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Registration number: 07496870

Zuora UK Limited

Annual Report and Financial Statements

for the Year Ended 31 January 2023

 

Zuora UK Limited

Contents

Company Information

1

Strategic Report

2 to 4

Directors' Report

5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 10

Profit and Loss Account

11

Balance Sheet

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14 to 21

 

Zuora UK Limited

Company Information

Directors

Alexander White

Margaret Thum

Matthew Dobson

Registered office

1 Dean Street
London
W1D 3RB

Auditors

KPMG
Chartered Accountants
1 Stokes Place
St Stephen's Green
Dublin 2
Ireland

 

Zuora UK Limited

Strategic Report for the Year Ended 31 January 2023

The directors present their report for the year ended 31 January 2023.

Fair review of the business

Zuora is a cloud-based subscription management platform, providing software that enables companies across multiple industries and geographies to launch, manage or transform to a subscription business model.

Designed specifically for dynamic, recurring subscription business models, our cloud-based software functions as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-revenue process, including billing and revenue recognition. The solution enables businesses to easily change pricing and packaging for products and services to grow and scale, lo efficiently comply with revenue recognition standards, and to build meaningful relationships with their subscribers.

Our 6 key products are Zuora Billing, Zuora Revenue, CPQ, Collect, Marketplace & Zephr.

Our offerings have competitive advantages enabling us to maintain and extend our leadership in the market, through:

- Solutions that are built specifically to handle subscription business models
- Flexible technology with a broad range of customers and use cases
- Deep domain expertise across a broad range of subscription business models

The results for the year and financial position of the Company are as shown in the annexed financial statements.

The company continues to grow and perform as per business forecasts both as an individual entity and exceeding expectations & targets as a subsidiary of Zuora Inc.
 

 

Zuora UK Limited

Strategic Report for the Year Ended 31 January 2023

Future developments

Subscription business models are inherently dynamic, with multiple interactions and constantly changing relationships and events. The capabilities to launch, price, and bill for products, facilitate and record cash receipts, process and recognize revenue, and produce the data required to close their books and drive key decisions are mission critical and particularly complex for companies with subscription business models. As a result, as companies launch or grow a subscription business, they often conclude that legacy systems arc inadequate.

Key elements of our growth strategy include:

• New Customer Acquisition
• Expand Relationships with existing customers
• Enter new vertical markets
- Expand our global footprint
- Leverage global system Integrators
- Launch new products and extend our Technology lead

We also intend to optimize pricing and packaging ·throughout the above to align the value customers realize from our products with the revenue we receive. We continue to experience rapid growth in our operations and personnel over this year. This growth and expansion of our business has placed and continues to place a significant strain on our management, operations, financial infrastructure, and corporate culture. In the event of further growth of our operations or in the number of our third-party relationships, our information technology systems and our internal controls and procedures may not be adequate to support our operations. To manage growth in our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures, all of which are underway.
 

 

Zuora UK Limited

Strategic Report for the Year Ended 31 January 2023

Principal risks and uncertainties

Political developments, economic uncertainty or downturns, particularly as it impacts particular industries, could adversely affect our business and operating results.

Political developments impacting government spending and international trade, including government shutdowns in the United States, continued uncertainty surrounding the United Kingdom's departure from the European Union and trade disputes and harm, may negatively impact markets and cause weaker macroeconomic conditions.

The effects of these events may continue due to potential additional U.S. government shutdowns, instability in the United Kingdom and the European Union as the terms of Brexit remain under negotiation and the prolonging of the United States' trade disputes with China and other countries. The continuing effect of any or all of these events could adversely impact demand for our products, harm our operations and weaken our financial results.

In recent years, the United Kingdom and other significant markets have experienced cyclical downturns and worldwide economic conditions ·remain uncertain. Economic uncertainty and associated macroeconomic conditions make it extremely difficult for our customers and us to accurately forecast and plan future business activities and could cause our customers to slow spending on our solution, which could delay and lengthen sales cycles. Furthermore, during uncertain economic times our customers may face issues gaining timely access to sufficient credit, which could result in an impairment of their ability to make timely payments to us. If that were to occur, we may be required to increase our allowance for doubtful accounts and our results could be negatively impacted.

