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Registered number: 10124977









DUCK CREEK TECHNOLOGIES LTD









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

 
DUCK CREEK TECHNOLOGIES LTD
 
 
COMPANY INFORMATION


Directors
M Jackowski 
C E McCloskey 




Registered number
10124977



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

London

United Kingdom

EC2N 4BG

EC2N 4BQ




Independent auditor
Nortons Assurance Limited
Statutory Auditor

Second Floor

NOW Building

Thames Valley Park

Reading

RG6 1RB





 
DUCK CREEK TECHNOLOGIES LTD
 

CONTENTS



Page
Group Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditor's Report
6 - 9
Consolidated Profit and Loss Account
10
Consolidated Statement of Comprehensive Income
11
Consolidated Balance Sheet
12 - 13
Company Balance Sheet
14
Consolidated Statement of Changes in Equity
15
Company Statement of Changes in Equity
16
Consolidated Statement of Cash Flows
17 - 18
Consolidated Analysis of Net Debt
19
Notes to the Financial Statements
20 - 47


 
DUCK CREEK TECHNOLOGIES LTD
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

Introduction
 
The Directors present their report and the audited financial statements of the Company for the year ended 31 August 2023.
Duck Creek Technologies Ltd (“the Company”) was incorporated on 14 April 2016. The Company is a wholly- owned subsidiary of Duck Creek Technologies, Inc. Duck Creek Technologies, Inc., the Company’s parent company, completed its initial public offering on 14 August 2020 and was traded on the Nasdaq stock exchange under the DCT ticker symbol. On 30 March 2023, the Company’s parent company, Duck Creek Technologies, Inc., was acquired by Vista Equity Partners at which point the shares of Duck Creek Technologies, Inc. ceased to be listed on the Nasdaq. Duck Creek Technologies Pty Ltd (“DC Australia”), Duck Creek Technologies Spain, S.L., Imburse AG, Prima Solutions Belgium and Effisoft SAS are wholly-owned subsidiaries of the Company. Duck Creek Technologies India LLP is a wholly-owned subsidiary of DC Australia. Imburse AG wholly owns Imburse Ltd. (UK) and Imburse Unipessoal Lda., Effisoft SAS wholly owns Effisoft UK Limited and has a joint venture interest in GIE Renovation.
The Company is a provider of Software-as-a-Service (SaaS) core systems to the property and casualty (P&C) insurance industry, through Duck Creek OnDemand. Products offered include Duck Creek Policy, Duck Creek Billing, Duck Creek Claims, Duck Creek Rating, Duck Creek Insights, Duck Creek Distribution Management, Duck Creek Reinsurance Management, Duck Creek Anywhere Managed Integrations, and Duck Creek Industry Content. The Company also provides its products via perpetual and term license arrangements to customers with legacy systems that have yet to upgrade to SaaS and professional services relating to the implementation of Company’s SaaS offerings and software licenses.

Business review
 
The results for the period ended 31 August 2023 are set out in the profit and loss account. The reporting period for the Company includes the trading activities for the Company for the period from 1 September 2022 to 31 August 2023. 
While the Company provides various services to local market and global customers, it also derives turnover from services provided to other subsidiaries of Duck Creek Technologies, Inc. 
The loss for the current period to 31 August 2023 is $37,564,039 compared to a loss of $10,220,558 in the prior period. The directors are confident that the business is moving forward and has a promising future. Investments are being made to expand the Company's local market customer base and to sell additional software products and services to its current customers. The Company has been successful in securing key personnel to manage this expansion.
The Company’s total revenue increased 72% to $55,695,093 in the current period compared to $37,372,152 in the prior period. The Company's maintenance and support revenue increased 70% to $5,948,663 in the current period compared to $3,495,649 in the prior period, SaaS revenue increased 61% to $17,999,758 in the current period compared to $11,163,214 in the prior year, professional services revenue increased 184% to $16,652,166 in the current period compared to $5,856,966 in the prior period. License revenues increased by 27% to $15,094,506 in the current period compared to $11,856,323 in the prior period. The Company is increasingly focused on selling its SaaS solutions to P&C insurance carriers around the globe.
The Company has a good cash position at the year end due to the timely collection of trade debts from its customers and the timely collection of intercompany debts from the U.S. based subsidiaries.
In a company the size of the Company, the directors consider various non financial performance indicators but none individually are key. The Company continues to enjoy a high rate of customer retention that should continue to provide recurring revenues to the business over the coming years.
Due to the Company's cash position, high customer retention rate, and availability of a variety of funding
Page 1

 
DUCK CREEK TECHNOLOGIES LTD
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

sources, the directors believe that it remains appropriate to prepare financial statements on a going concern basis, as explained in note 2.4 to the financial statements.

