C4X Discovery Holdings plc
Annual report and accounts 2016
BUILDING THE FIRST 
SELF‑SUSTAINABLE 
DRUG DISCOVERY ENGINE
C4X Discovery Holdings plc Annual report and accounts 2016 C4X Discovery (C4XD.L) aims to become 
the world’s most productive drug discovery 
company by exploiting cutting‑ edge 
technologies to design and create 
best‑ in‑ class drug candidates.
Stay up to date with the latest 
investor news and information 
at www.c4xdiscovery.com
Our unique capabilities power cost efficient discovery 
of a diverse multi-disease portfolio of pre-clinical assets, 
in order to generate a sustainable source of revenue.
C4XD at a glance
Read more on pages 2 and 3 2015 2016
Highlights
Operational highlights (including post-period end)
Strategic
•  The Board committed to the delivery of C4X Discovery’ s ("C4XD") vision to 
become the world’ s most productive Drug Discovery Engine. Focus has shifted to 
generating a high value pre-clinical asset portfolio that will drive revenue through 
early stage licensing deals. Existing fee-for-service agreements will be discontinued.
•  Strategic acquisitions made to enhance the Company’ s core target 
identification and drug design capabilities:
 – in March 2016, Adorial Limited (“Adorial”) together with its subsidiaries 
and its proprietary DNA-based target identification platform, T axonomy3
®
, 
were acquired. New T axonomy3
®
 targets in rheumatoid arthritis were 
announced in July 2016 alongside a potential personalised medicine 
approach in Parkinson’ s disease; and
 – also in July 2016, the pioneering computational drug discovery technologies 
from MolPlex Ltd were acquired, further enhancing the Company’ s cutting-edge 
drug design platform.
Senior appointments
•  Dr Clive Dix was appointed Chief Executive Officer in May 2016, following 
a successful period as Executive Chairman.
•  Brad Hoy, Chief Financial Officer, and Dr Craig Fox, Chief Scientific Officer, 
were appointed to the Board of Directors in November 2016.
Discovery Engine progress
•  Drug asset portfolio grown from three programmes in addiction, diabetes 
and chronic obstructive pulmonary disorder in 2014 to eight programmes 
across a number of therapeutic areas.
 – Future disease areas of focus will be inflammation, neurodegeneration 
and other opportunistic areas, for example, immuno-oncology.
Partnerships
•  A new multi-target risk-sharing alliance with Evotec AG (“Evotec”) was announced 
in September 2016. Evotec and C4XD will work together on novel small molecule 
drugs across a range of targets, therapeutic areas and stages of development.
•  In October 2015, a new research collaboration was announced with the 
University of Oxford’ s Structural Genomics Consortium, providing C4XD 
with access to valuable target, assay and “hit” molecule information.
Financial highlights
•  Completion of a £5.0 million fundraise in September 2016 through the conditional 
placing of 4,901,961 new ordinary shares at a price of 102 pence per ordinary share.
•  Acquisition of Adorial Limited and its subsidiaries (“Adorial”) on 1 March 2016 
for £1,670,700.
•  Fee-for-service revenue for the 12 months ended 31 July 2016 was £279,000 
(2015: £312,000).
•  Loss after tax for the 12 months ended 31 July 2016 was £5,321,000 
or 16.83 pence per share (2015: £3,064,000 or 10.77 pence per share).
• Net assets at 31 July 2016 of £4,305,000 (2015: £7,968,000).
•  Cash, cash equivalents, short-term investments and deposits of £1,328,000 
(2015: £7,485,000).
•  R&D expenses increased by 66% to £5,239,000 for the year ended 31 July 2016 
(2015: £3,159,000).
•  Administrative expenses increased by £903,000 during the year to £1,817,000 
(2015: £904,000).
Strategic report
01 Highlights
02 C4XD at a glance
04 Our business model
06 Interim Chairman’ s statement
08 CEO’ s statement
12 Strategic report
14 Financial review
Corporate governance
16 Board of Directors
18 Corporate governance statement
21 Directors’ remuneration report
24 Directors’ report
26 Statement of Directors’ responsibilities
Financial statements
28 Independent auditor’ s report to the members 
of C4X Discovery Holdings plc
29 Consolidated statement of comprehensive income
30 Consolidated statement of changes in equity
31 Company statement of changes in equity
32 Statements of financial position
33 Cash flow statements
34 Notes to the financial statements
IBC Corporate information
Loss after tax
£5,321,000
5,321,000
3,064,000
2014 2015 2016
1,118,000
Net assets
£4,305,000
7,968,000
4,305,000
(1,330,000)
2014
Cash
£1,328,000
7,485,000
2014 2015 2016
1,328,000
673,000 619,000
Fee-for-service revenues
£279,000
312,000
2014 2015 2016
279,000
Strategic report
01
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Our vision
The global medicine’s R&D landscape 
has transformed over the past decade. 
Large pharmaceutical companies have 
become increasingly reliant on discovery 
innovation from small and mid-size 
biopharma to supply their development 
pipelines. There is now a huge opportunity 
to provide pharma with a sustainable 
source of commercially attractive assets.
At C4X Discovery, our vision is to fulfil this need 
by becoming the world’ s most productive Drug 
Discovery Engine. We will commit our resources 
to the early discovery of novel therapeutic targets 
for valuable disease areas and generate multiple 
new candidate drug molecules against these targets. 
We will enable partners, who are much better placed, 
to take on the technical and financial risk associated 
with the clinical development of these molecules. 
Our goals are ambitious and we aim to produce at 
least four pre-clinical candidates every year 
once the Company reaches sustainable productivity 
(“steady state”). Our sustainability will be possible 
by licensing these assets to pharma and using the 
revenue generated to drive our engine further.
2015/16: An engine-building year
2016
7 October 2015
Small molecule 
leads against IL-17 
for inflammation and 
autoimmune diseases
19 November 2015
Appointment of Clive Dix 
as Executive Chairman
28 October 2015
Collaboration with Structural Genomics 
Consortium at Oxford University
C4XD’s management team has 
proactively driven the Company 
to reach multiple value inflexion 
points over the year.
C4XD at a glance
Our vision is to become the world’s most productive 
Drug Discovery Engine and provide pharma with a 
sustainable source of commercially attractive assets.
Our goal is to produce four or more pre-clinical candidates 
each year at steady state
We believe that our proprietary suite of state-of-the-art technologies, 
exploited by our highly experienced and uniquely trained scientific team, 
leaves us well positioned to achieve this goal. Under the Company’ s new 
leadership, with Dr Clive Dix as Chief Executive Officer and a strong 
and experienced team surrounding him, we have already taken strides 
towards achieving our vision.
Y ear 1
1–2
candidates
Y ear 2
2–3
candidates
Y ear 3
>4
candidates
Steady state
>4
candidates
Steady state
3 September 2015
Expansion of team with 
strong biology expertise
23 September 2015
Breakthrough compounds for 
diabetes and inflammation
C4X Discovery Holdings plc 
Annual report and accounts 2016 02
Strategic report Our Discovery Engine
Our suite of combined proprietary technologies forms the core of 
our state-of-the-art Drug Discovery Engine that spans novel target 
identification and drug molecule design.
T axonomy3
®
Taxonomy3
®
 is a novel in silico platform technology that utilises 
proprietary ground-breaking mathematical algorithms to perform 
complex multivariate analyses of genetic data. T axonomy3
®
 is used 
to analyse “healthy-versus-disease” genetic datasets. It identifies 
and characterises defined patient groups and is able to ascertain 
previously unknown genetic linkages and interactions between 
genes and biological pathways in a broad range of diseases. 
Taxonomy3
®
 fuels our drug discovery portfolio by generating 
novel targets in these genetically defined patient sub-groups.
Conformetrix
Our Conformetrix patented technology platform allows 
the dynamic 3D shapes of free drug molecules to be precisely 
measured from experimental data, giving medicinal chemists 
insights into the behaviour and physical properties of drug molecules. 
The measurement, analysis and use of dynamic 3D shapes is at 
the heart of the C4X Drug Discovery Engine. The focus and clarity 
that these provide, allow us to make rapid progress in developing 
new and better drugs at a fraction of the cost compared to best 
industry practice.
MolPlex
The MolPlex platform is a pioneering software-based system that 
combines state-of-the-art chemoinformatics, computational chemistry 
and artificial intelligence to optimise the drug development process. 
This technology enables C4XD to not only generate the chemical 
starting point for such design programmes in rapid time, but also 
to enhance the other properties required for successful human 
administration of a drug molecule (e.g. absorption, metabolism 
and excretion). Each of Conformetrix and MolPlex provide 
independent insights into how to refine initial hit molecules to be 
highly suited to interact with their biological targets.
4 July 2016
Identification of new drug 
targets in inflammation 
and neurodegeneration
28 September 2016
Post balance sheet event: 
new strategic collaboration 
with Evotec
4 May 2016
Appointment of Clive Dix 
as Chief Executive Officer and 
Sam Williams as Interim Chairman
11 July 2016
Acquisition of drug discovery 
technologies from MolPlex
Combined technology suite
T ogether with our highly experienced scientists, these 
three complementary technologies form our Discovery Engine. 
Used in conjunction with industry-standard chemical and 
biology techniques accessed via our network of contract 
research organisations, this represents the full complement 
of capabilities required to deliver viable pre-clinical candidates 
suitable for advancement into clinical development in 
collaboration with pharma partners.
1 March 2016
Acquisition of genetic 
analysis Adorial and 
its subsidiaries
6 September 2016
Post balance sheet event: 
£5.0m fundraise through 
conditional placing of 
ordinary shares
PRE-CLINICAL 
PORTFOLIO
DRUG TARGET 
DISCOVERY & 
SELECTION
NOVEL SMALL 
MOLECULE DESIGN
 Conformetrix technology platform
Taxonomy3
®
Partner targets
Industry approaches
BROAD THERAPEUTIC 
AREA OPPORTUNITIES
           MolPlex
Strategic report
03
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Our business model
Our vision is to become self-sustainable by building alliances with 
complementary organisations and focussing our capital on high 
value discovery activities.
Over the last five years, global licensing revenues of pre-clinical assets have grown significantly, reaching $2.4 billion 
in total deal value in 2015 (a near four-fold increase since 2011)
1
. We believe this trend will continue as large pharma 
engages in an increasingly aggressive competition for the most innovative assets. We aim to exploit this by continually 
monitoring the licensing landscape, only pursuing new programmes in areas of high unmet medical need that are 
commercially attractive, and focussing on developing long-term partnerships with licensees.
T o ensure our costs remain sustainable, our management team will continue to proactively seek opportunities to build alliances 
and collaborations with organisations that have capabilities complementary to our own, and we have already signed agreements 
with SGC Oxford and Evotec in this respect. We have also established a “virtual company” model that enables us to focus our 
capital on our high value discovery activities and effectively manage our cash spend.
Proactive commercial function driving out-licensing of C4XD assets
C4XD Discovery Engine
High value 
pre-clinical 
portfolio
Therapeutic area 
opportunities
Unmet 
medical need
Commercial 
attractiveness
External strategic collaborations 
and partnerships e.g. Evotec and 
Structural Genomics Consortium 
Out-licensing 
milestone and 
royalty revenue
Shareholder value
Reinvestment
1 Source: BIO Industry Analysis “Emerging Therapeutic Company Investment and Deal Trends” 25 May 2016.
C4X Discovery Holdings plc 
Annual report and accounts 2016 04
Strategic report Our people remain central to our business 
model. Developing the right talent continues 
to be paramount and we will continue to invest 
in our diverse, agile and innovative workforce. 
We have established a project-based culture 
that facilitates innovation through active 
collaboration between different skillsets and 
experiences, removing unnecessary layers 
of decision making to empower our scientists 
to break through barriers in drug discovery.
Separately, we have begun to build a proactive 
commercial function, recruiting the best talent 
from blue-chip professional organisations. We see 
this as critical to seeking out partners for our candidate 
portfolio, identifying the best commercial opportunities 
for new programmes, and prioritising strategic shifts 
that will enable C4XD to fulfil its ambitious goals. 
We will also continue to seek acquisition opportunities 
that present outstanding value to our shareholders 
where needed.
Suite of cutting-edge 
proprietary 
technologies
Highly experienced 
scientific team (>320 years)
Industry-leading 
management team 
and Board
Proactive  
commercial 
capability
Strategic report
05
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Interim Chairman’s statement
Sam Williams, Interim Chairman
” The Board is fully 
committed to the 
delivery of our strategy.”
Strategic report We are passionate about finding better ways 
of discovering drugs, from identifying novel 
therapeutic targets through to designing 
best-in-class molecules that act against these 
targets. We believe that the only way to 
do this is to equip talented and motivated 
scientists with unique tools that allow them 
to perform discovery better than anyone 
else. That is what we aim to do at C4XD. Our 
pioneering approach to target identification 
and drug design differentiates us from our 
peers and forms the core of our “Discovery 
Engine”. We will continue to keep an open 
mind in building our engine and will add 
to our technological foundations where 
necessary. If we can deliver our scientific 
goals and our commitment to sustainability 
through the reinvestment of deal revenue 
into our engine, then we believe we will 
break new ground in the UK R&D landscape. 
The Board is fully committed to the delivery 
of our strategy.
