CIC Annual Report 2022 by Jones and Palmer

Annual Report and Accounts for the year ended 31 March 2022

CAMBRIDGE INNOVATION CAPITAL

Welcome to Cambridge Innovation Capital Cambridge Innovation Capital (CIC) is a leading venture capital investor backing and building category‑leading deep tech and life sciences companies.

0.5bn

>£

Our focus on the Cambridge ecosystem, and unique relationship with the University of Cambridge, provides us with access to excellent investment opportunities.

OF ASSETS UNDER MANAGEMENT

We have now raised in excess of £0.5 billion from a geographically diverse range of institutional and strategic investors and currently manage a portfolio of more than 30 deep tech and life science companies in fields as diverse as surgical robotics, flexible electronics, microbiome science, genomic diagnosis, quantum computing software, peptide technology and AI decision-making software.

>35 INVESTED IN

With our knowledge, experience and connections we support our portfolio and community to positively impact society, whilst remaining focused on our commercial objective to optimise value for our stakeholders.

PORTFOLIO COMPANIES

2.1bn

ATTRACTED

>£

OUR VALUE PROPOSITION

OF CO-INVESTMENTS1

WORLD-CLASS INTELLECTUAL PROPERTY GENERATED BY THE CAMBRIDGE ECOSYSTEM

Company information

IBC

CAMBRIDGE INNOVATION CAPITAL

HOW WE CREATE VALUE... Our focus on the Cambridge ecosystem and unique position, as a preferred investor for the University of Cambridge and co-founders of two accelerators, provides us with unparalleled access to emerging opportunities in one of Europe’s leading innovation hubs.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

DEEP CONNECTIONS WITH LEADING RESEARCH INSTITUTIONS

OUR UNIQUE ACCESS HELPS US TO SOURCE OPPORTUNITIES

WE CREATE SUSTAINABLE VALUE FOR OUR STAKEHOLDERS

WE SELECT THE BUSINESSES WITH THE BEST POTENTIAL

WE BUILD GLOBAL, CATEGORY-LEADING COMPANIES

Financial Statements

CO-FOUNDERS OF TWO CAMBRIDGE ACCELERATORS

CAMBRIDGE INNOVATION CAPITAL

...Through a clear strategic FOCUS...

OUR AIMS

OUR PRIORITIES

We have maintained our position and reputation as the leading investor in the Cambridge ecosystem, allowing us to select companies with the potential for superior returns for the benefit of our stakeholders.

BE THE FIRST CHOICE FOR ENTREPRENEURS, START‑UPS AND INVESTORS WHO WANT TO BUILD A BUSINESS IN CAMBRIDGE Consolidate our position as a leading investor in the Cambridge ecosystem Strengthen our reputation for deep domain and operational expertise Continue to recruit and retain a world-class team with a unique set of skills Strive to add value to every interaction

SELECT AND NURTURE COMPANIES THAT HAVE THE POTENTIAL TO DELIVER SUPERIOR RETURNS Identify knowledge intensive and intellectual property rich companies with a clear path to commercialisation Execute our rigorous screening and approval process Invest in companies that have the potential to disrupt whole markets and sectors Optimise each investment by taking a hands-on approach and adding value

DRIVE GROWTH AND REALISE VALUE FOR OUR STAKEHOLDERS

Influence corporate strategy and business development Implement management changes and incentives Facilitate access to capital markets and M&A advisers Expedite realisations, as and when appropriate

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

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SOFTWARE APPLICATIONS

HARDWARE APPLICATIONS

THERAPEUTICS

Next-generation AI technologies

Internet of Things, RFID, NFC

Robotics

Small and large molecules

Edge and cloud computing

AI for audio, speech and business intelligence

Medical devices

Gene therapies

Liquid biopsy

Cell therapies

Quantum computing

Digital therapeutics and pathology

...And a balanced and diverse portfolio... 05

Financial Statements

SOFTWARE PLATFORMS

CAMBRIDGE INNOVATION CAPITAL

...Delivering strong performance...

In June 2021 we invested in Pretzel Therapeutics, which is developing treatments to address the genetic roots of mitochondrial dysfunction.

SUPPORTING OUR EXISTING PORTFOLIO CMR SURGICAL, a global surgical robotics business, completed a £425 million ($600 million) Series D financing, the largest ever MedTech private financing round worldwide, to support the accelerated global expansion and commercial scale up of the business. CIC was an early investor in CMR, having first invested in the company’s Series A round in 2016, and we have supported each of the subsequent rounds and provided guidance, enabling the realisation of the potential of Versius®. CMR works with surgeons and hospitals to provide an optimal tool to make robotic keyhole surgery universally accessible and affordable. The size, portability and versatility of Versius® have made it very popular with hospitals and surgeons around the world. As part of CMR’s ongoing international expansion, Versius® has been successfully launched in multiple geographies across Europe, Australia,

The technology is highly scalable, capable of stacking up to 64 vectors into a beam of light. By using a broad bandwidth of light to execute operations, Salience Labs delivers massively parallel processing performance within a given power envelope. Further details on Salience Labs are provided on pages 32 and 33.

CUMULATIVE NUMBER OF PORTFOLIOS COMPANIES 35 30

More recently we co-led Salience Labs’ $11.5 million seed funding round, to support the company’s development of a new breed of ultra-high-speed multi-chip processor for AI applications. Salience Labs participated in Deeptech Labs’ accelerator programme, having originally spun-out of the University of Oxford and the University of Münster in 2021 to commercialise an ultrahigh-speed multi-chip processor that packages a photonics chip together with standard electronics.

25 20 15 10 5 0

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Exited

India and the Middle East. Global demand for CMR’s surgical robot continues to grow with significant further momentum anticipated.

to other indications. The company’s pioneering technology has the potential to deliver a new era of personalised medicine based on the microbiome.

The Series D secures the financing to fully execute CMR’s strategy to rapidly accelerate its geographical expansion and build upon the framework the company has established to grow a long-term independent global business. The new funds also support the continued development of the system’s digital framework, including new technological developments, such as Versius Connect, an app for surgeons using the Versius® surgical robotic system.

Microbiotica, which was spun out of the Wellcome Sanger Institute in 2016, has taken microbiome analysis and patient stratification from clinical data to a new level of precision, and translates this into new therapeutics and biomarkers. The company’s proprietary technology is based on comprehensive gut bacterial isolation, its leading database of gut bacterial reference genomes, and advanced bioinformatic and machine learning tools. Over the last five years, Microbiotica has partnered with leading organisations, such as Cancer Research UK, Cambridge University Hospitals, University of Adelaide and Genentech.

MICROBIOTICA, a global leader in gut bacterial culturing, completed a £50 million ($67 million) Series B financing, the largest microbiome‑related financing in Europe to date. The round will fund Phase 1b clinical trials in immuno-oncology and ulcerative colitis, and the expansion of the company’s microbiome-based product pipeline

Further details on Microbiotica are provided on pages 26 and 27.

Financial Statements

During the year we participated in the £10.3 million ($13.6 million) seed financing of Epitopea, a business that is set to transform cancer care through the development of cancer vaccines and other novel therapeutics. Epitopea aims to bring transformative benefits to cancer patients by uncovering a new class of untapped tumour-specific antigens (TSAs), to create immunotherapies that target broad cancer patient populations in both solid and haematological cancers. The seed funding will be used to build the company’s executive team, advance further research on this new class of antigens, and catalyse their translation into novel cancer immunotherapeutics, including therapeutic vaccines, cell therapies, and TCR-based biologics.

Proceeds from the round will support a number of discovery and development programmes seeking to address specific rare mitochondrial diseases with potential against a range of broader chronic conditions, and to continue exploring the potential of other therapeutics in oncology, metabolic, and common mitochondrial diseases. If successful, Pretzel could offer the world’s first ever treatments for mitochondrial diseases. Further details on Pretzel are provided on pages 28 and 29.

Governance

EXPANDING OUR PORTFOLIO

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

ORIGAMI ENERGY raised £21 million to enable it to enhance its products, serve a growing customer base and scale up for international markets. Origami is on a mission to build a green energy world, powered by smart technology. As ambitious climate targets drive a transition to renewables, energy systems are becoming more distributed, complex, and volatile. Smart digital solutions are required to manage our power grid better as more and more renewable assets are added. Powerful real-time solutions are critical to coordinate networks of renewables, flexible demand, and energy storage, to build a green energy system that is efficient, profitable, and sustainable for the long term. Origami’s trading and automation software provides power traders with real-time data and machine-learning decision support tools to reduce risk, improve visibility and capture valuable opportunities within new and rapidly evolving energy markets. PETMEDIX, a biopharmaceutical company developing antibody-based therapeutics for companion animals, announced an oversubscribed £27 million ($37 million) Series B financing round that will be used to advance its innovative pipeline through clinical development. This investment enables PetMedix to take its next step towards becoming a truly global animal health company, and the first to bring fully species-specific therapeutic antibodies to veterinary medicine.

This financing round will propel PetMedix from an R&D-stage, UK-focused biotech company, into a clinical-stage international organisation. PetMedix’s internal discovery programmes will continue to advance through development, on the way to regulatory approval. PRAGMATIC SEMICONDUCTOR, a world leader in flexible electronics, secured $80 million of Series C funding. This scale-up investment will be used to build a second FlexLogIC® fab in the North East of England, to meet the growing demand for ultra-low-cost flexible integrated circuits (FlexICs) for the Internet of Everything, and helping the UK in its ambition to be a leading designer and manufacturer of next generation semiconductors. PragmatIC’s development over the past few years has seen the launch of its flagship ConnectIC® product line of ultra-low-cost RFID FlexICs, as well as its FlexIC Foundry® service enabling innovative designers to create more pioneering products and advance them rapidly from concept to reality. In the last year, it has demonstrated an order-of-magnitude improvement in complexity and compute capability for non-silicon chips by producing flexible microprocessors. These include the iconic 6502 and PlasticArm, an ultra-minimalist Arm® Cortex®-M0 based system-on-a-chip, which is 12 times more complex than previous state-of-the-art flexible electronics.

SWIM, an edge intelligence software firm that combines local data processing with analytics and machine learning to deliver real-time business insights, completed a funding round to support the continued growth of the business. Edge computing is an emerging technology for processing data on sensors and control devices in a network closest to where that data is generated. Processing data at the edge, where it is captured, rather than transmitting that data to the cloud, reduces latency and bandwidth, and reduces cloud storage and computing costs. Swim delivers Swim Continuum, the first open core, enterprise-grade platform for building, managing and operating continuous intelligence applications on-premises, in the cloud or at the edge. Built on the open source SwimOS core, Swim Continuum provides unprecedented performance and efficiency for operationalising high-frequency, contextual data analytics and real-time visualisations of massive amounts of streaming and batch data. Fortune 100 companies in telecommunications, energy, industrial automation and other innovative sectors of the market use Swim Continuum to monitor diverse data streams, anticipate disruption, and rapidly respond to global changes in their industries.

CUMULATIVE CAPITAL INVESTED £m 300 250 200 150 100 50 0

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Key Unealised AT 31 MARCH 2022, OUR CUMULATIVE PORTFOLIO HAD A VALUE OF:

Listed

>£0.5bn

Governance

Realised

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

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OTHER

DRIVING COMMERCIAL PROGRESS BICYCLE THERAPEUTICS (NASDAQ: BCYC), a biotechnology company pioneering a new and differentiated class of therapeutics based on its proprietary bicyclic peptide (Bicycle®) technology, announced that Ionis Pharmaceuticals has exercised its option and entered into an exclusive worldwide license and collaboration agreement for tissue-targeted delivery of oligonucleotide therapeutics using Bicycles with high affinity to the transferrin receptor (TfR1). Bicycle receives a total of $45 million upfront, which includes a license fee, an option fee and an $11 million equity investment. Bicycle is also eligible to receive development, regulatory and commercial milestone payments and royalties for each program developed under the collaboration.

CMR SURGICAL announced further expansion with its Versius® robotic system now being used in 11 countries and having achieved regulatory approval in more than 30 territories. Other achievements in the year included: •

breaking ground for the building of a new manufacturing site in Ely, Cambridgeshire. The new site is expected to become operational in the first half of 2023;

•

becoming the official medical device partner of ParalympicsGB in support of Team GB at the Tokyo Olympics;

•

extending the use of Versius® into thoracic surgery with operations performed in the lungs, thymus and oesophagus;

•

increasing revenues three-fold compared with the previous year;

•

expanding the team to more than 800 employees in six continents; and

•

becoming the first soft-tissue surgical robotics system to offer virtual reality training.

CONGENICA, the digital health company enabling rapid and accurate analysis of complex genomic data to transform people’s lives, announced that its genomic interpretation software is now CE Marked under the In Vitro Diagnostics Directive (98/79/EC). With the In Vitro Diagnostic (IVD) designation, Congenica’s clinical decision support platform can make the transition from research to clinical use and be applied to the clinical diagnosis of patients with rare hereditary genomic disorders. The platform is the only CE Marked IVD software for genomic diagnostics that is available either on a local infrastructure or via the cloud, and can be fully integrated with existing medical records and laboratory management systems. Medical devices require the CE Mark designation for use in clinical applications in several key territories including the UK and the EU.