Principal risks and uncertainties
 
Competitive pressure is a constant risk that could impact the operating performance of the Company. This risk is managed by working closely with customers to provide competitive products and services and ensuring that excellent service levels are maintained.
The Company has expanded its market share and SaaS offerings through a series of significant acquisitions in recent years, and the future success of the Company is dependent on the successful integration and scaling of these acquisitions.
The cash flow and liquidity needs of the Company are moderately dependent on interest related to the intercompany loans with affiliated subsidiaries of Duck Creek Technologies, Inc. The Company maintains its short term flexibility through intercompany borrowings, if required.
The global economic environment can affect the operating performance of the Company and the market it competes in. Both sales and profitability are exposed to these risks. The Company works to mitigate the impact of these external variables by competing in diverse geographies and with management planning and oversight processes.

Financial key performance indicators
 
As the Company continues to generate losses, the directors are primarily interested in revenue growth across the Company’s service lines.

Financial risk management objectives and policies
 
The company has no hedging arrangements as of 31 August 2023. The foreign exchange currency risk is managed centrally at a group level.
Liquidity and cash flow risks are governed by the ultimate parent undertaking’s requirements. The Company maintains its short term flexibility through intercompany borrowing, if required.
The Company governs its own price risk and credit risk based on directors’ requirements to meet its ultimate parent undertaking expectations.

Page 2

 
DUCK CREEK TECHNOLOGIES LTD
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

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


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



................................................
M Jackowski
Director

Date: 31 January 2025

Page 3

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation and minority interests, amounted to $37,556,791 (2022 - loss $10,206,272).

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

Directors

The directors who served during the year were:

M Jackowski 
C E McCloskey (appointed 19 July 2023)
E C Van Biert Jr, (appointed 30 March 2022, resigned 5 April 2023)

Future developments

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

Engagement with employees

The directors are committed to employee engagement through a variety of initiatives, including creating a positive culture, offering flexible remote-first work, and providing opportunities for career development and progression. 

Page 4

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023

Engagement with suppliers, customers and others

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

Greenhouse gas emissions, energy consumption and energy efficiency action

The Group has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.

Matters covered in the Group Strategic Report

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

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditor

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

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





................................................
M Jackowski
Director

Date: 31 January 2025

Page 5

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

Opinion


We have audited the financial statements of Duck Creek Technologies Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 August 2023, which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 August 2023 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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


Conclusions relating to going concern


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


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 6

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


Other information


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


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 7

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


Responsibilities of directors
 

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


In preparing the financial statements, the directors are responsible for assessing the Group's and the parent 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 Group or the parent 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 Group 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:

The objectives of our audit, in respect to fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. 
Our approach was as follows: 
 
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework including the Companies Act 2006 and the relevant tax compliance regulations in the UK.
 
We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures.
 
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by discussing with management to understand where it considered there was a susceptibility to fraud. We considered the controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from fraud and error.
 
Page 8

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


Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified in the paragraphs above. Our procedures involved journal entry testing, with a focus on journals indicating large or unusual transactions based on our understanding of the business, enquiries of Company management and focused testing. In addition, we completed procedures to conclude on the compliance of the disclosures in the Annual Report and Accounts with the requirements of the relevant accounting standards and UK legislation. 


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


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





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

31 January 2025
Page 9

 
DUCK CREEK TECHNOLOGIES LTD
 
 
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
$
$


Turnover
55,695,093
37,372,152

Gross profit
55,695,093
37,372,152

Administrative expenses
(95,714,537)
(48,210,696)

Other operating income
2,066,796
-

Operating loss
(37,952,648)
(10,838,544)

Interest receivable and similar income
1,770,385
608,069

Loss before tax
(36,182,263)
(10,230,475)

Tax on loss
(1,381,776)
9,917

Loss for the financial year
(37,564,039)
(10,220,558)

Loss for the year attributable to:

Non-controlling interests
(7,248)
(14,286)

Owners of the parent
(37,556,791)
(10,206,272)

(37,564,039)
(10,220,558)

The notes on pages 20 to 47 form part of these financial statements.

Page 10

 
DUCK CREEK TECHNOLOGIES LTD
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
$
$


Loss for the financial year

(37,564,039)
(10,220,558)

Other comprehensive income


Additional paid in capital
985,010
205,793

Other comprehensive income
(145,794)
102,690

Total comprehensive income for the year
(36,724,823)
(9,912,075)

(Loss) for the year attributable to:


Non-controlling interest
(7,248)
(14,286)

Owners of the parent Company
(37,556,791)
(10,206,272)

(37,564,039)
(10,220,558)

The notes on pages 20 to 47 form part of these financial statements.

