEOPLE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Principal risks and uncertainties
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The Global Risk Management Framework has been built to identify, evaluate, analyse, manage and mitigate those risks which threaten the successful achievement of our business strategy and objectives, within acceptable tolerances. Risks are owned and managed at a Group level and are formally reviewed on a quarterly basis.
Risk is inherent within our business activities, and the Group as a whole continues to prioritise and develop its risk management capability in recognition of this. Timely identification of risks, combined with their appropriate management and escalation, enables the Group to successfully run each business and deliver strategic change, whilst ensuring that the likelihood and/or impact associated with such risks is understood and managed within our defined risk appetite.
Currently there are ten principal risks which are monitored and reported against at a Group level which also apply to the Company.
• Execution of Product Strategy
• Developing and Exploiting New Business Models
• Route to Market
• Customer Experience
• People and Performance
• Culture
• Cyber Security
• Data and AI governance
• Readiness to Scale
• Environmental, Social & Governance
The background, management and mitigation process are disclosed in the Plc Annual Report and Accounts.
Financial risk management
The Company's operations expose it to a variety of financial risks that include credit risk and interest rate risk. The Company does not use derivative financial instruments to manage interest rate risk and as such, no hedge accounting is applied.
Credit risk
The Company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure with any counterparty is subject to a limit.
The treasury function is managed at a Group level. The credit risk on liquid funds is considered to be low, as the Audit Committee approved Global Treasury Policy restricts the value that can be invested in each approved counterparty to minimise the risk of loss. All counterparties must meet minimum credit rating requirements.
Interest rate risk
The Company’s exposure to interest rate risk is managed by the Group treasury function. The Company holds no external borrowings so is only exposed to interest rate fluctuations on intercompany borrowings, whose rates are set by the treasury function.
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SAGE PEOPLE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
As required under Section 172(1) of the Companies Act 2006 (“Section 172 (1)”), the Directors of the Company have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, they have had regard to the matters set out in Section 172(1) (a) to (f), which include:
· the likely consequences of decisions in the long term;
· the interests of the Company’s employees;
· fostering business relationships with customers, suppliers and others; the impact on society and the environment;
· maintaining high standards of conduct; and
· acting fairly between members of the Company.
Sage People Limited provides cloud HR software to mid-size companies, enabling them to acquire, manage and retain their people. HR software is a fast-growing market, with the move to cloud very well established and still accelerating.
The Company is a wholly owned subsidiary of the ultimate parent company The Sage Group plc. As is typical for a company which is part of a large, listed, group, day-to-day decision making is delegated to Sage’s management. Sage’s management engage with the Company’s immediate shareholder, Sage Holdings Company Limited, and other Group undertakings through Sage management activities and meetings. Decisions made by the Directors are guided by Sage Group’s governance framework, values, Code of Conduct and robust standard of business conduct and ethics.
The Directors recognise that the Company’s stakeholders are largely consistent with those set out in The Sage Group plc.’s Annual Report and Accounts, and balancing their respective needs and expectations is important. The decision-making process is structured to enable the Directors to evaluate the merit of proposed business activities in view of competing priorities and the likely consequences of decisions on our stakeholders over the short, medium and longer term. The Directors are committed to effective engagement with all stakeholders of the Company and engagement through delegation to its management teams. The values and behaviours upheld when engaging with stakeholders are consistent across Sage, irrespective of which member of the Group is communicating with any and all of Sage’s stakeholders.
The Directors also recognise that the Group is committed to managing the Group's use of resources proactively to minimise environmental impact and investing in education, technology, and environmental change to protect the planet and give individuals and small and mid-sized businesses, the opportunity to thrive. The Directors of the Company also support Sage's culture and commitment to doing business the right way, demonstrated through Sage Foundation, which encourages colleague engagement with charitable giving and philanthropic support for non-profit organisations and communities.
The Directors are kept informed of stakeholder priorities through regular engagement with Sage management and reporting mechanisms, and factor the wider interests of the Group into decision making when relevant.
The Company makes autonomous decisions through Board meetings which are convened, as required, to consider those matters which impact the Company. The Director’s consider relevant Section 172(1) factors to ensure stakeholders interests are balanced and that decisions are made in the context of long-term sustainable success of the Company.
Colleagues
Colleagues want to work for a company that values them, and that provides them an opportunity to be themselves and thrive. They expect the Company to address societal issues from diversity and inclusion to the future of work. Sage colleagues are proud of the work we do in our communities through our Sustainability and Society Strategy and Sage Foundation.
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SAGE PEOPLE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Colleagues (continued)
The Directors recognise that colleagues are a key resource and the lifeblood of the Company. Every day they serve our customers through their innovation, integrity and passion. Engagement with the Company’s employees during the year ended 30 September 2025 included, amongst other things, Sage TV broadcasts, presentations of strategy, quarterly performance updates, bi-annual colleague ‘Pulse’ surveys, ongoing ‘Always Listening’ channels and other feedback channels. Diversity, equity and inclusion remains an area of focus at Sage. The Directors are committed to fostering a culture of diversity, equity and inclusion and promoting a healthy and supportive corporate culture by setting the tone from the top.