CAMBRIDGE INNOVATION CAPITAL

PETMEDIX, a research and development stage biopharmaceutical company, is collaborating with Zoetis to develop novel, fully species-specific companion animal monoclonal antibody therapeutics (mAbs) using PetMedix’s proprietary transgenic platforms. As part of the collaboration, PetMedix will undertake discovery activities against a number of key targets, and Zoetis has an exclusive option to develop and bring these therapies to market. PRAGMATIC SEMICONDUCTOR, a world leader in flexible electronics, is working on an Innovate UK, Manufacturing Made Smarter project to increase the quality of plastic recyclate. In the project, code-named SORT‑IT, packaging will be given unique digital IDs to facilitate the tracking and separation of packaging waste in a Materials Recovery Facility. As part of the project, PragmatIC is collaborating with a range of companies who believe intelligent labels offer interesting possibilities in sorting. RIVERLANE, a quantum software company, was awarded the first contract to supply quantum software to the UK’s National Quantum Computing Centre (NQCC). The NQCC, funded through UK Research and Innovation, is dedicated to accelerating the development of quantum computing in the UK. Quantum computing has the potential to benefit many industries, including those focused on drug development, finance and materials design. Under the contract, Riverlane’s quantum scientists and engineers will deliver a benchmarking software suite that will allow comparison of the performance of different quantum computing resources. It will also provide significant insights into hardware architectures,

latency and other factors related to the practical implementation of error correction. Further details on Riverlane are provided on pages 30 and 31. SECONDMIND, the machine learning pioneer, announced that Mazda Motor Corporation had licensed its active learning platform to increase engine calibration efficiency and help manage the increasing complexity of powertrain design and development. Mazda is initially using Secondmind to calibrate electronic control units that control the company’s next-generation SKYACTIV engine technology, and expects Secondmind advanced machine learning to more than double the efficiency of its conventional engine calibration process. SENSE BIODETECTION, the global molecular diagnostics innovator, announced receipt of CE Marking for Veros COVID-19, the first and only fully integrated, easy-to-use molecular diagnostic test that provides laboratory-quality results in 15 minutes. Unconstrained by an instrument or reader and using a patient-friendly anterior nasal swab, Veros COVID-19 was designed for use in near-patient

environments, such as hospital emergency departments, pharmacies, care homes, and urgent care, providing accurate results and streamlining clinical decision making. STORM THERAPEUTICS entered into an exclusive collaboration and licence agreement with Exelixis to discover and develop inhibitors of novel RNA modifying enzymes. Under the terms of the agreement, Exelixis will pay Storm an upfront fee of $17 million in exchange for licensing two of Storm’s discovery programs targeting RNA modifying enzymes, including ADAR1, as well as provide funding for discovery research activities conducted or managed by Storm. Storm will also be eligible for development, regulatory and commercialisation milestones, as well as tiered royalties on the annual net sales of any compounds that are successfully commercialised under the collaboration.

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Governance

In May 2021 we announced that NeoGenomics, a leading provider of cancer-focused genetic testing services and global oncology contract research services, had acquired INIVATA, our liquid biopsy company. The acquisition followed a $25 million investment by NeoGenomics in Inivata that completed in May 2020, at which time NeoGenomics also secured a fixed price option to purchase the shares it did not own for $390 million. Inivata, with its leading liquid biopsy technology platform, will remain a separate business division alongside NeoGenomics’ growing clinical, pharma and informatics divisions. We first invested in Inivata at the seed round and have participated in every round since, validating our differentiated strategy of gaining early access to the most innovative life sciences and technology companies in the Cambridge ecosystem and supporting them through their lifecycles. Inivata’s InVision® platform unlocks essential genomic information from a simple blood draw to guide and personalise cancer treatment, monitor response and detect relapse. We are thrilled that this acquisition will accelerate patients’ access to Inivata’s groundbreaking technology that is based on the pioneering work of Dr Nitzan Rosenfeld from the Cancer Research UK Cambridge Institute. CENTESSA PHARMACEUTICALS, a clinical-stage company employing its innovative asset-centric business model to discover, develop and ultimately deliver impactful medicines to patients, announced its IPO on Nasdaq. The gross proceeds to Centessa from the offering, before deducting underwriting discounts, commissions and other estimated offering expenses, were quoted to be approximately $330 million.

More recently, we announced that an agreement has been reached to sell GYROSCOPE THERAPEUTICS to Novartis, a leading global medicines company, for up to $1.5 billion on a cash and debt free basis, with an upfront payment of $800 million and up to $700 million potentially due upon the achievement of certain customary milestones related to clinical development, regulatory approvals and reimbursement. Gyroscope, a global leader in ocular gene therapies, aims to address significant areas of unmet medical need based on correcting dysfunction in the complement cascade. The company was supported, in part, by the academic research and IP generated by the late Cambridge academic, Professor Sir Peter Lachmann, a leading researcher into the complement system. We first backed Gyroscope in its Series A round in February 2019, as a follow-on investor to Cambridge Enterprise Seed Funds, and are delighted that the Novartis acquisition will accelerate patient access to its ocular gene therapies.

CUMULATIVE VALUE £m 600 500 400 300 200 100 0

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2019

2020

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REALISATIONS AND IPOS

CAMBRIDGE INNOVATION CAPITAL

...In Europe’s leading innovation hub...

CIC CONTRIBUTES TO THE CAMBRIDGE ECOSYSTEM

THE CAMBRIDGE ECOSYSTEM HELPS TO SUSTAIN CIC

A RESPONSIBLE APPROACH TO INVESTMENT

WORLD-CLASS ACADEMIC AND COMMERCIAL RESEARCH

KNOWLEDGEABLE AND EXPERIENCED TEAM WITH AN EXTENSIVE GLOBAL NETWORK

RICH POOL OF EXCEPTIONAL TALENT

SIGNIFICANT SEED CAPITAL ACTIVITY

SUBSTANTIAL SERIES A AND FOLLOW-ON CAPITAL

DEEP HERITAGE AND PROVEN ECOSYSTEM TO HELP SCALE KNOWLEDGE INTENSIVE START-UPS

CO-INVESTMENT FURTHER IMPROVES JOB CREATION AND LOCAL ECONOMY

A STRONG TRACK RECORD AND GROWING PORTFOLIO

GLOBAL TECH COMPANIES OFFER POTENTIAL FOR STRATEGIC PARTNERSHIPS AND CHANNELS TO MARKET

The foundation for innovation is the steady supply of excellent ideas, of which there is an abundance in Cambridge. Ingenuity and creativity, alongside the fundamental research that underpins these ideas, combined with the constant exchange of ideas between academics and companies, governments and NGOs, has provided the recipe for this success. This combination of commercial and

scientific expertise, working in tandem, has promoted the propagation of a wide range of intellectual property rich businesses. Our focus enables us to be uniquely connected and deeply embedded within the community. We have established our reputation based on the strength of our relationships, our deep domain and operational expertise, and the mutual trust with the people with whom we work. This strategy ensures that we are not only the most active Series A investor in the Cambridge ecosystem, but we also participate in the biggest deals.

37,000

5,000+

121

£1.5BN

3RD

4 UNICORNS

PEOPLE WORKING AT UNIVERSITY OR RESEARCH ORIENTED ORGANISATIONS IN THE AREA

NOBEL PRIZES AWARDED TO UNIVERSITY OF CAMBRIDGE AFFILIATES, AND ALUMNI HAVE FOUNDED MORE UNICORNS THAN ANY OTHER UNIVERSITY

CAMBRIDGE IS THE THIRD MOST ACTIVE UNIVERSITY INNOVATION ECOSYSTEM, AFTER MIT AND STANFORD

KNOWLEDGE INTENSIVE COMPANIES EMPLOYING 68,000 HIGHLY SKILLED EMPLOYEES AND GENERATING £18 BILLION IN TURNOVER

VENTURE INVESTMENT IN CAMBRIDGE IN 2021, DOUBLING IN THE LAST TWO YEARS

IN 2021. CAMBRIDGE IS CREATING DEEPTECH AND LIFE SCIENCES UNICORNS AT AN ACCELERATING PACE

CREATED 24 UNICORNS INCLUDING

Financial Statements

Cambridge is also the European location of choice for numerous global technology companies including Amazon, Apple, Arm, AstraZeneca, GlaxoSmithKline, Microsoft and Samsung.

Governance

We have chosen to focus on the Cambridge ecosystem due to its growing importance as one of Europe’s largest and fastest growing deep tech ecosystems.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

...Demonstrating our value proposition...

WE ARE FOCUSED ON ONE OF EUROPE’S LEADING INNOVATION HUBS Cambridge’s global reputation, unique heritage and commercial expansion, combined with the deep scientific expertise, highly educated workforce and established networks for early-stage funding, make Cambridge a particularly attractive place to establish, nurture and cultivate intellectual property rich businesses. We work hard to develop the ecosystem and invest our time generously in coaching, mentoring, sponsoring and participating in a wide range of entrepreneurial and impact activities.

WE ARE A PREFERRED INVESTOR FOR THE UNIVERSITY OF CAMBRIDGE We benefit from a long-term partnership with, and permanent link to, the University. We have unique access to Cambridge Enterprise and its information systems, investment meetings and potential spin-out pipeline. We can exercise co‑investment and pre‑emption rights to existing and future University equity stakes.

WE ARE CO‑FOUNDERS OF TWO CAMBRIDGE ACCELERATORS We have co-founded two accelerators, Start Codon and Deeptech Labs, which will provide hands-on support to bridge the gap between translational research and Series A ready businesses. We benefit from the pre‑emption rights of companies participating in the accelerator programmes. READ MORE ABOUT OUR ACCELERATORS ON PAGES 16 AND 17

READ MORE ABOUT CAMBRIDGE ON PAGES 12 AND 13

WE ARE A LEADING INVESTOR Our reputation is based on the strength of our relationships, our deep domain and operational expertise, and the mutual trust with the people with whom we work. We are the most active Series A investor in the Cambridge ecosystem and participate in the biggest deals.

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

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WE ARE A VALUE‑ADDING PARTNER We meet hundreds of entrepreneurs and co-investors each year and strive to add value in every interaction. We are focused on growing the value of our investments by taking a hands-on approach including board participation, business planning and development, executive recruitment, commercialisation and scale-up.

WE ARE SECTOR EXPERTS We have built a team with a unique set of skills and experiences that are well suited to the Cambridge ecosystem and supporting the companies we are building within it. We bring deep domain and operational expertise developed through our past experiences as investors, entrepreneurs, scientists and operators. READ MORE ABOUT OUR PEOPLE ON PAGES 18 AND 19

CAMBRIDGE INNOVATION CAPITAL

...For Entrepreneurs... We have worked closely with key stakeholders in the Cambridge ecosystem to establish two accelerators: Start Codon and Deeptech Labs. The goal of these accelerators is to speed up the process of going from “bench to product” by compressing years of learning for many companies and researchers into structured and intensive programmes, ending in a demo day.

OUR STRATEGIC RATIONALE The Cambridge ecosystem is globally recognised as a centre of academic excellence and innovation, with an incredible track record for building category-leading life sciences and technology businesses. However, we identified an important gap in the ecosystem: dedicated hands-on support to bridge the gap between translational research and Series A ready businesses. As a limited partner in the accelerator funds, we benefit from the pre-emption rights of companies participating in the accelerator programmes.

THE PROGRAMME AND SUPPORT OFFERED TO ENTREPRENEURS The accelerators support early stage businesses in multiple ways, including providing: •

seed funding;

•

state-of-the-art lab and office space;

•

access to expert and hands on practitioners to support business model development and product‑directed discovery;

•

integration into the Cambridge ecosystem; and

•

access to a global network of investors and corporate partners.

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance Financial Statements Deeptech Labs invests in post-seed deeptech companies with an established technology, an extraordinary team and strong initial traction.

THE CATALYST FOR DEEPTECH SUCCESS

Start Codon leverages the unique resources of the Cambridge Cluster to identify, seed-fund and drive the success of truly disruptive healthcare start-ups.

START SOMETHING AMAZING

CAMBRIDGE INNOVATION CAPITAL

...Through great people... Venture capital is a people business and our people are our greatest strength. We are constantly working hard to ensure we maintain an inclusive and collaborative culture – which we see as critical to our success. We have built a team with a unique set of skills and experiences that are well suited to the Cambridge ecosystem and supporting the companies we are building within it. Our team has variously created, backed and sold university spin-out businesses in both Europe and North America and several have a PhD from one of the Universities of Cambridge or Oxford. The individual and collective experiences of the team helps them to understand, and empathise with, the challenges facing an entrepreneur striving to build a deeptech or life sciences business. We also have access through our wider network to some of the ecosystem’s world-leading academics and entrepreneurs.

ach member of our team is E passionate about building the Cambridge ecosystem, drawing on their knowledge and experience to make a positive difference to the community in which we live and work.

As we continue to grow, we strive to attract and retain the best talent, with a strong focus on excellence and integrity. During the year, we were delighted to welcome Anne Horgan and Ian Lane as Partners, and Ed Inns, as an Associate, to our investment team. Anne joined us from a Partner role at Advent France Biotechnology, a Paris-based venture capital firm specialising in life sciences seed investments. Anne brings 17 years of experience acquired as a Senior Associate at Sofinnova Partners, Business Development Executive at Cancer Research Technology and Senior Medicinal Chemist at Cambridge Biotechnology (now part of Benevolent AI). Anne’s experience includes equity financing (seed and series A), technology transfer and scouting, business development and biotech R&D. Prior to her commercial career, Anne carried out postdoctoral research at Yale University after her PhD in synthetic organic chemistry from the University of Bristol. She also holds a diplôme d’ingénieur (Chemistry) from the Institut National des Sciences Appliquées de Rouen, has authored several peer-reviewed papers and is an inventor on eight patent families.

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Ian focuses on technology investments having previously been a Director at Unilever Ventures in London, where he led all B2B/Technology investments. Over 11 years, he was responsible for numerous transactions across Europe and North America, including investments into Olapic (acquired by Monotype Inc), Mirakl, Aera Technology, Skupos, WeGift, Celtra, CreatorIQ, Mirriad (listed on AIM) and Blis Global. Prior to Unilever Ventures, Ian worked at L.E.K. Consulting in London and Australia, working on strategy consulting and private equity due‑diligence projects. Ian has a PhD in Physical Chemistry from the University of Cambridge and an MSci in Chemistry from Bristol University.

We also welcomed Professor Anne Ferguson-Smith, Pro-Vice-Chancellor for Research and the Arthur Balfour Professor of Genetics at the University of Cambridge, as she succeeded Professor Ian Leslie as a University-nominated Director. Ian was instrumental in the origination of CIC and has served as a Director from the outset of the business. We thank him for his unwavering support and considerable contribution during the last eight years and wish him well for the future.

