UMIP UPF Limited - Limited company accounts 18.2

REGISTERED NUMBER: 06452985 (England and Wales)

Director's Report and

Audited Financial Statements for the Year Ended 31 July 2019

for

UMIP UPF Limited

Page

Company Information

1

Director's Report

2

Statement of Director's Responsibilities

3

Independent Auditors' Report

4

Statement of Comprehensive Income

6

Statement of Financial Position

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTOR:

Mr S B Dauncey

SECRETARY:

Mrs J N Shelton

REGISTERED OFFICE:

c/o UMI3, Core Technology Facility

46 Grafton Street

Manchester

M13 9NT

REGISTERED NUMBER:

06452985 (England and Wales)

AUDITORS:

Ernst & Young LLP, Statutory Auditor

1 Colmore Square

Birmingham

B4 6HQ

BANKERS:

National Westminister Bank Plc

Manchester University Union Branch

323 Oxford Road

Manchester

Greater Manchester

M13 9PS

The director presents his report with the financial statements of the company for the year ended 31 July 2019.

PRINCIPAL ACTIVITY

The principal activity of the company is to invest in the UMIP Premier Fund, a fund dedicated to the commercialisation of

technology in university spin-outs. The fund primarily makes late-seed stage investments in businesses emerging from The

University of Manchester. The fund is managed by technology investment manager, MTI.

The decision has been made to transfer the company's investment in the UMIP Premier Fund to The University of Manchester

during the year ending 31 July 2020. The intention is to then wind up the company as soon as practically possible.

GOING CONCERN

Due to the plans to close UMIP UPF Ltd these accounts have not been prepared on a going concern basis.

As a result of ceasing to apply the going concern basis all debt due after more than one year has been reclassified as due within one

year.

REVIEW OF BUSINESS

The loss for the year is set out in the profit and loss account on page 6 of the financial statements.

The position at year end was satisfactory. The UMIP Premier Fund has a ten year term which was due to end in March 2018. The

term was extended by a further 12 months with an option to extend for another 12 months.

RESULTS AND DIVIDENDS

The loss for the year after taxation amounted to £141,907 (2018: loss £1,500,668).

The director does not recommend the payment of a dividend (2018: £nil) leaving the loss for the year of £129,209 (2018: loss

£1,500,668) to be transferred from reserves.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The director shown below has held office during the whole of the period from 1 August 2018 to the date of this report.

Mr S B Dauncey (The University of Manchester Nominated Representative)

Other changes in directors holding office are as follows:

Mr C G Rowland - resigned 6 January 2019

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being

information needed by the auditor in connection with preparing its report, of which the company's auditors are unaware. Having

made enquiries of fellow directors and the auditor, each director has taken all the steps that he or she ought to have taken as a

director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors

are aware of that information.

AUDITORS

Ernst & Young LLP, have indicated their willingness to be re-appointed for another term and appropriate arrangements have been

put in place for them to be deemed re-appointed as auditors in the absence of an Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

Mrs J N Shelton - Secretary

23 April 2020

The directors are responsible for preparing the Report of the Directors 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), including Financial Reporting Standard 102. 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;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue

in business;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and

explained in the financial statements.

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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the

company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may

differ from legislation in other jurisdictions.

Opinion

We have audited the financial statements of UMIP UPF Limited (the 'company') for the year ended 31 July 2019 which comprise the

Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the related notes 1 to

16, 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 company's affairs as at 31 July 2019 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditors' 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

Conclusions relating to basis of preparation; financial statements prepared on a basis other than going concern

We draw attention to note 2 to the financial statements and the Director's Report which explains that the directors intend to

liquidate the company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in

preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as

described in note 2. Our opinion is not modified in this respect of this matter.

Other information

The director is responsible for the other information. The other information comprises the information in the Director's Report and

the Statement of Director's Responsibilities, but does not include the financial statements and our Auditors' Report thereon.

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.

In connection with our audit of the financial statements, 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

audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material

misstatement of the other information. 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Director's Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have

not identified material misstatements in the Director's Report.

We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Director's Report.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either

intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 Auditors' 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.

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 Auditors' Report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

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 Auditors' 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.

