Company registration number 03228491 (England and Wales)
EMBARCADERO TECHNOLOGIES EUROPE LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
EMBARCADERO TECHNOLOGIES EUROPE LTD.
COMPANY INFORMATION
Directors
Mr R L Chambers III
Mr R E Jacops
Secretary
Mr J Lloyd
Company number
03228491
Registered office
Suite 4, 7th Floor
50 Broadway
London
SW1H 0DB
Auditor
Sumer Auditco Limited
The Beehive
Beehive Ring Road
London Gatwick Airport
Gatwick
United Kingdom
RH6 0PA
EMBARCADERO TECHNOLOGIES EUROPE LTD.
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
EMBARCADERO TECHNOLOGIES EUROPE LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
The company's strategy and main objective
The company's strategy is to continue supporting the immediate parent company, Embarcadero Technologies Inc. in generating value and preserving future growth.
The main objective of the company is to focus on growing the business organically through its existing partnerships, establishing new partnerships, supporting existing and capturing new customers in the European, South American, African and Asian continents.
Business Model
During the year, the company was a wholly owned subsidiary of Embarcadero Technologies Inc., part of the Idera Inc. group headed by Idera Parent LP, which in turn is majority owned by private equity firms Partners Group.
The company operates under licence from its immediate parent undertaking to generate licence and support fees from the sale, distribution and marketing of the intellectual property rights associated with the software tools.
The company's business model has not changed since the prior year and the directors expect it to remain the same for the foreseeable future.
Embarcadero uses 3 different routes to market:
1. partnership agreements with reputable local vendors in trading territories
2. a direct sales model with internally hired sales staff; and
3. e-commerce with a third party vendor
Future Developments
The immediate parent company continues to invest in research and development to enable all of the software tools to be competitive in the development and database tools market globally,
Review of business and key performance indicators
The company continues to use the same range of key performance indicators, which are reported to the immediate parent company on a monthly basis. Amongst other parameters, focus remains on the performance of the company both in terms of licence revenue and maintenance bookings.
The Statement of Comprehensive Income is set out on page 9 of this report and the Profit and Loss Account on page 8 shows turnover for the period of £25,312,463 (2023: £26,776,769).
Year on year operating profit was £1,539,034 (2023: £1,854,437) representing 6.08% (2023: 6.93%) of turnover.
The company continues to position itself aggressively in the development and database tools market place by restructuring and maximising returns on investment. The company is primarily focused on the distribution of development and database tools to a worldwide market.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Principal Risk and uncertainties
The company's operations expose it to a variety of financial risks that include the effects of changes in market prices, credit risk and interest rate risk. The company has in place a risk management programme that seeks to limit adverse effects on the financial performance of the company. Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. The company does not use derivative financial instruments and as such no hedge accounting is applied.
Foreign exchange
Sales to Ireland and mainland Europe (Euro Zone) are made in Euros. The sales to the Asia Pacific and Latin American regions are made in Australian Dollars and US Dollars. The company is therefore exposed to movements in the Euro, Australian Dollar and US Dollar to Sterling exchange rate. This is carefully monitored and whenever possible all purchases and payments are made in the local currency of the region requiring the expenditure. This therefore mitigates the need to purchase local currency on a needs basis, as the currencies are supplied by a collection of debt. The Company has recognised the effects of Brexit and continues to astutely manage foreign currency risk exposure by collection cash on a timely basis and holding sufficient cash reserves to naturally hedge the potential effects of the exposure.
Credit Risk.
The company's credit risk is primarily attributable to its trade debtors. Credit risk is managed by running credit Checks on new customers and by monitoring payments against contractual agreements.
Debt collection in certain countries remains a challenge. The directors have taken the view that where collections could be at risk due to the economic conditions, credit control effects should be maintained at the highest level. The company monitors cash flow as part of its day to day control procedures. Management consider cash flow projections on a weekly basis and ensures that appropriate facilities are available to be drawn upon as necessary.