Ed joined us from Williams Advanced Engineering, where he was an Investment Manager focused on investing in hardware and industrial software start-ups through the Foresight Williams Technology investment funds. Over four years, he helped to build the fund’s first portfolio of 30 companies across semiconductors, robotics and AI. Previously, he was an Investment Analyst at Oxford Technology Management, an early-stage deep tech fund. Ed holds a PhD in Biomaterials from the University of Cambridge and an MEng in Materials Science from the University of Oxford.

CAMBRIDGE INNOVATION CAPITAL

...Living our values... How we conduct ourselves and how we do business is extremely important to everyone at CIC. We strive to be good citizens and successful business partners, whilst achieving the best results. We believe our values will help us build a prosperous and sustainable future, enhance financial returns and have a positive impact on our stakeholders. These values were developed by our amazing team and truly characterise what it means to be part of CIC.

WE WANT TO ACHIEVE THE EXTRAORDINARY

BUT NOT AT ANY COST

We think big and believe anything is possible

We are committed to doing the right thing, even when no one else is looking

We seek to be the best at what we do

We speak with honesty, think with sincerity, act with integrity

We are pioneers, we are bold

WE HAVE A PASSION FOR LEARNING AND KNOWLEDGE

AND KNOW WE ARE STRONGER TOGETHER We use our combined resources, internally and in the Cambridge ecosystem, to get the best results

We are a people business and our success is built on enabling the growth and development of our team

We pride ourselves on our ability to collaborate across sectors and markets

We seek to ensure all members of our team are effective and fulfilled in their work

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

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WE WANT A CULTURE WHERE EVERYONE CAN BE THEMSELVES

AND TAKE PRIDE IN GIVING SOMETHING BACK

We celebrate different views and seek to avoid hierarchies

As individuals and an organisation, we can make a real difference to the future, our community and the environment

Each person on our team matters and plays an important role in our organisation’s success

We contribute positively to the Cambridge ecosystem, making it a great place to work, live and thrive

READ OUR IMPACT REPORT: WWW.CIC.VC/ABOUT-US/ OUR-VALUES-ESG-AND-IMPACT/

CAMBRIDGE INNOVATION CAPITAL

...through our actions...

Cambridge Science Centre (CSC) is an educational charity based in Cambridge that wants every young person to enjoy and explore STEM (Science, Technology, Engineering and Mathematics). CSC provides unique hands-on, interactive experiences, shows and activities, which are delivered by professional science communicators.

We are delighted to support CSC in the important work they do for young people in Cambridge and beyond. Our sponsorship has helped them to return to full capacity following the strains of the pandemic on their workforce, and to continue to thrive and develop the innovators of the future – people who will one day have the potential to change lives and make their mark on the world.

4/10

UK EMPLOYERS HAVE PROBLEMS RECRUITING STAFF WITH STEM SKILLS, BUT BY AGE 11 MOST YOUNG PEOPLE ARE ALREADY TURNED OFF SCIENCE

+300,000 YOUNG PEOPLE HAVE BEEN EXCITED ABOUT SCIENCE BY CSC IN THE LAST 10 YEARS

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ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance Financial Statements

The Investing in Women Code is a commitment by financial services firms to the advancement of female entrepreneurship through improving female entrepreneurs’ access to tools, resources and finance. LSX Female Founders was founded to connect women entrepreneurs in the health and life science field with investors as well as offer mentorship from relevant industry professionals.

We are committed to supporting diversity within the industry. Our ESG initiatives emphasise our own targets in advancing equality and inclusion within CIC, particularly through recruitment where gender and ethnic diversity is part of all shortlisted positions. As a founding partner of LSX Female Founders, we are pleased to have the opportunity to make a greater impact on diversity in the industry at a much larger scale. Together with our fellow founding partners, we can offer a combined network of over 10,000 investors to support the progression of new businesses.

less than 1/3

WOMEN ACCOUNT FOR LESS THAN A THIRD OF ENTREPRENEURS AND YET DELIVER TWICE AS MUCH REVENUE PER DOLLAR INVESTED THAN THEIR MALE PEERS1

1% of investment

WOMEN ARE PARTICULARLY UNDERREPRESENTED IN VENTURE CAPITAL. EVEN WHEN THEY DO CREATE A START-UP, WOMEN FIND IT CHALLENGING TO SECURE FUNDING. EUROPEAN FEMALE ENTREPRENEURS PULLED IN JUST 1% OF VENTURE CAPITAL INVESTMENT IN 20211

European Investment Bank, March 2022.

CAMBRIDGE INNOVATION CAPITAL

As a Series A investor, we are often the first institutional investor to invest in a company. This provides us with an ideal opportunity to instil best practices at an early stage. OUR THEORY OF CHANGE Our theory of change shows how we seek to: support the development of innovation and entrepreneurship in the Cambridge ecosystem; invest in entrepreneurial founders building category-leading, global businesses; and achieve enhanced financial returns for our investors by investing in best-in-class companies and supporting the growth of those companies with

the resources available. Beyond that, it shows how we seek to have a positive impact on society. We have selected the United Nations Sustainable Development Goals (SDGs) as a framework to consider the potential impact of our investment and also to encourage certain behaviours in our portfolio companies.

...and focusing on positive impact. THE SDGS THAT WE ASPIRE TO FULFIL THROUGH OUR CORE INVESTMENT ACTIVITIES ARE

WE ALSO AIM TO ENCOURAGE CERTAIN BEHAVIOURS WITHIN OUR PORTFOLIO COMPANIES BY FOCUSING ON

To ensure healthy lives and promote well-being

To ensure inclusive and equitable quality education and promote learning opportunities

To promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work

To achieve gender equality

To build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation

To reduce inequality

To make cities and human settlements inclusive, safe, resilient and sustainable

To ensure responsible consumption and production

ACTIVITIES Deep engagement with the Cambridge ecosystem

Insufficient funding for early stage companies

Early stage assessment of potential reach and depth of impact

Low success rate for early stage companies Innovations that can deliver value to society may not find a way to scale Lack of diversity in entrepreneurs and employees may result in missed opportunities

Development and commercialisation of impactful innovations

Enable visionaries to build global, category-leading companies Deliver enhanced financial return for our investors

Maintain a balanced and diversified portfolio

Investment and other support for entrepreneurs and their businesses

Facilitate access to capital through building investment syndicates

Strategic support to help build sustainable businesses

Opportunities identified for impact enhancement aligned with commercial goals

Encourage wider diversity in entrepreneurs and employees of portfolio companies

OUTCOMES

Attract more investment into our portfolio companies Cross-fertilise ideas and people within the portfolio to enhance outcomes Share and promote best practice within the portfolio

Identify best practices within the portfolio

ugh thro ty hnology e i c c so te to and ions s e t fit car olu s h

uced environmenta impact Re d

SDGs

Impact

t en

B he en al e t

Crea tion of em pl oy m

pr o ov ved er d tim iver sit y e

ti o ca u e d i ng ved earn o r p l Im and

Financial Statements

Insufficient support for entrepreneurial innovation

OUTPUTS

Governance

CHALLENGES

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

MICROBIOTICA

CIC has been a great partner! In particular, I have really appreciated the personal touch. This has been a new area for me, and I have valued the opportunity to talk through the process about what to expect as an academic starting a new business and to talk through the challenges and pitfalls with someone that I trust. CIC has been with us through the good and the bad and I have really valued their support.

WHAT IS YOUR VISION? WHAT IS THE PROBLEM YOU ARE TRYING TO SOLVE?

WHAT IS UNIQUE ABOUT YOUR PRODUCT/TECHNOLOGY?

Our goal from the very beginning of setting up Microbiotica has been to make medicines out of poop that can improve health and cure disease. In the early days of my academic research, we saw clear potential in infectious diseases but as time has gone on the vision for potential benefit has continually expanded. Microbiotica’s lead programs in inflammatory bowel disease and improving response to immuno-oncology treatments are just two examples of how we believe defined bacteriotherapies have the potential to treat a wide range of conditions.

It was more bringing together a collection of skills and technologies that together optimises our understanding of the microbiome and how to influence it positively. My group at the Sanger Institute had particular insights around genomic sequencing, culturing, developing disease-specific algorithms and bioinformatics. Bringing these things together with a clear goal of developing novel medicines, we believe, gives us a differentiated offering.

DR TREVOR LAWLEY CSO AND CO-FOUNDER

We found the technology very exciting, but the opportunity for us was to help shape microbiome therapeutics based on strong science. As mentioned, our first focus was on infectious disease, but this soon widened. I remember well a meeting with Cancer Research UK, which really opened my eyes to the breadth of benefits that microbiome therapeutics could potentially bring and from then I believe my ambitions expanded.

Q A

HOW DO YOU MEASURE PROGRESS?

Microbiotica has been on a journey to the point where we now have two candidates (for inflammatory bowel disease and immuno-oncology) in pre-clinical development with plans to enter the clinic next year. For me, the meetings with the regulatory authorities was a real milestone. Hearing their positive feedback and the realisation that we have a real product was very important to me. The recent fund-raising (Microbiotica’s £50 million Series B) was also a great endorsement of the work that we are doing.

Q A

WHAT HAS BEEN THE BIGGEST CHALLENGE TO DATE?

Everything is a challenge! We are innovators in this space and a lot of what we are doing is novel and new challenges need to be constantly overcome. Meeting the rigorous specification standards in CMC (Chemistry, Manufacturing and Control) to regulatory standards for complex products with novel bugs stands out as a particular area where Microbiotica has devoted a lot of resources. For me personally, starting Microbiotica has been an enriching experience, but it has been a steep learning curve. I have learnt a lot particularly around the importance of surrounding myself with the best people, time management and delegating.

WHAT IS NEXT?

We are really excited to be entering the clinic next year with our first two products. Defined bacteriotherapies have the potential to be transformational in providing a novel approach to address a wide range of diseases. We set up the company to try and improve human health and cure disease and we now have the opportunity to try and fulfil this ambition.

Financial Statements

Q A

WHAT IS THE MARKET OPPORTUNITY?

Governance

Translating precision in microbiome science into transformative medicines and biomarkers

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

PRETZEL THERAPEUTICS

CIC has been an important part of the whole Cambridge ecosystem which is super-supportive for early-stage companies. In the early days of spinning out my technology, Cambridge Enterprise was an invaluable source of knowledge and advice and CIC has complemented this input as the company has grown.

WHAT IS YOUR VISION? WHAT IS THE PROBLEM YOU ARE TRYING TO SOLVE?

WHAT IS UNIQUE ABOUT YOUR PRODUCT/TECHNOLOGY?

My academic research group is aiming to unravel the genetic links between mitochondrial gene regulation and human disease with the aim of using mitochondrial genome engineering to develop future therapies. Diseases associated with specific disorders within the mitochondria affect one in 5,000 people and currently there are no curative treatments. Mitochondrial disorders also impact a wide range of chronic conditions including neurodegeneration, cancer and healthy aging. The vision behind Pretzel Therapeutics is to develop novel treatments for both rare and common conditions associated with mitochondrial dysfunction.

DR MICHAL MINCZUK CO-FOUNDER

Pretzel Therapeutics is following two specific approaches. Firstly, through precision medicine technology we can find specific mutations within the mitochondrial DNA associated with disease with the aim of correcting the mutation with the aim of removing the cause of the disease. This has the potential to benefit specific rare diseases. Secondly, we have a number of small molecule discovery programmes that address validated targets associated with rare and common diseases. Our specific approach is to target very closely the source of the mitochondrial dysfunction, specifically the mitochondrial DNA rather than the downstream, secondary effects of the mitochondrial dysfunction.

One in 5,000 people in the population have specific mutations with their mitochondrial or nuclear DNA associated with specific mitochondria-related condition impacting their health and well-being. Currently, there are no treatment options for these patients; our precision approaches aim to address these conditions. More widely, with an aging population. the impact of neurodegeneration and diseases of aging affects an increasingly large number of people where there are no effective treatments.

Q A

HOW DO YOU MEASURE PROGRESS?

Q A

WHAT HAS BEEN THE BIGGEST CHALLENGE TO DATE?

Mitochondrial function is complex and dysfunction results in heterogeneous, multi-organ conditions. For both precision medicine approaches as well as small molecules effective delivery to the affected organs is a particular challenge.

WHAT IS NEXT?

We are focused on our aim of developing new medicines for conditions of unmet medical need. We have a great foundation on which to build but we are fully conscious of the challenges and the need for hard work to fulfil our vision.

All that we do at Pretzel Therapeutics is aimed at improving human health. When we see products that we develop that have a positive impact on human health, then we will know that we are making progress.

Financial Statements

Q A

WHAT IS THE MARKET OPPORTUNITY?

Governance

Developing treatments to address the genetic roots of mitochondrial dysfunction

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

RIVER LANE

Successfully spinning out a company from a university (in my case Cambridge University), transitioning from a start-up to a scale‑up, and raising subsequent rounds of investment have been critical steps in our journey so far. CIC has played a fundamental role in helping us successfully navigate each of these opportunities.

WHAT IS YOUR VISION? WHAT IS THE PROBLEM YOU ARE TRYING TO SOLVE?

WHAT IS UNIQUE ABOUT YOUR PRODUCT/TECHNOLOGY?

Quantum computers do not promise an improvement over the world’s most powerful computers today. Rather, they promise a whole new computing paradigm. By mirroring the quantum mechanical properties of nature and the universe, quantum computers offer the possibility of solving complex problems in fields such as material science, clean energy and drug discovery that are unsolvable today. But quantum computers of the scale, stability and accuracy to achieve this don’t yet exist. Further breakthroughs in science, engineering and applications are still required. Our mission is to make quantum computing useful far sooner than previously imaginable, enabling an era of human progress as significant as the digital and industrial revolutions.