Customers
Our customers are focused on (i) running and growing their business; (ii) having products that keep their business compliant; (iii) delivering quality customer service; and (iv) having greater visibility into their business and deriving actionable insights from their data. Improving efficiencies and productivity remain priorities, but they are also increasingly interested in the wellbeing of their staff and the environment and their role in protecting it.
Customers are at the heart of the Company’s business and the Directors recognise that fostering business relationships with them is essential to the long-term sustainable success of the Company. They are the small and mid-sized businesses which are the growth engine of the global economy, and the accountants and other professionals who rely on Sage to help them deliver a great service to their clients, whatever their size. Engagement with our customers is conducted through Sage management activities and ongoing meetings and dialogue.
Partners
The Directors recognise that our partners are fundamental to Sage’s ongoing growth and our unwavering commitment to customer success. By expanding our market reach and delivering enhanced outcomes across diverse customer segments, partners amplify the impact of our solutions and services. We support our partners through a tailored, collaborative approach that connects customers to Sage’s digital network, facilitating seamless interactions and value creation. Through these strategic partnerships, we further our mission to deliver exceptional experiences and results for customers worldwide.
Partners seek opportunities to create monetizable value and sustainable growth, and we are committed to enabling that ambition. Partners want the ability to differentiate their offering to remain competitive in the market and deliver business impact to the evolving needs of customers. The Directors recognise that partners look to Sage for support with driving growth by accelerating the time they spend on increasing value and revenue.
Shareholders
The Directors consider the long-term impact of corporate actions and decisions on and for the benefit of the Company’s direct and indirect shareholders. Engagement with other Sage Group undertakings, including the Company’s shareholder is conducted through internal Sage management activities and ongoing meetings and dialogue. The Company’s ultimate parent is The Sage Group plc.
Society
The Directors are committed to managing the Group’s use of resources proactively to minimise environmental impact and investing in education, technology, and environmental change to give individuals, small and mid-sized businesses and our planet the opportunity to thrive. Sage has made good progress on the Group’s Sustainability and Society strategy and has strengthened executive oversight and responsibility with the inclusion of ESG targets (one on climate, one on products and one on DEI) in leadership incentives.
The Directors of the Company support Sage’s culture and commitment to doing business the right way. Sage’s culture and commitment are demonstrated through the work of the Sage Foundation, which combines charitable
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SAGE PEOPLE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
giving and supporting colleague engagement with non-profit organisations delivering change.
Section 172(1) statement (continued)
Suppliers
In addition to the above stakeholders, it is recognised that suppliers are also relevant to the Company’s activities. The Directors have regard for and engage with such groups to the extent that they are affected by, and themselves affect, the operations of the Company. The Company’s suppliers are significant to the Company, and therefore the Company seeks to develop and foster business relationships with them to maximise value and efficiency. The Company engages with its suppliers through a thorough supplier onboarding process and procurement life-cycle (including to appropriately manage data privacy and security matters) through Sage’s governance model.
The Company also operates and engages with its suppliers in accordance with Sage’s Supplier Code of Conduct, which all suppliers are required to follow, and which defines Sage’s expectations of responsible business and behaviour underlying the strategic focus on customer needs, in line with the high standards of business conduct that Sage strives to promote. It is essential that our suppliers hold similar values to us, promote ethical business practices and conduct their business in accordance with applicable laws and regulations. That’s why the principles set out in the Supplier Code of Conduct are shared principles; we follow them in our business and we expect our suppliers to as well. By working together to promote good practices, we can ensure these principles are reflected in both Sage’s and our supply chain’s ways of working.
This report was approved by the board and signed on its behalf.
Christopher Ewen
Director
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SAGE PEOPLE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The Directors present their report and the audited financial statements for the year ended 30 September 2025.
Information included in the Strategic Report
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Relevant information, including the principal activity of the business, the business review including analysis using financial key performance indicators, future developments, principal risks and uncertainties and financial instruments is disclosed in the Strategic Report in accordance with Section 414C(11) of the Companies Act 2006.
The Directors do not recommend payment of a dividend (2024: nil). The profit after taxation for the year was £5,853,000 (2024: £7,270,000).
The Directors who served during the year were:
Pieter Bensch (appointed 19 May 2025)
Christopher Ewen
Jonathan Kirkup
Mark Parry
Paul Struthers (resigned 16 May 2025)
As at the date of this report, indemnities (which are qualifying third party indemnity provisions under the Companies Act 2006) are in place under which the Company has agreed to indemnify the Directors of the Company, to the extent permitted by law and by the Company's articles of association, in respect of all liabilities incurred in connection with the performance of their duties as a director of the Company or its subsidiaries. Copies of these indemnities are available for review at the registered office of the Company.
Research and development activities
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The Directors regard the investment in research and development as integral to the continuing success of the business and ensuring our products remain a strong player in this sector. Details of total spend in research and development are included within note 5 to the financial statements.
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SAGE PEOPLE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The principal activity of the company is that of a trading company for the the group headed by The Sage Group
Plc (the ultimate parent company). The company’s cash flows are therefore dependent on the continuation,
volume, and pricing of those operations.
The company meets its day to day working capital requirements through continued trading activity supported by intercompany loans from members of the Sage group.