Liquidity risk
The company has no requirement for debt finance as it maintains sufficient funds for operations. The objective of the Company in managing funding risk is to ensure that it can meet its financial obligations as and when they fall due. The Company expects to meet its financial obligations through operating cash flows.
Interest rate risk
The company has interest bearing assets in the form of cash balances, which are invested in secure banks to provide appropriate returns.
Inherent market volatility
The market for sale of software database management and development tools remains highly competitive. The company seeks to manage the risk of losing customers to key competitors by improving response times in the supply of the software, the handling of customer queries and by maintaining strong relationships and local representation with key customers, through the extensive resell channel base.
Mr R L Chambers III
Director
16 December 2024
EMBARCADERO TECHNOLOGIES EUROPE LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The Company is classified, for the purpose of determining the contents of the director's report, to qualify as a medium- sized company in accordance with Section 465 of the Companies Act 2006.
The business activities remain unchanged, supplying software and consultancy services, and continues its strategic objectives and activities as outlines in the strategic report.
Results and dividends
The results for the year are set out on page 8. In accordance with the Companies Act 2006 the company has disclosed review of business, risks/uncertainties, business model and developments within the strategic report.
Ordinary dividends were paid amounting to £416,028. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R L Chambers III
Mr R E Jacops
Business relationships
The company has branches, as defined in section 1406(3) of the Companies Act 2006, outside the UK as follows:
- Embarcadero Technologies Europe Ltd (France)
- Embarcadero Technologies Europe Ltd (Russia) [Representative office]
Due to the unrest between Russia and Ukraine, the Directors have taken the decision to cease all operations in Russia until such a time as circumstances change or further review of the situation is considered feasible.
Statement of directors' responsibilities
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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr R L Chambers III
Director
16 December 2024
EMBARCADERO TECHNOLOGIES EUROPE LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EMBARCADERO TECHNOLOGIES EUROPE LTD.
- 5 -
Opinion
We have audited the financial statements of Embarcadero Technologies Europe Ltd. (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, 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 March 2024 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.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EMBARCADERO TECHNOLOGIES EUROPE LTD. (CONTINUED)
- 6 -
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, outlines above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non - compliance with laws and regulations related to breaches of the Sale of Goods Act 1979 and employment laws. We consider the extent to which non- compliance might have a material effect on the financial statements. Additionally, we consider those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EMBARCADERO TECHNOLOGIES EUROPE LTD. (CONTINUED)
- 7 -
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks related to posting journal entries to manipulate financial performance, Management bias through judgements and assumptions in significant accounting estimates and significant one - off or unusual transactions. Audit procedures performed by the engagement team included but were not limited to:
Discussions with management and those charged with governance including consideration of known or suspected instances of non - compliance with laws and regulations and fraud.
Evaluation and testing of the operational effectiveness of managements entity level controls designed to prevent and detect irregularities.
Performing testing on month- end adjustments.
Incorporating unpredictability into the nature, timing and/ or extent of our testing.
Challenging assumptions and Judgements made by management in their significant accounting estimates, in particular in relation to deferred income.
Identifying and testing journal entries, in particular any journal entries posted by infrequent users or senior management or posted with descriptions indicating a higher level of risk.
It is the primary responsibility of management, with the oversite of those charged with governance, to ensure that the entity’s operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
Whilst our audit did not identify any significant matters relating to the detection of irregularities including fraud, and despite the audit being planned and conducted in accordance with ISAs (Uk), there remains an unavoidable risk that material misstatements in the financial statements may no be detected owing to the inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional misrepresentation or the override of internal controls.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors responsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Mr Alan Jones FCCA (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited, Statutory Auditor
Chartered Accountants
The Beehive
Beehive Ring Road
London Gatwick Airport
Gatwick
RH6 0PA
United Kingdom
25 February 2025
EMBARCADERO TECHNOLOGIES EUROPE LTD.