Furthermore, we have customers in a variety of different industries. A significant downturn in the economic activity attributable to any industry, including, but not limited to, the retail and financial industries, may cause
organizations to react by reducing their capital and operating expenditures in general or by specifically reducing their spending on information technology. In addition, our customers may delay or cancel information technology projects or seek to lower their costs by renegotiating vendor contracts. To the extent purchases of our solution are perceived by customers and potential customers to be discretionary, our revenue may be disproportionately affected by delays or reductions in general information technology spending. Also, customers may choose to develop in-house software or modify their legacy business software as an alternative to using our solution. Moreover, competitors may respond to challenging market conditions by lowering prices and attempting to lure away our customers.

We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally, or any industry. If the conditions in the general economy and the markets in which we operate worsen from present levels, our business, financial condition, and operating results could be materially adversely affected.

Approved by the board on 24 October 2023 and signed on its behalf by:
 

.........................................
Alexander White
Director

 

Zuora UK Limited

Directors' Report for the Year Ended 31 January 2023

The directors present their report and the financial statements for the year ended 31 January 2023.

Directors' of the company

The directors, who held office during the year, were as follows:

Andrew Cohen (appointed 14 February 2022 and ceased 16 March 2023)

Todd McElhatton (ceased 16 March 2023)

Jennifer Pileggi (ceased 11 February 2022)

Alexander White

The following directors were appointed after the year end:

Margaret Thum (appointed 16 March 2023)

Matthew Dobson (appointed 16 March 2023)

Principal activity

The principal activity of the company is providing a cloud-based subscription management platform through four key products; the platform itself, Billing, Revenue & Collect.

Political donations

The Company made no political donations during the year.

Research and development

Zuora UK employs three dedicated heads for Research & Development to continuously improve and develop the Subscription software platform, customer sandbox and project environments which can be brought into use and monetised accordingly.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved by the board on 24 October 2023 and signed on its behalf by:
 

.........................................
Alexander White
Director

 

Zuora UK Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual 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 United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 'Reduced Disclosure Framework' ('FRS 101'). 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 apply them consistently;

make judgements 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; and

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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Zuora UK Limited

Independent Auditor's Report to the Members of Zuora UK Limited

Opinion

We have audited the financial statements of Zuora UK Ltd. (‘the Company’) for the year ended 31 January 2023 set out on pages 11 to 22, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and related notes, including the summary of significant accounting policies set out in note 1.The financial reporting framework that has been applied in their preparation is UK Law and FRS 101 Reduced Disclosure Framework.

In our opinion:

the financial statements give a true and fair view of the state of the Company’s affairs as at 31 January 2023 and of its profit for the period then ended;

the financial statements have been properly prepared in accordance with FRS 101 Reduced Disclosure Framework issued by the UK’s Financial Reporting Council; and

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with ethical requirements that are relevant to our audit of financial statements in the UK, including the Financial Reporting Council (FRC)’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
 

Conclusions relating to 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.

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 the date 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

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 absence of reference to a material uncertainty in this auditor's report is not a guarantee that the Company will continue in operation.

 

Zuora UK Limited

Independent Auditor's Report to the Members of Zuora UK Limited

Detecting irregularities including fraud

We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and risks of material misstatement due to fraud, using our understanding of the entity's industry, regulatory environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures included: inquiring with the directors as to the Company’s policies and procedures regarding compliance with laws and regulations and prevention and detection of fraud; inquiring whether the directors have knowledge of any actual or suspected non-compliance with laws or regulations or alleged fraud; inspecting the Company’s regulatory and legal correspondence; and reading Board minutes.

We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.

The Company is subject to laws and regulations that directly affect the financial statements including companies and financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items, including assessing the financial statement disclosures and agreeing them to supporting documentation when necessary.

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. We identified the following areas as those most likely to have such an effect: health and safety, employment law and environmental law.

Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations to inquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.

We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. As required by auditing standards, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition. We did not identify any additional fraud risks.

In response to risk of fraud, we also performed procedures including: identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation; assessing significant accounting estimates for bias; and assessing the disclosures in the financial statements.

