Company registration number 03917515 (England and Wales)
ANSYS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ANSYS UK LIMITED
COMPANY INFORMATION
Directors
R A Belcher
F Vogel
Secretary
PITSEC Limited
Company number
03917515
Registered office
3 St Paul's Place
129 Norfolk Street
Sheffield
S1 2JE
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
ANSYS UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15 - 34
ANSYS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Principal activities
ANSYS UK Limited develops and markets engineering simulation software and services widely used by engineers and designers across a broad spectrum of industries, including aerospace, automotive, manufacturing, electronics, biomedical and professional sports.
Review of the business
During the year ANSYS UK Limited, in collaboration with the entire ANSYS, Inc. group, continued to invest in research and development. This has resulted in new releases of the company's products. The Directors regard investment in research and development as necessary for continuing success in the medium to long term future, and continue to work on behalf of ANSYS Inc. in this area.
On 15th June 2023, it was approved via resolution to transfer £50,000,000 from the Share Premium account to Retained Earnings to create distributable reserves.
A dividend of £20,504,714 was received on 19th June 2023 from ANSYS France SAS. This amount was then paid out as a dividend to ANSYS Luxumbourg S.à.r.l on 19th June 2023.
Ansys UK Limited purchased Ansys MEA FZ-LLC, a 100% owned direct subsidiary of the company for £810,795.
On 8th December 2023, it was approved via resolution that £160,994,072 would be transferred out of the Share Premium account and put into the Profit and Loss reserve. On the same day, it was also approved via resolution to reduce the share capital of the company from £9,900,022 (9,900,022 ordinary shares of £1 each), to £9,998 (9,998 ordinary shares at £1 each).
On 18th December 2023, Ansys Germany and Ansys France were disposed of at combined gain of £757,532,014. On 18th December 2023, dividends were paid out via promissory notes to Ansys Luxumbourg S.à.r.l for £575,315,025 and £343,211,076 (in relation to the group restructuring work involving Ansys Germany and Ansys France). Both these entities are now direct subsidiaries of Ansys Luxumbourg S.à.r.l.
Ansys UK Limited purchased 100% of the share capital of Onscale Ltd on 31st December 2023 from ANSYS Luxumbourg Holding Company S.à.r.l for consideration of 1 share for a value for £1 and £2,992,661 of share premium. On 31st December 2023, the assets and liabilities of Onscale Ltd were hived into Ansys UK Limited, by way of an intercompany creditor of £919,461. Further details on the hive up can be seen in Note 18.
As shown in the company's profit and loss account on page 12, the company's turnover was £77,193,333 (2022: £62,654,773) and profit after tax was £767,541,380 (2022: £3,089,105). Dividends of £20,504,714 (2022: £14,163,672) were received during the year. Dividends of £939,030,815 (2022: £12,945,836) were paid out.
The balance sheet on page 13 of the financial statements shows that the company's net asset position at the year-end has decreased from £294,920,693 to £127,107,258, mainly due to the restructuring process of the disposal of both ANSYS France SAS and ANSYS Germany GmbH as a direct subsidiaries of Ansys UK Limited, which has seen investments reduced by £160,183,278.
Management measure the performance of the company by looking at various indicators which include:
The change in software turnover
The mix of license types sold
The number of license seats held and supported
The number of customer support calls received and actioned
The number of bugs reported by customers
ANSYS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The Directors believe the blend of revenues continues to be appropriate to allow the Company to achieve its targets and to place it in a strong financial position, with net assets of £127,107,258 (2022: £294,920,693).
Turnover in the year (£77,193,333) was higher than in 2022 (£62,654,773). License revenue increased to £20,498,584 (2022: £13,737,124), service revenue increased to £26,723,803 (2022: £25,017,657) and intercompany sales increased to £29,971,036 (2022: £23,899,992). This year, the Company was in a profit position after tax of £767,541,380 (2022: £3,089,105). This is mainly due to the gain on disposal of investments of ANSYS France SAS and ANSYS Germany GmbH of £757,532,014.
Future Developments
Despite the current economic climate, the Directors believe that the company will see revenue growth in 2024. The company is continuing to invest in a change of go to market model, increasing indirect sales handled by Channel Partners and focusing direct sales at a more strategic level, with multi-year contracts securing the longer-term future revenues.