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
25,312,463
26,776,768
Cost of sales
(21,620,152)
(22,754,962)
Gross profit
3,692,311
4,021,806
Administrative expenses
(3,256,051)
(2,674,647)
Operating profit
4
436,260
1,347,159
Interest receivable and similar income
6
1,102,774
510,137
Interest payable and similar expenses
7
(2,859)
Profit before taxation
1,539,034
1,854,437
Tax on profit
8
(403,312)
(387,476)
Profit for the financial year
1,135,722
1,466,961
EMBARCADERO TECHNOLOGIES EUROPE LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
£
£
Profit for the year
1,135,722
1,466,961
Other comprehensive income
-
-
Total comprehensive income for the year
1,135,722
1,466,961
EMBARCADERO TECHNOLOGIES EUROPE LTD.
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,017
Current assets
Debtors
12
24,312,143
20,234,005
Cash at bank and in hand
1,370,708
1,494,369
25,682,851
21,728,374
Creditors: amounts falling due within one year
13
(18,342,321)
(15,395,698)
Net current assets
7,340,530
6,332,676
Total assets less current liabilities
7,340,530
6,337,693
Creditors: amounts falling due after more than one year
14
(5,011,582)
(4,728,439)
Net assets
2,328,948
1,609,254
Capital and reserves
Called up share capital
16
11,244
11,244
Profit and loss reserves
2,317,704
1,598,010
Total equity
2,328,948
1,609,254
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 16 December 2024 and are signed on its behalf by:
Mr R L Chambers III
Director
Company registration number 03228491 (England and Wales)
EMBARCADERO TECHNOLOGIES EUROPE LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
11,244
695,457
706,701
Year ended 31 March 2023:
Profit and total comprehensive income
-
1,466,961
1,466,961
Dividends
9
-
(564,408)
(564,408)
Balance at 31 March 2023
11,244
1,598,010
1,609,254
Year ended 31 March 2024:
Profit and total comprehensive income
-
1,135,722
1,135,722
Dividends
9
-
(416,028)
(416,028)
Balance at 31 March 2024
11,244
2,317,704
2,328,948
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information
Embarcadero Technologies Europe Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is Suite 4, 7th Floor, 50 Broadway, London, SW1H 0DB.
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 £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. 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 Idera Parent Sub, L.P as at 31 March 2024. These consolidated financial statements are available from Idera Inc. head office at 10801 N Mopac Expressway Building 1, Suite 100, Austin TX, 78759.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
Amortised evenly over its estimated useful life of 3 years
1.5
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
Over the period of the lease
Fixtures and fittings
20% Straight Line
Computers
16.7% - 33.3% 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.
1.6
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.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.7
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.
1.8
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.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Deferred income is valued at £17,125,176 (2023: £16,648,175) and is presented within other creditors both within and due after more than one year. Deferred income represents the company's estimate of advance payments received for services that are to performed in the future under existing contracts.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
2,551,343
2,525,115
Rest of Europe
15,034,684
14,365,825
Rest of World
6,928,248
8,760,482
Service fee
798,188
1,125,346
25,312,463
26,776,768
2024
2023
£
£
Other revenue
Interest income
1,102,774
510,137
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
429,269
(556,223)
Fees payable to the company's auditor for the audit of the company's financial statements
16,250
15,300
Depreciation of owned tangible fixed assets
4,842
13,482
Loss on disposal of tangible fixed assets
175
1,375
Operating lease charges
37,447
57,559
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration and finance
7
6
Sales and marketing
20
17
Technical support
6
4
Total
33
27
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,756,742
1,968,267
Social security costs
282,056
315,270
Pension costs
78,522
79,195
2,117,320
2,362,732
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
9,691
1,339
Interest receivable from group companies
1,093,083
508,798
Total income
1,102,774
510,137
7
Interest payable and similar expenses
2024
2023
£
£
Interest payable to group undertakings
2,859
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
386,013
355,166
Double taxation relief
(360,917)
(352,343)
Total UK current tax
25,096
2,823
Foreign current tax on profits for the current period
372,333
386,635
Adjustments in foreign tax in respect of prior periods
5,883
(1,982)
Total current tax
403,312