Page 11

 
DUCK CREEK TECHNOLOGIES LTD
REGISTERED NUMBER: 10124977

CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2023

2023
2022
Note
$
$

Fixed assets
  

Intangible assets
 11 
128,922,181
125,210,285

Tangible assets
 12 
2,144,708
2,635,912

  
131,066,889
127,846,197

Current assets
  

Debtors
 14 
34,097,727
51,918,189

Cash at bank and in hand
 15 
42,217,012
57,191,801

  
76,314,739
109,109,990

Creditors: amounts falling due within one year
 16 
(22,820,761)
(16,487,901)

Net current assets
  
 
 
53,493,978
 
 
92,622,089

Total assets less current liabilities
  
184,560,867
220,468,286

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

Deferred taxation
  
(8,693,684)
(7,890,776)

  
 
 
(8,693,684)
 
 
(7,890,776)

  

Net assets
  
100,867,183
137,577,510

Page 12

 
DUCK CREEK TECHNOLOGIES LTD
REGISTERED NUMBER: 10124977
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2023

2023
2022
Note
$
$

Capital and reserves
  

Called up share capital 
  
14,140
14,140

Share premium account
 21 
160,509,775
160,509,775

Other reserves
 21 
1,149,969
310,753

Profit and loss account
 21 
(60,838,265)
(23,281,474)

Equity attributable to owners of the parent Company
  
100,835,619
137,553,194

Non-controlling interests
  
31,564
24,316

  
100,867,183
137,577,510


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 January 2025.




................................................
M Jackowski
Director

The notes on pages 20 to 47 form part of these financial statements.

Page 13

 
DUCK CREEK TECHNOLOGIES LTD
REGISTERED NUMBER: 10124977

COMPANY BALANCE SHEET
AS AT 31 AUGUST 2023

2023
2022
Note
$
$

Fixed assets
  

Intangible assets
 11 
4,299,616
9,832,639

Tangible assets
 12 
397,616
278,780

Investments
 13 
145,753,928
126,767,814

  
150,451,160
136,879,233

Current assets
  

Debtors
 14 
16,938,666
36,966,306

Cash at bank and in hand
 15 
25,218,310
33,030,386

  
42,156,976
69,996,692

Creditors: amounts falling due within one year
 16 
(19,995,122)
(4,017,861)

Net current assets
  
 
 
22,161,854
 
 
65,978,831

Total assets less current liabilities
  
172,613,014
202,858,064

  

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

  

Net assets
  
97,613,014
127,858,064


Capital and reserves
  

Called up share capital 
  
14,140
14,140

Share premium account
 21 
160,509,775
160,509,775

Other reserves
 21 
146,772
158,094

Profit and loss account brought forward
  
(32,823,945)
(22,044,854)

Loss for the year
  
(30,233,728)
(10,779,091)

Profit and loss account carried forward
  
(63,057,673)
(32,823,945)

  
97,613,014
127,858,064


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 January 2025.


................................................
M Jackowski
Director

The notes on pages 20 to 47 form part of these financial statements.

Page 14
 

 
DUCK CREEK TECHNOLOGIES LTD


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023



Called up share capital
Share premium account
Other reserves
Profit and loss account
Non-controlling interests
Total equity


$
$
$
$
$
$



At 1 September 2021
14,140
160,509,775
12,300
(13,075,202)
-
147,461,013



Comprehensive income for the year


Loss for the year
-
-
-
(10,206,272)
14,286
(10,191,986)


Additional Paid In Capital
-
-
195,763
-
10,030
205,793


Other comprehensive income
-
-
102,690
-
-
102,690

Total comprehensive income for the year
-
-
298,453
(10,206,272)
24,316
(9,883,503)





At 1 September 2022
14,140
160,509,775
310,753
(23,281,474)
24,316
137,577,510



Comprehensive income for the year


Loss for the year
-
-
-
(37,556,791)
7,248
(37,549,543)


Additional Paid In Capital
-
-
985,010
-
-
985,010


Other comprehensive income
-
-
(145,794)
-
-
(145,794)

Total comprehensive income for the year
-
-
839,216
(37,556,791)
7,248
(36,710,327)



At 31 August 2023
14,140
160,509,775
1,149,969
(60,838,265)
31,564
100,867,183



The notes on pages 20 to 47 form part of these financial statements.

Page 15
 
DUCK CREEK TECHNOLOGIES LTD
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023


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

$
$
$
$
$


At 1 September 2021
14,140
160,509,775
12,300
(22,044,854)
138,491,361


Comprehensive income for the year

Loss for the year
-
-
-
(10,779,091)
(10,779,091)

Additional Paid In Capital
-
-
43,104
-
43,104

Other comprehensive income
-
-
102,690
-
102,690
Total comprehensive income for the year
-
-
145,794
(10,779,091)
(10,633,297)



At 1 September 2022
14,140
160,509,775
158,094
(32,823,945)
127,858,064


Comprehensive income for the year

Loss for the year
-
-
-
(30,233,728)
(30,233,728)

Additional Paid In Capital
-
-
134,472
-
134,472

Other comprehensive income
-
-
(145,794)
-
(145,794)
Total comprehensive income for the year
-
-
(11,322)
(30,233,728)
(30,245,050)


At 31 August 2023
14,140
160,509,775
146,772
(63,057,673)
97,613,014


The notes on pages 20 to 47 form part of these financial statements.