Principal risks and uncertainties
The company continues to be the dominant provider of tools in the Computer Aided Engineering (CAE) Simulation market. Competitive pressure still exists and there is a risk that the company could lose sales to one of the other players in the market. The company manages this risk by providing high quality, unlimited support; investing heavily in research and development (as a Group) and by working directly with customers to understand their current needs and future strategic plans. The year under review saw new software releases which continue to enhance the ease of use, speed and accuracy of the company's various software bundles.
The Directors believe that the Company has a positive credit rating and low financial liquidity risk given the Company has no external loans and has intercompany financing arrangements with fellow undertaking in the group. The Directors have considered the customer credit risk, and believe that as a result of robust Credit Control procedures, and no reliance on an individual customer, that this risk is low. The majority of the current liabilities are deferred revenues which will amortise over 2024 and as such the Directors are confident that the company has sufficient liquidity to maintain the going concern of the company.
The company mainly invoices its customers in GBP, but does have some sales in EUR and USD and these non GBP sales are exposed to the movement of the relative exchange rates. Likewise, a proportion of the company's costs are denominated in USD. The company minimises this risk as much as possible by managing its foreign currency bank deposit balances.
The Directors believe the direct, short to medium term, impact to the company as being within normal management tolerances. Only a small proportion of the company’s customers reside outside of the UK, while the majority of the company’s expenses are UK based employment costs and royalties payable to the USA.
Any longer term impact will be influenced by the impact on the macro UK economy of operating outside of the EU.
Group risks are discussed in the ANSYS, Inc. annual report which does not form part of this report.
ANSYS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Section 172(1) statement
In line with their duties under s172 of the Companies Act 2006, the Board of Directors act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole.
In doing so they have regard to a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the Company are appropriately informed by s172 factors.
The company's employees are considered to be fundamental to the delivery of our long-term plan and this is considered further in the Director's report. Our employees are considered to be one of our main assets.
The Company recognises the importance of maintaining strong relationships with its stakeholders in order to create sustainable long term value, and the Board encourages active dialogue and transparency with its stakeholder groups, particularly its customers, suppliers and the ultimate parent company, ANSYS Inc. As a subsidiary of a US registered company listed on NASDAQ, our results form part of the quarterly reports to the Stock Exchange and our long-term goals and strategy are fully aligned with that reporting.
The directors have considered the impact of the company's operations on the communities and the environment and believe that as a business operating online, that this impact is minimal. The company is looking to move to renewable energy sources where possible and are actively managing waste recycling from the offices. We offer and promote the cycle to work scheme at each of our offices. The company also introduced an electric car leasing scheme from Q3 2023.
The company recognises the importance of maintaining a reputation for a high standard of business conduct, by promoting the organisations values, culture and ethical standards at all times. Our core values are at the heart of all strategic plans.
We actively promote diversity and inclusivity through a programme of training and mentoring.
R A Belcher
Director
25 September 2024
ANSYS UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 12.
Ordinary dividends were paid amounting to £939,030,815. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R A Belcher
F Vogel
Environment
The company recognised the importance of its environmental responsibilities. Though not a direct producer of harmful emissions or waste products, the company implemented initiatives designed to minimise the company's impact on the environment which included improving our energy use efficiency and the recycling of equipment, consumables and paper.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee consultation
The company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on various factors affecting the performance of the Company. This is achieved through formal and informal meetings and the annual financial statements. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.
Post reporting date events
Acquisition of Ansys Japan KK
Ansys UK Limited purchased 100% of the share capital of Ansys Japan KK on 2nd January 2024 from ANSYS Luxembourg Holding Company SARL for consideration of 1 share for a value of £1 and £168,316,112 of share premium.
Synopsys merger
On January 15, 2024, Ansys, Inc., the ultimate controlling party of Ansys UK Limited, entered into an Agreement and Plan of Merger with Synopsys, Inc., a Delaware corporation, and ALTA Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Synopsys, Inc.
The Merger Agreement provides for the merger of Merger Sub with and into Ansys, Inc., with Ansys, Inc. surviving the merger as a wholly owned subsidiary of Synopsys.