The Directors have performed a going concern assessment which indicates that, in reasonably possible
downsides, the company will require additional funds, through funding from its ultimate company,
The Sage Group Plc, to meet its liabilities as they fall due during 12 month period from the date of approval of
accounts for year ended 30/09/2025, the going concern assessment period.
The Sage Group Plc has indicated its intention to continue to make available such funds as are needed by the
company, and that it does not intend to seek repayment of the amounts currently due to other members of the group of £10.1m, during the going concern period.
As with any company placing reliance on other group entities for financial support, the directors acknowledge
that there can be no certainty that this support will continue although, at the date of approval of these financial
statements, they have no reason to believe that it will not do so.
Consequently, the Directors are confident that the company will have sufficient funds to continue to meet its
liabilities as they fall due for at least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Disclosure of information to the auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
The external auditor of the company for the prior financial year was Ernst and Young. As a result of an audit tender undertaken by the Company's ultimate parent Company, The Sage Group plc, KPMG LLP were appointed by the Company as auditors for the year ended 30 September 2025.
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be re-appointed, and KPMG LLP will therefore continue in office.
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SAGE PEOPLE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
This report was approved by the board and signed on its behalf.
Christopher Ewen
Director
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SAGE PEOPLE LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2025
The Directors are responsible for preparing the Annual Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
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SAGE PEOPLE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SAGE PEOPLE LIMITED
Opinion
We have audited the financial statements of SAGE People Limited (“the Company”) for the year ended 30 September 2025 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and related notes, including the accounting policies in note 1.
In our opinion the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 30 September 2025 and of its profit for the year then ended;
∙have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
∙we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
∙we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
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SAGE PEOPLE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SAGE PEOPLE LIMITED
Fraud and breaches of laws and regulations – ability to detect (continued)
∙Enquiring of directors and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud as well as whether they have knowledge of any actual, suspected or alleged fraud.
∙Reading Board minutes.
∙Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because of the overall process in place for accounting for the high volume and low value revenue transactions and relatively lower and consistent level of manual adjustments to revenue. We did not identify any additional fraud risks.
We performed procedures including:
∙Identifying journal entries based on risk criteria and comparing the identified entries to supporting documentation. These included journals posted to seldom used accounts or journals posted after the closure of the general ledger.
∙Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and] taxation legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of Company’s license to operate. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery, employment law, contract legislation and certain aspects of company legislation recognising the nature of the Company’s activities.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
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SAGE PEOPLE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SAGE PEOPLE LIMITED
Fraud and breaches of laws and regulations – ability to detect (continued)
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors’ report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover these reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
∙we have not identified material misstatements in the strategic report and the directors’ report;
∙in our opinion the information given in these reports for the financial year is consistent with the financial statements; and
∙in our opinion these reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors’ remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
∙We have nothing to report in these respects.
Directors’ responsibilities
As explained more fully in their statement set out on page 5, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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SAGE PEOPLE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SAGE PEOPLE LIMITED
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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.
Dan Gibson (Senior Statutory Auditor)
KPMG Chartered Accountants
Quayside House, 110 Quayside
Newcastle Upon Tyne
NE1 3DX
28 April 2026
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SAGE PEOPLE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Selling and administrative expenses
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Profit for the financial year
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Total comprehensive income for the year
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The notes on pages 18 to 37 form part of these financial statements.
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SAGE PEOPLE LIMITED
REGISTERED NUMBER: 06221457
BALANCE SHEET
AS AT 30 SEPTEMBER 2025
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Customer acquisition costs
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Trade and other receivables
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Cash and cash equivalents
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SAGE PEOPLE LIMITED
REGISTERED NUMBER: 06221457
BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2025
Equity attributable to the owners of the parent
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 April 2026.
The notes on pages 18 to 37 form part of these financial statements.
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SAGE PEOPLE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Total comprehensive income for the year
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Employee share option scheme
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Total comprehensive income for the year
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Employee share option scheme
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The notes on pages 18 to 37 form part of these financial statements.
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Retained earnings include £826,000 (2024: £694,000) of non-distributable reserves.
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Page 17
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Sage People Limited (the “Company”) is a company incorporated and domiciled in England, it is a private company limited by shares and the Company’s registered address is C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle-Upon-Tyne, United Kingdom, NE28 9EJ.
2.Accounting policies
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Basis of preparation of financial statements
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The Company’s ultimate parent undertaking, The Sage Group plc., includes the Company in its consolidated financial statements. The consolidated financial statements of The Sage Group plc. are prepared in accordance with International Accounting Standards and are available to the public and may be obtained from the address given in note 20. The Company is therefore exempt by virtue of s400 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”) and the UK Companies Act 2006.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
Judgements made by the Directors, in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 3.
The financial statements are prepared on a going concern basis and under the historical cost convention, as modified by derivative financial assets and financial liabilities measured at fair value and in accordance with the Companies Act 2006. All amounts are presented in Great British Pounds (GBP).
The Directors have performed a going concern assessment which indicates that, in reasonably possible downsides, the company will require additional funds, through funding from its ultimate company,The Sage Group Plc, to meet its liabilities as they fall due during 12 month period from the date of approval of accounts for year ended 30/09/2025, the going concern assessment period.
The Sage Group Plc has indicated its intention to continue to make available such funds as are needed by the company, and that it does not intend to seek repayment of the amounts currently due to other members of the group of £10.1m, during the going concern period.