The strength of our core technologies 
has continued to attract market-leading 
talent, and the Group has already 
been transformed with the appointment 
of Clive Dix as Chief Executive Officer 
following his short and impactful period 
as Executive Chairman. We could not have 
found a more suitable candidate to take 
the Group forward and our conviction 
is supported by the superb progress the 
Group has made since his appointment 
in May 2016.
C4XD has demonstrated a continued ability 
to adapt and evolve in order to deliver strong 
growth and sound business fundamentals. 
We appreciate our shareholders’ continued 
support and confidence and we look forward 
to delivering significant shareholder value 
in 2017 and beyond.
Sam Williams
Interim Chairman
6 January 2017
” We are passionate about finding 
better ways of discovering drugs.”
Strategic report
07
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com CEO’s statement
Clive Dix, Chief Executive Officer
” We have a complete range 
of tools to discover novel 
compounds and pioneer 
new disruptive approaches 
to drug discovery.”
Strategic report We see ourselves as the “architects” of 
drug discovery , constantly innovating and 
finding novel ways to solve the challenges 
in biology and chemistry that confound 
others. T o enable this, we need to focus 
our efforts in areas where we can lead major 
shifts in traditional discovery approaches. 
It has been an exciting year for C4XD as 
we have taken the opportunity to identify 
these areas and build our Discovery Engine.
Strengthening our leadership
Our vision requires strong leadership. 
We have strengthened our Board 
with the appointment of Craig Fox, 
Chief Scientific Officer, and Brad Hoy, 
Chief Financial Officer. Both Craig and 
Brad bring a wealth of knowledge and 
experience to the Company and will make 
significant contributions to executing our 
strategic plans. In addition, Brad Hoy has 
been appointed permanent CFO following 
a period as interim CFO.
Enhancing our discovery platform
Our flagship Conformetrix technology, 
which we believe to be the only platform 
in the world able to see the “4D” shape 
of molecules in solution, is highly disruptive 
and enables our medicinal chemists to 
design candidates faster than the industry 
standard. We have proven our ability to 
do this for known therapeutic targets by 
producing a highly potent and selective 
Orexin-1 antagonist for addictive disorders 
that is now in pre-clinical development.
However, to become a truly productive 
Discovery Engine, we recognise the need 
to enhance our capabilities to identify our 
own novel therapeutic targets to which 
Conformetrix can be applied. T o address 
this, in March 2016 we acquired Adorial 
Limited and its subsidiaries (“Adorial”) 
and its proprietary genetic platform 
T axonomy3
®
. T axonomy3
®
 is a highly 
sensitive mathematical tool that is able to 
identify previously unknown linkages and 
interactions between genes and biological 
pathways in a broad range of diseases.
This enables the discovery of targets 
that cause disease, rather than those that 
are simply associated with its symptoms. 
This platform increases our chances of 
discovery success and reduces risk of clinical 
failures. The two founders of Adorial joined 
C4XD and have already led the identification 
of exciting novel targets in rheumatoid 
arthritis and a potential personalised medicine 
approach in Parkinson’ s disease. They are 
now working closely with our chemists as 
well as interrogating further genetic datasets.
T o differentiate us further and accelerate 
our ability to design best-in-class pre-clinical 
candidates, we also acquired a suite of 
advanced software tools from MolPlex Ltd. 
These tools enable rapid identification of 
new hit compounds against targets in silico 
using a vast library of virtual molecules, 
visualisation of interactions between drug 
and target, and prediction of “drug-like” 
qualities of lead molecules.
T aken together, we believe our suite of 
complementary proprietary technologies 
provides our scientists with a complete 
range of tools to discover novel compounds 
and pioneer new disruptive approaches 
to drug discovery.
Building our discovery portfolio
Since our IPO in 2014, we have grown 
our portfolio from three programmes (in 
addiction, diabetes and chronic obstructive 
pulmonary disorder) to eight programmes 
across a number of therapeutic areas. 
We will continue to invest in C4XD’ s 
core discovery activities to support our 
ambition of producing at least four pre-clinical 
candidates each year at steady state. T o focus 
our efforts, we will prioritise new programmes 
in the areas of inflammation and 
neurodegeneration as these diseases have 
strong genetic associations and are likely 
to drive strong commercial interest from 
prospective partners. We will continue to 
maximise value from opportunistic areas, 
for example, immuno-oncology. Additional 
disease areas are under continual assessment 
at C4XD, with robust scientific analysis and 
commercial intelligence used to identify 
the best next therapeutic areas for 
inclusion in our portfolio.
Forming strategic alliances
T o deliver our vision, we understand 
that we must focus our efforts on the 
areas where we have strengths – novel 
target identification and drug design. 
As such, we will no longer provide any 
fee-for-service capabilities. Instead, we 
have secured, and will continue to seek, 
longer-term risk-sharing strategic alliances 
that enable us to achieve our goal of 
becoming the world’ s most productive 
Drug Discovery Engine.
In October 2015, we signed an agreement 
with the University of Oxford’ s Structural 
Genomics Consortium (“SGC Oxford”). 
This collaboration gives us access to structural, 
biological and therapeutic information held 
by SGC Oxford on both targets and “hit” 
molecules. Our expertise in drug design will be 
used to improve existing SGC Oxford “hit” 
molecules, which will remain its exclusive 
property , whilst new compounds identified by 
C4XD will belong to us. This alliance provides 
us with a powerful new basis to expand our 
portfolio into new therapeutic areas.
Following the end of the financial 
year, we entered a new multi-target, 
risk-sharing strategic collaboration with 
Evotec AG (“Evotec”), a leading drug 
discovery and development alliance company .
” We see ourselves as the ‘architects’ 
of drug discovery.”
Strategic report
09
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Forming strategic alliances continued
This agreement builds on our existing 
scientific collaboration announced in 
January 2015 and will enable us to increase 
the output of our Discovery Engine with 
reduced risk and, potentially, lower cost. 
C4XD will work with Evotec on three projects 
where Evotec will apply its extensive assay 
and screening technologies, laboratory 
scientists and medicinal chemists in return 
for funding to partially cover operating 
costs, milestones and potential future 
royalties. We share common development 
and commercial goals with Evotec and we 
could not have found a better partner for 
this type of deal in terms of financial 
strength and capacity.
Successful £5 million fundraise
In September 2016, we successfully closed 
a £5 million fundraise at 102 pence per 
share. This brought in several new strategic 
investors, including Calculus Capital Limited 
and Polar Capital LLP , who have strong 
track records in investing in the life sciences 
sector . This new cash enables us to progress 
our pre-clinical pipeline and initiate new 
discovery programmes derived by 
Taxonomy3
®
, and provides working 
capital for operations.
Outlook
C4XD’ s strategy is to achieve our ambitions 
in drug discovery and corporate development, 
thereby delivering value for our shareholders. 
The coming year will focus on securing 
deal revenue from our existing portfolio, 
progressing our discovery candidates to 
pre-clinical development, identifying novel 
and exciting drug targets and selectively 
building our operations to support our vision. 
I am excited about what we can achieve and 
I look forward to sharing this journey with you.
Clive Dix
Chief Executive Officer
6 January 2017
Discovery portfolio review
Neuroscience – Addiction 
and Parkinson’s disease
Oral Orexin-1 Antagonist Programme
The treatment of addiction represents a 
substantial area of unmet medical need, 
forecast to be worth an estimated $13 billion 
per annum by 2018
1
. C4XD’ s lead programme 
targeting Orexin-1 could represent a major 
new method of treating addiction by targeting 
the “craving” process itself. Through the 
Company’ s Conformetrix platform, C4XD has 
identified novel, patentable oral antagonists 
of Orexin-1 providing the Company with 
a pre-clinical candidate and a second 
differentiated follow-up molecule. 
Furthermore, to enable visualisation of the 
activity of this drug in the brain in the planned 
Phase I clinical study , a potential PET imaging 
agent has been identified and is being 
assessed for suitability for clinical use.
The Orexin-1 receptor is considered 
to be central to the brain’ s “craving” and 
“reward” pathways with pre-clinical efficacy 
observed in multiple addiction models. 
Recently, Actelion Pharmaceuticals Ltd 
(“Actelion”) announced the first public 
disclosure of a selective Orexin-1 antagonist 
entering clinical development with a Phase 1 
study currently in progress. Selectivity against 
the structurally similar Orexin-2 receptor is 
of critical importance and C4XD has identified 
compounds with more than 1,000-fold 
selectivity for the Orexin-1 receptor versus 
the Orexin-2, which has a very different 
biological function in mediating the sleep/
wake cycle. Molecules that target the 
Orexin-2 receptor, such as the approved 
drug Suvorexant, have been shown to be 
beneficial in the treatment of insomnia and 
therefore this activity must be absent from 
a drug being developed for the treatment 
of addiction.
Following Actelion’ s lead, C4XD believes 
that a number of pharmaceutical companies 
have active pre-clinical Orexin-1 programmes 
for the treatment of addiction. C4XD’ s 
programme is well placed from a product 
development perspective and provides a 
licensing opportunity for pharma companies 
interested in the treatment of addiction 
seeking to acquire an Orexin-1 programme.
Parkinson’s disease
Analysis of the Wellcome Trust’ s 
publicly available Parkinson’ s disease 
dataset using C4XD’ s proprietary target 
discovery technology T axonomy3
®
 has 
identified multiple novel targets in discrete 
patient sub-groups that could potentially 
provide an opportunity in stratified medicine. 
C4XD is extending this analysis by examining 
an additional dataset that contains clinical 
phenotype descriptions to be used in 
combination with the genetic stratification. 
Once this analysis is complete, novel targets 
for progression will be selected and linked to 
a specific sub-group of Parkinson’ s patients.
Inflammation
Oral NRF-2 Activator Programme
In September 2015, C4XD announced 
it had designed novel activators of the 
NRF-2 pathway, which is important in 
mediating lung diseases such as chronic 
obstructive pulmonary disease (“COPD”), 
and multiple sclerosis (“MS”). COPD 
represents an area of substantial unmet 
medical need and a $41 billion market
2
 
and, therefore, oral activators of NRF-2 are 
the subject of considerable interest by the 
pharmaceutical industry. However, novel 
NRF-2 activators have proved difficult 
to identify. Recently, C4XD’ s proprietary 
technology has enabled the discovery 
of some of the most potent compounds 
reported so far against NRF-2 and these 
should be more selective than previously 
developed agents. C4XD initiated a fully 
integrated research programme in 2015/16
CEO’s statement continued
Clive Dix, Chief Executive Officer
C4X Discovery Holdings plc 
Annual report and accounts 2016 10
Strategic report with a UK-based contract research organisation 
providing chemistry and biology services 
with the goal of delivering a shortlist 
of molecules from which C4XD would 
select a candidate to take into pre-clinical 
development and significant progress has 
been made.
IL-17 Programme
In October 2015, C4XD announced it had 
identified highly selective small molecule 
leads in our programme against Interleukin-17 
(“IL-17”), a critical and high value target 
in inflammation and autoimmune diseases, 
including psoriasis. The psoriasis market is 
estimated to be worth $9 billion per annum
3
. 
Current attempts to target IL-17 are based 
on injectable monoclonal antibodies with 
the identification of orally available small 
molecules proving extremely challenging. 
C4XD’ s technology has enabled the 
identification of small molecules that can 
selectively block IL-17 activity, offering the 
potential of oral or topical use with benefits 
over injectable antibody therapies.
Rheumatoid arthritis
Analysis of the publicly available 
Wellcome Trust’ s rheumatoid arthritis 
dataset using C4XD’ s proprietary target 
discovery technology T axonomy3
®
 has 
identified multiple novel targets that have 
not previously been genetically linked with 
this major disease. The targets are from 
protein families whose function suggests 
that any resulting drug molecules will 
have a very different biological impact on 
disease from that of existing rheumatoid 
arthritis therapies, enabling considerable 
therapeutic and commercial differentiation.
C4XD has already prioritised two of these 
drug targets for evaluation as potential new 
pipeline programmes and the first of these 
targets is currently at the evaluation stage.
Diabetes
Oral GPR142 Agonist Programme 
Diabetes is a large and growing market, 
estimated to be worth $55 billion per 
annum by 2017
4
. In September 2015, C4XD 
announced the identification of novel 
lead molecules that target GPR142, a 
key factor in the production of insulin.
Activation of the GPR142 receptor stimulates 
insulin production in a glucose-dependent 
manner, avoiding the hypoglycaemia risk 
associated with some existing diabetes 
therapies. GPR142 has recently become 
the focus of considerable activity within the 
pharma industry, including key publications 
from Eli Lilly and Merck. Using its proprietary 
technology , C4XD has identified critical drug 
design principles, enabling the Company 
to generate novel, potent, orally available 
compounds in just a few months. C4XD 
has demonstrated potent activity of the 
Company’ s proprietary molecules in isolated 
pancreatic islets, the region of the pancreas 
that produces insulin, and continues to 
evaluate multiple novel series ahead of 
selecting its lead series for progression.
Oral GLP-1 Agonist Programme
GLP-1 is a clinically validated diabetes 
target with multiple products in late stage 
clinical development or approved and 
marketed. The market leader for GLP-1 
agonists, Victoza
®
, achieved 2015 sales of 
$2.68 billion in 2015
5
. However , these products 
are peptide-based therapeutic agents which 
require injection and are expensive to 
manufacture and prescribe. C4XD believes 
there is significant opportunity to develop 
a more convenient oral therapy that would 
also provide the potential for once-daily 
fixed-dose combination products with 
other marketed oral diabetes products.