The completion of the Merger is subject to customary closing conditions, however Ansys, Inc. anticipate the transaction to close in the first half of 2025.
ANSYS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Auditor
In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
The company has followed the 2019 HM Government Environmental Reporting Guidlines. The company has also used the GHG Reporting Protocol - Corporate Standard and have used the 2023 UK Government's Conversion Factors for Company Reporting.
GHG Emissions and Energy Usage
The total emissions from combustion ofGHGs for the firm are as follows:
GHG emissions and energy usage data:
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
798,029
2,002,678
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
-
- Fuel consumed for owned transport
-
-
-
-
Scope 2 - indirect emissions
- Electricity purchased
165.00
387.00
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
40.00
31.00
Total gross emissions
205.00
418.00
Intensity ratio
Tonnes of CO2e per £m of turnover
2.53
6.74
ANSYS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Quantification and reporting methodology
The reporting boundary used for collation of the above data is actual energy consumption and business mileage claimed. We have followed the 2023 UK Government environmental reporting guidance.
We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and emission factors from the UK Government's GHG Conversion Factors for Reporting 2023 to calculate the above disclosures.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m of turnover, the recommended ratio for the sector.
Measures taken to improve energy efficiency
| | | |
| | | Partial success - ongoing |
Increase recycling in offices | | | |
Promote Cycle to Work scheme | | | |
| | | |
Energy supply - All our offices are looking to improve on the percentage of green energy from our suppliers. This will continue over the coming years.
Increase proportion of waste recycling - Increase our office recycling programs, introduce centralised recycling bins. Reduce the amount of waste coming into our office. This will continue over the coming years.
Cycle to Work Scheme actively promoted in all our offices.
Electric car scheme started during 2023. Actively promoted in all our offices.
During May 2022, an Ansys online series titled "Earth Rescue - Fighting Against Climate Change Using Simulation" was launched. This series highlights what visionary companies are doing today to engineer radical new ideas in the fight against climate change via the use of simulation. New episodes and resources continue to be added. More information can be found at www.ansys.com/earth-rescue.
Energy consumption used has decreased significantly to last year. The main reason for this is that the part of the servers have moved to a different country following the reduction of office space at the Cambridge office. Business mileage has increased slightly now that travel has fully opened following the Covid-19 pandemic. Many meetings however, are still being held remotely where possible
Principal activity, indication of future developments, review of the business and strategies for management of financial risk
As permitted by section 414 of the Companies Act 2006, this information is presented in the Strategic Report on pages 1 to 3.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
ANSYS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
Research and development
The company undertook research and development and contributed to research and development carried out by the ANSYS, Inc. group. This allows an annual major update release of our existing products and the development of new ones.
Going concern
After making enquiries, the Board of Directors has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future even after considering the uncertainties that exist in the current economic environment. The Directors have considered the availabiiity of financing, the fact the company is profitable, generates positive cashtlows and the forecast trading of the business. A new transfer pricing regime was initiated from the beginning of 2020, automating the lntercompany transactions. Entities are automatically compensated for work for other group companies, and royalty charges apportioned from the IP holding companies. Embedded into this transfer pricing model is support to ensure that the subsidiary entities all achieve a minimum profit margin. Thus the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The impact of the general increase in cost inflation is not expected to be significant given that our main resource is labour and the current hybrid working patterns will mitigate some of the increasing costs. The increase in travel costs will be managed by conducting virtual meetings wherever possible.
On behalf of the board
R A Belcher
Director
25 September 2024
ANSYS UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
The directors are responsible 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 Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and 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 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.
ANSYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ANSYS UK LIMITED
- 9 -
Opinion
We have audited the financial statements of Ansys UK Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit 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.
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 UK, including the 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
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.
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 report. Our 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ANSYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ANSYS UK LIMITED (CONTINUED)
- 10 -
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 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, 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.