Page 16

 
DUCK CREEK TECHNOLOGIES LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2023

2023
2022
$
$

Cash flows from operating activities

Loss for the financial year
(37,564,039)
(10,220,558)

Adjustments for:

Corporation tax paid
(1,430,890)
(1,253,350)

Amortisation of intangible assets
18,503,091
8,948,315

Depreciation of tangible assets
792,128
800,205

(Increase) in debtors
(2,320,894)
(634,558)

Taxation charge
93,052
(70,056)

Decrease in amounts owed by groups
(8,141,238)
(1,044,048)

Amortisation of capitalised commissions
111,095
-

(Profit)/loss on disposal of subsidiary
-
(167,814)

Decrease in creditors
3,177,004
(4,004,052)

Share-based compensation expense
1,228,631
1,215,810

Bad debts
48,642
6,991

Net cash generated from operating activities

(25,503,418)
(6,423,115)


Cash flows from investing activities

Purchase of intangible fixed assets
(587,837)
-

Purchase of tangible fixed assets
(698,254)
(655,196)

Purchase of unlisted and other investments
(18,938,530)
(106,949,633)

Sale of unlisted and other investments
871,840
762,799

Purchase of short-term unlisted investments
(8,417,092)
(69,795,195)

Sale of short-term unlisted investments
38,298,502
39,913,785

Net cash from investing activities

10,528,629
(136,723,440)
Page 17

 
DUCK CREEK TECHNOLOGIES LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023


2023
2022

$
$



Cash flows from financing activities

New loans from group companies
-
175,000,000

Net cash used in financing activities
-
175,000,000

Net (decrease)/increase in cash and cash equivalents
(14,974,789)
31,853,445

Cash and cash equivalents at beginning of year
57,191,801
25,338,356

Cash and cash equivalents at the end of year
42,217,012
57,191,801


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
42,217,012
57,191,801

42,217,012
57,191,801


The notes on pages 20 to 47 form part of these financial statements.

Page 18

 
DUCK CREEK TECHNOLOGIES LTD
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 AUGUST 2023




At 1 September 2022
Cash flows
At 31 August 2023
$

$

$

Cash at bank and in hand

57,191,801

(14,974,789)

42,217,012


57,191,801
(14,974,789)
42,217,012

The notes on pages 20 to 47 form part of these financial statements.

Page 19

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

1.


General information

Duck Creek Technologies Limited ('the Company') is a company incorporated in the United Kingdom under the Companies Act. The Company is a private company limited by shares and is registered in England and Wales. The address of the Company's registered office is shown on the Company information page.
The principal activities of the Company and group are set out in the strategic report.
These financial statements present the results of the company and of the group for the year ended 31 August 2023.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements.

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 31 December 2021.

 
2.3

Going concern

The Company has obtained a letter of support from Disco Topco, Inc. its parent company. The directors of Disco Topco, Inc. have provided a commitment to provide any financial support which may be neccessary in order that the Company can meet its liabilities as they fall due for the foreseeable future.
As a result of the above the directors of the Company have adopted the going concern basis in preparing these financial statements.

Page 20

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is USD.

Transactions and balances

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Profit and Loss Account within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Dollars at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

The Group derives its revenues primarily from four sources: 
Sales of hosted software services under SaaS arrangements.
Sales of software licenses - Software license revenue is derived from the sale of term-based and perpetual licenses to customers.
Sales of maintenance and support services - Maintenance and support services include telephone and web-based support, software updates, and rights to unspecified software upgrades on a when-and-if-available basis.  
Sales of professional services and other - Professional services include training, implementation, and consulting services. Other revenues primarily consist of reimbursable employee out-of-pocket expenses. 
 
 
Page 21

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.5
Revenue (continued)

