| Instil Bio (UK) Limited (Formerly Immetacyte Limited) |
| Notes to the Accounts |
| for the period from 1 October 2019 to 29 February 2020 |
|
|
| 1 |
General information |
|
|
Instil Bio (UK) Limited (formerly Immetacyte Limited) is a private company limited by shares and incorporated in England and Wales under the Companies Act 2006. The address of the registered office is given on the company information page and the nature of the company's operations and its principal activity are set out in the directors' report. |
|
| 2 |
Accounting policies |
|
| 2.1 |
Basis of preparation |
|
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of 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 Section 1A FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3). |
|
The presentational and functional currency of these financial statements is GBP. Values are rounded to the nearest pound. |
|
The following principal accounting policies have been applied: |
|
| 2.2 |
Change of accounting period |
|
The accounting period has been shortened, therefore these financial statements cover the 5 month period ended 29 February 2020. The prior year comparatives cover the 12 month period ended 30 September 2019. |
|
| 2.3 |
Going concern |
|
The company meets its day to day working capital requirements through capital, accumulated reserves and cash at bank and in hand. Based upon the working capital requirements identified from the forecasts prepared for the next twelve months, the company is reliant on the support of the parent company to continue its operations. The company has received a formal legally binding undertaking from its parent company that it will continue to provide such financial support for the foreseeable future and for a period of at least twelve months from the date of signing the financial statements. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis. |
|
| 2.4 |
Turnover |
|
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover includes revenue earned from the sales of goods and is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
|
Grant income and government grants are included within turnover in the statement of comprehensive income. |
|
|
|
|
| 2.5 |
Research and development |
|
Research and development costs are written off to profit and loss accounts as they are incurred. Research and development tax credits are included within other operating income. |
|
| 2.6 |
Grant income |
|
Grants that do not impose specified future performance‑related conditions are recognised as per contractual obligations. Grants that do impose specified future performance‑related conditions are recognised when the performance‑related conditions are met. Grants received before the revenue recognition criteria are met are recognised as a liability. |
|
| 2.7 |
Government grants |
|
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income. |
|
|
Grants of a revenue nature are recognised in the statement of comprehensive income in the same period as the related expenditure. |
|
|
| 2.8 |
Tangible fixed assets |
|
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight‑line method. |
|
Depreciation is provided on the following basis: |
|
Equipment |
over 3 years |
|
|
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
|
|
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. |
|
| 2.9 |
Debtors |
|
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. |
|
| 2.10 |
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. |
|
|
| 2.11 |
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 asset's 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. |
|
| 2.12 |
Creditors |
|
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. |
|
| 2.13 |
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non‑monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
|
|
|
|
|
|
| 2.14 |
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using effective interest rate method. The finance charge is allocated to each period during the lease so as to produce constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. if there is no reasonably certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
| 2.15 |
Interest income |
|
Interest income is recognised in profit or loss using the effective interest method. |
|
| 2.16 |
Finance costs |
|
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. |
|
| 2.17 |
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
| 2.18 |
Dividends |
|
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. |
|
| 2.19 |
Current and deferred taxation |
|
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. |
|
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates 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; and |
|
· Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. |
|
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. |
|
|
| 3 |
Judgements in applying accounting policies and key sources of estimation uncertainty |
|
In preparing these financial statements, the directors have made the following judgements: |
|
Determine whether there are indicators of impairment of the company’s tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash‑generating unit, the viability and expected future performance of that unit. |
|
Other key sources of estimation uncertainty |
|
Tangible fixed assets (see note 7) |
|