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 gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of company minutes and legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ANSYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ANSYS UK LIMITED (CONTINUED)
- 11 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jamie Williams
Senior Statutory Auditor
For and on behalf of BHP LLP
25 September 2024
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
ANSYS UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£'000
£'000
Turnover
3
77,193
62,655
Cost of sales
(35,116)
(26,168)
Gross profit
42,077
36,487
Administrative expenses
(49,366)
(45,731)
Operating loss
4
(7,289)
(9,244)
Interest receivable and similar income
8
21,299
14,327
Interest payable and similar expenses
9
(20)
Other gains/(losses)
10
756,613
(1,218)
Profit before taxation
770,603
3,865
Tax on profit
11
(3,062)
(776)
Profit for the financial year
767,541
3,089
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ANSYS UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Goodwill
14
91,145
109,868
Tangible assets
15
2,004
2,355
Investments
16
1,739
161,922
94,888
274,145
Current assets
Debtors
19
40,534
34,325
Cash at bank and in hand
32,452
18,577
72,986
52,902
Creditors: amounts falling due within one year
20
(39,247)
(27,089)
Net current assets
33,739
25,813
Total assets less current liabilities
128,627
299,958
Creditors: amounts falling due after more than one year
21
(1,519)
(5,037)
Net assets
127,108
294,921
Capital and reserves
Called up share capital
26
10
9,900
Share premium account
85,476
293,477
Profit and loss reserves
41,622
(8,456)
Total equity
127,108
294,921
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
R A Belcher
Director
Company registration number 03917515 (England and Wales)
ANSYS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 January 2022
9,900
287,447
5,476
302,823
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
3,089
3,089
Issue of share capital
26
6,030
-
6,030
Dividends
12
-
-
(12,946)
(12,946)
Group share option charges
25
-
-
(4,075)
(4,075)
Balance at 31 December 2022
9,900
293,477
(8,456)
294,921
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
767,541
767,541
Issue of share capital
26
2,993
-
2,993
Dividends
12
-
-
(939,031)
(939,031)
Group share option charges
25
-
-
684
684
Reduction of shares
26
(9,890)
(210,994)
220,884
Balance at 31 December 2023
10
85,476
41,622
127,108
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information
Ansys UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3 St Paul's Place, 129 Norfolk Street, Sheffield, S1 2JE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of ANSYS Inc, a company incorporated in the United States of America. These consolidated financial statements are available from its registered office, Southpointe 2600 ANSYS Drive Canonsburg, PA 15317 United States.
1.2
Going concern
After making enquiries, the Board of Directors has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future even after considering the uncertainties that exist in the current economic environment. The Directors have considered the availabiiity of financing, the fact the company is profitable, generates positive cashtlows and the forecast trading of the business. A new transfer pricing regime was initiated from the beginning of 2020, automating the lntercompany transactions. Entities are automatically compensated for work for other group companies, and royalty charges apportioned from the IP holding companies. Embedded into this transfer pricing model is support to ensure that the subsidiary entities all achieve a minimum profit margin. Thus the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.true
The impact of the general increase in cost inflation is not expected to be significant given that our main resource is labour and the current hybrid working patterns will mitigate some of the increasing costs. The increase in travel costs will be managed by conducting virtual meetings wherever possible.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Turnover
Turnover is derived principally from the licensing of computer software products and from related software maintenance contracts. All turnover is stated net of VAT and trade discounts.
Revenue Recognition
The company has adopted a framework which allows the separate performance obligations of lease contracts, being the provision of the licence key and the provision of maintenance services, to be separately identified and valued on a reliable basis. Whilst FRS 102 provides limited guidance on when or how to identify whether a transaction consists of separately identifiable components or how to allocate revenue to any separately identified components, the directors consider that this framework determined by their parent company provides a more faithful representation of the commercial substance of the transactions to be recognised in the financial statements. Splitting the two components of the contract and recognising the revenue for the provision of the licence key at a point in time, being the date on which the key is provided to the customer and recognising the revenue for the provision of maintenance over the life of the lease.
Revenue from training, support and other services is recognised as the services are performed. For contracts in which the service consists of a single performance obligation, such as providing a training class to a customer, the Company recognises revenue upon completion of the performance obligation. For service contracts that are longer in duration and often include multiple performance obligations (for example, both training and consulting), the Company measures the progress toward completion of the obligations and recognises revenue accordingly. In measuring progress towards the completion of performance obligations, the Company typically utilises output-based estimates for services with contractual billing arrangements that are not based on time and materials, and estimates output based on the total tasks completed as compared to the total tasks required for each work contract. Input-based estimates are utilised for services that involve general consultations with contractual billing arrangements based on time and materials, utilising direct labour as the input measure.
