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Registered number: 10268645
CHECKMARX UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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CHECKMARX UK LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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CHECKMARX UK LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Consolidated Analysis of Net Debt
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Notes to the Financial Statements
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CHECKMARX UK LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors' present their Strategic Report for the year ended 31 December 2024.
Checkmarx software helps organizations to manage software security risk while integrating its solutions into the dev ops world.
Checkmarx security solutions comprised of CxSAST (Static Application Security Testing), CxSCA (Software Composition Analysis), CxIAST (Interactive Application security Testing) and CxCodebashing (Developer Appsec training platform).
Approximately 1,600 organizations adopted Checkmarx products globally, across several sectors such as technology, financial, healthcare, education, insurance and more. Several fortune 100 customers are being served by Checkmarx. Checkmarx UK is serving mostly the local market customers (UK region).
The results for the year show the total revenues of £27.16m vs £24.82M in 2023, reflecting 9.43% increase. Revenue growth is the Group's key performance indicator.
Principal risks and uncertainties
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Liquidity Risk
As of December 31, 2024, the cash and cash equivalent balances were £3.23m. The funds are kept in the Company’s bank accounts. We don't invest the free cash in deposits accounts or any other short terms investment.
This report was approved by the board and signed on its behalf.
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CHECKMARX UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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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 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 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 2006. They 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.
The profit for the year, after taxation, amounted to £1,454,847 (2023 - £556,416).
Dividends of £Nil were paid during the year (2023: £Nil).
The Directors who served during the year were:
Engagement with employees
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The Directors support the participation of employees in the activities of the Group, encourage employees to become involved in the pursuit of efficiency and high performance, and provide employees with regular communication on the Group's plans, performance and programmes.
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CHECKMARX UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Disclosure of information to auditors
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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 auditors are 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 auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
Economic impact of global events
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UK businesses are currently facing many uncertainties such as the consequences of environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
Checkmarx UK Limited continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
The auditors, Forvis Mazars LLP, will 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.
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CHECKMARX UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHECKMARX UK LIMITED
Opinion
We have audited the financial statements of Checkmarx UK Limited (the ‘Parent Company’) and its subsidiary (the 'Group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company Statements of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 December 2024 and of the Group's 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 Group's and 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.
Other information
The other information comprises the information included in the Annual Report and financial statements, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the Strategic Report and the Directors' 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.
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CHECKMARX UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHECKMARX UK LIMITED
Other information (continued)
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 the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the parent company and their 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 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.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 2, 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 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 intend either to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.
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CHECKMARX UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHECKMARX UK LIMITED
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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
In addition, we evaluated the Directors' and 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 were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion), significant fraud risk, and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the Directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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CHECKMARX UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHECKMARX UK LIMITED
Auditor's responsibilities for the audit of the financial statements (continued)
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 the audit 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 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Jonathan Marchant (Senior statutory auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
8th Floor
Assembly Building C
Cheese Lane
Bristol
BS2 0JJ
16 December 2025
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CHECKMARX UK LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Profit for the financial year
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Other comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Profit for the year attributable to:
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Owners of the parent company
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The notes on pages 16 to 35 form part of these financial statements.
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CHECKMARX UK LIMITED
REGISTERED NUMBER: 10268645
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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CHECKMARX UK LIMITED
REGISTERED NUMBER: 10268645
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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CHECKMARX UK LIMITED
REGISTERED NUMBER: 10268645
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own income statement in these financial statements. The parent Company's loss for the period was £196,330 (2023: loss of £2,042).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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CHECKMARX UK LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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Comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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The notes on pages 16 to 35 form part of these financial statements.
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CHECKMARX UK LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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The notes on pages 16 to 35 form part of these financial statements.
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CHECKMARX UK LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Decrease/(increase) in debtors
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(Increase) in amounts owed by groups
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(Decrease)/increase in creditors
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Corporation tax received/(paid)
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Exchange rate differences on cash, cash equivalents and restricted cash
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Currency translation differences
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Exchange rate differences on cash, cash equivalents and restricted cash
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 16 to 35 form part of these financial statements.
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CHECKMARX UK LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
The notes on pages 16 to 35 form part of these financial statements.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Checkmarx UK Limited is a private limited company incorporated in England and Wales, registered number 10268645. The address of its registered office is 869 High Street, London, N12 8QA.
The principal activity of the Group during the year continued to be the distribution of software products developed by its parent company.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgement in applying the Group's accounting policies (see note 3).
The following principal accounting policies have been applied:
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 Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on the going concern basis. In making their going concern assessment, the Directors have given consideration to the nature of the Company's operations and the likely impact of the Covid19 pandemic on the Company and wider Group.
The adoption of the going concern assumption is dependent on the continued financial support of the ultimate parent company, Crescendo (Luxembourg) S.a.r.l., for at least 12 months from the date of approval of these financial statements.
On this basis the Directors of the Company have concluded that there are no material uncertainties that may cast doubt on the Company's ability to continue as a going concern. Consequently, the Directors have prepared these financial statements on the going concern basis.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
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 the Statement of Comprehensive Income 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 Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling 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.
