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Registered number: 10124977









DUCK CREEK TECHNOLOGIES LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2022

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
COMPANY INFORMATION


Directors
M Jackowski 
C E McCloskey (appointed 19 July 2023)




Registered number
10124977



Registered office
C/O Skadden, Arps,Slate Meagher & Flom (UK) LLP
22 Bishopsgate

London

EC2N4BQ




Independent auditor
Nortons Assurance Limited
Chartered Accountants and Statutory Auditor

Second Floor

NOW Building

Thames Valley Park

Reading

Berkshire

RG6 1NT





 
DUCK CREEK TECHNOLOGIES LIMITED
 

CONTENTS



Page
Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditor's Report
6 - 9
Profit and Loss Account
10
Balance Sheet
11 - 12
Statement of Changes in Equity
13
Notes to the Financial Statements
14 - 37


 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2022

The directors present their report and the audited financial statements of the company for the year ended 31 August 2022.

Introduction
 
Duck Creek Technologies Limited (‘the Company’) was incorporated on 14 April 2016. The Company is a wholly owned subsidiary of Disco Topco Holdings (Cayman), L.P. which is wholly owned by Duck Creek Technologies Inc. (the ultimate parent company). Duck Creek Technologies, Inc. completed its initial public offering on 14 August 2020 and is currently traded on the Nasdaq stock exchange under the DCT ticker symbol. Duck Creek Technologies Pty Ltd (“DC Australia”) and Duck Creek Technologies Spain, SL (“DC Spain”) are wholly owned by the Company, and Duck Creek Technologies India LLP (“DC India”) is majority owned by DC Australia.  

Business review
 
The results for the period ended 31 August 2022 are set out in the Profit and Loss Account. The reporting period for the Company includes the trading activities for the Company for the period from 1 September 2021 to 31 August 2022.
While the Company provides various services to local market customers, it also derives turnover from services provided to DC Australia. The Company is a provider of Software as a Service (SaaS) systems to the property and casualty (P&C) insurance industry.
The loss for the current period to 31 August 2022 is $10,779,090 compared to a loss of $4,184,827 in the prior period. The directors are confident that the business is moving forward and has a promising future. Investments are being made to expand the Company’s local market customer base and to sell additional software products and services to its current customers. The Company has been successful in securing key personnel to manage this expansion.
The Company's total revenue increased 20% to $16,712,718 in the current period compared to $13,951,939 in the prior period.  The Company’s maintenance and support revenue increased slightly to $2,157,714 in the current period compared to $2,147,995 in the prior period, SaaS revenue increased 8% to $5,256,278 in the current period compared to $4,861,467 in the prior year, professional services revenue decreased 13% to $2,264,844 in the current period compared to $2,600,734 in the prior period, and intercompany revenue increased 47% to $5,547,719 in the current period compared to $3,773,689  in the prior period.  License revenues increased by 161% to $1,486,163 in the current period compared to $568,054  in the prior period.  The Company is increasingly focused on selling its SaaS solutions to P&C insurance carriers around the globe.
The Company has a good cash position at the year end due to the timely collection of trade debts from its customers and the timely collection of intercompany debts from the U.S. based subsidiaries. 
In a Company this size, the directors consider various non financial performance indicators but none individually are key. The Company continues to enjoy a high rate of customer retention that should continue to provide recurring revenues to the business over the coming years.
Due to the Company’s cash position, high customer retention rate, and availability of a variety of funding sources, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis, as explained in note 2.4 to the financial statements. 
 

Page 1

 
DUCK CREEK TECHNOLOGIES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022

Principal risks and uncertainties
 
Competitive pressure is a constant risk that could impact the operating performance of the Company. This risk is managed by working closely with customers to provide competitive products and services and ensuring that excellent service levels are maintained.  
The cash flow and liquidity needs of the Company are moderately dependent on interest income related to the intercompany loan with a U.S. based subsidiary. The Company maintains its short term flexibility through intercompany borrowings, if required.
The global economic environment can affect the operating performance of the Company and the market it competes in. Both sales and profitability are exposed to these risks. The Company works to mitigate the impact of these external variables by competing in diverse geographies and with management planning and oversight processes. 
 