As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Consequently, the Directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
Page 18
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
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Financial Reporting Standard 101 - reduced disclosure exemptions
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In these financial statements, the Company, as a qualifying entity under FRS 101, has applied the exemptions available under the standard in respect of the following disclosures:
• The requirements in paragraph 38 in IAS 1 Presentation of Financial Statements to present comparative information in respect of:
a. Paragraph 79(a)(iv) of IAS 1;
b. Paragraph 73(e) of IAS 16 Property, Plant and Equipment; and
• The requirements of paragraph 10(d), 10(f), 16, 38A-38D, 40A-40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;
• Disclosures in respect of capital management, as required by paragraphs 134 to 136 of IAS 1 Presentation of financial statements;
• A Cash Flow Statement and related notes, as required by IAS 7 Statement of Cash Flows;
• The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
• The effects of new but not yet effective IFRSs, as required by paragraphs 30 and 31 of IAS 8 Accounting policies, changes in accounting estimates and errors;
• Disclosures in respect of transactions with wholly owned subsidiaries, as required by IAS 24 Related Party Disclosures;
• Disclosures in respect of the compensation of Key Management Personnel, as required by paragraph 17 of IAS 24 Related Party Disclosures; and
• The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers.
• The requirements of paragraphs 130(f)(ii), 130(f)(iii) 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
As the consolidated financial statements of The Sage Group plc. include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
• IFRS 2 Share-based Payments in respect of group settled share-based payments, as required by paragraphs 45(b) and 46 to 52; and
• Certain disclosures required by paragraphs 91 to 99 of IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.
Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange prevailing at the balance sheet date. Transactions in foreign currencies are converted into sterling at the rate prevailing at the dates of the transactions. All differences on exchange are taken to the statement of comprehensive income.
Page 19
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
Revenue is measured at the fair value of the consideration received or receivable and represents amounts received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Identification of performance obligations
When the Company enters into an agreement with a customer, goods and services deliverable under the contract are identified as separate performance obligations to the extent that the customer can benefit from the goods or services on their own and that the separate goods and services are considered distinct from other goods and services in the agreement. Where individual goods and services do not meet the criteria to be identified as separate obligations they are aggregated with other goods and/or services in the agreement until a separate obligation is identified.
Determination of transaction price and standalone selling prices
The Company determines the transaction price it is entitled to in return for providing the promised obligations to the customer based on the committed contractual amounts, net of sales taxes and discounts. Contract terms generally are monthly or annual and customers either pay up-front or over the term of the related service agreement.
The transaction price is allocated between the identified obligations according to the relative standalone selling prices (SSPs) of the obligations. The SSP of each obligation in the contract is determined according to the prices that the Company would obtain by selling the same goods and/or services included in the obligation to a similar customer on a standalone basis. See “Judgements in applying accounting policies” in note 3 for details.
Timing of recognition
Revenue is recognised when the respective obligations in the contract are delivered to the customer and payment remains probable.
– Where the Company’s performance obligation is the grant of a right to continuously access a cloud offering for a certain term, revenue is recognised based on time elapsed and thus rateably over the term.
– Maintenance and support revenue is typically recognised based on time elapsed and thus rateably over the term of the support arrangement. Under the standardised maintenance and support services, the Company’s performance obligation is to stand ready to provide technical product support and unspecified updates, upgrades and enhancements on a when-and-if-available basis. The customers simultaneously receive and consume the benefits of these services.
– Professional services and training revenue are typically recognised over time. Where the Company stands ready to provide the service (such as access to learning content), revenue is recognised based on time elapsed and thus rateably over the service period. Consumption-based services (such as separately identifiable professional services and premium support services, messaging services, and classroom training services) are recognised over time as the services are utilised, typically following the percentage-of-completion method or rateably.
Identification of the contract with the customer
When the Company sells goods or services through a business partner, a key consideration is determining whether the business partner or the end user is the Company’s customer. The key criteria in this determination is whether the business partner has taken control of the product.
Page 20
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
Considering the nature of the Company's subscription products and support services, this is usually assessed based on whether the business partner has responsibility for payment, has discretion to set prices and takes on the risks and rewards of the product or service from the Company.
Principal versus agent considerations
When the Company has control of third-party goods or services prior to delivery to a customer, then the Company is the principal in the sale to the customer. As a principal, receipts from customers and payments to suppliers are reported on a gross basis in revenue and cost of sales. If the Company does not have control of third-party goods or services prior to transfer to a customer, then the Company is acting as an agent for the other party and revenue in respect of the relevant obligations is recognised net of any related payments to the supplier and reported revenue represents the margin earned by the Company. Whether the Company is considered to be the principal or an agent in the transaction depends on analysis by management of both the legal form and substance of the agreement between the Company and its supplier. This takes into account whether the Company bears the price, inventory and performance risks associated with the transaction.
Practical expedients
While the majority of contracts have a term of three years, the invoices are raised on a yearly basis, therefore any financing component is not considered when determining the transaction price.
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Incremental costs of obtaining customer contracts
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The incremental costs of obtaining customer contracts are capitalised under IFRS 15. Contract acquisition costs primarily consist of sales commissions earned by the Company’s sales force.