Using its Conformetrix platform, C4XD has 
identified novel molecules that activate the 
GLP-1 receptor and studies are underway to 
further profile these molecules for suitability 
as orally delivered therapeutic agents.
Oncology
C4XD’ s Drug Discovery Engine is currently 
being utilised to target two key therapeutic 
principles in the treatment of cancer: an 
epigenetic target potentially useful for the 
treatment of cancer, such as cancers of the 
breast, prostate, lung and head and neck; and 
a small molecule immuno-oncology approach 
useful for the treatment of metastatic 
non-small cell lung cancer, melanoma 
and bladder and renal cancers. These 
programmes are at the evaluation stage.
” Our alliances provide us with a powerful 
new basis to expand our portfolio.”
1 Source: GBI Research 2012.
2  Source: Visiongain, Asthma and COPD 
Therapies: World Market 2013–2023.
3  Source: Visiongain, Psoriasis Treatment: 
World Market 2013–2023.
4  Source: Visiongain, Diabetes Treatments: 
World-Drug-Market-2013–2023.
5  Novo Nordisk Annual Report 2015.
Strategic report
11
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Pages 2–11 of the annual report include 
details of the core strategy for the Group.
Business model
A description of the Group’ s activities 
and how it seeks to add value is included 
in the “Our business model” section, the 
Interim Chairman’ s Statement and the 
CEO’ s Statement on pages 4 to 11.
Review of the business 
and future developments
C4XD continues to progress its 
proprietary programmes and focus its 
activities on the delivery of its strategic 
ambitions and acquiring complementary 
technologies. Grant income received by 
the Group is netted off administrative 
expenses and is not included 
within revenue.
Key performance indicators
The key performance indicators for 
the business in its current stage of 
development are the progression of 
the Group’ s proprietary pipeline projects 
through the relevant milestones, together 
with collaborations with industry partners 
and other major bodies.
In addition, the management of and control 
of cash balances is a priority for the Group 
and this is budgeted and monitored closely 
to ensure that the Group maintains adequate 
liquid resources to meet financial 
commitments as they arise.
At this stage of its development, 
quantitative key performance indicators are 
not generally an effective way of measuring 
the Group’ s performance, although the 
Group’ s monitoring of cash and expenditure 
against budget is also measured against 
progress in its programmes. In addition, 
a qualitative summary of performance is 
provided in the Interim Chairman’ s 
Statement and the CEO’ s Statement.
Principal risks and uncertainties
The Group continues to manage to 
reduce the inherent risk for the business 
by collaborating and partnering with 
pharmaceutical companies and research 
organisations. The principal risks to achieving 
full commercialisation and to becoming 
cash generative are outlined as follows:
T echnology
In common with other technology 
businesses developing new and innovative 
technical applications for the pharmaceutical 
sector, there is an inherent risk that C4XD’ s 
techniques will not enable its scientists 
to obtain the results required to generate 
meaningful value in its internal drug discovery 
programmes nor satisfy the needs of its 
customers. The Group cannot guarantee 
in advance that its technologies will meet 
either its internal demands or those of its 
partners. The Group works closely with its 
collaborators and partners to ensure that 
C4XD continues to meet their expectations. 
The C4XD technical development team 
continues to improve the core technology 
in terms of functionality and efficiency 
of output.
Collaborators and partners
C4XD’ s success is dependent upon how 
extensively the Group’ s techniques are 
successful in discovering drug candidates 
that are commercially and technically 
attractive to pharmaceutical company 
collaborators and partners.
Timing
It may take longer than anticipated 
for the Group’ s proprietary programmes 
to progress. 
It may take longer than anticipated for 
the Group’ s technology to identify drug 
candidates that are commercially and 
technically attractive to pharmaceutical 
company collaborators.
Market and competition
Alternative competing technologies and 
products could emerge that might displace 
the market opportunity for drug candidates 
discovered by the Group. 
Intellectual property
The success of C4XD’ s technology 
depends in part upon the Group’ s ability 
to protect and defend its rights over current 
and future intellectual property in the form 
of technologies, processes or products.
The Group may be unable to adequately 
protect itself from intellectual property 
infringement or effectively enforce its 
rights in certain jurisdictions.
Strategic report
Clive Dix, Chief Executive Officer
C4X Discovery Holdings plc 
Annual report and accounts 2016 12
Strategic report C4XD has core patents that cover its 
drug discovery technologies that have been 
filed in a range of international territories. 
It is currently under examination in the US 
and Europe; it has been granted in Japan.
C4XD has filed several composition 
of matter patents covering novel molecules 
discovered for its most advanced proprietary 
pipeline programme for the treatment 
of addictive disorders.
Attraction and retention 
of key employees
Attracting, retaining and motivating 
suitable, high calibre personnel is critical 
to the long-term success of C4XD’ s business. 
The Group aims to provide remuneration 
packages and working conditions that will 
attract and retain personnel of the required 
calibre. The Group awards share options to 
all key staff as a further way of retaining staff 
by allowing them to benefit from future 
improvements in the Group’ s value.
Funding
C4XD conducts pharmaceutical-related 
research and development, which is 
expensive. As at 31 July 2016, the Group had 
cash and cash equivalents of £1,328,000. After 
taking into account the additional £5 million 
raised via a placing in September 2016, on 
the basis of current projections and plans, 
the Group has sufficient funding for the next 
12 months and thereafter for the foreseeable 
future in order to continue realising its assets 
and discharging its liabilities in the normal 
course of business.
C4XD may accelerate certain activities 
if this will create additional value for its 
shareholders. This would require additional 
funding. In the unlikely event that such 
funding was not achieved, plans could be 
curtailed to ensure that the Group could 
meet all of its liabilities as they fall due 
over the next 12 months.
Therefore, after making enquiries and 
considering the uncertainties described 
above, the Directors have a reasonable 
expectation that the Group will have 
adequate resources to continue in operation 
for the foreseeable future. For these reasons, 
they continue to adopt the going concern 
basis in preparing the financial information.
Clive Dix
Chief Executive Officer
6 January 2017
” The Directors have a reasonable expectation 
that the Group will have adequate resources to 
continue in operation for the foreseeable future.”
Strategic report
13
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Financial review
Brad Hoy, Chief Financial Officer
” Our cash position and 
fundraising will allow 
C4XD to continue with 
its plan of becoming the 
world’s most productive 
Drug Discovery Engine.”
Strategic report Results
Revenue for the 12 months ended 
31 July 2016 amounted to £279,000 
(2015: £312,000). These revenues were 
largely generated through collaborations 
with our partners. During the year, the 
Group has ceased its fee-for-service offering, 
choosing only to work on a collaborative 
risk-and-revenue-sharing basis. Grants 
secured are accounted for as a reduction 
in administrative expenses.
R&D expenses, which comprise 
payroll costs, materials spend and 
third-party contract development costs, 
have increased by 66% to £5,239,000 for 
the year ended 31 July 2016 (2015: £3,159,000). 
This reflects both the increase in drug 
discovery activity and the continued 
development of lead drug candidates.
Administrative expenses increased by 
£913,000 during the year to £1,817,000 
(2015: £904,000), reflecting costs relating to 
the departure of Piers Morgan as CEO in 
November 2015, additional professional 
fees, non-scientific staff costs, premises 
costs and some modest post-acquisition 
operating costs for Adorial, which have 
now been absorbed within C4XD. 
The loss after tax for the year ended 
31 July 2016 was £5,321,000 or 16.83 pence 
per share (2015: £3,064,000 or 10.77 pence 
per share).
The Group had net assets at 31 July 2016 
of £4,305,000 (2015: £7,968,000) and cash, 
cash equivalents, short-term investments 
and deposits of £1,328,000 (2015: £7,485,000).
The above cash position plus the £5 million 
raised post-year end and outlined in the 
CEO’ s Statement will allow C4XD to continue 
with its plan of becoming the world’ s most 
productive Drug Discovery Engine.
Both cash and costs continue to be prudently 
and tightly managed. 
Acquisition
The Group acquired the entire of the 
share capital of Adorial Limited and its 
subsidiaries (“Adorial”) on 1 March 2016 
for a consideration of £1,670,700, which was 
satisfied by the issue of 1,508,207 ordinary 
shares at a price of 106 pence and £72,000 
in cash. Adorial was acquired primarily for its 
proprietary genetic technology , T axonomy3
®
, 
and associated staff and scientific know-how. 
Since its acquisition Adorial has had no 
revenues, whilst its costs have largely 
comprised those related to its retained 
scientific staff.
Brad Hoy
Chief Financial Officer
6 January 2017
Strategic report
15
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com Sam Williams PhD
Non-Executive Interim Chairman
Sam has 20 years’ experience in the 
biotechnology sector , both as a top-ranked 
equity analyst in the City and, subsequently , 
as an entrepreneur and chief executive. 
Since 2007, he has been CEO of Modern 
Biosciences, a London-based company 
developing novel agents for the treatment 
of chronic inflammatory diseases. Prior to 
that, Sam spent ten years in finance, most 
notably at Lehman Brothers, during which 
time he was ranked the number one 
European biotechnology equity analyst by 
Institutional Investor magazine three years 
in a row. As well as being CEO of Modern 
Biosciences, Sam is a board member of the 
UK BioIndustry Association, a non-executive 
director of Diurnal Group plc and serves on 
the translational awards advisory committee 
of the British Heart Foundation. Sam has 
a PhD from Cambridge University and 
an MA in Pure and Applied Biology 
from Oxford University.
Clive Dix PhD
Chief Executive Officer
Clive has more than 30 years’ experience 
in life science research, with over 20 years 
in senior pharmaceutical industry positions 
and a degree and PhD in Pharmacology . 
His expertise includes an in-depth 
understanding of all facets of drug 
discovery and development, a broad 
knowledge of the science and commercial 
landscape of a variety of therapeutic areas 
and solid experience of the pharmaceutical 
business and finance community supporting 
the sector .
Clive was co-founder and chief executive 
of Convergence Pharmaceuticals Ltd, which 
was acquired by Biogen in January 2015.
Clive was previously co-founder 
and chief executive of PowderMed Ltd, 
a vaccines development company acquired 
by Pfizer in November 2006. Before that 
he was senior vice president, research 
and development and a Board member 
of PowderJect Pharmaceuticals plc until 
its acquisition by Chiron Vaccines in 2003. 
Clive began his career in industry at 
Ciba-Geigy and then GlaxoWellcome, 
where he left as UK research director 
in 2001. Clive is a recent past chairman 
of the BioIndustry Association, is currently 
non-executive chairman of T ouchlight 
Genetics Ltd and Centauri Ltd, and 
is a non-executive member of the 
Medicines Discovery Catapult Board.
Craig Fox PhD
Chief Scientific Officer
Craig is an experienced biologist 
having worked on and managed many 
drug discovery and development projects 
during the last 18 years, from initial target 
selection right through to investigating 
clinical efficacy and safety in Phase 2 
patient studies. Craig joined C4X as Head 
of Biology in June 2015 before becoming 
Chief Scientific Officer in October later 
that year. Prior to joining C4XD, Craig 
was director of respiratory research at 
Pulmagen Therapeutics, a clinical stage 
company spun-out of Argenta in 2010. 
At Pulmagen, Craig managed several of its 
collaborations and partnerships, including 
those with AstraZeneca, Chiesi, Domantis, 
Dr Reddy’ s, Skyepharma and T eijin Pharma. 
Craig was part of the Etiologics T eam that 
merged with Argenta Discovery in 2004 
and prior to this he worked for Bayer as 
a research scientist. Craig has a PhD in 
Respiratory Medicine from Birmingham 
University and a first-class biochemistry 
degree from the University of Surrey.
Board of Directors
C4X Discovery Holdings plc 
Annual report and accounts 2016 16
Corporate governance Brad Hoy
Chief Financial Officer
Brad has more than 20 years’ experience 
in the pharmaceutical and biotechnology 
industries and has held a number of senior 
financial and general management positions 
in both the UK and the US. Previously, 
Brad was chief financial officer of Plethora 
Solutions Holdings plc, an AIM-listed 
specialty pharmaceutical company, 
chief executive officer of Xcellsyz Limited, 
a UK venture capital-backed life science 
company, and senior director of Geron 
Corporation’ s stem cell-focussed UK 
subsidiary. Brad is a co-founder of 
Seven Hills Venture Partners, a life 
sciences advisory firm, and currently 
serves as non-executive director on the 
board of directors for e-Therapeutics plc.
Harry Finch PhD
Non-Executive Director
Harry has significant experience within 
the pharmaceutical industry, specialising 
in medicinal chemistry, drug discovery and 
development. Currently he is an independent 
consultant working with a variety of small 
biotech companies and investors, many 
of which are in the oncology arena. Harry is 
also a non-executive director of Pulmocide 
Therapeutics and Artios Pharma Ltd.
After attaining a PhD in Organic Chemistry , 
Harry worked at Ciba-Geigy AG (Now 
Novartis AG) and Roche Allen & Hanburys 
Limited, before joining GlaxoWellcome plc 
where he became director of Chemistry.
Harry is an expert in the respiratory area 
of the pharma industry and is co-inventor 
of GSK’ s successful asthma drug salmeterol 
(Serevent). In addition, he has worked 
across a range of therapeutic areas and 
at several biotechnology companies, 
including Ribotargets, Vernalis, 
Argenta and Pulmagen.