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 (irregularities) 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 remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Other information

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the strategic report and the directors’ report. The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

 

Zuora UK Limited

Independent Auditor's Report to the Members of Zuora UK Limited

Our responsibility is to read the other information 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 other information.

Opinion on other matter prescribed by the Companies Act 2006

Based solely on our work on the other information undertaken during the course of the audit:

we have not identified material misstatements in the directors' report or the strategic report;

in our opinion, the information given in the directors’ report and the strategic report is consistent with the financial statements;

in our opinion, the directors’ report and the strategic report 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; or

the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.

We have nothing to report in these respects.

Respective responsibilities and restrictions on use

Responsibilities of directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 6, the directors are responsible for: the preparation of the financial statements including 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.

Auditor 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, other irregularities or error, and to issue an opinion in an auditor’s report. 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, other irregularities 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.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
 

 

Zuora UK Limited

Independent Auditor's Report to the Members of Zuora UK Limited

The purpose of our audit work and to whom we owe our responsibilities

Our 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.

......................................
Maurice McCann (Senior Statutory Auditor)
For and on behalf of KPMG, Statutory Auditor

1 Stokes Place
St Stephen's Green
Dublin 2

25 October 2023

 

Zuora UK Limited

Profit and Loss Account for the Year Ended 31 January 2023

Note

2023
£

2022
£

Turnover

3

26,053,558

19,178,957

Administrative expenses

 

(22,054,453)

(20,892,127)

Operating profit/(loss)

4

3,999,105

(1,713,170)

Interest payable and similar expenses

(23,643)

(61,145)

 

(23,643)

(61,145)

Profit/(loss) before tax

 

3,975,462

(1,774,315)

Tax on profit/(loss)

8

(251,646)

(1,076,154)

Profit/(loss) for the year

 

3,723,816

(2,850,469)

The above results were derived from continuing operations.

 

Zuora UK Limited

(Registration number: 07496870)
Balance Sheet as at 31 January 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

9

554,166

1,296,792

Investments

10

818,836

35,665

 

1,373,002

1,332,457

Current assets

 

Trade and other debtors

11

87,844,362

66,110,839

Cash at bank and in hand

12

459,475

293,745

Corporation tax

 

-

405,883

 

88,303,837

66,810,467

Creditors: Amounts falling due within one year

13

(89,587,558)

(66,477,008)

Net current (liabilities)/assets

 

(1,283,721)

333,459

Total assets less current liabilities

 

89,281

1,665,916

Creditors: Amounts falling due after more than one year

14

(144,164)

(203,817)

Net (liabilities)/assets

 

(54,883)

1,462,099

Capital and reserves

 

Called up share capital

16

100

100

Other reserves

 

-

5,240,797

Retained earnings

 

(54,983)

(3,778,798)

Shareholders' (deficit)/funds

 

(54,883)

1,462,099

Approved by the board on 24 October 2023 and signed on its behalf by:
 

.........................................
Alexander White
Director

 

Zuora UK Limited

Statement of Changes in Equity for the Year Ended 31 January 2023

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 February 2022

100

5,240,797

(3,778,799)

1,462,098

Profit for the year

-

-

3,723,816

3,723,816

Total comprehensive income

-

-

3,723,816

3,723,816

Share based payment transactions

-

(5,240,797)

-

(5,240,797)

At 31 January 2023

100

-

(54,983)

(54,883)

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 February 2021

100

2,549,720

(928,329)

1,621,491

Loss for the year

-

-

(2,850,469)

(2,850,469)

Total comprehensive income

-

-

(2,850,469)

(2,850,469)

Share based payment transactions

-

2,691,077

-

2,691,077

At 31 January 2022

100

5,240,797

(3,778,798)

1,462,099

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

1

General information

The company is a private company limited by share capital, incorporated and domiciled in England.

The address of its registered office is:
1 Dean Street
London
W1D 3RB
England

These financial statements were authorised for issue by the board on 24 October 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework.

The financial statements are presented in Sterling.

Summary of disclosure exemptions

The Company’s ultimate parent undertaking, Zuora Inc includes the Company in its consolidated financial statements. The consolidated financial statements of Zuora Inc are prepared in accordance with US GAAP and are available to the public and may be obtained from 3050 South Delaware Street, Suite 301, San Mateo, California, USA. In these financial statements, the Company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 101 in respect of the following disclosures:

• Cash Flow Statement and related notes; and
• Key Management Personnel compensation.