STEVE BRIERLEY CEO AND FOUNDER

Every type of computer needs an operating system to manage complexity for the user. We’re building Deltaflow.OS, the operating system (OS) for quantum computers Uniquely, we’re engineering Deltaflow.OS to holistically tackle quantum computing’s defining challenge – data errors. Such errors are simply unavoidable due to the inherent instability of the quantum bits (aka qubits) that process and store information on a quantum computer. Correcting these errors at the scale and speed required is one of the most complex technical challenges mankind has ever sought to tackle. This is where we are focused and making strong progress.

The quantum computing market could create value of between $450 and $850 billion in the next 15–30 years, according to Boston Consulting Group (BCG, July 2021). By creating an operating system at the core of the whole quantum computing ecosystem, we can capture a considerable proportion of that value.

Q A

HOW DO YOU MEASURE PROGRESS?

As with any business, revenue and pipeline today are important markers of progress. On those fronts we are doing well, capturing 25% of the UK’s total commercial value in quantum computing today. And we are now starting to make similar inroads in the US too. For the medium to longer term, partnerships with quantum computer hardware companies and academic labs is our most critical metric. Today, we partner with about 30% of these globally. Our pipeline takes us to about 60%. Our long-term goal is to reach 80%.

Q A

WHAT HAS BEEN THE BIGGEST CHALLENGE TO DATE?

Talent. Acquiring, retaining, growing and blending the right mix of skills is absolutely critical for any growing technology business. In our field, it’s existential. In quantum error correction, for example, there’s a total global talent pool of no more than a few hundred physicists, mathematicians, engineers and academics in this field. So far, we’ve been successful at building teams with the right mix of these skills. This has involved both recruitment of existing talent and growth of next generation talent from within via intern, graduate and development schemes. Continued success in this area will be a key enabler of our success going forward.

WHAT IS NEXT?

The next phase for Riverlane is to internationalise our operations, customer base and culture. In 2022 and 2023, our focus is on expanding into North America.

Financial Statements

Q A

WHAT IS THE MARKET OPPORTUNITY?

Governance

The operating system for error corrected quantum computers

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

SALIENCE

Q A

CIC has been tremendously supportive, not least by leading our $11.5m seed with Oxford Enterprise Sciences. The primary value-add of working with CIC has been the deep experience of the team in scaling deeptech companies like Salience and the strength of their network. It has given us a tremendous commercial jump start. I would recommend the team to any deeptech founder who wants to plug into the wider deeptech ecosystem and who is looking for investors with vision.

WHAT IS YOUR VISION? WHAT IS THE PROBLEM YOU ARE TRYING TO SOLVE?

The compute requirements of AI double every three to four months, as the world needs ever-faster chips to grow AI capability. The current semiconductor industry cannot keep pace with this demand. What is required now is not further incremental innovations on transistor technology or chip architecture. We need a paradigm shift in the way we compute – one that delivers an immediate step change in performance and speed, while also offering a long-term future roadmap of scaling improvements. That is what we aim to deliver at Salience Labs. Salience Labs was spun out of the University of Oxford and the University of Münster in 2021, to commercialise an ultra-high-speed chip for AI. We are building a multi-chip processor that packages a photonics chip together with standard electronics. By using light to execute operations, we can deliver massively parallel processing performance – bringing high-speed computes to a wide array of new and existing AI applications.

Q A

WHAT IS UNIQUE ABOUT YOUR PRODUCT/TECHNOLOGY?

While other photonic chip companies execute operations in the phase of light, we use a proprietary amplitude-based approach to photonics, resulting in dense computing chips clocking at tens of GHz. Our unique approach allows us to leverage a multi-chip design, with the photonic processing mapping directly on top of the Static Random Access Memory (SRAM). This novel “on-memory compute” architecture delivers order of magnitude performance improvement. It can also be adapted to the application-specific requirements of different market verticals, making it ideal for realising AI use-cases in communications, robotics, vision systems, healthcare and other data workloads.

VAYSH KEWADA CEO AND CO-FOUNDER

Governance

Q A

The demand for AI compute doubles every 3.5 months. The industry is growing fast, and so the need of the market now is for a technological innovation to arise that can bring about an immediate stepchange in the way we compute. By leveraging our unique approach to multi-chip design, we are delivering to the market a huge jump in processing performance and bringing these high-speed processors to a variety of new and existing AI processes and applications.

Q A

HOW DO YOU MEASURE PROGRESS?

We originally spun-out of the University of Oxford and the University of Münster in 2021 and have just closed our seed round of $11.5 million from a number of leading VCs including Cambridge Innovation Capital and Oxford Science Enterprises, with participation from semiconductor industry leader Jala Bagherli, former CEO of Dialog Semiconductor. Since closing our seed round, our focus has been on the tape out of our next test chip, developing our software models and packaging solutions. We are also building relationships with customers across a range of market verticals.

Q A

WHAT HAS BEEN THE BIGGEST CHALLENGE TO DATE?

Attracting world-class talent is always front-of-mind for CEOs of high-growth companies. We have been able to bring on board an exemplary team, many of whom come from a distinguished semiconductor background. They’ve worked on standard electronic chips for most of their career, and this is their first role at a photonic compute company. They join Salience because we offer them the chance to work in an entirely new compute domain – photonics – while still leveraging all the experience and insight they have accumulated in their previous work. As with anything new, it is a hugely exciting opportunity but does require people to think creatively and look for new ways to solve these existing problems in the market. I anticipate many more people will make this leap into novel chip architecture as the market matures and production ramps up over the next one to two years.

Financial Statements

The photonic computing company WHAT IS THE MARKET OPPORTUNITY?

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Q A

WHAT IS NEXT?

We are at a very interesting point in time where the industry is recognising the potential of silicon photonic compute to solve the tremendous processing bottleneck currently hampering AI growth. We are talking to customers across a range of market verticals who are excited about the performance improvements our chips will offer and the new AI processes and applications this will enable. They are attracted by technology’s ability to adapt to their application-specific requirements and our ability to deliver the ultra-fast speed of photonics, the flexibility of electronics and the manufacturability of CMOS. Companies and analysts are updating their roadmaps because they recognise we are about to enter a new era of processing – where thanks to photonics – supercompute AI becomes truly ubiquitous.

CAMBRIDGE INNOVATION CAPITAL

DIRECTORS’ REPORT REPORT OF THE DIRECTORS The Directors present their report together with the audited consolidated financial statements for the year ended 31 March 2022. The objectives and future developments of the Company are addressed within the Strategic Report.

RESULTS AND DIVIDENDS During the year, the Group made a profit after tax for the year ended 31 March 2022 of £38.85 million (2021: £64.82 million) and the Company paid an interim dividend of 6.345 pence per share (2021: £nil). The Directors do not recommend the payment of a final dividend (2021: £nil).

SHARE BUYBACK During the year, the Company bought back at £1.29 each, and subsequently cancelled, 35,033,253 ordinary shares for total consideration of £45.19 million (2021: £nil).

DIRECTORS The Directors who served during the year and up to the date of signing the financial statements were as follows: Edward Benthall

Chairperson

Andrew Williamson

Managing Partner

Rob Sprawson

Partner and CFO

Humphrey Battcock

Non-executive Director

Clive Birch

Non-executive Director

Anne Ferguson-Smith

Non-executive Director

Appointed 11 October 2021

Ian Leslie

Non-executive Director

Resigned 11 October 2021

Andy Neely

Non-executive Director

DIRECTORS’ EMOLUMENTS Directors’ emoluments are disclosed in note 7 to the consolidated financial statements.

DIRECTORS’ INTERESTS IN SHARES The Directors who held office during the year ended 31 March 2022 had the following beneficial interests in the shares of the Company: At 31 March 2022

At 31 March 2021

Number of ordinary shares

Number of class A commitment shares

% of voting share capital

Number of ordinary shares

Number of class A commitment shares

% of voting share capital

Humphrey Battcock

250,052

–

0.08%

227,992

54,494

0.08%

Edward Benthall

569,824

–

0.19%

589,242

54,494

0.19%

43,009

–

0.01%

39,215

9,373

0.01%

–

0.00%

–

Clive Birch Rob Sprawson

The Directors who held office during the year ended 31 March 2022 had the following beneficial interests in options over the ordinary shares of the Company:

Rob Sprawson

Andrew Williamson

At 31 March 2021

Granted during the year

Exercised during the year

At 31 March 2022

Exercise price (pence)

29,228

–

(3,356)

25,872

0.17

118,425

–

(1)

118,424

0.01

236,722

–

236,722

0.01

DIRECTORS’ INDEMNITIES As detailed in the Company’s Articles of Association, indemnities were in force during the financial year and also at the date of approval of the financial statements between the Company and each of its Directors, under which the Company has agreed to indemnify each Director, to the extent permitted by law, in respect of certain liabilities incurred as a result of carrying out their duties as a Director of the Company. The Company has Directors’ and Officers’ Liability Insurance and it is the intention to maintain such a policy in the future.

PricewaterhouseCoopers LLP, having expressed their willingness to continue in office, will be deemed reappointed for the next financial year in accordance with section 487(2) of the Companies Act 2006, unless the Company receives notice under section 488(1) of the Companies Act 2006.

Shareholder

Cambridge University as trustee of the Cambridge University Endowment Fund

16.4%

Union Bancaire Privée

14.8%

The Chancellor, Masters and Scholars of the University of Cambridge

12.2%

Best of CIC UBP Fund Limited

7.2%

Fosun Industrial Co. Limited

6.6%

Private Equity Solutions

5.0%

Oman Investment Authority

4.1%

Legal & General Assurance Society Limited

3.7%

Bluesky Partnership II LP

3.6%

Lisbet Rausing

3.3%

GOING CONCERN The Group’s cash is sufficient to meet the investment requirements and operational needs of the Group for at least a year from the date of approval of the financial statements. Given the above, the Directors confirm that they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future and accordingly they continue to adopt the going concern basis in preparing the financial statements. Approved by the Board of Directors and signed on its behalf by EDWARD BENTHALL CHAIRPERSON 29 June 2022

POLITICAL DONATIONS The Group did not make any political donations during the year (2021: £nil).

POST BALANCE SHEET EVENTS Material events occurring since the balance sheet date are disclosed in note 22 to the consolidated financial statements.

Financial Statements

INDEPENDENT AUDITORS

As at 28 June 2022, the Company had the following shareholders with interests of 3% or more, in aggregate, of the Company’s ordinary shares. The Company’s issued share capital is disclosed in note 18 to the consolidated financial statements. Other than as shown below, so far as the Company and its Directors are aware, no other person holds or is beneficially interested in a disclosable interest in the Company.

Governance

SUBSTANTIAL SHAREHOLDERS

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).

select suitable accounting policies and then apply them consistently;

•

state whether applicable international accounting standards in conformity with the requirements of the Companies Act 2006 have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 102, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

•

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 and Company will continue in business.

In the case of each Director in office at the date the Directors’ Report is approved: •

so far as the Director is aware, there is no relevant audit information of which the Group and Company’s auditors are unaware; and

•

they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group and Company’s auditors are aware of that information.

Approved by the Board of Directors and signed on its behalf by

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 Group and Company and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required to: •

DIRECTORS’ CONFIRMATIONS

EDWARD BENTHALL CHAIRPERSON 29 June 2022

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

TO THE MEMBERS OF CAMBRIDGE INNOVATION CAPITAL LIMITED

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS OPINION

REPORTING ON OTHER INFORMATION

In our opinion: •

Cambridge Innovation Capital Limited’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 March 2022 and of the Group’s profit and the Group’s cash flows for the year then ended;

•

the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

•

the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and

•

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

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance 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 an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of 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 based on these responsibilities.

We have audited the financial statements, included within the Annual Report and Accounts for the year ended 31 March 2022 (the “Annual Report”), which comprise: the consolidated statement of financial position and the Company balance sheet as at 31 March 2022; the consolidated statement of comprehensive income, the consolidated statement of cash flows, and the consolidated and Company statements of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below. STRATEGIC REPORT AND DIRECTORS’ REPORT In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report for the year ended 31 March 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.

INDEPENDENCE We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

CONCLUSIONS RELATING TO GOING CONCERN

RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT

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 Company’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue. 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. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and Company’s ability to continue as a going concern.

RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Directors are also responsible for such internal control as they 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 either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Financial Statements

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Governance

INDEPENDENT AUDITORS’ REPORT

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF CAMBRIDGE INNOVATION CAPITAL LIMITED

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.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK regulatory principles, such as those governed by the Financial Conduct Authority, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to estimation uncertainty in the valuation of investments. Audit procedures performed by the engagement team included:

USE OF THIS REPORT This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

OTHER REQUIRED REPORTING COMPANIES ACT 2006 EXCEPTION REPORTING

Under the Companies Act 2006, we are required to report to you if, in our opinion:

•

performing procedures to ensure the financial statements are appropriately prepared and disclosed in line with the Companies Act 2006;

•

performing inquiries of management as to whether the entity is in compliance with all relevant laws and regulations;

•

inspecting the Company’s minutes to ensure we have identified any possible non-compliance reported internally;

•

assessing the estimates made by management in determining the fair values of investments and considering whether there were any indications of systematic bias, particularly where price at last transaction was no longer considered an appropriate basis for estimating fair value;

•

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

•

adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or

•

certain disclosures of Directors’ remuneration specified by law are not made; or

•

the Company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

•

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations;

•

designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and

•

reading key correspondence with the Financial Conduct Authority in relation to compliance with laws and regulations.

SIMON ORMISTON SENIOR STATUTORY AUDITOR for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Cambridge 29 June 2022

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

FOR THE YEAR ENDED 31 MARCH 2022

Note

Fair value changes in investments

2021 £

4,994,106

–

48,438,356

78,079,702

(14,782,721) (14,865,776)

Administrative expenses

48,986

999,897

Operating profit

38,698,727

64,213,823

Finance income

507,525

478,577

Finance costs

(27,708)

–

Share of net (losses)/profits of associates accounted for using the equity method

(120,623)

124,467

Other operating income

Profit before taxation

39,057,921

Income tax

Profit after taxation

(210,148)

64,816,867 –

38,847,773

64,816,867

38,882,732

64,816,867

Total comprehensive income for the year is attributable to Owners of Cambridge Innovation Capital Limited Non-controlling interests

(34,959) 38,847,773

All activities derive from continuing operations. The notes on pages 43 to 56 are an integral part of these financial statements.