Alex Stevenson PhD
Non-Executive Director
Alex has a proven track record in 
identifying, investing and growing 
businesses within the pharmaceutical 
sector. He is currently Chief Scientific 
Officer at 4D pharma plc.
From 2008, Alex was a director and 
shareholder of Aquarius Equity Partners 
Limited, and he joined the Board of C4XD 
as a Non-Executive Director following 
Aquarius’ investment in the Company. Prior 
to this, Alex worked for IP Group plc where 
he specialised in life science investments.
Alex has been involved in a number of 
private and public companies, including 
Nanoco Group plc, admitted to AIM in 
2009; Retroscreen Virology Group plc, 
admitted to AIM in 2012; Tissue Regenix 
Group plc, admitted to AIM in 2010; and 
Auralis Limited, which, after investment 
through Aquarius Equity Partners Limited, 
delivered a seven-fold return through to 
its trade sale to ViroPharma Inc in 2010.
17
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Corporate governance C4XD is committed to high standards 
of corporate governance and the Board 
acknowledges the importance of the 
principles set out in the UK Corporate 
Governance Code published by 
the Financial Reporting Council 
in September 2014 (“the Code”).
Although the Code is not mandatory 
for companies admitted to AIM, the Group 
has adopted many , although not all, aspects 
of the Code as set out in this report.
The Board
The Group is controlled through its Board 
of Directors. The Board’ s main roles are to 
provide overall strategy and direction for the 
Group and to ensure that the necessary 
financial and other resources are made 
available to enable those objectives to be 
met. It has a schedule of matters reserved 
for its approval, including, but not limited to, 
decisions on strategy and risk management, 
approval of budgets, acquisitions and 
disposals, major capital expenditure, legal 
and insurance issues, Board structure and 
the appointment of advisers. In some areas 
responsibility is delegated to Committees 
of the Board within clearly defined terms 
of reference.
Once the strategic and financial objectives 
of the Group have been set by the Board 
it is the role of the Chief Executive Officer 
to ensure that, through the day-to-day 
management of the Group’ s business, 
they are achieved.
All Directors are subject to election by the 
shareholders at the next general meeting 
following appointment to the Board and 
to re-election at intervals of not more than 
three years.
As at 31 July 2016, the Board comprised 
the Non-Executive Interim Chairman, 
the Chief Executive Officer and two 
independent Non-Executive Directors.
The names of the current Directors, 
together with their biographical details 
and any other directorships, are set out 
on pages 16 and 17. All of the Directors 
at 31 July 2016 served throughout the 
period under review.
The contracts of the Non-Executive Directors 
are available for inspection by shareholders 
at the AGM.
The Board considers its independent 
Non-Executive Directors to be independent in 
character and judgement. No Non-Executive 
Director has been an employee of the Group 
or has had a material business relationship 
with the Group since its Admission to AIM; 
receives remuneration other than a director’ s 
fee and share options (save as disclosed); has 
close family ties with any of the Group’ s 
advisers, Directors or senior employees; or 
holds cross-directorships. The independent 
Non-Executive Directors are Sam Williams, 
Harry Finch and Alex Stevenson. Prior to his 
appointment as a Non-Executive Director , 
Sam Williams was Chief Executive of C4XD; 
Alex Stevenson is a director and shareholder 
in Aquarius Equity Partners, a major 
shareholder of the Group.
The Non-Executive Directors constructively 
challenge and help develop proposals on 
strategy and bring strong, independent 
judgement, knowledge and experience 
to the Board’ s deliberations.
The Directors are given access to 
independent professional advice at the 
Group’ s expense when the Directors 
deem it is necessary in order for them 
to carry out their responsibilities.
The Board meets at least six times 
a year and the Audit Committee and 
Remuneration Committee normally 
meet at least twice a year.
The Board receives appropriate and timely 
information prior to each meeting, with a 
formal agenda and Board and Committee 
papers being distributed several days before 
meetings take place. Any Director may 
challenge Group proposals and decisions 
are taken democratically after discussion. 
Any Director who feels that any concern 
remains unresolved after discussion may 
ask for that concern to be noted in the 
minutes of the meeting. Any specific actions 
arising from such meetings are agreed by the 
Board and then followed up by management.
The Group maintains for its Directors and 
Officers liability insurance for any claims 
against them in that capacity.
The Group has effective procedures in place 
to deal with conflicts of interest. The Board is 
aware of other commitments of its Directors 
and changes to these commitments are 
reported to the Board.
The number of Board meetings attended 
by each of the Directors during the year 
is shown below.
Full Board
Number of meetings in year 6
Attendance:
Executive Directors
Clive Dix 4
Piers Morgan 2
Non-Executive Directors:
Sam Williams 6
Clive Dix 2
Harry Finch 6
Alex Stevenson 6
Corporate governance statement
C4X Discovery Holdings plc 
Annual report and accounts 2016 18
Corporate governance Audit, Remuneration and Nominations 
Committee meetings were held, as required, 
coincidental with full Board meetings.
The roles of the Chairman 
and the Chief Executive Officer
The division of responsibilities between 
the Chairman of the Board and the 
Chief Executive Officer is clearly defined. 
The Chairman leads the Board in the 
determination of its strategy and in the 
achievement of its objectives. The Chairman 
is responsible for organising the business 
of the Board, ensuring its effectiveness 
and setting its agenda. The Chairman 
is a Non-Executive Director and has no 
involvement in the day-to-day business 
of the Group. The Chairman facilitates 
the effective contribution of Non-Executive 
Directors and constructive relations between 
Executive and Non-Executive Directors, 
ensures Directors receive accurate, timely 
and clear information and facilitates effective 
communication with shareholders.
The Chief Executive Officer has direct 
charge of the Group on a day-to-day basis 
and is accountable to the Board for the 
financial and operational performance 
of the Group.
Professional development
On appointment, each Director takes part 
in an induction programme in which they 
receive comprehensive information about 
the Group, the role of the Board and the 
matters reserved for its decision, the terms 
of reference and membership of the Board 
and committees and the powers delegated 
to those committees, the Group’ s corporate 
governance practices and procedures,
including the powers reserved to the Group’ s 
most senior executives and the latest financial 
information about the Group. Throughout 
their period in office the Directors are updated 
on the Group’ s business, the competitive 
environment in which it operates, corporate 
social responsibility matters and other changes 
affecting the Group and the industry it 
operates in as a whole.
Performance evaluation
The Board has established a formal 
process for the annual evaluation of the 
performance of the Executive Directors. 
This evaluation is based on a performance 
evaluation questionnaire completed by 
each Executive Director. The evaluation 
of the Chief Executive Officer is performed 
by the Chairman and the evaluation of the 
other Executive Directors is performed by 
the Chief Executive Officer.
Information
Board reports and papers are circulated 
to the Directors in advance of the relevant 
Board or Committee meeting. These papers 
are supplemented by information specifically 
requested by the Directors from time to time. 
Minutes of Board and Committee meetings 
are circulated to all Board members.
The Non-Executive Directors receive 
monthly management accounts and regular 
management reports and information which 
enable them to scrutinise Group and 
management performance against 
agreed objectives.
Director dealings in Group shares
The Group has adopted a model code for 
Directors’ dealings in securities of the Group 
which is appropriate for a company quoted 
on AIM. The Directors comply with Rule 21 
of the AIM Rules relating to directors’ 
and applicable employees’ dealings. 
Investor relations
The Interim Chairman and other 
Non-Executive Directors are available 
to shareholders to discuss strategy and 
governance issues at a shareholder’ s 
request. In accordance with AIM Rule 26, 
there is an investors section on the Group’ s 
website, www.c4xdiscovery.com, which 
is kept up to date.
Annual General Meeting (“AGM”)
At the AGM, separate resolutions 
will be proposed for each substantially 
different issue. The outcome of the 
voting on AGM resolutions is disclosed 
by means of an announcement on the 
London Stock Exchange.
Board Committees
Audit Committee
The Audit Committee comprises 
Sam Williams and Harry Finch; Sam Williams 
is Chairman. The Committee is responsible 
for monitoring the quality of internal controls, 
ensuring that the financial performance of the 
Group is properly measured and reported 
on and reviewing reports from the Group’ s 
auditors relating to the Group’ s accounting 
and internal controls, in all cases having due 
regard to the interests of shareholders.
19
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Corporate governance Board Committees continued
Audit Committee continued
The Audit Committee’ s primary 
responsibilities are to review and monitor:
•  the annual report and accounts 
and preliminary and interim results 
and statements of the Group;
•  the appropriateness of accounting 
policies and the critical judgements 
and estimates;
•  the relevance of developments in 
accounting and reporting requirements;
•  the effectiveness of internal controls 
and risk management systems;
• the auditor’ s plan for the year-end audit;
•  the formal engagement terms, 
performance, objectivity and 
independence of the auditors, 
including the extent of non-audit 
work undertaken by the auditors; and
•  the audit and non-audit fees of the 
auditors. These are set out in note 6 
to the financial statements.
The Audit Committee reports to the Board 
on its activities and recommendations.
The Committee has recommended to 
the Board that a resolution reappointing 
KPMG LLP as external auditors be put 
to the shareholders at the AGM.
Remuneration Committee
The Remuneration Committee comprises 
Harry Finch, who is Chairman of the 
Committee, and Alex Stevenson. The 
Committee is responsible for establishing 
a formal and transparent procedure for 
developing policy on executive remuneration 
and for setting the remuneration of individual 
Directors. Full details of Directors’ 
remuneration and remuneration policy 
are set out on pages 21 to 23.
Nominations Committee
The Nominations Committee 
comprises Alex Stevenson, who 
is Chairman of the Committee, and 
Sam Williams. The Committee is responsible 
for identifying and nominating, for the 
approval of the Board, candidates to fill 
Board vacancies as and when they arise.
Internal controls and risk management
The Board has overall responsibility 
for the Group’ s system of internal controls, 
including reviewing the effectiveness of 
these controls and the processes in place for 
risk management. The role of the Executive 
Director is to implement the Board’ s 
policies on risk and control and provide 
assurance on compliance with these policies. 
The processes and procedures in place are 
designed to manage rather than eliminate risk 
and can therefore only provide a reasonable 
and not an absolute assurance against 
material misstatements or losses.
Executive Directors have a close involvement 
with all day-to-day operations and also meet 
with staff on a regular basis to identify and 
review business risks, the controls needed 
to minimise those risks and the effectiveness 
of controls in place. Business risks are 
monitored and updated on a regular basis. 
Insurance is in place where appropriate.
Some key features of the internal control 
system are:
(i)  annual budgets and rolling forecasts 
reviewed and approved by the Board;
(ii)  monthly management accounts 
information compared and reconciled 
with budgets;
(iii)  the Group has written operational, 
accounting and employment policies 
in place;
(iv)  the Board actively identifies and 
evaluates the risks inherent in the 
business and ensures that appropriate 
controls and procedures are in place 
to manage these risks;
(v)  the Group has well established 
financial reporting and approval 
systems and procedures which cover 
all key transactional processes and 
Group commitments; and 
(iv)  the Group has a uniform system 
of investment appraisal.
Risk management
Details of the technical, product, market 
and operational risks of the business 
are disclosed in the Strategic Report.
Details of the Group’ s financial risk 
management objectives and policies 
are disclosed in note 25 to the 
financial statements.
The Directors do not consider that 
the business is, at this time, significantly 
exposed to credit or interest risk and as 
such these risks are not considered to be 
material for an assessment of the assets, 
liabilities, financial position and results.
The Group seeks to manage liquidity 
by ensuring funds are available to meet 
foreseeable needs and to invest cash assets 
safely and profitably. The Group had cash, 
cash equivalent and deposit balances of 
£1,328,000 at 31 July 2016 (2015: £7,485,000). 
Cash deposits are spread across a range of 
financial institutions with investment grade 
credit status. Deposits are invested in a 
mixture of fixed-term and notice accounts. 
The Board approves all financial institutions 
before deposits are placed and regularly 
reviews the level of funds allocated to 
each institution.
Corporate governance statement continued
C4X Discovery Holdings plc 
Annual report and accounts 2016 20
Corporate governance Directors’ remuneration report
As a company listed on AIM, the Group 
is not required by the Companies Act 2006 
to prepare a Directors’ Remuneration Report. 
The Board has, however, provided certain 
information in relation to the remuneration 
policy of the Group as set out in this report.
Information not subject to audit
Remuneration Committee
The Remuneration Committee 
comprises Harry Finch, who is Chairman 
of the Committee, Sam Williams and 
Alex Stevenson. The Committee may 
invite anyone it deems appropriate 
to attend and advise at meetings. 
The Committee is responsible for establishing 
a formal and transparent procedure for 
developing policy on executive remuneration 
and for setting the remuneration of the 
Directors and certain senior management, 
as well as reviewing the performance of the 
Executive Directors of the Group.
The overall policy of the Board is to ensure 
that executive management are provided 
with appropriate incentives to encourage 
enhanced performance and are, in a fair 
and responsible manner, rewarded for 
their contribution to the success of the 
Group, including, where appropriate, 
bonuses and the award of share options. 
The Remuneration Committee takes 
into account the remuneration practices 
adopted in similar businesses and best 
practice in other AIM-listed businesses 
as well as in the general market.
There are three main elements to the 
remuneration packages for Executive 
Directors and senior management:
Basic annual salary
The base salary is reviewed annually. 