As the consolidated financial statements of the ultimate parent undertaking include the disclosures equivalent to those required by FRS 101, the Company has also taken the exemptions available in respect of the following disclosures:

• Certain disclosures required by FRS 101 Share-based Payments;
 

Changes in accounting policy

None of the standards, interpretations and amendments effective for the first time from 1 February 2022 have had a material effect on the financial statements.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes and other taxes. Revenue is attributable to one principle activity of the company, being recharged costs.

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Tax

A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets is stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Long leasehold

in accordance with the term of the lease

Improvements to property

in accordance with the term of the lease

Fixtures, fittings and computer equipment

Straight line over three years

Investments

Investments in subsidiaries, associates and joint ventures are measured at cost.

Financial Instruments
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and IFRS 7 'Financial Instruments ' of FRS 101 to all its financial instruments.

Financial Instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction.

At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at
the date of the transaction. All differences are charged to profit or loss.

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Borrowings

All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Provisions

Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably.

Leases

Assets obtained under hire purchase contracts or leases are capitalised on the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the profit and loss account over the relevant period. The capital element of the future payments is treated as a liability.

Defined contribution pension obligation

Contributions to defined contribution plans are expensed in the period to which they relate

Share based payments

The fair value of employee and director stock option compensation awards, including purchase rights issued under ESPP, is based on the awards estimated fair value on the date of grant. Expense associated with these awards is recognised using the straight-line attribution method over the requisite service period for stock options, RSUs and restricted stock; and over the offering period for the purchase rights issued under the ESPP, and is reported in the statement of comprehensive income.

The fair value of the stock options, and purchase rights under the ESPP, is estimated using the Black- Scholes option-pricing model. The resulting fair value, net of estimated forfeitures, is recognised on a straight-line basis over the period during which an employee is required to provide service in exchange for the reward. Stock options generally vest over two to four years and have a contractual term of ten years. ESPP purchase rights generally vest over the two-year offering period.

The fair value of restricted stock and RSU grants is based on the grant date fair value of the parent company's common stock. The resulting fair value, net of estimated forfeitures, is to recognise on a straight-line basis over the period during which an employee is required service in exchange for the reward, which is generally three to four years. Estimated forfeitures are based upon experience and estimates are revised, if necessary, in subsequent periods if actuall forfeitures differ from initial estimates.

The services received and a liability to pay for those services are recognised over the expected vesting period. Until the liability is settled it is measured at each reporting date with changes in fair value recognised in the statement of comprehensive income.

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

3

Turnover

The analysis of the company's turnover for the year from continuing operations is as follows:

2023
£

2022
£

Rendering of services

26,053,558

19,178,957

The directors have not disclosed revenue to third parties disaggregated by geographical location as in the opinion of the directors such disclosure would be seriously prejudicial to the interests of the group.

4

Operating profit/(loss)

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

1,010,890

1,025,695

Foreign currency (gains)/losses

(1,771)

1,121,135

5

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

16,190,220

14,257,978

Social security costs

1,601,449

1,687,669

Pension costs, defined contribution scheme

634,013

339,206

18,425,682

16,284,853

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Administration and support

19

16

Research and development

5

3

Sales, marketing and distribution

9

9

Sales

46

31

Marketing

6

6

Other departments

22

19

107

84

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

6

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

229,239

210,643

Contributions paid to money purchase schemes

7,066

6,770

236,305

217,413

7

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

27,500

27,500


 

8

Income tax

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

256,397

-

Deferred taxation

Arising from origination and reversal of temporary differences

(4,751)

1,076,154

Tax expense in the profit and loss account

251,646

1,076,154

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 25% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit/(loss) before tax

3,975,462

(1,774,315)

Corporation tax at standard rate

755,338

(337,120)

(Decrease)/increase from effect of capital allowances depreciation

(24,844)

10,134

Increase from effect of expenses not deductible in determining taxable profit (tax loss)

35,724

20,925

(Increase)/decrease from tax losses for which no deferred tax asset was recognised

(4,751)

1,076,154

(Decrease)/increase from effect of unrelieved tax losses carried forward

(392,593)