Financial risk management objectives and policies
 
The Company has no hedging arrangements as of 31 August 2022. The foreign exchange currency risk is managed centrally at a group level. 
Liquidity and cash flow risks are governed by the ultimate parent undertaking’s requirements. The Company maintains its short term flexibility through intercompany borrowing, if required.
The Company governs its own price risk and credit risk based on directors’ requirements to meet its ultimate parent undertaking expectations.

Directors' statement of compliance with duty to promote the success of the Company
 
The Directors have acted in a way they considered, in good faith, to be the most likely to promote the success of the Company for the benefit of its stakeholders. Section 172 requires the Directors to have regard, amongst other matters to the:
a) Likely consequences of any decisions in the long term
b) Interests of the Company’s employees
c) Need to foster the Company’s business relationships with suppliers, customers, and others
d) Impact of the Company’s operations on the community and the environment
e) Desirability of the Company maintaining a reputation for high standards of business conduct, and
f) Need to act fairly as between members of the Company
Similar to many large organisations, much of the group strategy is set at a corporate level. The Company delegates authority for the day to day management to the parent company executives. Management are responsible for overseeing the execution of the group strategy and adhering to polices set by the group.
Senior executives hold meetings with the regional management team regularly to ensure feedback from employees, customers and supplier base.

Page 2

 
DUCK CREEK TECHNOLOGIES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022


This report was approved by the board and signed on its behalf.


M Jackowski
Director

Date: 20 October 2023

Page 3

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2022

The directors present their report and the financial statements for the year ended 31 August 2022.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic 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 the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting 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;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to $10,779,090 (2021 - loss $4,184,827).

No dividends were paid or proposed during the current or prior year.

Directors

The directors who served during the year were:

M R Foster (resigned 3 March 2022)
M Jackowski 
E C Van Biert Jr. (appointed 30 March 2022, resigned 5 April 2023)


Future developments

There were no significant future developments expected to impact the Company.

Page 4

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022

Engagement with suppliers, customers and others

The directors are required to foster the Company’s business relationships with suppliers, customers and others. The Company has a number of direct contracts with external customers and a portion of its revenue is derived from services provided to customers of Duck Creek Australia. Due to the recurring nature of revenues, our account managers are responsible for maintaining those relationships. The majority of business operations are conducted by our own employees and a significant proportion of services are supplied on a cost share basis with the wider group. As such the key relationships with suppliers are maintained by our parent company.

Matters covered in the Strategic Report

The Company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the strategic report information required by The Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of risk and uncertainties and financial risk management objectives and policies

Disclosure of information to auditor

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.

Post balance sheet events

On 05 January 2023 the company acquired Imburse AG a payments infrastructure and orchestration business based in Switzerland.
On 30 March 2023 the companies ultimate parent company Duck Creek Technolgies Inc was acquired by Vista Equity Partners and at that point the shares ceased to be listed on the Nasdaq.

Auditor

The auditor, Nortons Assurance Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 


M Jackowski
Director

Date: 20 October 2023

Page 5

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DUCK CREEK TECHNOLOGIES LIMITED
 

Opinion


We have audited the financial statements of Duck Creek Technologies Limited (the 'Company') for the year ended 31 August 2022, which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 August 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least 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.


Page 6

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DUCK CREEK TECHNOLOGIES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DUCK CREEK TECHNOLOGIES LIMITED (CONTINUED)


Auditor's responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework including the Companies Act 2006 and the relevant tax compliance regulations in the UK.
We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how  fraud  might  occur  by meeting  with  management  to  understand  where  it  considered  there  was  a susceptibility to  fraud.  We considered  the  controls  that  the  Company has  established  to  address  risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls. Where the risk was considered to be higher, we performed audit procedures toaddress each identified fraud risk. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from fraud and error.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and  regulations  identified  in  the  paragraphs  above.  Our  procedures  involved  journal  entry testing,  with  a focus  on  journals  indicating  large  or  unusual  transactions  based  on  our  understanding  of  the  business, enquiries of Company management and focused testing. In addition, we completed procedures to conclude on  the  compliance  of  the  disclosures  in  the  Annual  Report  and  Accounts  with  the  requirements  of  the relevant accounting standards and UK legislation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.


Page 8

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DUCK CREEK TECHNOLOGIES LIMITED (CONTINUED)


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 2006Our 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.