Stephen Clark (Senior Statutory Auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

Birmingham

29 April 2020

TURNOVER

3

-

-

-

Administrative expenses

-

(16,086

)

(16,086

)

OPERATING LOSS

5

-

(16,086

)

(16,086

)

Amounts written off investments

6

-

88,060

88,060

Interest payable and similar expenses

7

-

(201,183

)

(201,183

)

LOSS BEFORE TAXATION

-

(129,209

)

(129,209

)

Tax on loss

8

-

(12,698

)

(12,698

)

LOSS FOR THE FINANCIAL YEAR

-

(141,907

)

(141,907

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(141,907

)

TURNOVER

3

-

101,401

101,401

Administrative expenses

-

(5,041

)

(5,041

)

OPERATING PROFIT

5

-

96,360

96,360

Amounts written off investments

6

-

(1,422,523

)

(1,422,523

)

Interest payable and similar expenses

7

-

(169,965

)

(169,965

)

LOSS BEFORE TAXATION

-

(1,496,128

)

(1,496,128

)

Tax on loss

8

-

(4,540

)

(4,540

)

LOSS FOR THE FINANCIAL YEAR

-

(1,500,668

)

(1,500,668

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(1,500,668

)

FIXED ASSETS

Investments

9

3,358,367

3,270,307

CURRENT ASSETS

Cash in hand

1,451,501

1,455,342

CREDITORS

Amounts falling due within one year

10

(9,188,234

)

(1,174,806

)

NET CURRENT (LIABILITIES)/ASSETS

(7,736,733

)

280,536

TOTAL ASSETS LESS CURRENT LIABILITIES

(4,378,366

)

3,550,843

CREDITORS

Amounts falling due after more than one year

11

-

(7,800,000

)

PROVISIONS FOR LIABILITIES

12

(183,637

)

(170,939

)

NET LIABILITIES

(4,562,003

)

(4,420,096

)

CAPITAL AND RESERVES

Called up share capital

13

10,000

10,000

Retained earnings

14

(4,572,003

)

(4,430,096

)

SHAREHOLDERS' FUNDS

(4,562,003

)

(4,420,096

)

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the director on 23 April 2020 and were signed by:

Mr S B Dauncey - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 August 2017

10,000

(2,929,428

)

(2,919,428

)

Changes in equity

Total comprehensive loss

-

(1,500,668

)

(1,500,668

)

Balance at 31 July 2018

10,000

(4,430,096

)

(4,420,096

)

Changes in equity

Total comprehensive loss

-

(141,907

)

(141,907

)

Balance at 31 July 2019

10,000

(4,572,003

)

(4,562,003

)

1.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. UMIP UPF Limited is a private company, limited by shares, incorporated in England and Wales. The registered office is c/o UMI3, CTF, 46 Grafton Street, Manchester, Greater Manchester, M13 9NT.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS102) "The

Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial

statements have been prepared under the historical cost convention.

The following accounting policies have been applied consistently in dealing with items which are considered material in

relation to the company's financial statements.

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as

permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates

In the process of applying these accounting policies, the company is required to make certain estimates, judgements and

assumptions that management believe are reasonable based on the information available. These are reviewed on a regular

basis by the management team. Significant estimates and material judgements used in the preparation of the financial

statements are as follows:

Impairments

Management make judgements as to whether any indicators of impairment are present for any of the company's assets.

Provisions

Management apply judgement to arrive at the best estimate for any obligation required. The amount recognised as a

provision is management's best estimate of the present value of the amount required to settle the estimate. To arrive at

this amount management assess the likelihood and extent of any future settlement and make judgements based on these.

Taxation

The company establishes provisions based on reasonable estimates, for possible consequences of audits by the tax

authorities of the respective countries in which it operates. The amount of such provisions is based on various factors,

such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the

responsible tax authority.

Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon

likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies.

Further details are contained in note 8.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value

added tax and other sales taxes.

Going concern

Due to plans to close UMIP UPF Ltd ias soon as possible, these accounts have not been prepared on a going concern basis.

Adjustments have been made as a consequence, specifically on relation to the reclassification from long term liabilities to

current liabilities.

Investments

Fixed asset investments are held at fair value with movements recognised in the Statement of Comprehensive Income. Fair

value is based on the market valuation of the investments, as assessed by the counterparty, MTI, using accepted

methodologies for venture capital investments.

Taxation

Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past

reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated.

Deferred tax assets are only 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.

Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the

reporting date that are expected to apply to the reversal of the timing difference.

