CERENCE LIMITED

Company Registration Number:
12000685 (England and Wales)

Unaudited statutory accounts for the year ended 30 September 2023

Period of accounts

Start date: 1 October 2022

End date: 30 September 2023

CERENCE LIMITED

Contents of the Financial Statements

for the Period Ended 30 September 2023

Directors report
Profit and loss
Balance sheet
Additional notes
Balance sheet notes

CERENCE LIMITED

Directors' report period ended 30 September 2023

The directors present their report with the financial statements of the company for the period ended 30 September 2023

Principal activities of the company

The Company's principal activities consist of the provision of research and development, sales and marketing, administrative and technical support to other Cerence Group Companies. The Company operates under a cost plus relationship within the Group by providing services to other Cerence Group Companies.



Directors

The directors shown below have held office during the whole of the period from
1 October 2022 to 30 September 2023

Jennifer Trusso Salinas
Dennis Joseph Close


Secretary Jennifer Trusso Salinas

The above report has been prepared in accordance with the special provisions in part 15 of the Companies Act 2006

This report was approved by the board of directors on
27 June 2024

And signed on behalf of the board by:
Name: Jennifer Trusso Salinas
Status: Secretary

CERENCE LIMITED

Profit And Loss Account

for the Period Ended 30 September 2023

2023 2022


£

£
Turnover: 1,644,262 1,694,460
Cost of sales: 0 0
Gross profit(or loss): 1,644,262 1,694,460
Administrative expenses: ( 1,540,049 ) ( 1,599,832 )
Operating profit(or loss): 104,213 94,628
Profit(or loss) before tax: 104,213 94,628
Tax: ( 17,221 ) ( 17,979 )
Profit(or loss) for the financial year: 86,992 76,649

CERENCE LIMITED

Balance sheet

As at 30 September 2023

Notes 2023 2022


£

£
Called up share capital not paid: 0 0
Fixed assets
Intangible assets:   0 0
Tangible assets:   0 0
Investments:   0 0
Total fixed assets: 0 0
Current assets
Debtors: 3 1,301,225 1,189,357
Cash at bank and in hand: 260 0
Total current assets: 1,301,485 1,189,357
Creditors: amounts falling due within one year: 4 ( 158,609 ) ( 133,473 )
Net current assets (liabilities): 1,142,876 1,055,884
Total assets less current liabilities: 1,142,876 1,055,884
Creditors: amounts falling due after more than one year:   0 0
Provision for liabilities: 0 0
Total net assets (liabilities): 1,142,876 1,055,884
Capital and reserves
Called up share capital: 500,001 500,001
Share premium account: 210,000 210,000
Profit and loss account: 432,875 345,883
Total Shareholders' funds: 1,142,876 1,055,884

The notes form part of these financial statements

CERENCE LIMITED

Balance sheet statements

For the year ending 30 September 2023 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These accounts have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

This report was approved by the board of directors on 27 June 2024
and signed on behalf of the board by:

Name: Jennifer Trusso Salinas
Status: Director

The notes form part of these financial statements

CERENCE LIMITED

Notes to the Financial Statements

for the Period Ended 30 September 2023

  • 1. Accounting policies

    Basis of measurement and preparation

    These financial statements have been prepared in accordance with the provisions of Section 1A (Small Entities) of Financial Reporting Standard 102

    Turnover policy

    Cerence Limited is operating on a Cost Plus methodology. Cerence GmbH (parent company) is charged a fee by Cerence Limited for Research & Development services rendered during the year. This fee is calculated as R&D costs incurred throughout the year, plus a mark up of 5%. Cerence GmbH (parent company) is charged a fee by Cerence Limited for Professional services and Marketing services rendered during the year. This fee is calculated as PS&M costs incurred throughout the year, plus a mark up of 7%.

    Other accounting policies

    Accounting policies Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies The following principal accounting policies have been applied: Going concern Despite increased economic uncertainty in the USA and abroad related to factors like COVID-19, Russian invasion of Ukraine etc. management believes that the Company has sufficient reserves to continue to operate. Therefore, management believes that the Company will continue to have sufficient liquidity to meet its obligations as they fall due. The current business model with a mutual service (R&D & PS&M agreement cost plus based) and cash flow agreement (Cerence cash pool set up via Citi bank) between Cerence Limited and the Cerence Group continues to secure the necessary funding going forward. Financial reporting standard 102 - reduced disclosures exemptions The Company's ultimate controlling party at 30 September 2023, Cerence Incorporated, includes the Company in its consolidated financial statements which are publicly available. In these financial statements, the Company is considered a qualifying entity and has taken advantage of the following exemptions available under FRS 102; Exemption from the requirement of Section 7 of FRS 102 and FRS 102 paragraph 3.17 (d) to present a Statement of Cash Flows, Exemption from the requirements of Section 33 Related Party Disclosure paragraph 33.7, Exemption from the requirements of Section 26 Share Based payments, paragraphs 26.18 (b), 26.19 to 26.21 and 26.23, Exemption from the requirements to disclose information in relation to Section 11 of FRS 102, paragraphs 11.42, 11.44, 11.45, 11.47, 11.48 (a)(iii), 11.48 (a)(iv), and 11.48 (c); and Exemption from the requirements to disdose information in relation to Section 12 of FRS 102, paragraphs 12.26,12.27, and 12.29 (a), 12.29 (b) and 12.29A. This information of the Company is included within the consolidated financial statements of Cerence Incorporated. Copies of the group financial statements are available to the public at 25 Burlington Mall Road Suite 416 Burlington, MA 01803 USA and at www.cerence.com. Foreign currency translation 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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'. Operating leases: the Company as lessee Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset. Taxation Tax is recognised in the profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance sheet date in the countries where the Company operates and generates income. Debtors Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. Cash and cash equivalents Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. Creditors Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. Financial instruments The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an assets carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the Balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

CERENCE LIMITED

Notes to the Financial Statements

for the Period Ended 30 September 2023

  • 2. Employees

    2023 2022
    Average number of employees during the period 14 13

CERENCE LIMITED

Notes to the Financial Statements

for the Period Ended 30 September 2023

3. Debtors

2023 2022
£ £
Trade debtors 1,281,706 1,167,196
Prepayments and accrued income 8,709 20,777
Other debtors 10,810 1,384
Total 1,301,225 1,189,357

CERENCE LIMITED

Notes to the Financial Statements

for the Period Ended 30 September 2023

4. Creditors: amounts falling due within one year note

2023 2022
£ £
Trade creditors 43,054 14,601
Taxation and social security 58,577 39,528
Accruals and deferred income 54,730 79,344
Other creditors 2,248
Total 158,609 133,473

CERENCE LIMITED

Notes to the Financial Statements

for the Period Ended 30 September 2023

5. Financial Commitments

The Company had no material capital commitments in the financial year ended 30 September 2023 (2022: None).