Anthony Campbell (Senior Statutory Auditor)
  
for and on behalf of
Nortons Assurance Limited
 
Chartered Accountants and Statutory Auditor
  
Second Floor
NOW Building
Thames Valley Park
Reading
Berkshire
RG6 1NT

20 October 2023
Page 9

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2022

2022
2021
Note
$
$

  

Turnover
 4 
16,712,718
13,951,939

Cost of sales
  
(1,967,443)
(1,645,305)

Gross profit
  
14,745,275
12,306,634

Administrative expenses
  
(26,133,001)
(22,541,464)

Operating loss
 5 
(11,387,726)
(10,234,830)

Interest receivable and similar income
 8 
608,636
6,050,003

Loss before tax
  
(10,779,090)
(4,184,827)

Tax on loss
 9 
-
-

Loss for the financial year
  
(10,779,090)
(4,184,827)

There are no items of other comprehensive income for 2022 or 2021 other than the loss for the yearAs a result, no separate Statement of Comprehensive Income has been presented.

The notes on pages 14 to 37 form part of these financial statements.

Page 10

 
DUCK CREEK TECHNOLOGIES LIMITED
REGISTERED NUMBER: 10124977

BALANCE SHEET
AS AT 31 AUGUST 2022

2022
2021
Note
$
$

Fixed assets
  

Intangible assets
 10 
9,832,639
15,734,649

Tangible assets
 11 
278,780
333,786

Investments
 12 
126,767,814
14,922,091

  
136,879,233
30,990,526

Current assets
  

Debtors: amounts falling due after more than one year
 13 
134,062
882,665

Debtors: amounts falling due within one year
 13 
6,848,144
107,367,058

Current asset investments
  
60,466,085
-

Cash at bank and in hand
 15 
2,548,401
5,297,884

  
69,996,692
113,547,607

Creditors: amounts falling due within one year
 16 
(3,648,008)
(5,295,865)

Net current assets
  
 
 
66,348,684
 
 
108,251,742

Total assets less current liabilities
  
203,227,917
139,242,268

Creditors: amounts falling due after more than one year
 17 
(75,000,000)
(125,960)

  
128,227,917
139,116,308

Other provisions
 18 
(369,853)
(624,948)

Net assets
  
127,858,064
138,491,360

Page 11

 
DUCK CREEK TECHNOLOGIES LIMITED
REGISTERED NUMBER: 10124977
    
BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2022

2022
2021
Note
$
$

Capital and reserves
  

Called up share capital 
 19 
14,140
14,140

Share premium account
 20 
160,509,774
160,509,774

Other reserves
 20 
158,094
12,300

Profit and loss account
 20 
(32,823,944)
(22,044,854)

  
127,858,064
138,491,360


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

M Jackowski
Director

Date: 20 October 2023

The notes on pages 14 to 37 form part of these financial statements.

Page 12

 
DUCK CREEK TECHNOLOGIES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2022


Called up share capital
Share premium account
Other reserves
Profit and loss account
Total equity

$
$
$
$
$


At 1 September 2020
14,140
160,509,774
6,152
(17,860,027)
142,670,039


Comprehensive income for the year

Loss for the year
-
-
-
(4,184,827)
(4,184,827)


Other comprehensive income for the year
-
-
-
-
-


Total comprehensive income for the year
-
-
-
(4,184,827)
(4,184,827)


Contributions by and distributions to owners

Credit to equity for equity settled share based payments
-
-
128,098
-
128,098

Charge from parent for equity settled share based payments
-
-
(121,950)
-
(121,950)


Total transactions with owners
-
-
6,148
-
6,148



At 1 September 2021
14,140
160,509,774
12,300
(22,044,854)
138,491,360


Comprehensive income for the year

Loss for the year
-
-
-
(10,779,090)
(10,779,090)

Other Comprehensive Income
-
-
102,690
-
102,690


Other comprehensive income for the year
-
-
102,690
-
102,690


Total comprehensive income for the year
-
-
102,690
(10,779,090)
(10,676,400)


Contributions by and distributions to owners

Charge from parent for equity settled share based payments
-
-
43,104
-
43,104


Total transactions with owners
-
-
43,104
-
43,104


At 31 August 2022
14,140
160,509,774
158,094
(32,823,944)
127,858,064


The notes on pages 14 to 37 form part of these financial statements.