The review process is undertaken by the 
Remuneration Committee and takes into 
account several factors, including the current 
position and development of the Group, 
individual contributions and market salaries 
for comparable organisations.
Other taxable benefits
The Group provides an occupational 
pension scheme for employees, including 
Executive Directors. The Group operates 
a voluntary, subsidised private health 
insurance scheme for employees, 
including Executive Directors.
The Group does not provide any other 
taxable benefits for Executives.
Discretionary annual bonus
All Executive Directors and employees 
are eligible for a discretionary annual 
bonus. This takes into account individual 
contribution, business performance 
and technical and commercial progress, 
along with financial results.
Discretionary share option schemes
All Directors and employees are eligible 
to receive discretionary share options to 
be granted in accordance with the Group’ s 
approved share option scheme. Details of the 
grants made under the scheme are provided 
in note 20 to the financial statements. 
This takes into account the need to motivate 
and retain key individuals. Details of share 
option grants made to Directors are shown 
in the table below.
Remuneration policy for 
Non-Executive Directors
Non-Executives receive a fixed fee and do 
not receive any pension payments or other 
benefits, but they do participate in the share 
option scheme at the discretion of the 
Remuneration Committee. 
Service contracts
Sam Williams (Non-Executive 
Interim Chairman) entered into a letter 
of appointment with the Company on 
17 October 2014. The appointment will 
continue for a period of three years from 
admission to the AIM market (subject to 
re-election by shareholders as required by the 
articles) and is terminable earlier by the Group 
in various specified circumstances and in any 
event by either party on six months’ notice. 
The annual fee payable for Sam’ s 
services as a Non-Executive Director 
is £15,450 per annum.
Harry Finch (Non-Executive Director) 
entered into a letter of appointment 
with the Company on 17 October 2014. 
The appointment will continue for a period 
of three years from admission to the AIM 
market (subject to re-election by shareholders 
as required by the articles) and is terminable 
earlier by the Group in various specified 
circumstances and in any event by either party 
on six months’ notice. The annual fee payable 
for Harry’ s services as a Non-Executive 
Director is £15,450 per annum.
In addition to his duties as a Non-Executive 
Director, Harry Finch acts as a consultant 
on certain technical matters, for which he is 
remunerated at the rate of £1,400 per day, 
which the Board (excluding Harry Finch) has 
determined to be an arm’ s length commercial 
rate. During the year ended 31 July 2016, 
in addition to his annual fee of £15,450 for 
his services as a Non-Executive Director, 
Harry Finch was paid £11,550 in connection 
with the services he provided as a technical 
consultant (2015: £2,100).
Alex Stevenson (Non-Executive Director) 
entered into a letter of appointment 
with the Group on 17 October 2014. 
The appointment will continue for a period 
of three years from admission to the AIM 
market (subject to re-election by shareholders 
as required by the articles) and is terminable 
earlier by the Group in various specified 
circumstances and in any event by either 
party on six months’ notice. The annual fee 
payable for Alex’ s services as a Non-Executive 
Director is £15,450 per annum.
21
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Corporate governance Directors’ remuneration report continued
Information not subject to audit continued
Directors’ shareholdings
Directors’ interests in the shares of the Group, including family and beneficial interests, at 31 July 2016 were:
Ordinary shares of 1 pence each
31 July
2016
Number
 31 July
2016
%
31 July
2015
Number
 31 July
2015
%
Dr Sam Williams 1,069,625 3.29% 1,069,625 3.45%
Dr Clive Dix 691,250 2.13% 591,250 1.91%
Dr Harry Finch 321,425 0.99% 321,425 1.04%
Dr Alex Stevenson* 485,403 1.49% 485,403 1.57%
*  Alex Stevenson’ s interest is by way of shares held on his behalf by Aquarius Equity Partners Limited and his participation in The Aquarius Origin Fund Co-investment LLP 
and The Aquarius IV Fund Co-investment LLP .
Information subject to audit
Directors’ remuneration
The remuneration of the Directors, who served on the Board of C4X Discovery Holdings plc during the year to 31 July 2016, is as follows:
Base salary
and fees
£000
Other
£000
Annual
bonus
£000
Pension
costs
£000
Benefits
in kind
£000
Share-based
payments
£000
Total
2016
£000
Executive Directors:
Clive Dix* 74 — — — — 27 101
Piers Morgan 271 — — 26 — — 297
Non-Executive Directors:
Sam Williams 16 — — — — 1 17
Clive Dix* 8 — — — — 1 9
Harry Finch** 16 11 — — — 1 28
Alex Stevenson*** 16 — — — — — 16
401 11 — 26 — 30 468
*  Clive Dix was Non-Executive Chairman until 19 November 2015, when he became Executive Chairman, and in turn on 4 May 2016 became Chief Executive Officer. 
His total remuneration has accordingly been split between that earned in his capacity as a Non-Executive Director and that earned in his capacity as an Executive Director . 
** Harry Finch received £11,550 in connection with the services he provided as a technical consultant.
*** Alex Stevenson’ s remuneration takes the form of monitoring fees paid to Aquarius Equity Partners Limited.
C4X Discovery Holdings plc 
Annual report and accounts 2016 22
Corporate governance 31 July 2015 comparative
Base salary
and fees
£000
Other
£000
Annual
bonus
£000
Pension
costs
£000
Benefits
in kind
£000
Share-based
payments
£000
Total
2015
£000
Executive Directors:
Piers Morgan 191 — 75 3 — 15 284
Non-Executive Directors:
Clive Dix 25 — — — — — 25
Harry Finch 15 2 — — — — 17
Alex Stevenson 15 — — — — — 15
Sam Williams 15 — — — — — 15
261 2 75 3 — 15 356
Directors’ share options
Directors’ interests in share options to acquire ordinary shares of 1 pence in the Group as at 31 July 2016 were:
Share options: Date granted
Exercise
price
At 31 July
2015
Exercised
during the
year Lapsed
Granted
during the
year
At 31 July
2016
Sam Williams 8 June 2015 £1.00 20,000 — — — 20,000
Clive Dix 8 June 2015 £1.00 20,000 — — — 20,000
8 December 2015 £0.77 — — — 500,000 500,000
Harry Finch 8 June 2015 £1.00 20,000 — — — 20,000
The options granted on 8 December 2015 are exercisable, subject to meeting certain performance criteria, at any time between three years 
and ten years of them being granted.
The market price for C4XD shares as at 31 July 2016 was 116.0 pence per share. The highest and lowest prices during the year were 
133.5 pence and 67.50 pence respectively.
No options were granted during the year below market value.
On behalf of the Board
Harry Finch
Chairman of the Remuneration Committee
6 January 2017
23
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Corporate governance Directors’ report
The Directors present their report and the 
audited financial statements for the Group 
and parent company for the year ended 
31 July 2016.
Financial instruments
Details of the Group’ s financial risk 
management objectives and policies 
are disclosed in note 25 to the 
financial statements.
Research and development
The principal activity of the Group 
is research and development, a review 
of which is included in the Interim 
Chairman’ s and CEO’ s statements 
on pages 6 to 11.
T otal research and development 
spend was £5,239,000 (2015: £3,159,000). 
No development expenditure was capitalised 
in the period (2015: £nil) for the reasons 
provided in note 3(f) to the accounts.
Dividends
The Directors do not recommend payment 
of an ordinary dividend (2015: £nil).
Share capital and funding
As at 31 July 2016 share capital comprised 
32.5 million ordinary shares of 1 pence 
each (2015: 31.0 million ordinary shares) 
and 2.0 million deferred shares of £1 each 
(2015: 2.0 million shares). During the year, 
the Company issued 1,508,207 ordinary 
shares as part of the consideration for 
the acquisition of Adorial. Full details 
of the Group’ s and Company’ s share capital 
movements during the period are given 
in note 19 to the financial statements.
In September 2016, the Group raised 
£5.0 million via a placing of 4,901,961 
ordinary shares at 102 pence each.
Details of shares under option are provided 
in note 20 to the financial statements.
Directors and their interests
The following Directors held office during 
the year: 
Dr Sam Williams;
Dr Clive Dix;
Dr Harry Finch;
Dr Alex Stevenson;
Piers Morgan (resigned 19 November 2015);
Craig Fox (appointed 22 November 2016); and
Brad Hoy (appointed 22 November 2016).
Biographies of the Directors can be found 
on pages 16 and 17.
Details of Directors’ remuneration and 
interests in the share capital of the Group 
are shown in the Directors’ Remuneration 
Report on pages 21 to 23.
No Director had an interest in any contract 
that was significant in relation to the Group’ s 
business at any time during the year.
Directors are subject to re-election at 
intervals of not more than three years.
Directors’ indemnity insurance
The Group has maintained insurance 
throughout the year for its Directors 
and Officers against the consequences 
of actions brought against them in relation 
to their duties for the Group. Such provision 
remains in force as at the date of approval 
of the Directors’ Report.
Significant shareholders
The Group is aware that the following had an interest in 3% or more of the issued ordinary 
share capital of the Company at 31 July 2016:
Number of 1 pence
ordinary shares at
31 July 2016
% of issued
share capital
The Aquarius IV Fund LLP 4,864,375 14.97%
Mr Andrew Almond 3,010,000 9.26%
Mr Charles Douglas Blundell 3,010,000 9.26%
Mr Andrew Black 2,600,000 8.00%
The Aquarius Origin Fund LLP 2,595,050 7.99%
Aviva Life & Pensions UK Limited 2,533,604 7.80%
Mr Samuel Cameron Williams 1,069,625 3.29%
C4X Discovery Holdings plc 
Annual report and accounts 2016 24
Corporate governance Donations
No charitable or political donations 
were made in the year (2015: £nil).
Employment policies
The Group is committed to ensuring 
the health and safety of its employees 
in the workplace. This includes the provision 
of subsidised private health insurance 
for employees who elect to take it.
The Group supports the employment 
of disabled people where possible through 
recruitment, by retention of those who 
become disabled and generally through 
training, career development and promotion.
The Group is committed to keeping 
employees as fully informed as possible 
with regard to the Group’ s performance 
and prospects and seeks their views, 
wherever possible, on matters which 
affect them as employees.
Corporate Governance Statement
The Group’ s statement on corporate 
governance can be found in the Corporate 
Governance Statement on pages 18 to 20.
Going concern
The Chief Executive Officer’ s Statement 
on pages 8 to 11 outlines the business 
activities of the Group along with the factors 
which may affect its future development 
and performance. The Group’ s financial 
position is discussed in the Financial Review 
on pages 14 to 15 along with details of its 
cash flow and liquidity . Note 24 to the financial 
statements sets out the Group’ s financial 
risks and the management of those risks.
Having prepared management 
forecasts and made appropriate enquiries, 
the Directors are satisfied that the Group 
has adequate resources for the foreseeable 
future. Accordingly, they have continued to 
adopt the going concern basis in preparing 
the Group and Company financial statements.
Disclosure of information to the auditor
The Directors who held office at the date 
of approval of this Directors’ report confirm 
that, so far as they are each aware, there is 
no relevant audit information of which the 
Company’ s auditor is unaware; and each 
Director has taken all the steps that he 
ought to have taken as a Director to make 
himself aware of any relevant 
audit information and to establish that the 
Company’ s auditor is aware of that information.
Auditor
In accordance with Section 489 of the 
Companies Act 2006, a resolution for the 
re-appointment of KPMG LLP as auditor 
of the Company is to be proposed at the 
forthcoming Annual General Meeting.
Annual General Meeting notice
The Annual General Meeting of the Company 
will be held on 31 January 2017, at 12 noon, 
at The Podium, Euston, 1 Eversholt Street, 
London NW1 1AD. The notice convening 
the AGM, together with an explanation of the 
resolutions to be proposed, are enclosed 
with the annual report and accounts 2016, 
in addition to a form of proxy.
On behalf of the Board
Clive Dix
Chief Executive Officer
6 January 2017
25
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Corporate governance The Directors are responsible for 
preparing the annual report and the 
financial statements in accordance 
with applicable law and regulations.
Company law requires the Directors 
to prepare Group and parent company 
financial statements for each financial 
year. As required by the AIM Rules of the 
London Stock Exchange they are required 
to prepare the Group financial statements 
in accordance with IFRSs as adopted by the 
EU and applicable law and have elected 
to prepare the parent company financial 
statements on the same basis.
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 parent company and of their profit or 
loss for that period. In preparing each of 
the Group and parent company financial 
statements, the Directors are required to:
•  select suitable accounting policies 
and then apply them consistently;
•  make judgements and estimates 
that are reasonable and prudent;
•  state whether they have been prepared 
in accordance with IFRSs as adopted 
by the EU; and 
•  prepare the financial statements 
on the going concern basis unless 
it is inappropriate to presume that 
the Group and the parent company 
will continue in business.
The Directors are responsible for keeping 
adequate accounting records that are 
sufficient to show and explain the parent 
company’ s transactions and disclose with 
reasonable accuracy at any time the financial 
position of the parent company and enable 
them to ensure that its financial statements 
comply with the Companies Act 2006. 
They have general responsibility for taking 
such steps as are reasonably open to 
them to safeguard the assets of the 
Group and to prevent and detect 
fraud and other irregularities.
The Directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
Group’ s website. Legislation in the UK 
governing the preparation and dissemination 
of financial statements may differ from 
legislation in other jurisdictions.