301,969

(Decrease)/increase from effect of exercise employee share options

(117,228)

4,092

Total tax charge

251,646

1,076,154

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

9

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
£

Improvements to property
£

Total
£

Cost or valuation

At 1 February 2022

2,165,532

1,147,763

950,887

4,264,182

Additions

5,754

262,510

-

268,264

At 31 January 2023

2,171,286

1,410,273

950,887

4,532,446

Depreciation

At 1 February 2022

1,302,254

982,649

682,487

2,967,390

Charge for the year

688,763

131,950

190,177

1,010,890

At 31 January 2023

1,991,017

1,114,599

872,664

3,978,280

Carrying amount

At 31 January 2023

180,269

295,674

78,223

554,166

At 31 January 2022

863,278

165,114

268,400

1,296,792

The net book value of property, plant and equipment includes £180,269 in respect of assets held under finance leases

10

Investments

Subsidiaries

£

Cost or valuation

At 1 February 2022

35,665

Additions

783,171

At 31 January 2023

818,836

Carrying amount

At 31 January 2023

818,836

Details of the subsidiaries as at 31 January 2023 are as follows:

Name of subsidiary
 


 


 

Holding
 

Proportion of ownership interest and voting rights held
2023

2022

Zuora Sweden AB

Ordinary

100%

100%

Zuora Italia SRL

Ordinary

100%

100%

Zuora Germany GmbH

Ordinary

100%

100%

Zephr Inc Limited

Ordinary

100%

0%

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Zuora UK Limited holds 100% of the share capital in overseas subsidiaries: Zuora Sweden AB, Zuora Italia SRL and Zuora Germany GmbH.

On 2 September 2022 Zuora UK Limited purchased 100% of the shares of Zephr Inc Limited for £41,516,408 and subsequently disposed of component parts of the investment to its parent, Zuora Inc on the same day for £40,733,238. The remaining investment relates to the elements of Zephr that are specific to the UK.
 

The Directors, in preparing these financial statements have complied with the Companies Act 2006. The Company is 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 International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). The Company's ultimate parent undertaking is in the US, The consolidated financial statements of Zuora Inc are prepared in accordance with US GAAP and are available to the public and may be obtained from 101 Redwood Shores Parkway, Redwood City, CA 94065, USA.

11

Trade and other debtors

Trade and other debtors falling due within one year

2023
£

2022
£

Trade debtors from related parties

85,310,097

64,338,635

Prepayments

221,356

202,170

Other trade debtors

1,537,259

1,327,820

VAT Control account

770,899

242,214

Deferred tax assets

4,751

-

87,844,362

66,110,839

Other trade debtors includes a long term debtor of £1,316,205 (2022 £1,316,205)

12

Cash at bank and in hand

2023
£

2022
£

Cash at bank

459,475

293,745

13

Creditors: amounts falling due within one year

2023
£

2022
£

Trade creditors

60,260

86,654

Accrued expenses

1,611,918

1,416,425

Amounts due to related parties

86,612,942

62,511,695

Social security and other taxes

736,856

1,321,880

Other trade creditors

245,318

283,490

Income tax liability

260,613

-

Obligations under leases and hire purchase contracts

59,651

856,864

89,587,558

66,477,008

 

Zuora UK Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

14

Creditors: amounts falling due after more than one year

2023
£

2022
£

Obligations under leases and hire purchase contracts

-

59,652

Other non-current financial liabilities

144,164

144,165

144,164

203,817

15

Obligations under leases and hire purchase contracts

2,023

2,022

Amounts payable

£

£

Within one year

59,653

856,864

Within two to five years

-

59,653

59,653

203,817

16

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary Shares of £1 each

100

100

100

100

         

17

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £634,012 (2022 - £339,206).

18

Related party transactions

The company has taken advantage of exemption under the terms of Financial Reporting Standard 101 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned companies within the Group

19

Parent and ultimate parent undertaking

The immediate parent undertaking and ultimate holding company is Zuora Inc, with registered office address 3050 South Delaware Street, Suite 301, San Mateo, California, United States of America. The consolidated financial statements include the results of the company and are available at 101 Redwood Shores Parkway, Redwood City, CA 94065, USA.