Page 13

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

1.


General information

Duck Creek Technologies Limited ('the Company') is a company incorporated in the United Kingdom under the Companies Act. The Company is a private company limited by shares and is registered in England and Wales. The address of the Company's registered office is shown on the Company information page.
The principal activities of the Company are set out in the strategic report.
These financial statements present the results for the year ended 31 August 2021. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Duck Creek Technologies, Inc. as at 31 August 2021 and these financial statements may be obtained from 22 Boston Wharf Road, Boston, MA 02210, USA or www.duckcreek.com.

 
2.3

Exemption from preparing consolidated financial statements

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of its immediate parent undertaking established under the law of a non-EEA state and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.

Page 14

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)

 
2.4

Going concern

The accounts have been prepared on a going concern basis. The directors are therefore satisfied that adequate resources are available to the Company and they have no reason to believe that any material uncertainty exists that may cast significant doubt about the ability of the Company to continue as a going concern.

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is USD, rounded to the nearest whole dollar.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.6

Revenue

The Company derives its revenues primarily from four sources: 
Sales of hosted software services under SaaS arrangements.
Sales of software licenses - Software license revenue is derived from the sale of term-based and perpetual licenses to customers.
Sales of maintenance and support services - Maintenance and support services include telephone and web-based support, software updates, and rights to unspecified software upgrades on a when-and-if-available basis.  
Sales of professional services and other - Professional services include training, implementation, and consulting services. Other revenues primarily consist of reimbursable employee out-of-pocket expenses. 
 
SaaS Arrangements
The transaction price allocated to SaaS arrangements is recognized as revenue over time throughout the term of the contract as the services are provided on a continuous basis, beginning after the SaaS environment is provisioned and made available to customers. The Company’s SaaS arrangements generally have terms of three to seven years, and are generally payable on a monthly basis over the term of the SaaS arrangement, which is typically noncancellable. Revenue is recognized ratably using contractual DWP (the gross dollar value of total premiums paid to carriers by policyholders) as the measure of progress.
Software Licenses
The Company has concluded that its software licenses provide the customer with the right to functional intellectual property (IP), and are distinct performance obligations as the customer can benefit from the software licenses on their own. The transaction price allocated to perpetual and term
Page 15

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)


2.6
Revenue (continued)

license arrangements is recognized as revenue at a point in time when control is transferred to the customer, which generally occurs at the time of delivery. Perpetual software license fees are generally payable when the contract is executed. Term license fees are generally payable in advance on an annual basis over the term of the license arrangement, which is typically noncancellable. Perpetual and term license arrangements are delivered before related services are provided, including maintenance and support services, and are functional without such services.
Maintenance and Support Services
Maintenance and support contracts associated with the Company’s software licenses entitle customers to receive technical support and software updates, on a when and if available basis, during the term of the maintenance and support contract. Technical support and software updates are considered distinct from the related software licenses but accounted for as a single performance obligation as they each constitute a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. The transaction price allocated to software maintenance and support is recognized as revenue over time on a straight-line basis over the term of the maintenance and support contract. Maintenance and support fees are generally payable in advance on a monthly, quarterly, or annual basis over the term of the maintenance and support contract. Maintenance and support contracts are priced as a percentage of the associated software license.
Professional Services
The Company’s professional services revenue is primarily comprised of implementation services provided to customers. The majority of professional services engagements are billed to customers on a time and materials basis. The Company has determined that professional services provided to customers represent distinct performance obligations. These services may be provided on a stand-alone basis or bundled with other performance obligations, including SaaS arrangements, software licenses, and maintenance and support services. The transaction price allocated to these performance obligations is recognized as revenue over time as the services are performed. In those limited instances where professional services arrangements are sold on a fixed price basis, revenue is recognized over time using an input measure of time incurred to date relative to total estimated time to be incurred at project completion. Invoices for all professional services arrangements are generally invoiced monthly in arrears.
Costs to obtain a contract
The Company allocates the incremental costs to obtain a contract among the identified performance obligations that are included in the contract, on a relative basis to the allocated transaction price. Incremental costs primarily comprise of commissions paid to the Company's sales representatives. Any such costs that are allocated to performance obligations that are recognised at a point in time are expensed at that time. Any such costs that are allocated to performance obligations that are recognised over time are capitalised in the period in which they are incurred and amortised on a straight-line basis over the expected benefit of the associated contract. As a practical expedient, the Company recognises the incremental costs of obtaining a contract as an expense when incurred if the amortisation period of the asset that it would otherwise have recognised is one year or less. 
The Company has estimated that the typical period of benefit for its contracts is 8 years, based on both qualitative and quantitative factors, including product lifecycle attributes and historical customer retention data. The Company assesses deferred contract costs for impairment on an annual basis. Expenses associated with deferred contract costs are included within administrative expenses. Deferred contract costs are included on the balance sheet within other debtors.
 