– 64,816,867

Financial Statements

Revenue

2022 £

Governance

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CAMBRIDGE INNOVATION CAPITAL

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2022

Note

2022 £

2021 £

16,585

Assets Non-current assets Property, plant and equipment

402,677

Right-of-use assets

1,889,335

–

Investments held at fair value

398,298,000

396,136,943

Investments accounted for using the equity method

373,177

493,800

400,963,189

396,647,328

Current assets Trade and other receivables

Cash and cash equivalents

Total assets

2,710,911

847,111

40,056,836

35,529,532

42,767,747

36,376,643

443,730,936

433,023,971

Liabilities Non-current liabilities Lease liabilities

(1,731,781)

–

Current liabilities Trade and other payables

Lease liabilities

(31,781,008) (22,616,714) (141,564) 31,922,572

– (22,616,714)

Total liabilities

(33,654,353) (22,616,714)

Net assets

410,076,583

410,407,257

Equity Issued share capital

Share premium account Capital redemption reserve

30,165

32,252

25,063,978

120,803,271

3,503

49,992,656

3,090,737

3,343,750

Capital reserve

255,092,652

206,620,171

Retained earnings

126,205,253

29,615,157

Capital and reserves attributable to owners of Cambridge Innovation Capital Limited

409,486,288

410,407,257

Share based payment reserve

Non-controlling interests

Total equity

590,295

–

410,076,583

410,407,257

The notes on pages 43 to 56 are an integral part of these financial statements. The consolidated financial statements on pages 39 to 56 of Cambridge Innovation Capital Limited, registered number 08243718, were authorised for issue by the Board of Directors on 29 June 2022 and were signed on its behalf by ROB SPRAWSON DIRECTOR AND CFO

Buyback of ordinary shares (including expenses)

30,165

–

(3,503)

–

49,992,656

–

25,063,978

–

3,503

–

3,503

(120,803,271) (49,992,656)

–

25,063,978

–

120,803,271

–

43,851,544

–

76,951,727

Capital redemption reserve £

3,090,737

–

(253,013)

–

3,343,750

–

3,343,750

Share based payment reserve £

The notes on pages 43 to 56 are an integral part of these financial statements.

At 31 March 2022

Dividends paid

Capital reduction

Share based payments

Share capital issued (net of expenses)

1,416

–

Transactions with owners

–

32,252

(49,992,656)

Fair value changes in investments

Profit for the year and total comprehensive income

At 31 March 2021

Buyback of deferred shares

Share capital issued (net of expenses)

2,478

–

Transactions with owners

–

50,022,430

Fair value changes in investments

Note

Profit for the year and total comprehensive income

At 1 April 2020

Share premium account £

255,092,652

–

48,472,481

–

206,620,171

–

78,079,702

–

128,540,469

Capital reserve £

Retained earnings £

126,205,253

(19,139,425)

(45,476,657)

170,795,927

–

(48,472,481)

38,882,732

29,615,157

(1)

–

(78,079,702)

64,816,867

42,877,993

Attributable to owners of Cambridge Innovation Capital Limited

409,486,288

(19,139,425)

(45,476,657)

–

(253,013)

25,065,394

–

38,882,732

410,407,257

(1)

43,854,022

–

64,816,867

301,736,369

Total £

590,295

–

625,254

–

(34,959)

–

Non- controlling interests £ Total equity £

410,076,583

(19,139,425)

(45,476,657)

–

(253,013)

25,690,648

–

38,847,773

410,407,257

(1)

43,854,022

–

64,816,867

301,736,369

Financial Statements

Issued share capital £

FOR THE YEAR ENDED 31 MARCH 2022

Governance

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022

Note

2022 £

2021 £

38,698,727

64,213,823

Cash flows from operating activities Operating profit Adjustments for: Fair value changes in investments

(48,438,356) (78,079,702) –

Non-cash items included in other operating income Share based payments Depreciation

(253,013)

11, 12

119,722 (2,024,403)

(Increase)/decrease in trade and other receivables Increase in trade and other payables Cash used in operating activities Net cash used in operations

– 19,404 275,342

8,904,292

8,329,315

(2,993,031)

(5,289,817)

(50,148)

Income tax paid

(47,999)

–

(3,043,179)

(5,289,817)

(432,713)

(6,772)

Cash flows from investing activities Purchase of property, plant and equipment

Purchase of investments held at fair value

(16,819,621) (25,891,647) 460

Transactions with non-controlling interests Proceeds from the sale of investments Repayment of loans by portfolio companies

–

2,287

–

Purchase of investments accounted for using the equity method

64,005

Interest received Net cash generated from/(used in) investing activities

–

64,325,838

47,137,969

(1) 178,073 (25,718,060)

Cash flows from financing activities (16,798)

Purchase of right-of-use assets

Proceeds from issue of shares

25,065,394

Buyback of shares (including expenses)

(45,476,657)

– 43,854,022 (1)

Dividends paid

(19,139,425)

–

Net cash (used in)/generated from financing activities

(39,567,486)

43,854,021

Net change in cash and cash equivalents

4,527,304

12,846,144

Cash and cash equivalents at beginning of the year

35,529,532

22,683,388

Cash and cash equivalents at end of the year

40,056,836

35,529,532

The notes on pages 43 to 56 are an integral part of these financial statements.

FOR THE YEAR ENDED 31 MARCH 2022

1. GENERAL INFORMATION

2. BASIS OF PREPARATION The Group’s cash is sufficient to meet the investment requirements and operational needs of the Group for at least a year from the date of approval of the financial statements. As a result, the financial statements for the year ended 31 March 2022 have been prepared: •

on a going concern basis and under the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities at fair value through the income statement; and

•

in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 (“IFRS”).

The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

3. SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION

The consolidated financial statements include the financial information of the Company and entities controlled by it (its subsidiary undertakings). Control is achieved when the Group: •

has power over the subsidiary undertaking;

•

is exposed or has rights to a variable return from its involvement with the subsidiary undertaking; and

•

has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls a subsidiary undertaking if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Group has less than a majority of the voting rights, it considers that it has power over the company when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the company unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in a company are sufficient to give it such power, including: •

the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

•

potential voting rights held by the Group, other vote holders or other parties;

•

rights arising from other contractual arrangements; and

•

any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made.

The financial information of the subsidiary undertakings is prepared for the same reporting period as the Company, using consistent accounting policies. Subsidiary undertakings are consolidated from the date on which control is transferred to the Group and would cease to be consolidated from the date on which control is transferred out of the Group. Intra-group transactions, profits and balances are eliminated in full on consolidation. Fund investments (see Note 13) are not considered to be subsidiary undertakings and therefore are not included in the consolidated financial information.

ASSOCIATES

Associates are accounted for using the equity method of accounting. Under the equity method, interests in associates are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income.

SEGMENTAL REPORTING

The Chief Operating Decision Maker has been identified as the Company’s Board of Directors. The Board is of the opinion that the Group operates one operating segment, that of managing investments in world-leading life sciences and technology companies with an affiliation to Cambridge, Europe’s leading capital for innovation. The Board assesses the performance of the operating segment using financial information which is measured and presented in a manner consistent with that in the financial statements. All of the assets of the Group are related to that operating segment and are held in either the UK or Jersey, a British Crown dependency.

Financial Statements

Cambridge Innovation Capital Limited is incorporated in England and Wales and is domiciled in the UK, the address of its registered office being 22 Station Road, Cambridge, England, CB1 2JD. Cambridge Innovation Capital Limited and its subsidiaries, disclosed in note H to the Company’s financial statements, form the “Group” and the Group’s consolidated financial statements presented herein are in sterling. The Group backs world-leading life sciences and technology companies with an affiliation to Cambridge, Europe’s leading capital for innovation.

Governance

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

REVENUE

Revenue relates to management fees that are generally earned as a fixed percentage of funds under management and are recognised as the related services are provided. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of VAT. Revenue is recognised when the Group satisfies its performance obligations, in line with IFRS 15. All revenue is generated within the United Kingdom.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price and costs directly attributable to bringing the asset to its working condition for its intended use. Depreciation on assets is calculated, using the straight-line method, to allocate the cost to their residual values over their estimated useful lives, as follows: •

leasehold improvements, five years;

•

furniture and equipment, three years; and

•

computer equipment, three years.

LEASES

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: •

fixed payments (including in-substance fixed payments) less any lease incentives receivable; and

•

variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case, the Group’s estimated incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost and comprise: the amount of the initial measurement of the lease liability; any lease payments made at or before the commencement date; any initial direct costs; restoration costs; less any lease incentives received. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Where the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

INVESTMENTS

The Group classifies all its investments (equity and loans), which are not subsidiaries or associates as financial assets, at fair value through profit or loss. These financial assets are initially recognised at fair value, which is normally the transaction price, and subsequently carried at fair value with any changes in fair value recognised in profit or loss in the period in which they arise. The Group measures the fair value of its investments in line with International Private Equity and Venture Capital (“IPEV”) Valuation 2018 Guidelines, endorsed by the British Venture Capital Association. The fair values of investments in quoted companies are based on bid prices in an active market at the reporting date. For the Group’s investments in unquoted entities, where there are often no current earnings, no short-term future earnings or positive cash flows, it is often difficult to make reliable cash flow forecasts. The Group considers that fair value estimates based entirely on observable market data are of greater reliability than those based on assumptions. In such circumstances, the price of recent investment is considered to be the best estimate of fair value at the date of investment and is therefore used as the de facto starting position for any fair value estimate made by the Group. Accordingly, where there has been a recent investment by a third party, the price of that investment will also provide the starting position for fair value, subject to adjustment for any subsequent milestones or impairments. Where the Group considers that the price of recent investment, unadjusted, is no longer relevant and there are limited or no comparable entities or transactions from which to infer value, the Group carries out an enhanced assessment based on milestone analysis and industry and sector analysis. When appropriate, the Group may consider the use of external advisers to assess the reasonableness of any change in fair value estimated by the Group.

where the investment was made recently, its cost will generally provide the basis of fair value. The length of period for which it remains appropriate to use the price of a recent investment depends on the specific circumstances of the investment and the stability of the external environment;

•

the price of any recent third-party investment; and

•

where the equity structure of a portfolio company involves different class rights in a sale or liquidity event, the Group takes these rights into account when forming a view of the value of its investment.

At each measurement date, or if the Group considers that there is a reason to believe that the fair value might have changed between measurement dates, an assessment is made of the required adjustment to the fair value estimate of the investment. Wherever possible, the adjustment is based on objective data from the entity in which the investment was made. When applying the milestone analysis approach to investments in entities in early or development stages, the Group seeks to determine whether there is an indication of change in fair value based on a consideration of performance against any milestones that were set at the time of the investment, as well as taking into consideration key market drivers for the investee company and the overall economic environment. Where deterioration in value is assessed to have occurred, the Group reduces the carrying value of the investment to reflect the estimated decrease. In these circumstances, the fair value of the investment is reduced by 25%, 50%, 75% or 100%, as judged appropriate by the Group. If there is evidence of positive developments and value creation unrelated to recent investments, the Group may increase the fair value estimate of the investment. However, it is often difficult to determine the specific value attributable to those positive developments and the costs and risks associated with realising that value. Factors that the Group considers in its assessment of the fair value of an investment include, inter alia: technical measures such as product development phases and patent approvals; financial measures such as changes in the rate of cash consumption; changes in profitability expectations; and market and sales measures such as product development phases, market launches and geographic expansions.

TRADE AND OTHER RECEIVABLES

Trade and other receivables are classified as loans and receivables and are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the consolidated statement of comprehensive income.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.

FINANCIAL LIABILITIES

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities, unless required to be categorised as at fair value through profit or loss, are recorded initially at fair value and subsequently at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the consolidated statement of comprehensive income. A financial liability is derecognised only when the obligation is extinguished.

SHARE BASED PAYMENTS OPTIONS OVER SHARES HELD BY THE EMPLOYEE BENEFIT TRUST The Group operates an equity-settled, share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee service received in exchange for the grant of the options is recognised as an expense over the vesting period. The total amount expensed over the vesting period is determined by reference to the fair value of the options granted. At each reporting date, the entity revises its estimates of the number of options that are expected to vest and recognises the impact of the revision to original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cash-settled transaction. OPTIONS OVER SHARES ISSUED IN ACCORDANCE WITH THE GROUP’S INCENTIVE SCHEMES The Group operates a share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. Given that it is the Directors’ intention that such options will be settled in the form of cash, the options are accounted for as cash-settled and such options are measured at fair value at the balance sheet date. The Group recognises a liability at the balance sheet date based on these fair values, taking into account the estimated number of options that will actually vest and the current proportion of the vesting period. Changes in the value of this liability are recognised in the consolidated statement of comprehensive income. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cash-settled transaction.

Financial Statements

•

Governance

The following factors are considered in the assessment of the fair value of any investment:

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

PENSION COSTS

The Group makes payments for each employee to a defined contribution scheme or a scheme of their choice. The assets of the defined contribution scheme are held separately from the Group in independently administered funds. Contributions made by the Group are charged to the consolidated statement of comprehensive income in the period to which they relate.

MANAGEMENT INCENTIVE PLAN

The Group operates a management incentive plan for all employees. Before any payment to a participant becomes due, the Group must first have returned the aggregate capital raised from shareholders, together with a compounded hurdle rate of 8% per annum. At the point at which the hurdle rate has been exceeded, a provision is included for the unrealised gain due to participants. The provision is measured by reference to net assets, with movements in the provision charged/credited to the consolidated statement of comprehensive income within administrative expenses.