Statement of Directors’ responsibilities
C4X Discovery Holdings plc 
Annual report and accounts 2016 26
Corporate governance Financial statements
28  Independent auditor’ s report to the members of C4X Discovery Holdings plc
29 Consolidated statement of comprehensive income
30 Consolidated statement of changes in equity
31 Company statement of changes in equity
32 Statements of financial position
33 Cash flow statements
34 Notes to the financial statements
IBC Corporate information Independent auditor’s report
to the members of C4X Discovery Holdings plc
for the year ended 31 July 2016
We have audited the financial statements 
of C4X Discovery Holdings Plc for the 
year ended 31 July 2016 set out on pages 
29 to 56. The financial reporting framework 
that has been applied in their preparation 
is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted 
by the EU and, as regards the parent 
company financial statements, as applied 
in accordance with the provisions of the 
Companies Act 2006. 
This report is made solely to the 
Company’ s members, as a body, in 
accordance with Chapter 3 of Part 16 
of the Companies Act 2006. Our audit 
work has been undertaken so that we 
might state to the Company’ s members 
those matters we are required to state to 
them in an auditor’ s report and for no other 
purpose. T o the fullest extent permitted by 
law, we do not accept or assume responsibility 
to anyone other than the Company and the 
Company’ s members, as a body, for our 
audit work, for this report, or for the 
opinions we have formed.
Respective responsibilities 
of Directors and auditors 
As explained more fully in the Directors’ 
Responsibilities Statement set out on 
page 26, the directors are responsible for 
the preparation of the financial statements 
and for being satisfied that they give a true 
and fair view. Our responsibility is to audit, 
and express an opinion on, the financial 
statements in accordance with applicable 
law and International Standards on Auditing 
(UK and Ireland). Those standards require 
us to comply with the Auditing Practices 
Board’ s Ethical Standards for Auditors.
Scope of the audit of the 
financial statements 
A description of the scope of an audit 
of financial statements is provided on 
the Financial Reporting Council’ s website 
at www.frc.org.uk/auditscopeukprivate. 
Opinion on financial statements 
In our opinion: 
•  the financial statements give a true 
and fair view of the state of the Group’ s 
and of the parent company’ s affairs as 
at 31 July 2016 and of the Group’ s loss 
for the period then ended; 
•  the Group financial statements have 
been properly prepared in accordance 
with IFRSs as adopted by the EU; 
•  the parent company financial 
statements have been properly 
prepared in accordance with IFRSs 
as adopted by the EU and as applied 
in accordance with the provisions 
of the Companies Act 2006 and 
•  the financial statements have 
been prepared in accordance 
with the requirements of the 
Companies Act 2006. 
Opinion on other matter prescribed 
by the Companies Act 2006 
In our opinion the information given in the 
Strategic Report and the Directors’ Report 
for the financial year for which the financial 
statements are prepared is consistent with 
the financial statements.
Matters on which we are required 
to report by exception 
We have nothing to report in respect 
of the following matters where the 
Companies Act 2006 requires us 
to report to you if, in our opinion: 
•  adequate accounting records have 
not been kept by the parent company, 
or returns adequate for our audit have 
not been received from branches not 
visited by us; or 
•  the parent company financial statements 
are not in agreement with the accounting 
records and returns; or 
•  certain disclosures of directors’ 
remuneration specified by law 
are not made; or 
•  we have not received all the information 
and explanations we require for our audit.
Antony Whittle 
(Senior Statutory Auditor) 
for and on behalf of KPMG LLP, 
Statutory Auditor 
Chartered Accountants 
1 St Peter’s Square
Manchester
M2 3AE
6 January 2017
28
Financial statements Consolidated statement 
of comprehensive income
for the year ended 31 July 2016
Notes
2016
£000
2015
£000
Revenue 5 279 312
Cost of sales (12) (112)
Gross profit 267 200
Research and development expenses (5,239) (3,159)
Administrative expenses (1,817) (904)
Operating loss (6,789) (3,863)
Finance income 8 32 49
Loss on ordinary activities before taxation (6,757) (3,814)
Taxation 9 1,436 750
Loss for the year and total comprehensive loss for the year (5,321) (3,064)
Loss per share
Basic and diluted loss for the year 10 (16.83)p (10.77)p
The loss for the year arises from the Group’ s continuing operations and is attributable to the equity holders of the parent.
There were no other items of comprehensive income for the year (2015: £nil) and therefore the loss for the year is also the total 
comprehensive loss for the year. 
The basic and diluted loss per share are the same as the effect of share options is anti-dilutive.
The notes on pages 34 to 56 form an integral part of these financial statements.
29
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Consolidated statement of changes in equity
for the year ended 31 July 2016
Issued 
equity
capital
£000
Share
premium
£000
Share-
based
payment
reserve
£000
Merger
reserve
£000
Capital
contribution
reserve
£000
Revenue
reserve
£000
Total
£000
At 31 July 2014 200 — 29 920 — (2,482) (1,333)
Loss for the year and total comprehensive 
loss for the year — — — — — (3,064) (3,064)
Issue of share capital 110 10,890 — — — — 11,000
Expenses of placing — (877) — — — — (877)
Loan notes converted to deferred shares 2,025 — — — — — 2,025
Waiver of loan note interest — — — — 195 — 195
Share-based payments — — 22 — — — 22
Transactions with owners 2,135 10,013 22 — 195 — 12,365
At 31 July 2015 2,335 10,013 51 920 195 (5,546) 7,968
Loss for the year and total comprehensive 
loss for the year — — — — — (5,321) (5,321)
Issue of share capital 15 1,584 — — — — 1,599
Share-based payments — — 59 — — — 59
Transactions with owners 15 1,584 59 — — — 1,658
At 31 July 2016 2,350 11,597 110 920 195 (10,867) 4,305
C4X Discovery Holdings plc 
Annual report and accounts 2016 30
Financial statements Company statement of changes in equity
for the year ended 31 July 2016
Issued
equity
capital
£000
Share
premium
£000
Share-
based
payment
reserve
£000
Total
£000
At 31 July 2014 — — — —
Loss for the year and total comprehensive loss for the year — — — —
Acquisition of C4X Discovery Limited 200 — — 200
Issue of share capital 110 10,890 — 11,000
Expenses of placing — (877) — (877)
Loan notes converted to deferred shares 2,025 — — 2,025
Share-based payments — — 22 22
Transactions with owners 2,335 10,013 22 12,370
At 31 July 2015 2,335 10,013 22 12,370
Loss for the year and total comprehensive loss for the year — — — —
Issue of share capital 15 1,584 — 1,599
Share-based payments — — 59 59
Transactions with owners 2,350 11,597 81 14,028
At 31 July 2016 2,350 11,597 81 14,028
31
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Statements of financial position
at 31 July 2016 
Registered no. 09134041
Notes
31 July
2016
Group
£000
31 July
2016
Company
£000
31 July
2015
Group
£000
31 July
2015
Company
£000
Assets
Non-current assets
Property, plant and equipment 11 94 — 85 —
Intangible assets 12 654 — 59 —
Goodwill 13 1,192 — — —
Investment in subsidiaries 14 — 1,952 — 222
1,940 1,952 144 222
Current assets
Trade and other receivables 15 429 12,075 388 12,147
Income tax asset 16 1,400 — 700 —
Short-term investments and cash on deposit 17 — — 4,000 —
Cash and cash equivalents 17 1,328 1 3,485 1
3,157 12,076 8,573 12,148
Total assets 5,097 14,028 8,717 12,370
Liabilities
Current liabilities
Trade and other payables 18 792 — 749 —
792 — 749 —
Total liabilities 792 — 749 —
Net assets 4,305 14,028 7,968 12,370
Capital and reserves
Issued equity capital 19 2,350 2,350 2,335 2,335
Share premium 19 11,597 11,597 10,013 10,013
Share-based payment reserve 20 110 81 51 22
Merger reserve 21 920 — 920 —
Capital contribution reserve 22 195 — 195 —
Revenue reserve 23 (10,867) — (5,546) —
Total equity 4,305 14,028 7,968 12,370
Approved by the Board and authorised for issue on 6 January 2017.
The notes on pages 34 to 56 form an integral part of these financial statements.
Clive Dix
Chief Executive Officer
6 January 2017
C4X Discovery Holdings plc 
Annual report and accounts 2016 32
Financial statements Cash flow statements
for the year ended 31 July 2016
Notes
31 July
2016
Group
£000
31 July
2016
Company
£000
31 July
2015
Group
£000
31 July
2015
Company
£000
Loss after interest and tax (5,321) — (3,064) —
Adjustments for:
Depreciation of tangible fixed assets 11 33 — 21 —
Amortisation of intangible assets 12 55 — 5 —
Share-based payments 20 59 — 22 —
Finance expense — — — —
Taxation (1,436) — (750) —
Changes in working capital:
(Increase)/decrease in trade and other receivables (40) 67 (231) —
(Decrease)/increase in trade and other payables (28) — 510 —
(Decrease)/increase in deferred revenue (56) — 12 —
Cash (outflow)/inflow from operating activities (6,734) 67 (3,475) —
Research and development tax credit received 736 — 300 —
Net cash (outflow)/inflow from operating activities (5,998) 67 (3,175) —
Cash flows from investing activities
Purchases of tangible fixed assets 11 (42) — (85) —
Purchases of intangible fixed assets 12 (50) — (8) —
Acquisition of subsidiary (net of cash acquired) (67) (67) — —
Cash advance to subsidiary — — — (10,122)
Decrease/(increase) in cash placed on deposit 17 4,000 — (4,000) —
Net cash inflow/(outflow) from investing activities 3,841 (67) (4,093) (10,122)
Cash flows from financing activities
Proceeds from issues of ordinary share capital 19 — — 11,000 11,000
Expenses share capital issue 19 — — (877) (877)
Repayment of preference shares — — (30) —
Interest paid — — (13) —
Net cash inflow from financing activities — — 10,080 10,123
(Decrease)/increase in cash and cash equivalents (2,157) — 2,812 1
Cash and cash equivalents at the start of the year 3,485 1 673 —
Cash and cash equivalents at the end of the year 1,328 1 3,485 1
Monies placed on deposit at the end of the year — — 4,000 —
Cash, cash equivalents and deposits at the end of the year 17 1,328 1 7,485 1
The notes on pages 34 to 56 form an integral part of these financial statements.
33
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements
for the year ended 31 July 2016
1. Reporting entity
C4X Discovery Holdings plc (“the Company”) is an AIM-listed company incorporated and domiciled in the UK.
These Group financial statements consolidate those of the Company and its subsidiaries (together referred to as “the Group” 
and individually as “Group entities”) for the year ended 31 July 2016.
The financial statements of the Company and the Group for the year ended 31 July 2016 were authorised for issue by the Board of Directors 
on 6 January 2017 and the statement of financial position was signed on the Board’ s behalf by Clive Dix.
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the parent company’ s 
statement of comprehensive income. The parent company’ s result for the year ended 31 July 2016 was £nil (2015: £nil).
The significant accounting policies adopted by the Group are set out in note 3.
2. Basis of preparation
(a) Statement of compliance
The Group’ s and parent company’ s financial statements have been prepared in accordance with International Financial Reporting Standards 
as adopted by the European Union (“IFRS”) and International Financial Reporting Committee (“IFRIC”) interpretations as they apply to 
the financial statements of the Group for the period ended 31 July 2016.
(b) Basis of measurement 
The Company and Group financial statements have been prepared on the historical cost basis.
The methods used to measure fair values of assets and liabilities are discussed in the respective notes in note 3 below.
(c) Going concern 
The Interim Chairman’ s Statement and CEO’ s Statement on pages 6 to 11 outline the business activities of the Group along with the 
factors which may affect its future development and performance. The Group’ s financial position is discussed in the Financial Review on 
pages 14 and 15 along with details of its cash flow and liquidity. Note 25 to the financial statements sets out the Group’ s financial risks 
and the management of those risks.
Having prepared management forecasts, which incorporate the post-year-end £5 million cash raise, and made appropriate enquiries, the 
Directors are satisfied that the Group has adequate resources for the foreseeable future. Accordingly , they have continued to adopt the going 
concern basis in preparing the Group and Company financial statements. However, given the nature of the Group’ s biotechnology-based 
business and need for ongoing investment in its drug development activities, the Group will be looking to raise additional funds in the 
future to allow continued development.
(d) Functional and presentational currency 
These financial statements are presented in Sterling, which is the Group’ s functional currency. All financial information presented has 
been rounded to the nearest thousand.
(e) Use of estimates and judgements 
The preparation of financial statements requires management to make estimates and judgements that affect the amounts reported for 
assets and liabilities as at the reporting date and the amounts reported for revenues and expenses during the year . The nature of estimation 
means that actual amounts could differ from those estimates. Estimates and judgements used in the preparation of the financial statements 
are continually reviewed and revised as necessary. 
While every effort is made to ensure that such estimates and judgements are reasonable, by their nature they are uncertain and, as such, 
changes in estimates and judgements may have a material impact on the financial statements.
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amount of assets 
and liabilities within the next financial year are discussed below.