The Company also executes arrangements through independent channel partners in which the channel partners are authorised to market and distribute the Company's software products to end users of the Company's products and services in specified territories. In sales facilitated by channel partners, the channel partner bears the risk of collection from the end-user customer. The Company recognises revenue from transactions with channel partners at a point in time or over time as appropriate when the channel partner submits a purchase commitment, collectability from the channel partner is probable, a license agreement signed by the end-user customer is received and the performance obligation was met. Revenue from channel partner transactions is the amount remitted to the Company by the channel partners. This amount includes a fee for Post Contractual Support (PCS) that is compensation for providing technical enhancements and the second level of technical support to the end user, which is recognised over the period that PCS is to be provided. The Company does not offer right of return, product rotation or price protection to any of its channel partners.
Non-income related taxes collected from customers and remitted to governmental authorities are recorded on the balance sheet as accounts receivable and accrued expenses. The collection and payment of these amounts are reported on a net basis in the Profit and Loss account and do not impact reported revenues or expenses.
The Company warrants to its customers that its software will perform substantially as specified in the Company's current user manuals. The Company has not experienced significant claims related to software warranties beyond the scope of maintenance support, which the Company is already obligated to provide. The warranty is not sold, and cannot be purchased, separately. The warranty does not provide any type of additional service to the customer or performance obligation for the Company.
The Company's agreements with its customers generally require it to indemnify the customer against claims that the Company's software infringes third-party patent, copyright, trademark or other proprietary rights. Such indemnification obligations are generally limited in a variety of industry-standard respects, including the Company's right to replace an infringing product. As of 31 December 2023, the Company had not experienced any losses related to these indemnification obligations and no claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations, and, consequently, the Company has not established any related reserves.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Significant Judgments with respect to Revenue Recognition
The Company's contracts with customers typically include promises to transfer licenses and services to a customer. Judgment is required to determine if the promises are separate performance obligations, and if so, the allocation of the transaction price to each performance obligation. The Company uses the estimated standalone selling price method to allocate the transaction price for items that are not sold separately, particularly lease licenses sold with PCS. The estimated standalone selling price is determined using all information reasonably available to the Company, including market conditions and other observable inputs. The corresponding revenues are recognised as the related performance obligations are satisfied.
Interest Income
Interest income is recognised on a time-proportion basis using the effective interest method.
Dividend Income
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably).
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 7 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
10% Straight Line
Plant and Machinery
25% Straight Line
Furniture
14% Straight Line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Share-based payments
The company provides some employees of the company with the ability to purchase the ultimate holding company's ordinary shares at the current market value of the ordinary shares at the grant date. The company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the company's estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions. This share option scheme was closed for new grants in 2013, and replaced by a restricted stock unit scheme. The share-based payment scheme liability has fully cleared this year.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
Fair value is measured by use of the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The company makes payments to the ultimate parent which represent the costs of the option grants and exercises. These costs are deducted from the reserve created by the fair value calculation highlighted above.
Restricted Stock Units
The Company accounts for stock-based compensation in accordance with share-based payment accounting guidance. The guidance requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognised over the period during which an employee is required to provide service in exchange for the award, typically the vesting period.
The company makes payments to the ultimate parent which represent the costs of the option grants and exercises. These costs are deducted from the reserve over the vesting period.
Employee Stock Purchase Plan
During 2019 the company rolled out an Employee Stock Purchase Plan (ESPP) which was available to all employees. Employees who opt into the scheme have a deduction from their salary every month for a period of six months. This value is then available to purchase Ansys shares at a discounted value of 15% below the market price on the lowest of either the first or last date of the six month period. As shares can only be purchased in whole numbers, any remaining value is carried forward to the next six month period. These shares cannot be sold by the employee within I year.
1.17
Leases
The company has no finance leases. Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.19
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment. an impairment loss is recognised in profit or loss as described below.