TAXATION

Taxation expense comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity respectively. Current or deferred taxation assets and liabilities are not discounted. CURRENT TAX Current tax is the amount of income tax payable in respect of the taxable profit for the period or prior periods. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end. DEFERRED TAX Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

EQUITY

Equity comprises the following: •

share capital represents the nominal value of equity shares;

•

share premium represents the excess over nominal value of the fair value of consideration received for equity;

•

capital redemption reserve reflects the buyback of share capital;

•

share based payment reserve represents equity-settled share based remuneration until such instruments are exercised;

•

capital reserve represents fair value gains and losses on investments that are initially recorded through the statement of comprehensive income but are transferred to the capital reserve to track the cumulative gains and losses; and

•

retained earnings represents retained profits less accumulated losses.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In determining and applying accounting policies, judgement is often required in respect of items where the choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or the net asset position of the Group. Management considers that certain accounting estimates and assumptions relating to the valuation of investments are critical accounting estimates. The treatment of investments has been detailed above.

5. SEGMENTAL REPORTING The Group’s property, plant and equipment (note 11) are held in the UK. The Group’s investments in portfolio companies (note 13) are held in Jersey whereas fund investments (note 12) and investments accounted for using the equity method (note 14) are held in the UK. The Group’s cash and cash equivalents are held in the UK (2022: £19.0 million; 2021: £10.8 million) and Jersey (2022: £21.1 million; 2021: £24.7 million).

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

6. OPERATING PROFIT 2021 £

Operating profit is stated after charging/(crediting) Depreciation

119,722

Other operating income

(48,986)

19,404 (999,897)

Services provided by the Group’s auditors Fees payable to the Group’s auditors and their associates for the audit of the Company and the consolidated financial information

65,127

49,740

– Tax compliance services

51,580

31,600

– Other assurance services

12,275

5,500

128,982

86,840

Fees payable to the Group’s auditors for other services

7. EMPLOYEES AND DIRECTORS The average monthly number of persons (including Executive Directors but excluding Non-executive Directors) employed by the Group during the year was: 2022 Number

2021 Number

Investment staff

Support staff

2022 £

2021 £

By primary activity

Employee benefit expenses for the above persons 2,833,502

2,510,834

Social security costs

577,862

374,145

Other pension costs

186,992

182,397

Cash-settled share based payment expense (note 8)

278,568

306,661

3,876,924

3,374,037

969,486

936,820

Wages and salaries

Key management, being Executive and Non-executive Directors, compensation Emoluments Other pension costs Employer’s National Insurance Cash-settled share based payment expense

46,162

47,386

135,380

124,016

71,589

94,975

1,222,617

1,203,197

435,621

420,125

Emoluments of the highest paid Director Emoluments Other pension costs

25,562

27,386

461,183

447,511

One of the Directors exercised options during the year ended 31 March 2022 (2021: none of the Directors exercised options). At 31 March 2022 there were two Directors (2021: two) who were members of a defined contribution pension scheme to which the Company contributed.

Financial Statements

2022 £

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

8. SHARE BASED PAYMENTS OPTIONS OVER SHARES HELD BY THE EMPLOYEE BENEFIT TRUST

Certain employees have been granted call options over ordinary shares of the Company held by the Cambridge Innovation Capital Limited Employee Benefit Trust. The terms provide that shares may be acquired at a fixed price in tranches commencing one year from the date of employment and expiring on the earlier of six months after an Initial Public Offering and ten years from the date of the award. If an employee leaves, there is no impact on vested tranches but unvested tranches expire on the leaving date. Movements in the number of options outstanding and their related weighted average exercise prices are as follows: At 1 April 2021

Granted during the year

Exercised during the year

Lapsed during the year

At 31 March 2022

Number

2,754,501

–

1,167,371

Exercisable

2,754,501

n/a

1,167,371

Exercise price for all options (pence)

0.17

n/a

0.17

n/a

0.17

Weighted average remaining contractual life (years)

2.73

n/a

1.87

4,713

n/a

1,997

Proceeds receivable on exercise (£)

(1,587,130)

(2,716)

The fair value of the options over shares held by the Employee Benefit Trust has been calculated based on the fair value of the shares at the date of grant less the nominal exercise price. During the year, a charge of £nil (2021: £nil) has been recorded in relation to options over shares held by the Employee Benefit Trust.

OPTIONS OVER SHARES ISSUED IN ACCORDANCE WITH THE COMPANY’S INCENTIVE SCHEMES

Certain employees have been granted options over ordinary shares of the Company in accordance with the Company’s incentive schemes. The options provide that shares may be acquired at a fixed price in two equal tranches two and three years after the date of the award and expire five years after the vesting date. If an employee leaves and is considered a good leaver, vested tranches expire one year after leaving and unvested tranches expire one year after the future vesting date. If an employee leaves and is considered a bad leaver, vested and unvested tranches lapse on the leaving date. Movements in the number of options outstanding and their related weighted average exercise prices are as follows: At 1 April 2021

Number

Granted during the year

Exercised during the year

764,632

–

28,757

n/a

28,757

Exercise price for all options (pence)

0.01

n/a

0.01

Weighted average remaining contractual life (years)

5.65

n/a

4.73

n/a

Proceeds receivable on exercise (£)

(7)

(26,305)

At 31 March 2022

863,848

Exercisable

(72,911)

Lapsed during the year

(3)

It has been determined that options over shares issued in accordance with the Company’s incentive schemes would be cash, rather than equity, settled based on the net assets per share most recently approved by the Board. The liability for cash-settled options assumes an annual leavers rate of 10% and is prorated for the extent to which each option has vested. At 31 March 2022, the aggregate liability, including employer’s National Insurance contributions, for these options was £828,247 (2021: £598,219) and during the year a charge of £345,851 (2021: £348,979) has been recorded.

9. FINANCE INCOME AND COSTS 2022 £

2021 £

Bank and other interest

507,525

478,577

Finance charges for lease liabilities

(27,708)

–

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

10. INCOME TAX

Profit before taxation Standard corporation tax rate Expected tax expense

2022 £

2021 £

39,057,921

64,816,867

19%

7,421,005

12,315,205

(9,216,255) (14,835,143)

Income not subject to tax (fair value changes) Expenses not tax deductible Tax loss carried forward not recognised

2,226,133

2,428,357

–

91,581

Utilisation of tax losses not previously recognised

(641,031)

–

Tax on profit

(210,148)

–

The standard rate of UK Corporation Tax is currently 19% (2021: 19%) but in 2021 the Government enacted legislation to increase the standard rate to 25% with effect from 1 April 2023. As a result, deferred tax has been calculated at 25% (2021: 19%) in these financial statements (see note 17).

11. PROPERTY, PLANT AND EQUIPMENT Leasehold improvements £

Furniture and equipment £

Computer equipment £

Total £

170,279

Cost At 1 April 2020

60,840

57,379

52,060

Additions

–

6,772

Disposals

–

(31,921)

At 31 March 2021

60,840

57,379

26,911

145,130

Additions

285,950

141,783

4,980

432,713

Disposals

(60,840)

(34,749)

(4,377)

(99,966)

At 31 March 2022

285,950

164,413

27,514

477,877

At 1 April 2020

45,272

54,879

40,911

141,062

Provided in the year

12,168

835

6,401

19,404

–

(31,921)

At 31 March 2021

57,440

55,714

15,391

128,545

Provided in the year

22,463

16,754

7,404

46,621

(60,840)

(34,749)

(4,377)

(99,966)

19,063

37,719

18,418

75,200

At 31 March 2022

266,887

126,694

9,096

402,677

At 31 March 2021

3,400

1,665

11,520

16,585

Accumulated depreciation

Disposals

Disposals At 31 March 2022 Net book amount

Financial Statements

The relationship between the expected tax expense based on the standard corporation tax rate of the Company and the tax expense actually recognised in the income statement is reconciled as follows:

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

12. LEASES The Group leases its office and the financial statements include the following amounts relating to this lease: 2022 £

2021 £

1,962,436

–

Right-of-use assets Cost

–

Provided in the year

73,101

–

Depreciation at 31 March

73,101

–

1,889,335

–

Depreciation at 1 April

Net book amount Lease liabilities Current Non-current

Interest expense (included in finance cost)

141,564

–

1,731,781

–

1,873,345

–

27,708

–

On 15 November 2021, the Company entered into a new office lease. The lease has a contractual period of 10 years, but may be cancelled by the Company on the fifth anniversary of the lease commencement date. The lease term is considered to be 10 years, representing the non-cancellable lease period, as it is reasonably certain that the lease will not be cancelled. The lease provides for an annual rent of approximately £245,000, payable quarterly in advance, a six-month rent-free period from the lease commencement date and, if the Company does not cancel the lease after five years, a three-month rent-free period from the fifth anniversary of the lease commencement date. The Company recorded a right-of-use asset of approximately £2.0 million and a lease liability of approximately £1.8 million at the lease commencement date, based on the present value of future lease payments discounted at 4% over the lease term. As the lease does not provide an implicit rate, the discount rate of 4% is the Company’s estimated incremental borrowing rate at the commencement of the lease. Rent expense is recognised on a straight-line basis over the 10 year lease term, including the rent-free periods. During the year, the Company incurred net cash outflows of £16,798 (2021: £nil) in relation to the lease.

13. INVESTMENTS HELD AT FAIR VALUE

At 1 April 2020

Portfolio companies £

Fund investments £

Total £

291,548,629

568,966

292,117,595

Investments

24,996,481

943,165

25,939,646

Fair value changes in investments

78,079,702

–

78,079,702

394,624,812

1,512,131

396,136,943

Investments

15,364,392

2,674,475

Realisations

(64,316,166)

At 31 March 2021

Fair value changes in investments

48,613,537

At 31 March 2022

394,286,575

– (175,181) 4,011,425

18,038,867 (64,316,166) 48,438,356 398,298,000

The Directors have determined that the Company meets the definition of an investment entity as set out in IFRS 10, “Consolidated Financial Statements” and, therefore, investments that are held as part of the Group’s investment portfolio are carried in the consolidated statement of financial position at fair value even though the Group may have significant influence over these companies.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

At 31 March 2022, the Group held investments in the following entities: Primary instrument

% held

Abcodia Limited

England and Wales

Convertible loan

19.1%

Audio Analytic Limited

England and Wales

Series A Preferred shares

18.6%

AudioTelligence Limited

England and Wales

A Preferred shares

31.3%

Bicycle Therapeutics plc

England and Wales

Ordinary shares

5.9%

Carrick Therapeutics Limited

Ireland

Preferred shares

9.1%

Centessa Pharmaceuticals plc

England and Wales

Ordinary shares

0.7%

CMR Surgical Limited

England and Wales

Preferred shares

Congenica Limited

England and Wales

A Ordinary shares

Cytora Limited

England and Wales

B Preferred shares

Exvastat Limited

England and Wales

Series A shares

Fluidic Analytics Limited

England and Wales

Series A shares

Geospock Limited

England and Wales

Series A1 Preferred shares

22.6%

Imagen Limited

England and Wales

Series A shares

42.6%

Immutrin Limited

England and Wales

Seed shares

29.6%

Microbiotica Limited

England and Wales

Seed shares

14.0%

Origami Energy Limited

England and Wales

A Ordinary shares

11.9%

PervasID Limited

England and Wales

Ordinary shares

11.1%

PetMedix Limited

England and Wales

B Preferred shares

12.1%

Polyprox Therapeutics Limited

England and Wales

Ordinary shares

24.9%

PragmatIC Semiconductor Limited

England and Wales

A Ordinary shares

23.4%

Predictimmune Limited

England and Wales

A Ordinary shares

Riverlane Limited

England and Wales

Ordinary Preferred shares

22.4%

Secondmind Limited

England and Wales

Series A Preferred shares

11.9%

Sense Biodetection Limited

England and Wales

B Preferred shares

16.3%

Storm Therapeutics Limited

England and Wales

A Preferred shares

17.2%

Swim.ai Incorporated

Delaware, United States

Series B Preferred stock

15.1%

Undo Limited

England and Wales

B Preferred shares

24.2%

Cambridge Innovation Capital II LP

England and Wales

Loan

Cambridge Innovation Capital II (USD) LP

England and Wales

Capital

Start Codon Fund I Limited Partnership

England and Wales

Loan

Start Codon Carry Limited Partnership

Scotland

Capital

DeepTech Labs Fund I Limited Partnership

England and Wales

Loan

7.3% 17.5% 4.3% 54.4% 1.1%

4.8%

Fund investments 6.4% 0.0% 16.0% 3.1% 42.9%

All of the Group’s investments are in unquoted entities, except for Bicycle Therapeutics plc and Centessa Pharmaceuticals plc, which are listed on Nasdaq. At 31 March 2022, the Group had committed, subject to certain milestone provisions contained in the relevant legal documentation, to make further investments of $1.3 million (2021: £0.2 million) in portfolio companies and £3.1 million (2021: £6.5 million) as fund investments. As these relate to future investments, they have not been included in the financial statements. Please also see the post balance sheet events disclosed in note 22.

Financial Statements

Country of registration

Portfolio companies

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Details of the Group’s interests in associated undertakings are as follows: Entity

Principal activity

2022

2021

Start Codon Limited

Life science accelerator Milner Therapeutics Institute, Puddicombe Way, Cambridge, CB2 0AW

26.6%

Accelerator Advisory Limited (trading as Deeptech Labs)

Technology accelerator c/o Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge, CB2 1PH

27.9%

2022 £

2021 £

Registered address

Summarised financial information in respect of the associated undertakings is set out below:

Summarised statement of financial position (100%) Non-current assets Cash and cash equivalents Other current assets Other current liabilities Net assets Group’s share of net assets

29,620

8,404

1,009,065

1,594,987

285,648

377,673

(128,788)

(356,297)

1,195,545

1,624,767

373,177

493,800

2022 £

2021 £

Summarised statement of comprehensive income (100%) (429,222)

Operating (loss)/profit

466,746

–

Taxation

–

(Loss)/profit and total comprehensive (expense)/income for the year

(429,222)

466,746

Group’s share of (loss)/profit for the year

(120,623)

124,467

The following table reconciles the summary information above to the carrying amount of the Group’s interests in associated undertakings:

At 1 April

2022 £

2021 £

493,800

369,332

–

Investments (Loss)/profit from continuing operations At 31 March

(120,623)

124,467

373,177

493,800

2022 £

2021 £

15. TRADE AND OTHER RECEIVABLES Trade receivables Prepayments and accrued income Other receivables

2,062,175

–

542,594

604,090

106,142

243,021

2,710,911

847,111

All amounts are short term. The carrying values of receivables are considered reasonable approximations to fair value. All of the receivables have been reviewed for indicators of impairment.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

16. TRADE AND OTHER PAYABLES

Social security and other taxes Accruals and deferred income Other payables

2021 £

433,571

69,154

92,274

91,891

30,995,163

22,455,669

260,000

–

31,781,008

22,616,714

All trade and other payables are unsecured, interest free and payable on demand. The carrying values of trade and other payables are all in pounds sterling and are considered reasonable approximations to fair value.