Up to and including FY24, the amortisation period was determined as seven years. From April 2025 onwards, the Company revised the amortisation period to five years to reflect the prior 12 months results and future expectations regarding the pattern of economic benefits that align with the group accounting manual.
Amortisation of the capitalised costs of obtaining customer contracts is reported within selling and administrative expenses
Cost of sales includes the third party costs of providing professional services to customers and hosting costs. All other operating expenses incurred in the ordinary course of business are recorded in selling and administrative expenses.
Interest income is recognised in profit or loss using the effective interest method.
Page 21
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
Finance costs are charged to statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
The taxation expense for the year represents the sum of current tax payable and deferred tax. The expense is recognised in the statement of comprehensive income according to the accounting treatment of the related transaction.
Current tax payable or receivable is based on the taxable income for the period and any adjustment in respect of prior periods. Current tax is measured at the amount expected to be recovered from or paid to the taxation authorities, calculated using tax rates that have been enacted at the end of the reporting period.
The Company is able to relieve its tax losses by surrendering them to other group companies within the UK corporation tax group, where capacity to utilise these losses exists.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences and carried forward tax credits or tax losses can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated on an undiscounted basis at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised based on tax rates that have been enacted or substantively enacted at the end of the reporting period. The carrying amount of deferred income tax asset is reviewed at each balance sheet date. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, the deferred income taxes relate to the same taxation authority and that authority permits the Company to make a single net payment.
Investments are stated at cost less provision for any diminution in value. Any impairment is charged to income statement as it arises.
Financial assets and financial liabilities are recognised in the Company’s balance sheet when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised (i.e., removed from the Company’s balance sheet) when the rights to receive cash flows from the asset have expired; or when the Company has transferred those rights and either has also transferred substantially all the risks and rewards of the asset or has
Page 22
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
neither transferred nor retained substantially all the risks and rewards of the asset but no longer has control of the asset.
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Financial assets and financial liabilities are initially measured at fair value.
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
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Trade and other receivables
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Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for expected credit losses.
The Company uses the term “accrued income” for contract receivables. These are recognised when the right to consideration is unconditional. Typically, for performance obligations satisfied over time, judgement is required in determining whether a right to consideration is unconditional. In such situations, a receivable is recognised for the transaction price of the non-cancellable portion of the contract when the Company starts satisfying the performance obligation.
When revenue recognised in respect of a customer contract exceeds amounts received or receivable from the customer a contract asset is recognised.
The carrying amounts of trade and other receivables are reduced by allowances for expected credit losses using the simplified approach under IFRS 9. The Company uses a matrix approach to determine the allowance. The default rates applied are based on the ageing of the receivable, past experience of credit losses and forward-looking information. An allowance for a receivable’s estimated lifetime expected credit losses is first recorded when the receivable is initially recognised, and subsequently adjusted to reflect changes in credit risk until the balance is collected. In the event that management considers that a receivable cannot be collected, the balance is written off.
For amounts owed by group undertakings that are trade receivables, the Company applies the simplified approach using a provision matrix as for external trade receivables.
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Cash and cash equivalents
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Cash and cash equivalents include cash at bank and in hand and short-term deposits with an original maturity period of three months or less. Bank overdrafts that are an integral part of the Company’s cash management are included in cash and cash equivalents where they have a legal right of set-off and there is an intention to settle net, against positive cash balances, otherwise bank overdrafts are classified as borrowings.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Page 23
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
The Company uses the term “deferred income” for a contract liability. Contract liabilities primarily reflect invoices due or payments received in advance of revenue recognition. Deferred income is unwound as related performance obligations are satisfied.
Obligations under defined contribution schemes are recognised as an operating cost in the statement of comprehensive income as incurred.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
The Sage Group plc. issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest allowing for the effect of non-market-based vesting conditions.
Fair value is measured using the Black-Scholes or the Monte Carlo pricing models, based on observable market prices. The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
The Company also provides certain employees with the ability to purchase The Sage Group plc.'s ordinary shares at a discount to the current market value at the date of the grant. The Company records an expense, based on its estimate of the discount related to shares expected to vest, on a straight-line basis over the vesting period.
The Company is not charged by The Sage Group plc. for its allocation of the share-based payment charge for its employees and the Company records a non-distributable credit to equity.
Expenditure on research activities is recognised in the profit and loss account as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Company intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during its development.
Page 24
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Judgements in applying accounting policies
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The following are the key judgements and assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amount of the assets and liabilities within the next year.
Revenue recognition
Some of the Company’s revenue is generated from sales to partners rather than to end users. The key judgement is determining whether the business partner is a customer of the Company. The key criteria in this determination is whether the business partner has taken control of the product. Considering the nature of the Company's subscription products and support services, this is usually assessed based on whether the business partner has responsibility for payment, has discretion to set prices and takes on the risks and rewards of the product or service from the Company. The key criteria in this determination is whether the business partner has taken control of the product. Where the business partner is a customer of the Company, discounts are recognised as a deduction from revenue. Where the business partner is not a customer of the Company and their part in the sale has simply been in the form of a referral, they are remunerated in the form of a commission payment.