Page 16

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)


2.6
Revenue (continued)

The Company records reimbursable out-of-pocket expenses associated with professional services contracts in both revenue and cost of revenue.
The Company also recognises revenue for services provided to other group companies under a global cost sharing arrangement.
Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 
2.7

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 17

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)

 
2.10

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

 
2.11

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 18

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Profit and Loss Account over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
10
years
Intellectual property
-
7
years

Amortisation is included in administrative expenses in the profit and loss account.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold improvements
-
Lower of estimated useful life of life of lease
Fixtures and fittings
-
5 - 10 years
Computer equipment
-
2 - 4 years
Assets under construction
-
No depreciation

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 19

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)

 
2.14

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.19

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

Page 20

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)

 
2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.21

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Page 21

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)


2.21
Financial instruments (continued)

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the
Page 22

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

2.Accounting policies (continued)


2.21
Financial instruments (continued)

risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Company's accounting policies, the directors are required to make judgments,  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. Estimates are used when accounting for certain items such as valuation of goodwill and intangible assets, the useful lives of intangible assets, impairment of tangible fixed assets, provisions, share-based compensation and standalone selling prices in transactions with customer that include multiple performance obligations.
Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in the estimates are recorded in the period in which they become known. The Company bases its estimates on historical experiences  and various other assumptions that it believe to be reasonable under the circumstances. Actual results could differ from managements estimates if past experience or other assumptions are not substantially accurate.

Page 23

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
$
$

Licence
1,486,163
568,054

Maintenance & Support
2,157,714
2,147,995

SaaS
5,256,278
4,861,467

Professional services
2,264,844
2,600,734

Intercompany
5,547,719
3,773,689

16,712,718
13,951,939


Analysis of turnover by country of destination:

2022
2021
$
$

United Kingdom and EU
3,955,968
3,281,488

Rest of the world
12,756,750
10,670,451

16,712,718
13,951,939



5.


Operating loss

The operating loss is stated after charging:

2022
2021
$
$

Exchange differences
1,494,883
10,261

Other operating lease rentals
133,571
457,674


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor and its associates:


2022
2021
$
$

Fees payable to the Company's auditor and its associates for the audit of the Company's financial statements
37,411
39,908

Page 24

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

7.


Employees

Staff costs were as follows:


2022
2021
$
$

Wages and salaries
3,982,948
3,661,484

Social security costs
468,606
540,593

Cost of defined contribution scheme
174,891
178,477

4,626,445
4,380,554


In addition, a share based payment expense of $(231,100) (2021: $677,756) has been recognised during the year.

The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Professional services
11
12



Sales and pre sales
10
10



Customer support and care
2
2



Other
9
7

32
31

The directors of the Company are also directors or officers of a number of companies within the wider Duck Creek group. The directors' services to the Company do not occupy a significant amount of their time. As such the directors do not consider that they have received any remuneration for their incidental services to the Company for the years ending 31 August 2022 and 31 August 2021.


8.


Interest receivable

2022
2021
$
$


Interest receivable from group companies
548,204
6,050,003

Other interest receivable
60,432
-

Page 25

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

9.