SaaS Arrangements
The transaction price allocated to SaaS arrangements is recognized as revenue over time throughout the term of the contract as the services are provided on a continuous basis, beginning after the SaaS environment is provisioned and made available to customers. The Group’s SaaS arrangements generally have terms of three to seven years, and are generally payable on a monthly basis over the term of the SaaS arrangement, which is typically noncancellable. Revenue is recognized ratably using contractual DWP (the gross dollar value of total premiums paid to carriers by policyholders) as the measure of progress.
Software Licenses
The Group has concluded that its software licenses provide the customer with the right to functional intellectual property (IP), and are distinct performance obligations as the customer can benefit from the software licenses on their own. The transaction price allocated to perpetual and term license arrangements is recognized as revenue at a point in time when control is transferred to the customer, which generally occurs at the time of delivery. Perpetual software license fees are generally payable when the contract is executed. Term license fees are generally payable in advance on an annual basis over the term of the license arrangement, which is typically noncancellable. Perpetual and term license arrangements are delivered before related services are provided, including maintenance and support services, and are functional without such services.
Maintenance and Support Services
Maintenance and support contracts associated with the Group’s software licenses entitle customers to receive technical support and software updates, on a when and if available basis, during the term of the maintenance and support contract. Technical support and software updates are considered distinct from the related software licenses but accounted for as a single performance obligation as they each constitute a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. The transaction price allocated to software maintenance and support is recognized as revenue over time on a straight-line basis over the term of the maintenance and support contract. Maintenance and support fees are generally payable in advance on a monthly, quarterly, or annual basis over the term of the maintenance and support contract. Maintenance and support contracts are priced as a percentage of the associated software license.
Professional Services
The Group’s professional services revenue is primarily comprised of implementation services provided to customers. The majority of professional services engagements are billed to customers on a time and materials basis. The Group has determined that professional services provided to customers represent distinct performance obligations. These services may be provided on a stand-alone basis or bundled with other performance obligations, including SaaS arrangements, software licenses, and maintenance and support services. The transaction price allocated to these performance obligations is recognized as revenue over time as the services are performed. In those limited instances where professional services arrangements are sold on a fixed price basis, revenue is recognized over time using an input measure of time incurred to date relative to total estimated time to be incurred at project completion. Invoices for all professional services arrangements are generally invoiced monthly in arrears.
Costs to obtain a contract
The Group allocates the incremental costs to obtain a contract among the identified performance obligations that are included in the contract, on a relative basis to the allocated transaction price. Incremental costs primarily comprise of commissions paid to the Group's sales representatives. Any such costs that are allocated to performance obligations that are recognised at a point in time are expensed at that time. Any such costs that are allocated to performance obligations that are
Page 22

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.5
Revenue (continued)

recognised over time are capitalised in the period in which they are incurred and amortised on a straight-line basis over the expected benefit of the associated contract. As a practical expedient, the Group recognises the incremental costs of obtaining a contract as an expense when incurred if the amortisation period of the asset that it would otherwise have recognised is one year or less. 
The Group has estimated that the typical period of benefit for its contracts is 8 years, based on both qualitative and quantitative factors, including product lifecycle attributes and historical customer retention data. The Group assesses deferred contract costs for impairment on an annual basis. Expenses associated with deferred contract costs are included within administrative expenses. Deferred contract costs are included on the balance sheet within other debtors.
The Group records reimbursable out-of-pocket expenses associated with professional services contracts in both revenue and cost of revenue.
The Group also recognises revenue for services provided to other group companies under a global cost sharing arrangement.
Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 
2.6

Operating leases: the Group as lessee

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

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

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Interest income

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

Page 23

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.9

Pensions

Defined contribution pension plan

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

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

 
2.10

Share-based payments

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

Page 24

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

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

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


Page 25

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

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

Other intangible assets

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

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

 The estimated useful lives range as follows:

Goodwill
-
10 years
Other intangible fixed assets
-
7 - 10 years

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

 
2.13

Tangible fixed assets

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

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

Depreciation is provided on the following basis:

Long-term leasehold property
-
Estimated useful life of lease
Fixtures and fittings
-
5 - 10 years
Computer equipment
-
2 - 4 Years

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

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

Page 26

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Debtors

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

 
2.16

Cash and cash equivalents

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

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.17

Creditors

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

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.19

Financial instruments

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

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

Financial instruments are recognised in the Group's Balance Sheet when the Group 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.

Page 27

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.19
Financial instruments (continued)

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

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

Other financial assets

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

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. 

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

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

Financial liabilities

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

Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Page 28

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

2.Accounting policies (continued)


2.19
Financial instruments (continued)


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

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

Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

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

Page 29

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

4.


Turnover

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


2023
2022
$
$

Licence
15,094,506
16,856,323

Maintenance and support
5,948,663
3,495,649

SaaS
17,999,758
11,163,214

Professional Services
16,652,166
5,856,966

55,695,093
37,372,152


Analysis of turnover by country of destination:

2023
2022
$
$

United Kingdom
3,000,424
2,611,353

Rest of Europe
9,877,782
2,729,646

Rest of the World
42,816,887
32,031,153

55,695,093
37,372,152



5.


Other operating income

2023
2022
$
$

Research and development tax credit
2,066,796
-



6.


Operating loss

The operating loss is stated after charging:

2023
2022
$
$

Exchange differences
1,683,671
2,543,493

Other operating lease rentals
2,515,434
1,852,180

Page 30

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

7.


Auditor's remuneration

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


2023
2022
$
$

Fees payable to the Company's auditor and its associates for the audit of the consolidated and parent Company's financial statements
90,000
32,000


8.


Employees

Staff costs were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$


Wages and salaries
48,147,647
28,986,274
5,492,506
3,937,293

Social security costs
12,605,225
1,325,808
2,572,240
468,606

Cost of defined contribution scheme
2,094,404
1,169,830
252,890
174,891

62,847,276
31,481,912
8,317,636
4,580,790


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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Professional Services
469
407
14
11



Sales and pre sales
36
37
6
10



Customer support and care
151
174
1
2



Other
305
315
33
9

961
933
54
32

Page 31

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

9.


Interest receivable

2023
2022
$
$


Interest receivable from group companies
1,474,065
547,637

Other interest receivable
296,320
60,432

1,770,385
608,069


10.