17. DEFERRED TAX There were no deferred tax assets or liabilities recognised by the Group during the year reported on (2021: £nil). A deferred tax asset would be recognised only when sufficient taxable profits are expected to be generated to relieve the trading losses. 2022 £

2021 £

Deferred tax amounts not provided for –

355,300

6,479,320

3,913,905

6,479,320

4,269,205

Trade losses unrelieved Other timing differences

18. ISSUED SHARE CAPITAL 2022 Number

2021 Number

2022 £

2021 £

Allotted, called up and fully paid 1

–

301,645,780

308,354,953

30,165

30,836

Special share of £0.0001 Ordinary shares of £0.0001 each

–

28,324,079

–

1,416

301,645,781

336,679,033

30,165

32,252

Class A commitment shares of £0.00005 each

The Company has issued one special share to the University of Cambridge that: •

entitles the University of Cambridge to be issued ordinary shares for no consideration if, on the issue of ordinary or class A commitment shares to third parties, its founding shareholding falls below 5% of the then in issue ordinary and class A commitment shares;

•

carries no right to participate in the income of the Company;

•

carries no right to receive notice of, or to attend, speak or vote at, any general meeting of the Company;

•

entitles the holder to the nominal value of the special share on a return of assets on liquidation or capital reduction or otherwise; and

•

is not transferable.

The ordinary and class A commitment shares carry equal voting rights, equal rights to income and distributions of assets on liquidation, or otherwise, and no right to fixed income. During the year ended 31 March 2022, the Company: •

issued 28,324,079 (2021: 49,555,367) class B commitment shares at a subscription price of £0.88495 (2021: £0.88495) each that immediately paired up with the same amount of class A commitment shares, with each pair of class A and class B commitment shares converting into one new ordinary share;

•

completed a capital reduction whereby the share premium account and the capital redemption reserve were cancelled and the amount arising from such cancellation was credited to retained earnings; and

•

bought back at £1.29 each, and subsequently cancelled, 35,033,253 ordinary shares.

At 31 March 2022, the Cambridge Innovation Capital Limited Employee Benefit Trust held 1,167,371 (2021: 2,754,501) ordinary shares of £0.0001 each.

Financial Statements

Trade payables

2022 £

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

19. NON-CONTROLLING INTERESTS Non-controlling interests represent the interests of minority shareholders in the total comprehensive income (or expense) and net assets of subsidiary companies where the Company holds less than 100% of the issued share capital. The movements in non-controlling interests during the year were as follows: 2022 £

2021 £

–

Acquisition of non-controlling interests

625,254

–

Total comprehensive expense attributable to non-controlling interests

(34,959)

–

590,295

–

At 1 April

20. RELATED PARTY TRANSACTIONS The Group discloses transactions with related parties that are not wholly owned within the same Group. Convertible loans to related parties typically have the potential to be long term in nature. As a result, they are included within non-current investments (see note 13) and the aggregate balance is shown below: 2022 £

2021 £

Loans at 1 April

11,628,348

1,973,968

Loans advanced

3,278,352

13,278,434

(6,558,661)

(2,218,721)

Loans converted or exchanged for equity

(624,745)

Loans reclassified

–

Loss allowance Loans at 31 March

7,723,294 Income during the year ended 31 March

Income from related parties that primarily relates to management fees, interest on convertible loans and recharged expenses

11,628,348

Amounts due at 31 March

2022 £

2021 £

2022 £

2021 £

5,798,973

1,676,016

2,418,751

683,759

Purchases during the year ended 31 March

Purchases from related parties that primarily relate to the Group’s office and the provision of other services

– (1,405,333)

Amounts due at 31 March

2022 £

2021 £

2022 £

2021 £

28,050

49,845

598

540

21. FINANCIAL INSTRUMENTS The Group is entirely equity funded and uses certain financial instruments including cash, trade and other receivables, trade and other payables, lease liabilities and equity interests in, and loans to, investments held by the Group. The carrying amounts of assets and liabilities may be categorised as follows: 2022 £

2021 £

398,298,000

396,136,943

Financial assets at fair value through profit or loss Investments Financial assets at amortised cost Trade and other receivables

2,414,455

685,393

Cash and cash equivalents

40,056,836

35,529,532

42,471,291

36,214,925

Trade and other payables

31,685,734

22,521,823

Lease liabilities

(1,873,345)

Financial liabilities at amortised cost

29,812,389

– 22,521,823

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

The Group’s main objective in using financial instruments is to back world-leading life sciences and technology companies with an affiliation to Cambridge, Europe’s leading capital for innovation, from funds raised specifically for this purpose. Within the context of this objective, the Group seeks to maximise returns from funds held on deposit while maintaining liquidity and credit risk at acceptable levels. Balance sheets at 31 March 2022 and 2021 are not necessarily representative of the positions throughout the year, as investments and cash and cash equivalents vary considerably depending on when equity raisings and investments have actually occurred.

MARKET (PRICE) RISK

Investments are held for strategic rather than trading purposes and therefore are not actively traded by the Group. The Group is exposed to price risk in respect of equity interests in, and loans to, investments held by the Group and classified on the balance sheet at fair value through profit or loss. The Group seeks to manage this risk by routinely monitoring and reporting to the Board the status, performance and valuation of these investments. Proposed investments are subject to a detailed analysis and approval process. Post tax profit for the year may increase or decrease as a result of fair value gains/losses on investments classified at fair value through profit or loss and are allocated to the capital reserve.

MARKET (INTEREST RATE) RISK

The Group has no liabilities that are exposed to interest rate risk. The Group receives interest from cash and cash equivalents, which are primarily held in sterling, and the level of this interest is dependent upon the prevailing interest rates. The Group seeks to optimise the receipt of interest but has a primary focus on acceptable levels of credit and liquidity risk. All of the Group’s cash and cash equivalents were subject to floating rates in the range of 0.00% to 0.70% (2021: 0.00% to 1.50%). The following table illustrates the sensitivity of the profit/(loss) for the year and total equity to a reasonably possible change in interest rates to +2% and 0% for both years with effect from the beginning of each year. The changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the Group’s financial assets held during the year. All other variables are held constant. 2022 +2% £

2022 0% £

2021 +2% £

2021 0% £

Result for the year

755,864

(507,525)

582,129

(478,577)

Equity

755,864

(507,525)

582,129

(478,577)

LIQUIDITY RISK

Liquidity risk is the risk that the Group may not be able to meet its financial obligations. The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet forecast cash flows. Net cash requirements are compared to available cash and updated on a monthly basis.

CREDIT RISK

In order to minimise the risk of loss, cash and cash equivalents are only held with European authorised financial institutions of good credit rating, being those at or above the credit rating of the main UK clearing banks. The credit rating profile, as per Standard & Poor’s rating services, of the Group’s financial assets was as follows:

AAA+

2022 £

2021 £

–

22,008,927

40,056,836

13,520,605

40,056,836

35,529,532

FOREIGN EXCHANGE RISK

The Group occasionally enters into transactions in currencies other than sterling. At 31 March 2022, the Group had committed, subject to certain milestone provisions contained in the relevant investment agreements, to make further investments of $1.3 million (2021: $nil). The Group does not hedge its foreign currency commitments because of its policy not to enter into hedging transactions.

CAPITAL RISK MANAGEMENT

The capital structure of the Group is limited to its equity comprising share capital, reserves and retained losses. The Group manages its capital to ensure that entities within the Group will be able to continue as going concerns while maximising the return to shareholders through the optimisation of any equity balance. The Group’s overall strategy remains unchanged for the years under review.

Financial Statements

The main risks associated with the Group’s financial instruments relate to market (price and interest rate risk), liquidity and credit risk. The Group does not have any committed borrowing facilities and it is the Group’s policy not to trade in derivative instruments, or to enter into hedging transactions.

Governance

RISK MANAGEMENT OBJECTIVES

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

FAIR VALUES

The fair values of the Group’s financial assets and liabilities are considered a reasonable approximation to the carrying values shown in the statement of financial position. The basis for determining fair values is described in note 3.

ESTIMATION OF FAIR VALUES

Level 1 £

Level 3 £

Total £

21,173,467

270,944,128

292,117,595

–

25,939,646

Fair value changes in investments

16,744,503

61,335,199

78,079,702

At 31 March 2021

37,917,970

358,218,973

396,136,943

At 1 April 2020 Investments

Transfers between classifications

7,359,918

Investments

–

Fair value changes in investments

17,813,625

Realisations

–

At 31 March 2022

63,091,513

(7,359,918)

–

18,038,867

30,624,731

48,438,356

(64,316,166) (64,316,166) 335,206,487

398,298,000

The Group’s investments in Bicycle Therapeutics plc and Centessa Pharmaceuticals plc, which are listed on Nasdaq, are classified as Level 1. All of the Group’s other investments are in unquoted companies or partnerships. If one or more of the significant inputs to the fair value is not based on observable market data, the instrument is included as Level 3. As a result, the Group classifies all its unquoted investments as Level 3 and these investments are held at fair value in accordance with the investments policy in note 3. The Audit and Risk Management Committee and Board review the investment valuation process, and resultant fair values, at least twice a year in line with the Group’s reporting dates. The valuation of investments is prepared by the investment team, and reviewed by the Executive Directors, before being submitted to the Audit Committee and Board for approval. The fair value profile of investments is summarised as follows: 2022 £

2021 £

Price of recent investment 275,000

11,350,030

259,574,357

113,520,782

Investment completed between one and two years

53,467,468

171,593,958

Investment completed more than two years ago

21,889,662

61,754,203

335,206,487

358,218,973

Adjusted for milestones or impairments Investment completed within one year

Listed investments

63,091,513

37,917,970

398,298,000

396,136,943

If the fair value of the Group’s investments varied by +/-10%, the profit for the year would change by +/- £39.8 million (2021: +/- £39.6 million).

22. POST BALANCE SHEET EVENTS Following the year end, the Group invested a further £2.2 million in investments held at fair value and impaired the carrying value of unquoted entities by £6.0 million.

23. CONTROLLING PARTY There is no ultimate controlling party.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

AT 31 MARCH 2022

Note

2022 £

2021 £

Tangible assets

402,677

16,585

Investments

185,852,938

234,012,233

186,255,615

234,028,818

Current assets Debtors

Cash at bank and in hand

Creditors: amounts falling due within one year

2,147,302

392,737

17,770,485

9,483,699

19,917,787

9,876,436

(31,905,710) (22,475,429)

Net current liabilities

(11,987,923) (12,598,993)

Total assets less current liabilities

174,267,692

221,429,825

Net assets

174,267,692

221,429,825

Capital and reserves Called up share capital

Share premium account Capital redemption reserve

30,165

32,252

25,063,978

120,803,271

3,503

49,992,656

3,090,737

3,343,750

Retained earnings

146,079,309

47,257,896

Total shareholders’ funds

174,267,692

221,429,825

Share based payment reserve

The notes on pages 59 to 65 are an integral part of these financial statements. The financial statements on pages 57 to 65 of Cambridge Innovation Capital Limited, registered number 08243718, were authorised for issue by the Board of Directors on 29 June 2022 and were signed on its behalf by ROB SPRAWSON DIRECTOR AND CFO

Financial Statements

Fixed assets

Governance

COMPANY BALANCE SHEET

CAMBRIDGE INNOVATION CAPITAL

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022

Note

At 1 April 2020 Loss for the year and total comprehensive expense

Called up share capital £

Share premium account £

Capital redemption reserve £

Share based payment reserve £

Retained earnings £

Total shareholders’ funds £

55,318,769

185,636,676

50,022,430

76,951,727

–

3,343,750

–

2,478

43,851,544

–

49,992,656

–

(1)

32,252

120,803,271

49,992,656

3,343,750

–

(8,060,872)

Transactions with owners Share capital issued (net of expenses) Buyback of deferred shares

(49,992,656)

At 31 March 2021 Loss for the year and total comprehensive expense

47,257,896

(7,358,432)

43,854,022 (1) 221,429,825

(7,358,432)

Transactions with owners Share capital issued (net of expenses)

1,416

25,063,978

–

Share based payments

–

Capital reduction

–

Buyback of ordinary shares (including expenses)

Dividends paid At 31 March 2022

(120,803,271) (49,992,656)

(3,503)

– (253,013)

– –

–

170,795,927

25,065,394 (253,013) –

–

3,503

–

(45,476,657) (45,476,657)

–

(19,139,425) (19,139,425)

30,165

25,063,978

3,503

3,090,737

The notes on pages 59 to 65 are an integral part of these financial statements.

146,079,309

174,267,692

Governance

NOTES TO THE COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

A. GENERAL INFORMATION

B. STATEMENT OF COMPLIANCE The Company meets the definition of a qualifying entity under Financial Reporting Standard (“FRS”) 100 issued by the Financial Reporting Council (“FRC”). The financial statements have therefore been prepared in compliance with UK Accounting Standards including FRS 102, “The Financial Reporting Standard Applicable in the UK and Republic of Ireland” and the Companies Act 2006.

C. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PREPARATION

These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the revaluation of certain assets and liabilities measured at fair value through profit or loss. The principal accounting policies adopted in the preparation of these financial statements have been consistently applied to all the years presented, unless otherwise stated.