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the_ asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
Where indicators exist for a decrease in impairment loss previously recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a cash-generating unit, the reversal is applied first to the assets of the CGU, on a pro-rata basis.
1.20
All revenue expenditure associated with research and development activities is written off in the year of expenditure.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
With the exception of the disclosure in the revenue recognition on page 16 the Directors conclude there are no critical judgements that have a significant effect on the amounts recognised in the financial statements.
The directors do not believe that there are any sources of estimation uncertainty in the current period.
3
Turnover and other revenue
The company's turnover relates entirely to its principal activity. An analysis of turnover by destination by geographical market is given below:
2023
2022
£'000
£'000
Turnover analysed by class of business
License Revenue
20,498
13,737
Service Revenue
26,724
25,018
Intercompany Revenue
29,971
23,900
77,193
62,655
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
45,660
35,778
Rest of Europe
3,554
7,321
Rest of World
27,979
19,556
77,193
62,655
2023
2022
£'000
£'000
Other revenue
Interest income
794
163
Dividends received
20,505
14,164
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
110
(77)
Research and development costs
15,040
13,773
Depreciation of owned tangible fixed assets
866
1,048
Amortisation of intangible assets
20,797
20,624
Share-based payments
4,727
3,616
Operating lease charges
876
891
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
44
42
For other services
All other non-audit services
4
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Staff
343
319
Directors
1
1
Total
344
320
Their aggregate remuneration comprised:
2023
2022
£'000
£'000
Wages and salaries
35,152
29,639
Social security costs
3,412
3,797
Pension costs
2,279
2,006
40,843
35,442
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
7
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
219
189
Company pension contributions to defined contribution schemes
9
8
228
197
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£'000
£'000
Remuneration for qualifying services
219
n/a
Company pension contributions to defined contribution schemes
9
n/a
8
Interest receivable and similar income
2023
2022
£'000
£'000
Interest income
Interest on bank deposits
794
163
Income from fixed asset investments
Income from shares in group undertakings
20,505
14,164
Total income
21,299
14,327
9
Interest payable and similar expenses
2023
2022
£'000
£'000
Other interest
20
10
Other gains/(losses)
2023
2022
£'000
£'000
Gain on disposal of fixed asset investments
757,532
Impairment of fixed asset investments
(919)
(1,218)
756,613
(1,218)
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
11
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
3,341
1,067
Adjustments in respect of prior periods
93
(382)
Total current tax
3,434
685
Deferred tax
Origination and reversal of timing differences
(372)
91
Total tax charge
3,062
776
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£'000
£'000
Profit before taxation
770,603
3,865
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
181,092
734
Tax effect of expenses that are not deductible in determining taxable profit
5,379
3,920
Tax effect of income not taxable in determining taxable profit
(183,110)
(2,691)
Adjustments in respect of prior years
72
(361)
Group relief
(29)
Tax losses not recognised in deferred tax
(211)
(141)
Items not recognised in deferred tax
(32)
Items not recognised in SOCIE
(114)
(940)
Other short term timing differences
(17)
43
Rate change
244
Taxation charge for the year
3,062
776
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 27 -
The finance Bill 2021 was substantively enacted on 24 May 2021; this legislation increased the main rate of UK corporation tax to 25% with effect from 1 April 2023.
The Organisation for Economic Co-operation and Development ("OECD"), in coordination with the G20, has suggested a number of fundamental changes as part of an effort to address the global tax issue of base erosion and profit shifting. In particular, and as a way to address the tax challenges arising from the digitalisation of the economy, the OECD has introduced a two-pillar approach which provides for the allocation of profits among taxing jurisdictions in which companies do business, and the implementation of a 15 percent global minimum tax rate (namely the "Pillar One" and "Pillar Two" proposals). The agreement between OECD and G20 members calls for implementation of the various measures of the Pillar Two rules in 2024 and 2025. In this regard, the United Kingdom introduced two new taxes, the Multinational Top-up Tax and the Domestic Top-up Tax, which take effect from 1 January 2024 and ensure that corporations pay tax at a rate of at least 15%. While the Company does not anticipate the Multinational Top-up Tax or the Domestic Top-up Tax to have a material impact on its provision for income taxes, we will closely monitor future developments on this matter and will evaluate their impact.