Taxation


2023
2022
$
$

Corporation tax


Current tax on profits for the year
2,136,942
670,006



Origination and reversal of timing differences
(755,166)
(679,923)


Tax on loss
1,381,776
(9,917)
Page 32

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 24.28% (2022 - 22.13%). The differences are explained below:

2023
2022
$
$


Loss on ordinary activities before tax
(36,182,263)
(10,230,475)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 24.28% (2022 - 22.13%)
(8,785,053)
(2,264,004)

Effects of:


Unrelieved tax losses
6,559,824
-

Foreign exchange differences
(331,344)
(278,248)

Share based compensation
(311,552)
(269,088)

Other differences leading to an increase (decrease) in the tax charge
4,249,901
2,801,423

Total tax charge for the year
1,381,776
(9,917)


Factors that may affect future tax charges

There are no factors that the directors are aware of that will have an affect on future tax charges. 

Page 33

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

11.


Intangible assets

Group





Intellectual Property
Goodwill
Total

$
$
$



Cost


At 1 September 2022
62,827,676
104,329,489
167,157,165


Additions
4,523,161
17,691,825
22,214,986



At 31 August 2023

67,350,837
122,021,314
189,372,151



Amortisation


At 1 September 2022
27,364,516
14,582,364
41,946,880


Charge for the year on owned assets
7,079,547
11,423,543
18,503,090



At 31 August 2023

34,444,063
26,005,907
60,449,970



Net book value



At 31 August 2023
32,906,774
96,015,407
128,922,181



At 31 August 2022
35,463,160
89,747,125
125,210,285



Page 34

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
 
           11.Intangible assets (continued)

Company




Intellectual Property
Goodwill
Total

$
$
$



Cost


At 1 September 2022
30,995,000
14,741,534
45,736,534



At 31 August 2023

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



Amortisation


At 1 September 2022
26,936,130
8,967,765
35,903,895


Charge for the year
4,058,870
1,474,153
5,533,023



At 31 August 2023

30,995,000
10,441,918
41,436,918



Net book value



At 31 August 2023
-
4,299,616
4,299,616



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

Page 35

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

12.


Tangible fixed assets

Group






Long-term leasehold property
Office equipment
Computer equipment
Other fixed assets
Total

$
$
$
$
$



Cost or valuation


At 1 September 2022
1,207,203
422,589
4,550,741
9,222
6,189,755


Additions
7,879
2,168
579,329
589,462
1,178,838


Disposals
-
-
(277,054)
(9,222)
(286,276)


Exchange adjustments
18,793
(15,178)
(77,144)
-
(73,529)



At 31 August 2023

1,233,875
409,579
4,775,872
589,462
7,008,788



Depreciation


At 1 September 2022
1,065,773
366,798
2,121,272
-
3,553,843


Charge for the year on owned assets
55,342
24,807
1,574,952
-
1,655,101


Disposals
-
-
(277,054)
-
(277,054)


Exchange adjustments
8,576
(12,509)
(63,877)
-
(67,810)



At 31 August 2023

1,129,691
379,096
3,355,293
-
4,864,080



Net book value



At 31 August 2023
104,184
30,483
1,420,579
589,462
2,144,708



At 31 August 2022
141,430
55,791
2,429,469
9,222
2,635,912

Page 36

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

           12.Tangible fixed assets (continued)


Company






Long-term leasehold property
Office equipment
Computer equipment
Other fixed assets
Total

$
$
$
$
$

Cost or valuation


At 1 September 2022
516,779
14,952
202,808
9,222
743,761


Additions
7,879
-
258,455
-
266,334


Disposals
-
-
-
(9,222)
(9,222)


Exchange adjustments
46,551
1,347
18,777
-
66,675



At 31 August 2023

571,209
16,299
480,040
-
1,067,548



Depreciation


At 1 September 2022
392,660
14,952
57,369
-
464,981


Charge for the year on owned assets
47,495
-
115,569
-
163,064


Exchange adjustments
35,371
1,347
5,169
-
41,887



At 31 August 2023

475,526
16,299
178,107
-
669,932



Net book value



At 31 August 2023
95,683
-
301,933
-
397,616



At 31 August 2022
124,119
-
145,439
9,222
278,780






Page 37

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

13.