Taxation



Factors affecting tax charge for the year

The tax assessed for the year is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:

2022
2021
$
$


Loss on ordinary activities before tax
(10,779,090)
(4,184,827)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(2,048,027)
(795,117)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
297,356
280,089

Capital allowances for year in excess of depreciation
-
44,782

Other timing differences leading to an increase (decrease) in taxation
4,073
719

Effect of share based payments
(49,807)
(1,543)

Unrelieved tax losses carried forward
1,796,405
471,070

Total tax charge for the year
-
-


Factors that may affect future tax charges

The Finance Act 2021 was substantially enacted in May 2021 and has increased the corporation tax rate to from 19% to 25% with effect from 1 April 2023.  
No deferred asset has been recognised in respect of losses which are not expected to reverse in the foreseeable future. The unrecognised deferred tax asset in respect of these losses is approximately $6,200,000 (2021: $3,440,000).  

Page 26

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

10.


Intangible assets




Intellectual  Property
Goodwill
Total

$
$
$



Cost


At 1 September 2021
30,995,000
14,741,534
45,736,534



At 31 August 2022

30,995,000
14,741,534
45,736,534



Amortisation


At 1 September 2021
22,508,273
7,493,612
30,001,885


Charge for the year on owned assets
4,427,857
1,474,153
5,902,010



At 31 August 2022

26,936,130
8,967,765
35,903,895



Net book value



At 31 August 2022
4,058,870
5,773,769
9,832,639



At 31 August 2021
8,486,727
7,247,922
15,734,649


On 1 August 2016 the Company acquired the legal title to certain intellectual property which has a remaining useful economic life as at 31 August 2022 of 1 year. The useful life of the intellectual property is based on the expected utilisation by the Company.


Page 27

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

11.


Tangible fixed assets





Leasehold improvements
Fixtures and fittings
Computer equipment
Assets under construction
Total

$
$
$
$
$



Cost 


At 1 September 2021
1,275,957
146,623
65,743
-
1,488,323


Additions
-
-
137,065
438
137,503


Disposals
(759,178)
(122,887)
-
-
(882,065)



At 31 August 2022

516,779
23,736
202,808
438
743,761



Depreciation


At 1 September 2021
1,079,464
46,622
28,451
-
1,154,537


Charge for the year on owned assets
43,570
6,654
28,918
-
79,142


Disposals
(730,374)
(38,324)
-
-
(768,698)



At 31 August 2022

392,660
14,952
57,369
-
464,981



Net book value



At 31 August 2022
124,119
8,784
145,439
438
278,780



At 31 August 2021
196,493
100,001
37,292
-
333,786



Page 28

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

12.


Fixed asset investments





Investments in subsidiary companies

$



Cost 


At 1 September 2021
14,922,091


Additions
111,845,723



At 31 August 2022
126,767,814





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Duck Creek Technologies Pty Ltd
100, Level 35 One International Towers, Barangaroo Avenue, Sydney NSW 2000, Australia
Ordinary
100%
Duck Creek Technologies Spain, SL
Gran Via de les Corts Catalanes, 630, 08007 Barcelona, Spain
Ordinary
100%
Duck Creek Technologies India LLP
Godrej IT Park Block A, 2nd Floor, Godrej Business District, Pirojshanagar, L.B.S., LBS Rd, Vikhroli West, Mumbai, India
Ordinary
100%
Effisoft SA
6, rue Marius Aufan, 92300 Levallois-Perret, France
Ordinary
100%
Prima Solutions Belgium SA
2800 Malines, Schuttersvest, 75 Belgium
Ordinary
100%

Page 29

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

13.


Debtors

2022
2021
$
$

Due after more than one year

Other debtors
134,062
32,543

Prepayments and accrued income
-
850,122

134,062
882,665


2022
2021
$
$

Due within one year

Trade debtors
1,773,536
1,878,192

Amounts owed by group undertakings
1,122,994
102,483,162

Other debtors
159,476
28,994

Prepayments and accrued income
3,792,138
2,976,710

6,848,144
107,367,058


Amounts due are unsecured, interest free, have no fixed date of repayment and are repayable on demand.


14.


Current asset investments

2022
2021
$
$

Unlisted investments
60,466,085
-

60,466,085
-



15.


Cash and cash equivalents

2022
2021
$
$

Cash at bank and in hand
2,548,401
5,297,884


Page 30

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

16.


Creditors: Amounts falling due within one year

2022
2021
$
$

Trade creditors
2,860
48,696

Amounts owed to group undertakings
1,814,016
3,156,359

Other taxation and social security
73,692
81,130

Accruals and deferred income
1,757,440
2,009,680

3,648,008
5,295,865


Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.