387,476
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:
2024
2023
£
£
Profit before taxation
1,539,034
1,854,437
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
384,759
352,343
Permanent capital allowances in excess of depreciation
1,254
2,823
Effect of overseas tax rates
17,299
32,310
Taxation charge for the year
403,312
387,476
9
Dividends
2024
2023
£
£
Interim paid
416,028
564,408
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
10
Intangible fixed assets
Software
£
Cost
At 1 April 2023 and 31 March 2024
7,188
Amortisation and impairment
At 1 April 2023 and 31 March 2024
7,188
Carrying amount
At 31 March 2024
At 31 March 2023
11
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 April 2023
53,624
13,561
62,086
129,271
Disposals
(53,624)
(13,561)
(22,304)
(89,489)
At 31 March 2024
39,782
39,782
Depreciation and impairment
At 1 April 2023
49,482
12,686
62,086
124,254
Depreciation charged in the year
4,142
700
4,842
Eliminated in respect of disposals
(53,624)
(13,386)
(22,304)
(89,314)
At 31 March 2024
39,782
39,782
Carrying amount
At 31 March 2024
At 31 March 2023
4,142
875
5,017
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,651,371
5,055,331
Amounts owed by group undertakings
2,309,984
728,767
Amounts owed by parent undertakings
18,312,700
14,407,083
Prepayments and accrued income
38,088
42,824
24,312,143
20,234,005
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Debtors
(Continued)
- 21 -
Amounts due from group undertakings shown within one year are repayable by 60 days of receipt of the invoice.
The Revolving Demand Note to the parent (Embarcadero Technologies Inc) issued on 21 December 2022, bears annual interest calculated at Bank of England base rate plus 2 % and is repayable on or before 21 December 2032 or as the lender may designate. . All interest calculations are based on calendar year and days elapsed.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Trade creditors
31,880
58,879
Amounts owed to group undertakings
732,853
617,454
Amounts owed to parent undertakings
4,976,105
2,260,451
Corporation tax
31,368
2,823
Other taxation and social security
262,748
230,671
Deferred income
12,113,594
11,919,736
Accruals
193,773
305,684
18,342,321
15,395,698
Trade payables to fellow subsidiary Embarcadero Germany GmbH bear annual interest calculated at Euribor +1% rate and are repayable on demand.
Trade payables to parent Embarcadero Technologies Inc are repayable no later than 40 days after the end of each of the first three fiscal quarters of each fiscal year. If the payments are not paid within 40 days of the due date, then interest shall accrue at a rate of 2 % over the then applicable LIBOR rate.
Trade payables to parent Idera Inc. are repayable within 60 days of receipt of the invoice.
14
Creditors: amounts falling due after more than one year
2024
2023
£
£
Accruals and deferred income
5,011,582
4,728,439
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,522
79,195
The company operates a defined contribution pension scheme. The assets of the fund are held separately from those of the company in independently administered funds.
EMBARCADERO TECHNOLOGIES EUROPE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
11,244
11,244
11,244
11,244
17
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
33,508
The company entered into a lease agreement with TA Fisher & Sons Limited with a contractual term ending 19 November 2023.
18
Related party transactions
The company has taken advantage of the exemption in FRS 102 Section 33 'Related Party Disclosures' from the requirement to disclose transactions with wholly owned group companies on the grounds that the company is a wholly owned subsidiary which has been included within group consolidated financial statements prepared by the ultimate parent company. There were no other related party transactions during the year.
All directors and certain senior employees who have authority and responsibility for planning, directing and controlling the activities of the company are considered to be key management personnel.
The two directors received no remuneration in respect of their services to the company and are paid by the parent or ultimate parent company in the United States of America.
19
Ultimate controlling party
The company’s parent company is Embarcadero Technologies Inc., a company registered in the United States of America. The company's ultimate parent company is Idera Parent Sub, L.P., a company registered in the United States of America.
Idera Parent Sub, L.P. is the parent company of the largest and smallest group of which the company is a member and for which group accounts are drawn up. Copies of the financial statements of Idera Parent Sub, L.P. can be obtained from Idera Inc. Creekside, Suite 125, 4001 W Parmer Lane, Austin, TX. 78727
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