12
Dividends
2023
2022
£'000
£'000
Final paid
939,031
12,946
13
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2023
2022
Notes
£'000
£'000
In respect of:
Fixed asset investments
16
919
1,218
Recognised in:
Amounts written off investments
919
1,218
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
14
Intangible fixed assets
Goodwill
£'000
Cost
At 1 January 2023
145,573
Additions
2,074
At 31 December 2023
147,647
Amortisation and impairment
At 1 January 2023
35,705
Amortisation charged for the year
20,797
At 31 December 2023
56,502
Carrying amount
At 31 December 2023
91,145
At 31 December 2022
109,868
15
Tangible fixed assets
Leasehold land and buildings
Plant and Machinery
Total
£'000
£'000
£'000
Cost
At 1 January 2023
2,364
3,923
6,287
Additions
54
442
496
Business combinations
49
49
Disposals
(44)
(135)
(179)
At 31 December 2023
2,374
4,279
6,653
Depreciation and impairment
At 1 January 2023
1,439
2,493
3,932
Depreciation charged in the year
180
686
866
Eliminated in respect of disposals
(42)
(107)
(149)
At 31 December 2023
1,577
3,072
4,649
Carrying amount
At 31 December 2023
797
1,207
2,004
At 31 December 2022
925
1,430
2,355
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
16
Fixed asset investments
2023
2022
Notes
£'000
£'000
Investments in subsidiaries
17
1,739
161,922
Movements in fixed asset investments
Shares in subsidiaries
£'000
Cost or valuation
At 1 January 2023
161,922
Additions
3,804
Transfer to goodwill
(2,074)
Disposals
(160,994)
At 31 December 2023
2,658
Impairment
At 1 January 2023
-
Impairment losses
919
At 31 December 2023
919
Carrying amount
At 31 December 2023
1,739
At 31 December 2022
161,922
17
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Onscale Ltd
50 Lothian Road, Festival Square, Edinburgh, Scotland, EH3 9WJ
Direct
100.00
ANSYS Iberia s.a.r.l.
Plaza Carlos Trias Bertran 7, Edificio Sollube (Planta 5, Modulo A), 28020 Madrid, Spain
Direct
100.00
ANSYS Poland sp. z.o.o
Pulawska 145, 02-715 Warszawa, Poland
Direct
100.00
Ansys MEA FZ-LLC
DMC-BLD05-VD-G00-437, Ground Floor, DMC5, Dubai Media City, Dubia, United Arab Emirates
Direct
100.00
Granta Design Limited
300 Rustat House, 62 Clifton Road, Cambridge, Cambridgeshire, CB1 7EG
Direct
100.00
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
18
Acquisition of Onscale Ltd
On 31 December 2023, the trade assets and liabilities of Onscale Ltd were hived into Ansys UK Limited.
The following table shows the book values of the major categories of assets and liabilities. In the opinion of the directors no fair value adjustments were required and therefore the amounts showed represent the fair value amounts included in the financial statements at the date of the hive up.
£'000 £'000
Net assets hived up:
Tangible assets 49
Debtors 845
Cash 297
Creditors (272)
Net assets hived up 919
Satisfied by: Intercompany creditor 919
19
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
15,207
19,737
Corporation tax recoverable
195
Amounts owed by group undertakings
14,755
5,814
Prepayments and accrued income
9,089
7,468
39,051
33,214
2023
2022
Amounts falling due after more than one year:
£'000
£'000
Deferred tax asset (note 22)
1,483
1,111
Total debtors
40,534
34,325
Amounts owed by group undertakings relate to trading balances incurred in the ordinary course of business, and do not attract any interest (2022 : same)
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
20
Creditors: amounts falling due within one year
2023
2022
Notes
£'000
£'000
Trade creditors
235
530
Amounts owed to group undertakings
12,944
2,344
Corporation tax
2,026
Other taxation and social security
2,992
4,408
Deferred income
23
12,329
12,199
Accruals
8,721
7,608
39,247
27,089
Amounts owed by group undertakings relate to trading balances incurred in the ordinary course of business, and do not attract any interest (2022 : same)
21
Creditors: amounts falling due after more than one year
2023
2022
Notes
£'000
£'000
Deferred income
23
626
3,576
Other creditors
893
1,461
1,519
5,037
Included in other long term creditors is a restoration provision that has been created to provide for the cost of returning leased office accommodation to original state at the end of the lease. In estimating the liability the directors have used assumptions based on the market price for this type of restoration in each location.