17.


Creditors: Amounts falling due after more than one year

2022
2021
$
$

Amounts owed to group undertakings
75,000,000
-

Accruals and deferred income
-
125,960



18.


Provisions





Onerous lease provision

$





At 1 September 2021
624,948


Charged to profit or loss
(255,095)



At 31 August 2022
369,853

The onerous lease provision is expected to unwind over the remaining term of the lease ending in December 2024.


19.


Share capital

2022
2021
$
$
Allotted, called up and fully paid



10,004 (2021 - 10,004) Ordinary shares of £1.00 each
14,140
14,140


Page 31

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

20.


Reserves

Share premium account

The share premium account contains the premium arising on the issue of ordinary shares.

Other reserves

Other reserves represents credit to equity in respect of equity settles share based payments.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses net of distributions to owners.

Page 32

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

21.


Share-based payments

Class D Units and Phantom Units
Prior to the IPO, the parent company granted Class D incentive units (Class D Units) to certain employees and directors under the terms of Incentive Unit Award Agreements and also granted Phantom Unit incentive awards (“Phantom Units”) to certain employees of the Group's international subsidiaries (including the Company). The Phantom Units are granted in three tranches, as follows:
Class D-1 Phantom Units 80% of the Phantom Units granted
Class D-2 Phantom Units 10% of the Phantom Units granted
Class D-3 Phantom Units 10% of the Phantom Units granted
Vesting of the Class D Units was 50% time based, quarterly, over a four year period from the vesting start date, and 50% based on the date in which the Class D Units become participating units. These vesting terms applied to each of the Class D1, Class D2 and Class D3 tranches described above. Class D1 Units would become participating units upon the later of: (i) the date which aggregate distributions by the Company exceeded the minimum threshold equity value (as defined in each Incentive Unit Award Agreement), or (ii) when the total cumulative distributions made to the Class A Unit holders exceeded the aggregate investment made by the Class A Unit holders. Class D2 and D3 Units would become participating units upon the later of: (i) the date which aggregate distributions by the Company exceeded the minimum threshold equity value (as defined in each Incentive Unit Award Agreement), or (ii) when the total cumulative distributions made to the Class A Unit holders exceeded either three times (Class D2 Units) or four times (Class D3 Units) the aggregate investment made by the Class A Unit holders. The terms of the Phantom Unit awards were similar to the Class D Unit awards; however, they did not represent ownership of any class unit of the Company. The Phantom Units vested and became participating units in similar fashion to the Class D Units as described above. The holder of a vested and participating Phantom Unit was eligible to receive a distribution in the same form and consideration as a Class D Unit holder, however, only upon a change in control event. Upon receiving the distribution, the Phantom Units would cease to be outstanding. 
With respect to the Phantom Units, as a change in control event represents a contingent future event outside the control of the Company, the Company did not record any share-based compensation expense related to the Phantom Units until the contingency was resolved.
On the date of the IPO, participating D-1 Phantom units became eligible for cash settlement. Non-participating Phantom Units were cancelled and replaced with new phantom stock awards. All converted and replaced awards retained the same vesting attributes as the original Phantom Units.
Non-participating D-2 and D-3 Phantom Units were converted to phantom stock awards (“Class D Phantom Stock Awards”). The grant date fair value of Class D Phantom Stock Awards is being recorded as share-based compensation expense over the requisite service period of the awards. The Company has concluded that Class D Phantom Stock Awards should be treated as liability classified share-based compensation awards because they will be settled in cash. Accordingly, the accrued liability balance associated with Class D Phantom Stock Awards is adjusted to fair value at each reporting period through earnings.

Page 33

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

Share based payments (continued)