Equity-settled share-based payments
The determination of share-based payment costs requires: the selection of an appropriate valuation method; consideration as to the inputs 
necessary for the valuation model chosen; judgement regarding when and if performance conditions will be met; and the estimation of the 
number of awards that will ultimately vest. Inputs required for this arise from judgements relating to the future volatility of the share price of C4XD 
and comparable companies, the Group’ s expected dividend yields, risk-free interest rates and expected lives of the options. The Directors 
draw on a variety of sources to aid in the determination of the appropriate data to use in such calculations. The share-based payment expense 
is most sensitive to vesting assumptions and to the future volatility of the future share price factor. Further information is included in note 3.
C4X Discovery Holdings plc 
Annual report and accounts 2016 34
Financial statements 2. Basis of preparation continued
(e) Use of estimates and judgements continued
T axation 
Management judgement is required to determine the amount of tax assets that can be recognised, based upon the likely timing and level 
of future taxable profits together with an assessment of the effect of future tax planning strategies. The carrying value of the unrecognised 
tax losses at 31 July 2016 was £830,000 (2015: £416,000). The value of the net deferred tax liability not recognised at the year end is 
£12,000 (2015: £8,000). Further information is included in note 9.
Research and development
Careful judgement by the Directors is applied when deciding whether the recognition requirements for development costs have been met. 
This is necessary as the economic success of any product development is uncertain until such time as technical viability has been proven 
and commercial supply agreements are likely to be achieved. Judgements are based on the information available at each reporting date 
which includes the progress with testing and certification and progress on, for example, establishment of commercial arrangements with 
third parties. In addition, all internal activities related to research and development of new products are monitored by the Directors. 
Further information is included in note 3.
Revenue recognition
Judgements are required as to whether and when contractual milestones have been achieved and in turn the period over which development 
revenue should be recognised. Management judgements are similarly required to determine whether services or rights under licence 
agreements have been delivered so as to enable licence revenue to be recognised. Further information is included in note [3].
Valuation of IP assets
The IP assets acquired coincidental with the purchase of Adorial have been valued by independent specialists. The carrying value will 
be reviewed annually by the Board for any subsequent impairment.
3. Significant accounting policies
The accounting policies set out below are consistent with those of the previous financial year and are applied consistently by Group entities.
(a) Basis of consolidation
The Group financial statements consolidate the financial statements of C4X Discovery Holdings plc and the entities it controls (its subsidiaries) 
drawn up to 31 July each year. 
All business combinations are accounted for by applying the acquisition method as at the acquisition date, which is the date on which 
control is transferred to the Group. 
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus 
• the recognised amount of any non-controlling interests in the acquiree; plus
• the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Transaction costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs 
in connection with a business combination are expensed as incurred.
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies. All C4X Discovery Holdings plc’ s 
subsidiaries are 100% owned. Subsidiaries are fully consolidated from the date control passes.
All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. 
Subsidiaries’ accounting policies are amended where necessary to ensure consistency with the policies adopted by the Group.
(b) Foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying the spot rate ruling at the date of the 
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange 
ruling at the reporting date. All differences are taken to the consolidated statement of comprehensive income. 
35
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
3. Significant accounting policies continued
(c) Segmental reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, 
whose operating results are regularly reviewed by the entity’ s chief operating decision maker to make decisions about resources to be 
allocated to the segment and assess its performance, and for which discrete financial information is available. As at the reporting date 
the Group operated with only a single segment.
(d) Revenue recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. 
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or services, excluding discounts, 
rebates, VAT and other sales taxes or duties.
The Group’ s revenues to date comprise amounts earned under joint development agreements and individual project development 
programmes in respect of novel small molecule therapies. 
Revenues received from development programmes are recognised on a straight-line basis over the period that the development work is 
being performed as measured by contractual milestones. Revenue is not recognised where there is uncertainty regarding the achievement 
of such milestones and where either revenue has not been paid or the customer has the right to recoup advance payments.
(e) Government grants
Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions are 
met, usually on submission of a valid claim for payment. 
Government grants of a revenue nature are deducted from R&D expenses in the consolidated statement of comprehensive income 
in line with the terms of the underlying grant agreement.
Government grants relating to capital expenditure are deducted in arriving at the carrying amount of the asset.
(f) Research and development
Research costs are charged in the consolidated statement of comprehensive income as they are incurred. Development costs will 
be capitalised as intangible assets when it is probable that future economic benefits will flow to the Group. Such intangible assets 
will be amortised on a straight-line basis from the point at which the assets are ready for use over the period of the expected benefit, 
and will be reviewed for impairment at each reporting date based on the circumstances at the reporting date.
The criteria for recognising expenditure as an asset are:
• it is technically feasible to complete the product;
• management intends to complete the product and use or sell it;
• there is an ability to use or sell the product;
• it can be demonstrated how the product will generate probable future economic benefits; 
• adequate technical, financial and other resources are available to complete the development, use and sale of the product; and
• expenditure attributable to the product can be reliably measured.
Development costs are currently charged against income as incurred since the criteria for their recognition as an asset are not met.
(g) Lease payments
Rentals payable under operating leases, which are leases where the lessor retains a significant proportion of the risks and rewards of the 
underlying asset, are charged in the consolidated statement of comprehensive income on a straight-line basis over the expected lease term. 
Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
C4X Discovery Holdings plc 
Annual report and accounts 2016 36
Financial statements 3. Significant accounting policies continued
(h) Finance income
Finance income comprises interest income on funds invested. Interest income is recognised as interest accrues using the effective 
interest rate method.
(i) Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated statement of comprehensive 
income except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from, 
or paid to, the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively 
enacted by the reporting date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying 
amounts in the financial statements with the following exceptions:
•  where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is 
not a business combination and that at the time of the transaction affects neither accounting nor taxable profit nor loss; and
•  in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary 
differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are measured on an undiscounted basis using the tax rates and tax laws that have been enacted 
or substantially enacted by the date and which are expected to apply when the related deferred tax asset is realised or the deferred 
tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which 
differences can be utilised. An asset is not recognised to the extent that the transfer of economic benefits in the future is uncertain.
(j) T angible fixed assets
Property, plant and equipment assets are recognised initially at cost. After initial recognition, these assets are carried at cost less 
any accumulated depreciation and any accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value 
of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating 
as intended.
Depreciation is computed by allocating the depreciable amount of an asset on a systematic basis over its useful life and is applied 
separately to each identifiable component.
The following bases and rates are used to depreciate classes of assets:
Building improvements – straight line over remainder of lease period
Office equipment – straight line over three years
The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate that the 
carrying value may not be recoverable, and are written down immediately to their recoverable amount. Useful lives and residual values 
are reviewed annually and where adjustments are required these are made prospectively.
A property, plant and equipment item is derecognised on disposal or when no future economic benefits are expected to arise from 
the continued use of the asset. Any gain or loss arising on the derecognition of the asset is included in the consolidated statement 
of comprehensive income in the period of derecognition.
37
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
3. Significant accounting policies continued
(k) Intangible assets
Intangible assets acquired either as part of a business combination or from contractual or other legal rights are recognised separately 
from goodwill provided they are separable and their fair value can be measured reliably. This includes the costs associated with acquiring 
and registering patents in respect of intellectual property rights.
Where intangible assets recognised have finite lives, after initial recognition their carrying value is amortised on a straight-line basis 
over those lives. The nature of those intangibles recognised and their estimated useful lives are as follows:
Patents – straight line over 20 years
IP assets – straight line over five years
Software – straight line over five years
(l) Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised 
but is tested annually for impairment.
(m) Impairment of assets
At each reporting date the Group reviews the carrying value of its plant, equipment, intangible assets and goodwill to determine whether 
there is an indication that these assets have suffered an impairment loss. If any such indication exists, or when annual impairment testing 
for an asset is required, the Group makes an assessment of the asset’ s recoverable amount.
An asset’ s recoverable amount is the higher of an asset’ s or cash-generating unit’ s fair value less costs to sell and its value in use and is 
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets 
or groups of assets. Where the carrying value of an asset exceeds its recoverable amount, the asset is considered impaired and is written 
down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a 
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining 
fair value less costs of disposal, an appropriate valuation model is used, these calculations corroborated by valuation multiples, or other 
available fair value indicators. Impairment losses on continuing operations are recognised in the consolidated statement of comprehensive 
income in those expense categories consistent with the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no 
longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss 
is reversed only if there has been a change in the assumptions used to determine the asset’ s recoverable amount since the last impairment 
loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot 
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset 
in prior years. Such reversal is recognised in the consolidated statement of comprehensive income unless the asset is carried at revalued 
amount, in which case the reversal is treated as a valuation increase. After such a reversal, the depreciation charge is adjusted in future 
periods to allocate the asset’ s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
The carrying values of plant, equipment, intangible assets and goodwill as at the reporting date have not been subjected to impairment charges.
(n) Investments in subsidiaries
Investments in subsidiaries are stated in the Company statement of financial position at cost less provision for any impairment.
(o) Trade and other receivables
Trade receivables, which generally have 30 to 60 day terms, are recognised and carried at the lower of their original invoiced value 
and recoverable amount. The time value of money is not material.
Provision is made when there is objective evidence that the Group will not be able to recover balances in full. Significant financial difficulties 
faced by the customer , probability that the customer will enter bankruptcy or financial reorganisation and default in payments are considered 
indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’ s carrying amount and the 
present value of estimated future cash flows, discounted at the original effective interest rate. The carrying value of the asset is reduced 
through the use of an allowance account, and the amount of the loss is recognised in the consolidated statement of comprehensive 
income within administrative expenses.
When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables.
C4X Discovery Holdings plc 
Annual report and accounts 2016 38
Financial statements 3. Significant accounting policies continued
(p) Cash, cash equivalents and short-term investments and cash on deposit
Cash and cash equivalents comprise cash at hand and deposits with maturities of three months or less. Short-term investments and cash 
on deposit comprise deposits with maturities of more than three months, but no greater than 12 months.
(q) Trade and other payables
Trade and other payables are non-interest bearing and are initially recognised at fair value. They are subsequently measured at amortised 
cost using the effective interest rate method. 
(r) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable 
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made 
of the amount of the obligation.
The expense relating to any provision is presented in the consolidated statement of comprehensive income, net of any expected 
reimbursement, but only where recoverability of such reimbursement is virtually certain. 
Provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risk specific to the liability. Where discounting 
is used, the increase in the provision due to the passage of time is recognised as a finance cost.
There were no provisions at 31 July 2016 (2015: nil).
(s) Financial assets and liabilities
Financial assets and liabilities are recognised when the Group becomes party to the contracts that give rise to them and are classified 
as financial assets and liabilities at fair value through the consolidated statement of comprehensive income. The Group determines 
the classification of its financial assets and liabilities at initial recognition and re-evaluates this designation at each financial year end. 
A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold or cancelled or expires.
At the year end, the Group had no financial assets or liabilities designated at fair value through the consolidated statement 
of comprehensive income (2015: £nil).
(t) Classification of financial instruments issued by the Group
Following the adoption of IAS 32, financial instruments issued by the Group are treated as equity only to the extent that they meet 
the following two conditions: 
•  they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets 
or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and 
•  where the instrument will or may be settled in the Company’ s own equity instruments, it is either a non-derivative that includes 
no obligation to deliver a variable number of the Company’ s own equity instruments or is a derivative that will be settled by 
the Company’ s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
T o the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified 
takes the legal form of the Company’ s own shares, the amounts presented in these financial statements for called-up share capital and share 
premium account exclude amounts in relation to those shares. 
(u) Share capital
Proceeds on issue of shares are included in shareholders’ equity, net of transaction costs. The carrying amount is not remeasured 
in subsequent years.
39
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
3. Significant accounting policies continued
(v) Share-based payments
Equity-settled share-based payment transactions are measured with reference to the fair value at the date of grant, recognised on 
a straight-line basis over the vesting period, based on the Group’ s estimate of shares that will eventually vest. Fair value is measured 
using a suitable option pricing model.
At each reporting date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period 
has expired and management’ s best estimate of the achievement or otherwise of non-market conditions and the number of equity 
instruments that will ultimately vest. The movement in cumulative expense since the previous reporting date is recognised in the 
consolidated statement of comprehensive income, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, 
the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is 
recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference 
between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. 
No reduction is recognised if this difference is negative.
Where awards are granted to the employees of a subsidiary company, the fair value of the awards at grant date is recorded in 
the Company’ s financial statements as an increase in the value of the investment with a corresponding increase in equity via the 
share-based payment reserve.
(w) Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in 
an independently administered fund. The amounts charged against profits represent the contributions payable to the scheme in respect 
of the accounting period.
(x) New accounting standards and interpretations 
A number of new standards, amendments to standards and interpretations are effective for annual periods commencing on or after 
1 January 2016 or ending 31 July 2017 or thereafter and have not been applied in preparing these consolidated financial statements 
and those that are relevant to the Group are summarised below. None of these are expected to have a significant effect on the consolidated 
financial statements of the Group in the period of initial application.
The following standards and interpretations have an effective date after the date of these financial statements.