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re‑assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. |
|
| 4 |
Audit information |
|
|
The auditor's report on the financial statements for the period ended 29 February 2020 was unqualified. |
|
|
Senior statutory auditor: |
Stuart Wood |
|
Firm: |
BDO LLP |
|
Date of audit report: |
20 November 2020 |
|
|
| 5 |
Employees |
2020 |
|
2019 |
| Number |
Number |
|
|
Average number of persons employed by the company |
33 |
|
23 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Dividends |
|
|
During the year, a final dividend was proposed and paid of £Nil (2019 – 2.5 pence) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7 |
Tangible fixed assets |
|
|
|
|
|
|
|
|
Equipment |
| £ |
|
Cost |
|
At 1 October 2019 |
758,715 |
|
Additions |
211,626 |
|
At 29 February 2020 |
970,341 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 October 2019 |
332,366 |
|
Charge for the period |
97,224 |
|
At 29 February 2020 |
429,590 |
|
|
|
|
|
|
|
|
|
|
Net book value |
|
At 29 February 2020 |
540,751 |
|
At 30 September 2019 |
426,349 |
|
|
| 8 |
Debtors |
2020 |
|
2019 |
| £ |
£ |
|
|
Trade debtors |
332,721 |
|
15,432 |
|
Corporation Tax |
|
|
|
|
233,390 |
|
228,081 |
|
VAT Debtor |
|
|
|
|
60,502 |
|
54,404 |
|
Prepayments and accrued income |
656,101 |
|
711,016 |
|
|
|
|
|
|
1,282,714 |
|
1,008,933 |
|
|
|
|
|
|
|
|
|
|
| 9 |
Creditors: amounts falling due within one year |
2020 |
|
2019 |
| £ |
£ |
|
|
Other loans |
- |
|
15,529 |
|
Trade creditors |
480,341 |
|
104,266 |
|
Other creditors |
|
|
|
|
183,612 |
|
182,776 |
|
Taxation and social security costs |
54,101 |
|
82,868 |
|
Accruals and deferred income |
224,286 |
|
1,121,011 |
|
|
|
|
|
|
942,340 |
|
1,506,450 |
|
|
|
|
|
|
|
|
|
|
| 10 |
Creditors: amounts falling due after one year |
2020 |
|
2019 |
| £ |
£ |
|
|
Other loans |
- |
|
9,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11 |
Loans |
2020 |
|
2019 |
| £ |
£ |
|
Analysis of the maturity of loans is given below: |
|
Amounts falling due within one year |
|
Other loans |
|
- |
|
15,529 |
|
Amounts falling due 1 - 2 years |
|
Other loans |
- |
|
9,723 |
|
|
|
|
|
|
- |
|
25,252 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Share capital |
2020 |
|
2019 |
| £ |
£ |
|
Allotted, called up and fully paid |
|
3,165,200 ordinary shares of £0.01 each |
31,652 |
|
31,652 |
|
|
|
|
|
|
|
|
31,652 |
|
31,652 |
|
|
|
|
|
|
|
|
|
|
| 13 |
Reserves |
|
|
The company’s capital and reserves are as follows: |
|
Called up share capital |
|
Called up share capital represents the nominal value of the shares issued. |
|
Share premium account |
|
The share premium account includes the premium on issue of equity shares, net of any issue costs. |
|
Profit and loss account |
|
The profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments. |
|
| 14 |
Pension commitments |
|
|
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £40,252 (2019 ‑ £71,115). Contributions totalling £13,064 (2019 ‑ £12,218) were payable to the fund at the reporting date and are included in creditors. |
|
|
|
|
|
|
|
|
|
|
| 15 |
Commitments under operating leases |
2020 |
|
2019 |
| £ |
£ |
|
At 29 February 2020 the company had future minimum lease payments under non‑cancellable operating leases as follows: |
|
|
Not later than 1 year |
372,674 |
|
- |
|
Later than 1 year and not later than 5 years |
527,955 |
|
- |
|
|
|
|
|
|
|
900,629 |
|
- |
|
|
|
|
|
|
|
|
|
|
| 16 |
Related party transactions |
|
|
The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group. |
|
Included within other loans is amounts of £Nil (2019 ‑ £25,252) which has been advanced by a director of the company. The loan accrues interest at 9% and has been repaid in full during the financial year. |
|
| 17 |
Post balance sheet events |
|
|
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (COVID‑19 outbreak) and the risks to the international community as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID‑19 outbreak as a pandemic. |
|
The full impact of the COVID‑19 outbreak continues to evolve at the date of this report. Management is actively monitoring the situation and its impact on the company’s financial condition, liquidity and operations. Although there is uncertainty as to the full impact that the pandemic will have on the financial condition, liquidity, and future results of operations of the company during 2020 the directors are satisfied it has sufficient cash resources via support from the parent company to meet its obligations as they fall due throughout the next 12 months and the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. |
|
On 2 September 2020, Instil Bio (UK) Limited entered into a lease at Alderley Park. The lease term is for 10 years with a 5 year break clause. The total commitment under the operating lease is £802,136. |
|
| 18 |
Controlling party |
|
|
Up to 1 March 2020, the controlling party was the shareholders acting in concert. |
|
From 2 March 2020, the immediate parent company and ultimate controlling party is Instil Bio Inc, a company registered in the United States of America. |
|
|
|
|
|
|
|
| 19 |
Other information |
|
|
Instil Bio (UK) Limited (Formerly Immetacyte Limited) is a private company limited by shares and incorporated in England. Its registered office is: |
|
48 Grafton Street |
|
Manchester |
|
M13 9XX |