The Class D Phantom Stock Awards retain the vesting attributes (including original service period vesting start date) of the Phantom Units. These awards will be settled in cash equal to the fair market value of a share of the Company’s common stock, determined on the day that such award becomes fully vested.
In substitution for part of the economic benefit of the Phantom Units that was not reflected in the conversion to Class D Phantom Stock Awards, stock appreciation rights (“Leverage Restoration SARs”) were granted to holders of Phantom Units. The fair value of the Leverage Restoration SARs is being recorded as share-based compensation expense over the requisite period of the awards. The Company has concluded that the Leverage Restoration SARs should be treated as liability classified share-based compensation awards because they will be settled in cash. Accordingly, the accrued liability balance associated with Leverage Restoration SARs is adjusted to fair value at each reporting period through earnings. 
Leverage Restoration Stock Appreciation Rights (“SARs”) were granted on August 14, 2020 with an exercise price of $27.00, a ten-year contractual term and retained vesting attributes (including original service period vesting start dates) of the Phantom Units. SARs will be settled in cash equal to the excess of the fair market value of a share of the Company’s common stock, determined on the date of exercise, over the exercise price share of common stock underlying such SAR.
New Restricted Stock Awards and Restricted Stock Units
On the date of the IPO, the parent company granted Restricted Stock Units (“RSUs”) to select international employees. The RSUs represent the right to receive shares of the Company’s common stock as they vest; however, the holder of an RSU has no rights as a stockholder. These awards vest annually over a 4-year requisite service period and are settled in shares of the Company’s common stock. The Company has concluded that the RSUs should be treated as equity classified share-based compensation awards.  

Page 34

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

22.
 

Business combinations

The Company acquired Effisoft, a société par actions simplifiée incorporated under the Laws of France (Prima XL) and Prima Solutions Belgium SA, a company incorporated under the Laws of Belgium (Prima Compliance for Solvency II) on 12 July 2022.  Prima XL, Prima Solutions flagship commercial reinsurance technology solution is expected to enhance Duck Creek’s value to current and future customers by simplifying reinsurance management.
Purchase Price Allocation
The base purchase price was EUR 110,000,000 funded by cash reserves. The allocation of the purchase price to identifiable assets, liabilities, and contingent liabilities acquired is outlined in the table below:
ole0d6f.png
Goodwill
Goodwill, representing the excess of the purchase price over fair values, is attributed to expected synergies and future business opportunities. It will be subject to annual impairment testing in line with FRS 102.

Transaction Costs
Directly attributable transaction costs are expensed as incurred.
Post-Acquisition Performance
Effisoft SA and Prima Solutions Belgium SA results have been included in the consolidated financial statements from the acquisition date.
Related Party Transactions
Refer to related party transactions note.

     



 


 


Page 35

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

23.


Contingent liabilities

On 30 December 2022, the Company entered into an agreement to assign the property lease to a third party however, the Company remains guarantor for all obligations under the terms on the lease in the event of any default by the assignee.


24.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to $174,891 (2021: $178,477). Contributions totalling $30,169 (2021: $20,806) were payable to the fund at the balance sheet date and are included in creditors.


25.


Commitments under operating leases

At 31 August 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
$
$


Not later than 1 year
274,505
329,064

Later than 1 year and not later than 5 years
274,505
329,064

Later than 5 years
91,502
438,752

640,512
1,096,880




26.


Related party transactions

The Company has taken advantage of the exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the Group.
Services provided on behalf of and by Accenture
Subsequent to the acquisition of Duck Creek on 1 August 2016, the Company entered into a transition services agreement with Accenture, the sellers of Duck Creek, who have retained a minority share in the equity of Disco Topco Holdings (Cayman), L.P. Accenture provides certain professional services and software maintenance services to end customers as a subcontractor to Accenture as part of its typical revenue generating arrangements. During the period ended 31 August 2022, the Company recognised revenue of $436,891 (2021: $384,013) relating to services performed in this subcontractor capacity. As of 31 August 2022, the Company did not have outstanding accounts receivables due  relating to these services. 

Page 36

 
DUCK CREEK TECHNOLOGIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022

27.


Post balance sheet events

On 5 January 2023 the company acquired Imburse AG a payments infrastructure and orchestration business based in Switzerland. 
On 30th March 2023 the companies ultimate parent company Duck Creek Technolgies Inc was acquired by Vista Equity Partners and at that point the shares ceased to be listed on Nasdaq. 
 


28.


Controlling party

The immediate parent company is Disco Topco Holdings (Cayman), L.P., registered at Maples Corporate Services Limited, PO BOX 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
The ultimate parent company is Duck Creek Technologies, Inc., registered at 22 Boston Wharf Road, Boston, MA 02210, USA.
Duck Creek Technologies, Inc. is the smallest and largest group to consolidate these financial statements.

 

 
Page 37