TANGIBLE FIXED ASSETS

Tangible fixed assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price and costs directly attributable to bringing the asset to its working condition for its intended use. Depreciation on assets is calculated, using the straight-line method, to allocate the cost to their residual values over their estimated useful lives, as follows: leasehold improvements, five years;

•

furniture and equipment, three years; and

•

computer equipment, three years.

INVESTMENTS

Investments in subsidiary and associate undertakings are held at cost, less any accumulated impairment losses. An impairment review is performed to assess the carrying value of subsidiaries and associates at each reporting date. Investments which are not subsidiaries or associates, are held as financial assets at fair value through profit or loss. These financial assets are initially recognised at fair value, which is normally the transaction price, and subsequently carried at fair value with any changes in fair value recognised in profit or loss in the period in which they arise. The Company measures the fair value of these investments in line with International Private Equity and Venture Capital (“IPEV”) Valuation 2018 Guidelines, endorsed by the British Venture Capital Association.

FINANCIAL INSTRUMENTS

The Company has adopted the provisions of Section 11 and Section 12 of FRS 102 in respect of financial instruments. The Company does not have any financial instruments other than investments, cash, debtors and creditors. Cash, debtors and creditors are all measured at cost on the date the transaction was entered into and financial assets are subsequently reviewed for possible impairment.

CASH AT BANK AND IN HAND

Cash and cash equivalents includes cash in hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.

SHARE BASED PAYMENTS OPTIONS OVER SHARES HELD BY THE EMPLOYEE BENEFIT TRUST The Company operates an equity-settled, share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee service received in exchange for the grant of the options is recognised as an expense over the vesting period. The total amount expensed over the vesting period is determined by reference to the fair value of the options granted. At each reporting date, the entity revises its estimates of the number of options that are expected to vest and recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cash-settled transaction.

Financial Statements

Cambridge Innovation Capital Limited (the “Company”) is incorporated in England and Wales and is domiciled in the UK, the address of its registered office being 22 Station Road, Cambridge, CB1 2JD.

•

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE COMPANY FINANCIAL STATEMENTS

CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

OPTIONS OVER SHARES ISSUED IN ACCORDANCE WITH THE COMPANY’S INCENTIVE SCHEMES The Company operates a share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. Given that it is the Directors’ intention that such options will be settled in the form of cash, the options are accounted for as cash-settled and such options are measured at fair value at the balance sheet date. The Group recognises a liability at the balance sheet date based on these fair values, taking into account the estimated number of options that will actually vest and the current proportion of the vesting period. Changes in the value of this liability are recognised in the statement of comprehensive income. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cashsettled transaction.

PENSION COSTS

The Company makes payments for each employee to a defined contribution scheme or a scheme of their choice. The assets of the defined contribution scheme are held separately from the Company in independently administered funds. Contributions made by the Company are charged to the profit and loss in the period to which they relate.

MANAGEMENT INCENTIVE PLAN

The Company operates a management incentive plan for all employees. Before any payment to a participant becomes due, the Company must first have returned the aggregate capital raised from shareholders, together with a compounded hurdle rate of 8% per annum. At the point at which the hurdle rate has been exceeded, a provision is included for the unrealised gain due to participants. The provision is measured by reference to net assets, with movements in the provision charged/credited to the profit and loss.

OPERATING LEASES

Lease payments are expensed in the profit and loss on a straight-line basis over the initial period of the lease.

TAXATION

Taxation expense comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity respectively. Current or deferred taxation assets and liabilities are not discounted. CURRENT TAX Current tax is the amount of income tax payable in respect of the taxable profit for the period or prior periods. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end. DEFERRED TAX Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

CAPITAL AND RESERVES

Capital and reserves comprises the following: •

called up share capital represents the nominal value of equity shares;

•

share premium represents the excess over nominal value of the fair value of consideration received for equity;

•

capital redemption reserve reflects the buyback of share capital;

•

share based payment reserve represents equity-settled share based remuneration until such instruments are exercised; and

•

retained profit/(accumulated losses) represents retained profits/(accumulated losses).

EXEMPTIONS FOR QUALIFYING ENTITIES UNDER FRS 102

The Company has not provided a statement of cash flows or certain disclosures in relation to key management and related party transactions, as this information is included in the consolidated financial statements.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

D. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

E. RESULTS OF THE COMPANY The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included a profit and loss account. The Company’s loss for the year ended 31 March 2022 is £7,358,432 (2021: £8,060,872).

F. EMPLOYEES AND DIRECTORS All of the Group’s employees are employed by the Company. Employee numbers and employee benefit expenses are disclosed in note 7 to the consolidated financial statements.

G. TANGIBLE ASSETS Leasehold improvements £

Furniture and equipment £

Computer equipment £

Total £

170,279

Cost At 1 April 2020

60,840

57,379

52,060

Additions

–

6,772

Disposals

–

(31,921)

At 31 March 2021

60,840

57,379

26,911

145,130

Additions

285,950

141,783

4,980

432,713

Disposals

(60,840)

(34,749)

(4,377)

(99,966)

At 31 March 2022

285,950

164,413

27,514

477,877

At 1 April 2020

45,272

54,879

40,911

141,062

Provided in the year

12,168

835

6,401

19,404

–

(31,921)

At 31 March 2021

57,440

55,714

15,391

128,545

Provided in the year

22,463

16,754

7,404

46,621

(60,840)

(34,749)

(4,377)

(99,966)

19,063

37,719

18,418

75,200

At 31 March 2022

266,887

126,694

9,096

402,677

At 31 March 2021

3,400

1,665

11,520

16,585

Accumulated depreciation

Disposals

Disposals At 31 March 2022 Net book amount

Financial Statements

In determining and applying accounting policies, judgement is often required in respect of items where the choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or the net asset position of the Company. Management considers that certain accounting estimates and assumptions relating to the carrying value of the Company’s investments are critical accounting estimates. The treatment of investments has been detailed above.

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE COMPANY FINANCIAL STATEMENTS

CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

H. INVESTMENTS 2022 £

2021 £

234,012,233

196,068,965

Investments

2,079,680

37,943,268

Realisations

(50,132,044)

At 1 April

(106,931)

Fair value changes in investments At 31 March

185,852,938

– – 234,012,233

At 31 March 2022, the Company held investments in the following entities: Entity

Principal activity

Registered address

Cambridge Innovation Capital (Jersey) Limited

Invests in high growth technology businesses

Aztec Group House, 11-15 Seaton Place, St Helier, Jersey, JE4 0QH

100.0%

Cambridge Innovation Capital ICC

Management of Cambridge Innovation Capital – Cell One IC

Aztec Group House, 11-15 Seaton Place, St Helier, Jersey, JE4 0QH

100.0%

Cambridge Innovation Capital - Cell One IC

Co-invest vehicle for investments in high growth technology businesses

Aztec Group House, 11-15 Seaton Place, St Helier, Jersey, JE4 0QH

n/a1

Cambridge Innovation Capital Manager Limited

FCA Authorised AIFM

22 Station Road, Cambridge, CB1 2JD

100.0%

CICSP Limited

Member of CICGP Limited Liability Partnership

50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ

100.0%

CICGP Limited Liability Partnership

General partner of funds managed by Cambridge Innovation Capital Manager Limited

22 Station Road, Cambridge, CB1 2JD

100.0%

CICFP Limited Partnership

Carry/co-invest vehicle for the Company and its directors, employees and other associated individuals for funds managed by Cambridge Innovation Capital Manager Limited

50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ

UBP CIC Co-invest ICC

Management of UBP CIC Co‑invest Cell One IC

Aztec Group House, 11-15 Seaton Place, St Helier, Jersey, JE4 0QH

100.0%

UBP CIC Co-invest Cell One IC

Co-invest vehicle for investments in high growth technology businesses

Aztec Group House, 11-15 Seaton Place, St Helier, Jersey, JE4 0QH

n/a1

Start Codon Limited

Life science accelerator

Milner Therapeutics Institute, Puddicombe Way, Cambridge, CB2 0AW

26.6%

Start Codon Fund I Limited Partnership

Life science accelerator investment fund

Milner Therapeutics Institute, Puddicombe Way, Cambridge, CB2 0AW

16.0%

Start Codon Carry Limited Partnership

Life science accelerator investment fund carry vehicle

c/o Brodies LLP, Capital Square, 58 Morrison Street, Edinburgh, EH3 8BP

3.1%

Accelerator Advisory Limited (trading as Deeptech Labs)

Technology accelerator

c/o Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge, CB2 1PH

27.9%

DeepTech Labs Fund I Limited Partnership

Technology accelerator investment fund

c/o Mills & Reeve LLP Botanic House, 100 Hills Road, Cambridge, CB2 1PH

42.9%

% held

50.0%

The Company only holds management shares, which do not provide any beneficial interests, in these entities.

At 31 March 2022, the Company had committed, subject to certain provisions contained in the relevant legal documentation, to make further investments of £7.4 million (2021: £6.5 million) in the limited partnerships listed above. As these relate to future investments, they have not been included in the financial statements.

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

I. DEBTORS

Other debtors Prepayments and accrued income

2021 £

1,857,925

231,019

99,065

61,466

190,312

100,252

2,147,302

392,737

All amounts are short term. The carrying values of debtors are considered reasonable approximations to fair value. All of the debtors have been reviewed for indicators of impairment.

J. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2022 £

2021 £

Trade payables

423,062

65,805

Amounts owed to group undertakings

281,716

–

92,274

91,891

Taxation and social security Other creditors Accruals and deferred income

79,246

–

31,029,412

22,317,733

31,905,710

22,475,429

All creditors are unsecured, interest free and payable on demand. The carrying values of creditors are all in pounds sterling and are considered reasonable approximations to fair value.

K. DEFERRED TAX There were no deferred tax assets or liabilities recognised by the Company during the year reported on (2021: £nil). A deferred tax asset would be recognised only when sufficient taxable profits are expected to be generated to relieve the trading losses. 2022 £

2021 £

Deferred tax amounts not provided for –

355,300

6,479,320

3,913,905

6,479,320

4,269,205

Trade losses unrelieved Other timing differences

The Company may also benefit from a tax deduction when the outstanding call options over ordinary shares of the Company are exercised. Such a benefit would create an additional tax deductible expense. The Company’s trading tax losses at 31 March 2022 were approximately £nil (2021: £1.87 million).

L. CALLED UP SHARE CAPITAL 2022 Number

2021 Number

2022 £

2021 £

Allotted, called up and fully paid 1

–

301,645,780

308,354,953

30,165

30,836

Special share of £0.0001 Ordinary shares of £0.0001 each

–

28,324,079

–

1,416

301,645,781

336,679,033

30,165

32,252

Class A commitment shares of £0.00005 each

The Company has issued one special share to the University of Cambridge that: •

•

carries no right to participate in the income of the Company;

•

carries no right to receive notice of, or to attend, speak or vote at, any general meeting of the Company;

•

entitles the holder to the nominal value of the special share on a return of assets on liquidation or capital reduction or otherwise; and

•

is not transferable.

The ordinary and class A commitment shares carry equal voting rights, equal rights to income and distributions of assets on liquidation, or otherwise, and no right to fixed income.

Financial Statements

Amounts owed by group undertakings

2022 £

CAMBRIDGE INNOVATION CAPITAL

NOTES TO THE COMPANY FINANCIAL STATEMENTS

CONTINUED

FOR THE YEAR ENDED 31 MARCH 2022

During the year ended 31 March 2022, the Company: •

•

completed a capital reduction whereby the share premium account and the capital redemption reserve were cancelled and the amount arising from such cancellation was credited to retained earnings; and

•

bought back at £1.29 each, and subsequently cancelled, 35,033,253 ordinary shares.

At 31 March 2022, the Cambridge Innovation Capital Limited Employee Benefit Trust held 1,167,371 (2021: 2,754,501) ordinary shares of £0.0001 each.

M. SHARE BASED PAYMENTS OPTIONS OVER SHARES HELD BY THE EMPLOYEE BENEFIT TRUST

Granted during the year

Exercised during the year

Lapsed during the year

At 31 March 2022

Number

2,754,501

–

1,167,371

Exercisable

2,754,501

n/a

1,167,371

Exercise price for all options (pence)

0.17

n/a

0.1711

n/a

0.17

Weighted average remaining contractual life (years)

2.73

n/a

1.87

4,713

n/a

1,997

Proceeds receivable on exercise (£)

(1,587,130)

(2,716)

OPTIONS OVER SHARES ISSUED IN ACCORDANCE WITH THE COMPANY’S INCENTIVE SCHEMES

Number

Granted during the year

Exercised during the year

764,632

–

28,757

n/a

28,757

Exercise price for all options (pence)

0.01

n/a

0.01

0.0100

0.01

Weighted average remaining contractual life (years)

5.65

n/a

4.73

n/a

Proceeds receivable on exercise (£)

(7)

(26,305)

At 31 March 2022

863,848

Exercisable

(72,911)

Lapsed during the year

(3)

Strategic Report

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

Governance

N. OPERATING LEASE COMMITMENTS The Group leases its office and the future aggregate minimum lease payments under this non-cancellable lease are as follows: 2021 £

Within one year

214,296

–

Later than one year but not later than five years

887,799

–

1,102,095

–

O. RELATED PARTY TRANSACTIONS The Company’s related party transactions include transactions with: the University of Cambridge and its subsidiaries; its subsidiary companies and associate undertakings; and entities in which the Company, or one of its wholly owned subsidiaries, has made an investment. Related party transactions for the Group are disclosed in note 19 to the consolidated financial statements. The exemption from disclosing transactions and balances with wholly owned subsidiaries has been taken.

P. POST BALANCE SHEET EVENTS Following the year end, the Company purchased a further £0.9 million of investments.

Q. CONTROLLING PARTY There is no ultimate controlling party.

Financial Statements

2022 £

CAMBRIDGE INNOVATION CAPITAL

SHAREHOLDER NOTES

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022

CIC Annual Report 2022

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Selected portfolio companies

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