Critical accounting judgement – Reseller fee income
Management has exercised judgement in determining that reseller fee income arising from intercompany transfer pricing arrangements is classified as revenue in the statutory financial statements of the IP owning entity.
Under the Group’s operating model, IP owning entities grant distribution and licensing rights to other Group entities in exchange for sales based consideration calculated by reference to external customer sales. Management considers this income to arise in the ordinary course of business, as the ownership and management of software intellectual property is one of the principal activities of the IP owning entity.
The arrangements are governed by enforceable contracts and represent a licence of intellectual property for the purposes of IFRS 15 as applied by FRS 101. The IP owning entity is principal in the licensing of the IP, retains ownership and control of the IP, and the consideration received in return is recognised over time as the licensed rights are exploited.
Accordingly, reseller fee income is presented as revenue in the individual statutory financial statements, with corresponding charges in reseller entities presented within selling and administrative expenses. This presentation is considered to faithfully reflect the underlying economics and business model.
Incremental costs of obtaining customer contracts
The Company capitalises cumulative target commissions for all customer contracts that count towards the cumulative target but only if nothing other than obtaining customer contracts can contribute to achieving the cumulative target. The capitalised assets are amortised over the period during which the related revenue is recognised, which may extend beyond the initial contract term where the Company expects to benefit from future renewals as a result of incurring the costs. Typically, either the Company does not pay sales commissions for customer contract renewals or such commissions are not commensurate with the commissions paid for new contracts and are not capitalised. Consequently, the Company amortises sales commissions paid for new customer contracts on a straight-line basis over the expected contract life including probable contract renewals.
Judgement is required in estimating these contract lives. In exercising this judgement, the Company considers respective renewal history adjusted for indications that the renewal history is not fully indicative of future renewals.
Page 25
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
3.Judgments in applying accounting policies (continued)
Recoverability of trade and other receivables
Trade and other receivables (including amounts owed by group undertakings) to which the simplified approach under IFRS 9 to recognising expected credit losses applies. The Company uses a matrix approach to determine the allowance. The default rates applied are based on the ageing of the receivable, past experience of credit losses and forward-looking information. An allowance for a receivable’s estimated lifetime expected credit losses is first recorded when the receivable is initially recognised, and subsequently adjusted to reflect changes in credit risk until the balance is collected. In the event that management considers that a receivable cannot be collected, the balance is written off.
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An analysis of turnover by class of business is as follows:
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Software subscription revenue
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Analysis of turnover by country of destination:
Page 26
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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The operating profit is stated after charging/(crediting):
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Research & development charged as an expense
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Research and development tax credit
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Customer acquisition costs
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Depreciation of tangible fixed assets
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Net foreign exchange loss/(gains)
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Auditors’ remuneration is borne by the ultimate parent company, The Sage Group plc., for the year. The audit fees payable in relation to the audit of the financial statements of the Company are £67,958 (2024: £65,000).
The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the group accounts of the parent Company.
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Page 27
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average number of employees, including the Directors, during the year was as follows:
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Sales support/customer service
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The Directors did not receive any emoluments during the year in respect of their services to the Company (2024: £nil).
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The majority of the Company’s employees are members of defined contribution schemes. The Company pays contributions into separate funds on behalf of the employees and has no further obligations to employees. The risks associated with this type of plan are assumed by the member. Contributions of £86,000 (2024: £81,000) were outstanding at the balance sheet date.
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Net foreign exchange gains
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Page 28
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Interest payable to group undertakings
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Net foreign exchange losses
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Current tax on profits for the year
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Origination and reversal of timing differences
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Page 29
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
10.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2024 - lower than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
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Profit multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)
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Expenses not deductible for tax purposes
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Utilisation of tax losses
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Tax deduction arising from exercise of employee options
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Total tax charge for the year
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The following table details the Company’s subsidiary undertaking which is held directly.
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251 Little Falls Drive,
Wilmington, New Castle, DE, 19808, United States
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Page 30
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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(Charged)/credited to the profit or loss
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The deferred tax asset is made up as follows:
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Trade and other receivables
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Less; provision for impairment of receivables
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Amounts owed by group undertakings
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Deferred taxation (Note 12)
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Amounts owed by group undertakings are non-interest bearing repayable on demand. Interest, where appropriate, is received at a treasury rate advised by The Sage Group plc.
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Page 31
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Cash and cash equivalents
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Amounts owed to group undertakings
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Other taxation and social security
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Amounts owed to group undertakings are unsecured, repayable on demand, and attract an interest rate of between 0% and 6.56% (2024 between 0% and 6.81%).
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In all material respects current deferred income at 30 September 2024 was recognised as revenue during the year ended 30 September 2025.
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Page 32
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Allotted, called up and fully paid
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6,203,532 (2024 - 6,203,532) Ordinary shares of £0.001 each
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The share premium represents the excess paid for ordinary share capital above its nominal value.
Other reserves represent the reserves created on the issue of share options.
Retained earnings represents all accumulated gains and losses of the Company since its inception, less dividends paid.