The breakdown of the above is as follows:
With regards to the impact of the time value of money, the above estimates are reviewed annually and are adjusted as necessary.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
22
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£'000
£'000
Accelerated capital allowances
(77)
(116)
Retirement benefit obligations
48
41
Share based payments
1,473
1,129
Other
39
57
1,483
1,111
2023
Movements in the year:
£'000
Asset at 1 January 2023
(1,111)
Credit to profit or loss
(372)
Asset at 31 December 2023
(1,483)
23
Deferred income
2023
2022
£'000
£'000
Other deferred income
12,955
15,775
Included in the financial statements as follows:
Current liabilities
12,329
12,199
Non-current liabilities
626
3,576
12,955
15,775
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
2,279
2,006
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
25
Share-based payment transactions
Restricted Share Units (RSUs)
These options vested evenly over a 4 year period up to 2017 and then over a 3 year period from 2018. On 3rd March 2023 the company granted 22,483 RSUs (2022: 19,647) at a weighted price of $309.73 (2022: $325.40) the market price on that date. These were all outstanding at the end of the period.
The company recognised total expenses of £4,727,264 (2022: £3,615,592) in relation to RSUs. The company contributed £4,054,350 (2022: £3,651,995) to the group in relation to options vested in the year.
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£'000
£'000
Outstanding at 1 January 2023
32,223
35,226
300.76
251.53
Granted
22,483
19,647
309.73
325.40
Forfeited
(1,312)
(1,380)
316.65
279.83
Exercised
(15,104)
(21,073)
289.91
226.82
Transferred from / (to) other group company
35
(197)
156.66
325.40
Outstanding at 31 December 2023
38,325
32,223
315.77
300.76
The options outstanding at 31 December 2023 had an exercise price ranging from $313.99 to $317.55, and a remaining contractual life of up to 3 years.
26
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £1 each
9,999
9,900,022
10
9,900
During the year the company made a reduction in share capital and share premium. Share capital reduced by £9,890,024 and share premium reduced by £210,994,070.
One ordinary share of £1 and £2,992,661 of share premium was issued in the year in respect of the acquisition of Onscale Ltd.
27
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£'000
£'000
Within one year
785
1,072
Between two and five years
2,365
3,312
In over five years
72
359
3,222
4,743
ANSYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
28
Events after the reporting date
Acquisition of Ansys Japan KK
Ansys UK Limited purchased 100% of the share capital of Ansys Japan KK on 2nd January 2024 from ANSYS Luxembourg Holding Company SARL for consideration of 1 share for a value of £1 and £168,316,112 of share premium.
Synopsys merger
On January 15, 2024, Ansys, Inc., the ultimate controlling party of Ansys UK Limited, entered into an Agreement and Plan of Merger with Synopsys, Inc., a Delaware corporation, and ALTA Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Synopsys, Inc.
The Merger Agreement provides for the merger of Merger Sub with and into Ansys, Inc., with Ansys, Inc. surviving the merger as a wholly owned subsidiary of Synopsys.
The completion of the Merger is subject to customary closing conditions, however Ansys, Inc. anticipate the transaction to close in the first half of 2025.
29
Ultimate controlling party
The immediate parent company is ANSYS Luxembourg Holding Company Sarl, of 6, rue Eugene Ruppert, L-2453 Luxembourg, a company incorporated in Luxembourg, Registration No. B150.645. The ultimate parent company and ultimate controlling party is ANSYS, Inc., of Southpointe, 2600 Ansys Drive, Canonsburg, PA 15317, USA, a company incorporated in the United States of America. This is the largest and smallest group of which the company is a member and for which group financial statements are drawn up and their registered offices are listed above. Copies of the group financial statements are available from www.ansys.com.
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