With the exception of changes arising on the initial recognition of a business combination, the tax expense (income) is

presented either in profit or loss, other comprehensive income or equity depending on the transaction that resulted in the

tax expense (income).

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. Deferred tax

assets and deferred tax liabilities are offset only if:

- the group has a legally enforceable right to set off current tax assets against current tax liabilities, and

- the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either

the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net

basis, or to realise the assets and settle the liabilities simultaneously.

Related party disclosure

As the company is a wholly owned subsidiary of The University of Manchester, the company has taken advantage of the

exemption contained in FRS102 section 33.1a, and has therefore not disclosed transactions or balances with entities which

form part of the group. The consolidated financial statements of The University of Manchester, within which this company

is included, can be obtained from the address given in note 15.

3.

TURNOVER

The turnover and loss before taxation is wholly attributable to the principal activity of the company and arise solely in the

United Kingdom.

4.	DIRECTORS' EMOLUMENTS

There were no staff costs during the year (2018: £NIL).

The director who held office during the year was an employee of The University of Manchester and was remunerated by

that entity.

5.	OPERATING (LOSS)/PROFIT

2019

2018

Operating (loss)/profit from continuing operations is stated after charging:

£

£

Fees payable to the company's auditor

- audit of these financial statements pursuant to legislation

5,690

2,746

6.

AMOUNTS WRITTEN OFF INVESTMENTS

2019

2018

£

£

Profit/(Loss) on financial assets at fair value

88,060

(1,422,523

)

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Interest payable to The University of Manchester

201,183

169,965

8.

TAXATION

Analysis of the tax charge

The tax charge on the loss for the year was as follows:

2019

2018

£

£

Deferred tax

12,698

4,540

Tax on loss

12,698

4,540

UK corporation tax has been charged at 19% (2018 - 19%).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained

below:

2019

2018

£

£

Loss before tax

(129,209

)

(1,496,128

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

(24,550

)

(284,264

)

Effects of:

Expenses not deductible for tax purposes

(15,192

)

270,279

Group relief surrendered

39,742

19,060

Adjust opening / closing rate to 19.00%

-

(535

)

Adjustments to deferred tax charge in respect of previous periods

12,698

-

Total tax charge

12,698

4,540

9.	FIXED ASSET INVESTMENTS

Fixed asset investments are carried at fair value, net of appreciation/ depreciation of the investment portfolio.

£

Valuation at 31 July 2018

3,270,307

Change in fair value

88,060

Valuation at 31 July 2019

3,358,367

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Trade creditors

10,320

-

Accruals and deferred income

7,910

5,985

Amounts due to The University of Manchester

9,170,004

1,168,821

9,188,234

1,174,806

The amounts owed to The University of Manchester in 2019 include a loan plus outstanding interest at UK base rate plus

1.5%. The loan is due for repayment in December 2019.

11.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Amounts due to The University of Manchester

-

7,800,000

As the decision has been made to close the company, all of the outstanding debt due to The University of Manchester (the

loan) has been reclassified as due within one year.

12.	PROVISIONS FOR LIABILITIES

2019

2018

£

£

Deferred tax

Tax losses carried forward

(71,172

)

(66,632

)

Short term timing differences

254,809

237,571

183,637

170,939

Deferred

tax

£

Balance at 1 August 2018

170,939

Charge to Statement of Comprehensive Income during year

12,698

Balance at 31 July 2019

183,637

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

£

£

10,000

Ordinary

£1

10,000

10,000

14.

RESERVES

Retained

earnings

£

As at 1 August 2018

(4,430,096

)

Loss for the year

(141,907

)

As at 31 July 2019

(4,572,003

)

15.	ULTIMATE PARENT UNDERTAKING

The company is a wholly owned subsidiary of The University of Manchester, a University incorporated by Royal Charter.

The largest and smallest group in which the results of the company are consolidated is that headed by The University of

Manchester.

The University of Manchester is the ultimate controlling party and the ultimate parent of the company.

Copies of the group financial statements can be obtained from that University's registered office, which is The University of

Manchester, Oxford Road, Manchester, M13 9PL and are also available on the University's website.

16.	POST BALANCE SHEET EVENTS

On 19th December the company's investment in UMIP Premier Fund was transferred to The University of Manchester for a

value of £3,070,650.