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The Company recognises a share-based payment expense based on an allocation from its parent company of the fair value of the awards granted, and an equivalent credit directly in equity as a capital contribution. This allocation was £132,000 (2024: £134,000) in the year of the total group IFRS2 charge of
£51m (2024: £56m). The below is a description of the Group share based payment awards in the year:
Performance Share Awards
Performance Share Awards– Previously awards were granted under the Sage Group Performance Share Plan (“PSP”), with the last awards granted in December 2024. The Sage Group Long Term Incentive Plan (“LTIP”) was approved in February 2025 and allows for grants of both performance awards and time-based awards. Subsequently, performance awards for Directors and senior executives are granted under the LTIP.
Annual grants of performance shares will normally be made to Executive Directors and Senior Executives after the preliminary declaration of the annual results. Under Performance Share awards, 875,535 (2024: 755,730) awards were made during the year.
Awards for 2023
These performance shares are subject to a service condition and three performance conditions. Performance conditions are weighted 50% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 20% on the achievement of ESG targets.
The financial performance target is based on the achievement of Sage Business Cloud (SBC) Penetration targets for the final year of the performance period. Where SBC Penetration is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range.
Where the Group's SBC Penetration is between 85% and 89% or 89% and 92%, the extent to which the financial performance condition is satisfied will be calculated on a straight-line pro rata basis between 10% and 40% or between 40% and 50% respectively.
The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis
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Share-based payments (continued)
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between 24% and 30%.
The comparator group for awards granted for 2023 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies.
The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition, (ii) a Tech for Good condition, and (iii) two Diversity, Equity and Inclusion conditions. Where attainment of each of the ESG condition are between prescribed targets, the extent to which the ESG performance conditions are satisfied will be calculated on a straight-line, pro-rata basis within defined ranges as detailed below.
The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2 and 3 carbon emissions during the performance period.
Where the Group's reduction in carbon emissions during the performance period is between 6.9% and 13.8% or 13.8% and 20.7%, the extent to which the carbon emissions performance condition is satisfied will be calculated on a straight-line pro rata basis between 1.5% and 6% or between 6% and 7.5% respectively.
The Tech for Good condition will be measured by reference to the number of Sage products that have embedded functionality for carbon accounting at the end of the performance period.
Where the Group's number of products with embedded functionality for carbon accounting at the end of the performance period is between 3 and 6 or 6 and 8, the extent to which the carbon emissions performance condition is satisfied will be calculated on a straight-line pro rata basis between 1% and 4% or between 4% and 5% respectively.
The Diversity, Equity and Inclusion conditions will be measured by reference to (i) the inclusion score in the employee engagement survey undertaken in the last financial year of the performance period, and (ii) the percentage of leadership teams meeting Sage’s global gender diversity target at the end of the performance period.
Where the Group's inclusion score in the last financial year of the performance period is between 82 and 84 or 84 and 86, the extent to which the inclusion performance condition is satisfied will be calculated on a straight-line pro rata basis between 0.75% and 3% or between 3% and 3.75% respectively.
Where the Group's % of leadership teams meeting the global gender diversity target at the end of the performance period is between 50% and 65% or 65% and 80%, the extent to which the diversity performance condition is satisfied will be calculated on a straight-line pro rata basis between 0.75% and 3% or between 3% and 3.75% respectively.
Awards for 2024
These performance shares are subject to a service condition and three performance conditions over the 3-year length of the performance period. Performance conditions are weighted 50% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 20% on the achievement of ESG targets.
The financial performance target is based on the achievement of underlying earnings per share targets at the end of the performance period. Where Underlying EPS is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Share-based payments (continued)
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Where the Group's Underlying EPS is between 37.0p and 43.0p or 43.0p and 46.0p, the extent to which the financial performance condition is satisfied will be calculated on a straight-line pro rata basis between 10% and 40% or between 40% and 50% respectively.
The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 24% and 30%.
The comparator group for awards granted for 2024 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies.
The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition, (ii) a Tech for Good condition, and (iii) two Diversity, Equity and Inclusion conditions.
The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2 and 3 carbon emissions during the performance period.
Where the Group's reduction in carbon emissions during the performance period is between 8.1% and 16.2% or 16.2% and 24.3%, the extent to which the carbon emissions performance condition is satisfied will be calculated on a straight-line pro rata basis between 1.5% and 6% or between 6% and 7.5% respectively.
The Tech for Good condition will be measured by reference to the Sage suites that have embedded functionality for carbon accounting at the end of the performance period.
Where the access to carbon accounting functionality through Sage Suites at the end of the performance period is limited to the Sage for Small Business Suite, 1% of the Tech for Good performance condition will be satisfied. Where the access is embedded within Sage for Small Business suite and Sage for Accountants suite, 4% of the Tech for Good performance condition will be satisfied. Where the access is embedded within Sage for Small Business suite, Sage for Accountants suite and Sage for Medium Business suite, 5% of the Tech for Good performance condition will be satisfied.
The Diversity, Equity and Inclusion conditions will be measured by reference to (i) the percentage of ethnically diverse colleagues in Senior Leadership Teams, and (ii) the percentage of leadership teams in the top four levels of Sage meeting the global gender diversity target, at the end of the performance period.
Where the Group's % of ethnically diverse colleagues in Senior Leadership Teams at the end of the performance period is between 13.0% and 16.5% or 16.5% and 20.0%, the extent to which the inclusion performance condition is satisfied will be calculated on a straight-line pro rata basis between 0.75% and 3% or between 3% and 3.75% respectively.