Fixed asset investments

Company





Investments in subsidiary companies

$



Cost or valuation


At 1 September 2022
126,767,814


Additions
18,986,114



At 31 August 2023
145,753,928






Net book value



At 31 August 2023
145,753,928



At 31 August 2022
126,767,814

Page 38

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Duck Creek Technologies Pty Ltd
100, Level 35 One International Towers, Barangaroo Avenue, Sydney NSW 2000, Australia
Ordinary
100%
Duck Creek Technologies Spain, SL
Gran Via de les Corts Catalanes, 630, 08007 Barcelona, Spain
Ordinary
100%
Duck Creek Technologies India LLP
Godrej IT Park Block A, 2nd Floor, Godrej Business District, Pirojshanagar, L.B.S., LBS Rd, Vikhroli West, Mumbai, India
Ordinary
100%
Effisoft SAS
6, rue Marius Aufan, 92300 Levallois-Perret, France
Ordinary
100%
Prima Solutions Belgium SA
2800 Malines, Schuttersvest, 75 Belgium
Ordinary
100%
IMburse Ltd.
22 Bishopsgate, London, EC2N 4BQ
Ordinary
100%
IMburse AG
c/o Wicki Partners AG Stockerstrasse 44 8002 Zürich
Ordinary
100%
IMburse Unipessoal Lda.
Rua José Galhardo, nº 3, Loja 3, Lisboa, Lumiar, 1750 131 Lisboa
Ordinary
100%
GIE Renovation
6, rue Marius Aufan – 92300 Levallois-Perret, France
Ordinary
50%

Page 39

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

14.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Due after more than one year

Other debtors
3,549,589
2,886,991
237,299
134,062

3,549,589
2,886,991
237,299
134,062

Due within one year

Trade debtors
3,845,780
4,660,355
1,420,083
1,773,536

Amounts owed by group undertakings
13,753,645
5,383,209
10,439,925
1,122,994

Other debtors
5,360,540
33,129,428
-
30,143,576

Prepayments and accrued income
7,588,173
5,858,206
4,841,359
3,792,138

34,097,727
51,918,189
16,938,666
36,966,306



15.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Cash at bank and in hand
42,217,012
57,191,801
25,218,310
33,030,386



16.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Trade creditors
812,769
902,719
-
2,860

Amounts owed to group undertakings
2,515,329
1,414,291
17,042,463
1,814,016

Corporation tax
166,497
286,684
-
-

Other taxation and social security
963,733
516,885
22,194
73,692

Other creditors
4,021,373
2,689,168
499,616
369,853

Accruals and deferred income
14,341,060
10,678,154
2,430,849
1,757,440

22,820,761
16,487,901
19,995,122
4,017,861


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

Page 40

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

17.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Amounts owed to group undertakings
75,000,000
75,000,000
75,000,000
75,000,000


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


18.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Financial assets

Financial assets measured at fair value through profit or loss
42,217,012
57,191,801
25,218,310
33,030,386




19.


Deferred taxation


Group



2023
2022


$

$






At beginning of year
(7,890,776)
(7,890,776)


Charged to profit or loss
(802,908)
-



At end of year
(8,693,684)
(7,890,776)

Company


2023
2022



Group
Group
2023
2022
$
$

Temporary timing differences
(8,693,684)
(7,890,776)

(8,693,684)
(7,890,776)

Page 41

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

20.


Share capital

2023
2022
$
$
Allotted, called up and fully paid



10,004 (2022 - 10,004) Ordinary Shares of £1.00 Each shares of £1.000000 each
14,140
14,140



21.


Reserves

Share premium account

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

Other reserves

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

Profit and loss account

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

Page 42

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

22.


Share-based payments

Class D Units and Phantom Units
Prior to the IPO, the parent company granted Class D incentive units (Class D Units) to certain employees and directors under the terms of Incentive Unit Award Agreements and also granted Phantom Unit incentive awards (“Phantom Units”) to certain employees of the Group's international subsidiaries (including the Company). The Phantom Units are granted in three tranches, as follows:
Class D-1 Phantom Units 80% of the Phantom Units granted
Class D-2 Phantom Units 10% of the Phantom Units granted
Class D-3 Phantom Units 10% of the Phantom Units granted
Vesting of the Class D Units was 50% time based, quarterly, over a four year period from the vesting start date, and 50% based on the date in which the Class D Units become participating units. These vesting terms applied to each of the Class D1, Class D2 and Class D3 tranches described above. Class D1 Units would become participating units upon the later of: (i) the date which aggregate distributions by the Company exceeded the minimum threshold equity value (as defined in each Incentive Unit Award Agreement), or (ii) when the total cumulative distributions made to the Class A Unit holders exceeded the aggregate investment made by the Class A Unit holders. Class D2 and D3 Units would become participating units upon the later of: (i) the date which aggregate distributions by the Company exceeded the minimum threshold equity value (as defined in each Incentive Unit Award Agreement), or (ii) when the total cumulative distributions made to the Class A Unit holders exceeded either three times (Class D2 Units) or four times (Class D3 Units) the aggregate investment made by the Class A Unit holders. The terms of the Phantom Unit awards were similar to the Class D Unit awards; however, they did not represent ownership of any class unit of the Company. The Phantom Units vested and became participating units in similar fashion to the Class D Units as described above. The holder of a vested and participating Phantom Unit was eligible to receive a distribution in the same form and consideration as a Class D Unit holder, however, only upon a change in control event. Upon receiving the distribution, the Phantom Units would cease to be outstanding. 
With respect to the Phantom Units, as a change in control event represents a contingent future event outside the control of the Company, the Company did not record any share-based compensation expense related to the Phantom Units until the contingency was resolved.
On the date of the IPO, participating D-1 Phantom units became eligible for cash settlement. Non-participating Phantom Units were cancelled and replaced with new phantom stock awards. All converted and replaced awards retained the same vesting attributes as the original Phantom Units.
Non-participating D-2 and D-3 Phantom Units were converted to phantom stock awards (“Class D Phantom Stock Awards”). The grant date fair value of Class D Phantom Stock Awards is being recorded as share-based compensation expense over the requisite service period of the awards. The Company has concluded that Class D Phantom Stock Awards should be treated as liability classified share-based compensation awards because they will be settled in cash. Accordingly, the accrued liability balance associated with Class D Phantom Stock Awards is adjusted to fair value at each reporting period through earnings.
The Class D Phantom Stock Awards retain the vesting attributes (including original service period vesting start date) of the Phantom Units. These awards will be settled in cash equal to the fair market value of a share of the Company’s common stock, determined on the day that such award becomes fully vested.
In substitution for part of the economic benefit of the Phantom Units that was not reflected in the conversion to Class D Phantom Stock Awards, stock appreciation rights (“Leverage Restoration SARs”) were granted to holders of Phantom Units. The fair value of the Leverage Restoration SARs is being recorded as share-based compensation expense over the requisite period of the awards. The Company
Page 43