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:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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 the Statement of Comprehensive Income 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.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income 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.
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.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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:
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 the Statement of Comprehensive Income.
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Impairment of fixed assets and goodwill
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Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment.
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Cash and cash equivalents
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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.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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.
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Provisions for liabilities
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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 the Statement of Comprehensive Income.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
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.
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 Statement of Comprehensive Income. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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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 the Statement of Comprehensive Income.
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 Statement of Comprehensive Income.
Basic 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.
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.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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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 Statement of Comprehensive Income. They are subsequently measured at fair value with changes in the Statement of Comprehensive Income.
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 Statement of Comprehensive Income. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. In this regards, the Directors believe that the critical accounting policies where judgements or estimations are necessarily applied are summarised below:
Depreciation and residual values
The Directors have reviewed the asset lives and associated residual values of all fixed tangible asset classes, and in particular, the useful economic life and residual values, and have concluded that asset lives and residual values are appropriate.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The whole of the turnover is attributable to the principal activity of the Group.
Analysis of turnover by country of destination:
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Europe, Middle East & Africa
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The operating profit is stated after charging:
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Other operating lease rentals
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the Directors, during the year was as follows:
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Foreign tax on income for the year
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Foreign tax in respect of prior periods
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Origination and reversal of timing differences
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
7.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of25% (2023 - 23.52%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in relation to foreign taxation
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Remeasurement of deferred tax for changes in tax rates
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Adjustments to tax charge in respect of prior periods
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Total tax charge for the year
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Factors that may affect future tax charges
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There are no factors that may affect future tax charges.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Charge for the year on owned assets
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
8.Tangible fixed assets (continued)
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Charge for the year on owned assets
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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4710-011 São Vitor - Braga, Portugal
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The aggregate of the share capital and reserves as at 31 December 2024 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:
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Aggregate of share capital and reserves
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by group undertakings are unsecured, interest free and have been confiirmed that they will not be repayable within 12 months of the year end.
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and have been confiirmed that they will not be repayable within 12 months of the year end.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Charged to profit or loss
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Effects of foreign exchange
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Allotted, called up and fully paid
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10,000 (2023 - 10,000) Ordinary shares of £0.01 each
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Equity Incentive Plans
The Company operates equity-based compensation plans, including Employee Stock Options (ESOPs) and Restricted Stock Units (RSUs), under which employees are granted awards that vest over a specified service period.
The fair value of each award is estimated at the grant date using the Black-Scholes option pricing model for stock options. For RSUs, the fair value is based on the market price of the underlying shares at the grant date.
Share Options (ESOPs)
The table below summarizes the movement of stock options during the year ended 31 December 2024:
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Weighted Average Exercise Price (USD)
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Weighted Average Expense Per Award (USD)
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Remaining Contractual Life (In Years)
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Remaining Life to Expense - Options (In Years)
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Aggregate Intrinsic Value
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Outstanding at 31 Dec 2023
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Granted - activity for period
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Exercised - activity for period
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Cancelled forfeited - activity for period
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Cancelled expired - activity for period
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Outstanding at 31 Dec 2024
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Vested - activity for period
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Exercisable at 31 Dec 2024
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Vested & expected to Vest at 31 Dec 2024
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The remaining contractual life of outstanding options ranges from approximately 0.57 to 7.10 years.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Restricted Stock Units (RSUs)
The movement of RSUs during the year ended 31 December 2024 is as follows:
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Weighted Average Exercise Price (USD)
|
Weighted Average Expense Per Award (USD)
|
Remaining Contractual Life (In Years)
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Remaining Life to Expense - Options (In Years)
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Aggregate Intrinsic Value
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Outstanding at 31 Dec 2023
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Granted - activity for period
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Exercised - activity for period
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Cancelled forfeited - activity for period
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Cancelled expired - activity for period
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Outstanding at 31 Dec 2024
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Vested - activity for period
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Exercisable at 31 Dec 2024
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Vested & expected to Vest at 31 Dec 2024
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Accounting Policy
The fair value of stock options is recognized as an expense over the requisite service period using the straight-line method. Historical volatility of comparable publicly traded companies is used to estimate expected volatility.
The risk-free interest rate is based on U.S. treasury bond yields with equivalent terms. Dividends are not anticipated on the underlying shares, and no cash dividends have been paid historically.
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CHECKMARX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The Company operates a defined contribution scheme for the benefit of all its employees. The assets of the scheme are administered by trustees in a fund independent from those of the Company. For details of contributions made in the year see note 6.
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Related party transactions
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Exemption has been taken under paragraph 33.1A of FRS 102 not disclose transactions between wholly owned group companies.
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The immediate parent undertaking is Checkmarx Limited, a company incorprated in Israel.
The ultimate parent undertaking is Crescendo (Luxembourg) S.a.r.l., a company incorporated in Luxembourg.
The ultimate controlling party is Hellman and Friedman, a private equity firm, by virtue of its 70% ownership of Crescendo (Luxembourg) S.a.r.l..
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