Where the Group's % of leadership teams in the top four levels of Sage meeting the global gender diversity target at the end of the performance period is between 50% and 65% or 65% and 80%, the extent to which the diversity performance condition is satisfied will be calculated on a straight-line pro rata basis between 0.75% and 3% or between 3% and 3.75% respectively.
Awards were valued using the Monte Carlo option pricing model. Performance conditions were included in the fair value calculations, which were based on observable market prices at grant date. All options granted under performance share awards have an exercise price of nil.
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Share-based payments (continued)
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Awards for 2025
These performance shares are subject to a service condition and three performance conditions over the 3-year length of the performance period. Performance conditions are weighted 60% on the achievement of a financial performance target, 30% on the achievement of a TSR target, and 10% on the achievement of ESG targets.
The financial performance condition is based on the achievement of underlying earnings per share targets at the end of the performance period. Where underlying EPS is between prescribed targets, the extent to which the financial performance condition is satisfied will be calculated on a straight-line, pro-rata basis within a defined range.
Where the Group's Underlying EPS is between 47.5p and 58.0p, the extent to which the financial performance condition is satisfied will be calculated on a straight-line pro rata basis between 12% and 60%.
The performance target relating to TSR measures share price performance against a designated comparator group. Where TSR is between median and upper quartile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 6% and 24%, and where TSR is between upper
quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line, pro-rata basis between 24% and 30%.
The comparator group for awards granted for 2025 onwards is the companies comprised in the FTSE 100 Index at the start of the performance period, excluding financial services and extraction companies.
The performance targets relating to ESG are based on the achievement of targets relating to (i) a Protect the Planet condition and (ii) a Tech for Good condition.
The Protect the Planet condition will be measured by reference to the reduction in the Group’s Scope 1, 2, and 3 carbon emissions during the performance period.
Where the Group's reduction in carbon emissions during the performance period is between 8.6% and 17.2% or 17.2% and 25.8%, the extent to which the carbon emissions performance condition is satisfied will be calculated on a straight-line pro rata basis between 1% and 4% or between 4% and 5% respectively.
The Tech for Good condition will be measured by reference to the Sage suites that have embedded functionality for carbon accounting at the end of the performance period.
Where the access to carbon accounting functionality through Sage Suites at the end of the performance period is limited to the Sage for Sage Active suite in France, 1% of the Tech for Good performance condition will be satisfied. Where the access is embedded within Sage for Sage Active suite in France, Spain, and Germany, 4% of the Tech for Good performance condition will be satisfied. Where the access is embedded within Sage for Sage Active suite in France, Spain, and Germany, and Sage Distribution and Manufacturing Operations (SDMO) suite, 5% of the Tech for Good performance condition will be satisfied.
Awards were valued using the Monte Carlo option pricing model. Performance conditions were included in the fair value calculations, which were based on observable market prices at grant date. All options granted under performance share awards have an exercise price of £nil.
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SAGE PEOPLE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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Share-based payments (continued)
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Restricted Share Awards
Restricted Share Awards– Previously awards were granted under the Sage Group Restricted Share Plan, with the last awards granted in December 2024. The LTIP was approved in February 2025 and allows for grants of both performance awards and time-based awards. Subsequently, restricted awards for colleagues who contribute to Sage’s strategic outcomes are granted under the LTIP.
Restricted Share Awards granted under the Group’s RSP and LTIP are issued to colleagues who contribute to Sage’s strategic outcomes.
These contingent share awards are made primarily with service conditions. Executive Directors are not permitted to participate in the plan and shares are either purchased in the market or treasury shares are utilised to satisfy vesting awards. These awards primarily have service conditions, and their fair values are equal to the share price on the date of grant. During the year 4,274,238 (2024: 4,115,981) awards were made, with fair values ranging from 12.30p to 13.12p.
Share options
The Save and Share Plan is a savings-related share option scheme for employees of the Group and is available to employees in the majority of countries in which the Group operates. The UK plan is an HMRC-approved savings-related share option scheme. The fair value of the options is expensed over the service period of three years, with a forfeiture assumption included for any anticipated lapses as employees leave the Group. During the year, 1,132,772 (2024: 1,423,017) options were granted under the terms of the Save and Share Plan.
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As the consolidated financial statements of The Sage Group plc. include the equivalent disclosures, the Company has taken the exemptions under FRS 101 available in respect of certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures. The disclosures below cover statutory balances in relation to Amounts owed by / to group undertakings that are not covered in The Sage Group plc. consolidated financial statements.
Fair value measurement of financial assets and financial liabilities
Amounts owed by group undertakings and amounts owed to group undertakings are initially measured at fair value and are subsequently measured at amortised cost. The Directors consider that the carrying amounts of the financial assets and financial liabilities recognised in the financial statements approximate their fair values.
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Immediate and ultimate parent company
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The Company’s immediate parent undertaking is Sage Holding Company Limited, a company registered in England and Wales.
The ultimate parent undertaking and ultimate controlling party is The Sage Group plc., a company registered in England and Wales. The Sage Group plc. is the largest and smallest group to consolidate these financial statements. Copies of the group financial statements can be obtained from the registered office at C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle-Upon-Tyne, NE28 9EJ.
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