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
has concluded that the Leverage Restoration SARs should be treated as liability classified share-based compensation awards because they will be settled in cash. Accordingly, the accrued liability balance associated with Leverage Restoration SARs is adjusted to fair value at each reporting period through earnings. 
Leverage Restoration Stock Appreciation Rights (“SARs”) were granted on August 14, 2020 with an exercise price of $27.00, a ten-year contractual term and retained vesting attributes (including original service period vesting start dates) of the Phantom Units. SARs will be settled in cash equal to the excess of the fair market value of a share of the Company’s common stock, determined on the date of exercise, over the exercise price share of common stock underlying such SAR.
New Restricted Stock Awards and Restricted Stock Units
On the date of the IPO, the parent company granted Restricted Stock Units (“RSUs”) to select international employees. The RSUs represent the right to receive shares of the Company’s common stock as they vest; however, the holder of an RSU has no rights as a stockholder. These awards vest annually over a 4-year requisite service period and are settled in shares of the Company’s common stock. The Company has concluded that the RSUs should be treated as equity classified share-based compensation awards.  

Page 44

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

23.
 

Business combinations

On 25 January 2023, Duck Creek Technologies Limited acquired IMburse AG and its subsidiaries IMburse Limited and IMburse Unipessoal Lda.

Acquisition of Imbuse AG

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
$
$
$

Fixed Assets

Tangible
82,685
-
82,685

Intangible
-
4,523,161
4,523,161

82,685
4,523,161
4,605,846

Current Assets

Stocks
194,494
-
194,494

Debtors
184,542
-
184,542

Cash at bank and in hand
578,320
-
578,320

Total Assets
1,040,041
4,523,161
5,563,202

Creditors

Due within one year
(318,396)
-
(318,396)

Provisions for liabilities
(565,366)
-
(565,366)

Total Identifiable net assets
156,279
4,523,161
4,679,440


Goodwill
16,095,556

Total purchase consideration
20,774,996

Consideration

$


Cash
20,774,996

Total purchase consideration
20,774,996

Page 45

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

23.Business combinations (continued)

Cash outflow on acquisition

$


Purchase consideration settled in cash, as above
20,774,996

20,774,996

Less: Cash and cash equivalents acquired
(578,320)

Net cash outflow on acquisition
20,196,676

The goodwill arising on acquisition is attributable to the acquisition of Imbuse AG.

The results of Imbuse AG and its subsidiaries since acquisition are as follows:

Current period since acquisition
$

Turnover
3,241,332

Profit for the period since acquisition
197,175


24.


Pension commitments

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group  in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to $2,094,404 (2022: $1,169,829). Contributions totalling $812,072 (2022: $73,456) were payable to the fund at the balance sheet date and are included in creditors.


25.


Commitments under operating leases

At 31 August 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Not later than 1 year
1,911,537
1,432,013
727,697
235,800

Later than 1 year and not later than 5 years
2,380,654
3,347,101
638,305
314,400

4,292,191
4,779,114
1,366,002
550,200

Page 46

 
DUCK CREEK TECHNOLOGIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023

26.


Related party transactions

The Company has taken advantage of the exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the Group.


27.


Post balance sheet events

There have been no significant events affecting the Group since the year end.


28.


Controlling party

The immediate parent company is Duck Creek Technologies, Inc., registered at 100 Summer Street, Boston, MA 02201, USA.
The ultimate parent company is Disco Topco Inc, L.P., registered at 1209 Orange Street, Wilmington, County of New Castle, Delaware, 19801, USA.
Disco intermediate, LLC, is the smallest and largest group to consolidate these financial statements

Page 47