Effective date
Accounting for Acquisitions of Interests in Joint Operations – Amendments to IFRS 11 1 January 2016
Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and IAS 38 1 January 2016
Equity Method in Separate Financial Statements – Amendments to IAS 27 (endorsed for use in the EU 
on 18 December 2015) 1 January 2016
Annual Improvements to IFRSs – 2012–2014 Cycle (endorsed or use in the EU on 15 December 2015) 1 January 2016
Disclosure Initiative – Amendments to IAS 1 (endorsed for use in the EU on 18 December 2015) 1 January 2016
Recognition of Deferred T ax Assets for Unrealised Losses – Amendments to IAS 12 1 January 2017
Disclosure Initiative – Amendments to IAS 7 1 January 2017
IFRS 9 Financial Instruments 1 January 2018
IFRS 15 Revenue from Contracts with Customers 1 January 2018
Clarifications to IFRS 15 Revenue from Contracts with Customers 1 January 2018
Effective date of IFRS 15 – Amendment to IFRS 15 1 January 2018
Classification and Measurement of Share-based Payment Transactions – Amendments to IFRS 2 1 January 2018
IFRS 16 Leases 1 January 2018
C4X Discovery Holdings plc 
Annual report and accounts 2016 40
Financial statements 4. Acquisitions of businesses
Acquisition of subsidiary in the current period
On 1 March 2016, the Group acquired all of the ordinary shares in Adorial Limited together with its subsidiaries for a consideration 
of £1,670,700, of which £1,598,700 was satisfied by the issue of 1,508,207 ordinary shares at a price of 106 pence, being a 3% premium 
to the closing price of a C4XD share on 29 February 2016, and £72,000 in cash. The privately held company has a key proprietary genetic 
technology platform, T axonomy3
®
, for the identification of novel drug targets. 
With Adorial, the Group now not only has the ability to create the best-in-class molecules against any known therapeutic target using 
C4XD’ s approach to ligand-based drug discovery , but also the ability to identify its own highly relevant and unique targets using T axonomy3
®
. 
Combining T axonomy3
®
 with C4XD’ s existing platform will fuel the Group’ s small molecule drug discovery and development pipeline, 
as well as help it to progress towards its goal of becoming the world’ s leading engine for the discovery of novel small molecule drugs.
In the five months to 31 July 2016 the subsidiary contributed an estimated pre-tax loss of £75,000 to the consolidated pre-tax loss for the 
year. If the acquisition had occurred on 1 August 2015, Group revenue would have been unchanged, as Adorial currently has no revenue, 
and the pre-tax loss would have been an estimated £75,000 higher than currently shown. In determining these amounts, management 
has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition occurred 
on 1 August 2015.
Effect of acquisition
The acquisition had the following effect on the Group’ s assets and liabilities.
Recognised
values on
acquisition
£000
Acquiree’s net assets at the acquisition date:
Intangible assets – IP assets 600
Trade and other receivables 1
Cash and cash equivalents 5
Trade and other payables (127)
Net identifiable assets and liabilities 479
Consideration paid: 
Cash 72
Equity issued – see above 1,599
Total consideration 1,671
Goodwill 1,192
Goodwill has arisen on the acquisition due to the excess of the consideration paid over the net assets acquired.
The Group incurred acquisition-related professional fees of £68,000, which have been included in administrative expenses in the Group’ s 
consolidated statement of comprehensive income.
41
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
5. Segmental information
Operating segments
At 31 July 2016, the Group operated as one segment, being the provision of new technologies to improve the drug discovery process 
for novel small molecule therapies. This is the level at which operating results are reviewed by the chief operating decision maker 
(i.e. the CEO) to make decisions about resources, and for which financial information is available. All revenues have been generated 
from continuing operations and are from external customers.
31 July
2016
£000
31 July
2015
£000
Analysis of revenue
Amounts earned under joint development agreements 279 312
279 312
Included within amounts earned under joint development agreements is revenue from two material customers of £128,000 and £106,000 
respectively (2015: one material customer amounting to £152,000). 
The Group operates in two main geographic areas, although both are managed in the UK. The Group’ s revenue per geographical segment 
based on the customer’ s location is as follows:
31 July 
2016
£000
31 July 
2015
£000
Revenue
UK 151 160
Europe (excluding UK) 128 152
279 312
All the Group’ s assets are held in the UK and all of its capital expenditure arises in the UK.
6. Operating loss
The Group
31 July
2016
£000
31 July
2015
£000
Operating loss is stated after charging/(crediting):
Depreciation of property, plant and equipment (see note 11) 33 21
Amortisation of intangible assets (see note 12) 55 5
Research and development expense* 5,239 3,159
Cost of inventories recognised as an expense (included in cost of sales) 12 112
Grant income (65) (144)
Operating lease rentals (see note 24):
Land and buildings 62 34
Auditor’s remuneration:
Audit services:
– Fees payable to Company auditors for the audit of the parent and the consolidated accounts 38 25
Fees payable in respect of the audit of subsidiary companies:
– Auditing the accounts of subsidiaries pursuant to legislation 12 —
– Other services 4 103
Total auditor’s remuneration 54 128
* Included within research and development expense are staff costs totalling £1,535,000 (2015: £937,000) also included in note 7.
C4X Discovery Holdings plc 
Annual report and accounts 2016 42
Financial statements 7. Staff costs and numbers
31 July
2016
£000
31 July
2015
£000
Wages and salaries 1,784 1,177
Social security costs 206 140
Pension contributions 101 3
Share-based payments 59 22
 2,150 1,342
Directors’ remuneration (including benefits in kind) included in the aggregate remuneration above comprised:
Emoluments for qualifying services 468 356
Directors’ emoluments (excluding social security costs, but including benefits in kind) disclosed above include £297,000 paid to the highest 
paid Director (2015: £284,000). An analysis of the highest paid Director’ s remuneration is included in the Directors’ Remuneration Report.
Retirement benefits are accruing to four Directors (2015: one Director).
The average number of employees during the year (including Directors) was as follows:
The Group
31 July
2016
Number
31 July
2015
Number
Directors 4 5
T echnological staff 23 14
Administrative staff 1 —
 28 19
8. Finance income and expense
The Group
31 July
2016
£000
31 July
2015
£000
Finance income:
Bank interest receivable 32 49
32 49
Bank interest receivable includes £nil (2015: £49,000) which is receivable after the year end.
9. Income tax
The tax credit is made up as follows:
The Group
31 July
2016
£000
31 July
2015
£000
Current income tax:
UK corporation tax losses in the year — —
Research and development income tax credit receivable (1,400) (700)
Adjustment in respect of prior years (36) (50)
T otal current income tax (1,436) (750)
43
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
9. Income tax continued
The tax assessed for the year varies from the standard rate of corporation tax as explained below:
The Group
31 July
2016
£000
31 July
2015
£000
Loss on ordinary activities before taxation (6,757) (3,814)
T ax at standard rate of 20.00% (2015: 20.67%) (1,351) (788)
Effects of:
Expenses not deductible for tax purposes 25 8
Movement in unprovided deferred tax (12) (6)
Surrender of research and development relief for repayable tax credit 835 447
Research and development tax credit receivable (1,400) (700)
T ax losses carried forward 503 339
Adjustment in respect of prior years (36) (50)
Tax credit in income statement (1,436) (750)
Reductions of the main rate of corporation tax from 23% to 21% from 1 April 2014 and to 20% from 1 April 2015 were substantively 
enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively 
enacted on 26 October 2015.
An additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will reduce the Group’ s 
future tax charge accordingly.
The Group has accumulated losses available to carry forward against future trading profits. The estimated value of the deferred tax asset, 
measured at a standard rate of 18% (2015: 20%) is £830,000 (2015: £416,000), of which £nil (2015: £nil) has been recognised. Remaining tax 
losses have not been recognised as an asset as it is not probable that future taxable profits will be available against which the unused 
tax losses can be utilised.
The Group also has a deferred tax liability being accelerated capital allowances, for which the tax, measured at a standard rate of 18% 
(2015: 20%), is £32,000 (2015: £18,000).
The Group has a deferred tax asset for share-based payments, for which the tax, measured at a standard rate of 18% (2015: 20%), 
is £20,000 (2015: £10,000).
The net deferred tax liability of £12,000 (2015: £8,000) has not been recognised as it is covered by accumulated tax losses (2015: £nil). 
10. Earnings per share
The Group
 31 July
 2016
 £000
31 July
2015
£000
Loss for the financial year attributable to equity shareholders (5,321) (3,064)
Weighted average number of shares:
Ordinary shares in issue 31,616,625 28,457,043
Basic loss per share (pence) (16.83) (10.77)
Diluted loss per share has not been presented above as the effect of share options issued is anti-dilutive.
C4X Discovery Holdings plc 
Annual report and accounts 2016 44
Financial statements 11. Property, plant and equipment
The Group
Office
equipment,
fixtures and
fittings
£000
Building
improvements
£000
Total
£000
Cost:
At 31 July 2014 44 — 44
Additions 47 38 85
At 31 July 2015 91 38 129
Additions 42 — 42
At 31 July 2016 133 38 171
Depreciation:
At 31 July 2014 23 — 23
Provided during the year 18 3 21
At 31 July 2015 41 3 44
Provided during the year 25 8 33
At 31 July 2016 66 11 77
Net book value:
At 31 July 2016 67 27 94
At 31 July 2015 50 35 85
The Company has no property, plant and equipment.
12. Intangible assets
The Group
Patents
£000
IP assets
£000
Software
£000
Total
£000
Cost:
At 31 July 2014 79 — — 79
Additions 8 — — 8
At 31 July 2015 87 — — 87
Additions — — 50 50
Additions – acquisition through business combinations — 600 — 600
At 31 July 2016 87 600 50 737
Amortisation:
At 31 July 2014 23 — — 23
Provided during the year 5 — — 5
At 31 July 2015 28 — — 28
Provided during the year 5 50 — 55
At 31 July 2016 33 50 — 83
Net book value:
At 31 July 2016 54 550 50 654
At 31 July 2015 59 — — 59
Patents are amortised on a straight-line basis over 20 years. Amortisation provided during the period is recognised in administrative expenses. 
The Group does not believe that any of its patents in isolation is material to the business.
IP assets are amortised on a straight-line basis over five years. Amortisation provided during the period is recognised in administrative expenses.
Software assets are amortised on a straight-line basis over five years. Additions were acquired at the end of the period so there is no 
amortisation charge for this period. The Company has no intangible assets.
45
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
13. Goodwill
The Group
Purchased
goodwill
£000
Total
£000
Cost:
At 31 July 2014 — —
Additions — —
At 31 July 2015 — —
Purchase of Adorial 1,192 1,192
At 31 July 2016 1,192 1,192
Impairment:
At 31 July 2014 — —
Provided during the year — —
At 31 July 2015 — —
Provided during the year — —
At 31 July 2016 — —
Net book value:
At 31 July 2016 1,192 1,192
At 31 July 2015 — —
The goodwill which originated in the period is explained in note 4. The value at which goodwill is carried is reviewed annually . No impairment 
charge was provided during the period. The Company has no goodwill.
Impairment
Goodwill considered significant in comparison to the Group’ s total carrying amount of such assets have been allocated to one cash 
generating unit as follows:
The Group
Goodwill
2016
£000
Goodwill
2015
£000
Taxonomy3 1,192 —
The Group has one overall cash generating unit, to which synergies from the business combination will arise. The goodwill arising from 
the acquisition of Adorial Limited in March 2016 is therefore considered for impairment based on the business as a whole. The 
recoverable amount of the T axonomy3 technology has been calculated with reference to its fair value less cost to sell. In calculating this 
value, management has used the following assumptions, based on their experience of the recent acquisition and external sources: the 
ability of the T axonomy3 technology to identify new drug targets and their potential market value; and the value of the Group’ s drug 
discovery capability as a whole and T axonomy3’ s contribution to that valuation. Such valuation is based on both management 
experience and external valuation assessments. As the business is currently in the Research and Development phase, no revenue is 
being generated.  However, the acquisition has generated significant synergies to provide greater depth and breadth of drug discovery 
for the Group.
C4X Discovery Holdings plc 
Annual report and accounts 2016 46
Financial statements 14. Investment in subsidiaries
The Company
Shares
£000
Loans
£000
Total
£000
At 31 July 2015 200 22 222
Acquisition of subsidiary 1,671 — 1,671
Increase in respect of share-based payments — 59 59
At 31 July 2016 1,871 81 1,952
By subsidiary 
C4X Discovery Limited 200 81 281
C4X Drug Discovery Limited — — —
Adorial Limited 1,671 — 1,671
At 31 July 2016 1,871 81 1,952
Subsidiary undertakings Country of incorporation Principal activity Class of shares held
31 July
2016
C4X Discovery Limited England and Wales Research and development Ordinary 100%
C4X Drug Discovery Limited England and Wales Dormant company Ordinary 100%
Adorial Limited England and Wales Drug discovery Ordinary 100%
Adorial T echnologies Limited England and Wales Research and development Ordinary 100%
Adorial Pharma Limited England and Wales Research and development Ordinary 100%
15. Trade and other receivables
31 July 
2016
Group
£000
31 July 
2016
Company
£000
31 July 
2015
Group
£000
31 July 
2015
Company
£000
Trade receivables 39 — 31 —
Prepayments 145 — 172 —
Inter-company short-term loan to subsidiary — 12,075 — 12,147
Other receivables 245 — 185 —
429 12,075 388 12,147
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
All trade receivables are denominated in Sterling.
There are no formal terms for the repayment of inter-company loans, none of which bear interest and all of which are repayable on demand.
Other receivables include £243,000 VAT receivable (2015: £174,000).
16. Income tax asset
31 July 
2016
Group
£000
31 July 
2016
Company
£000
31 July 
2015
Group
£000
31 July 
2015
Company
£000
Research and development income tax credit receivable 1,400 — 700 —
1,400 — 700 —
47
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
17. Cash, cash equivalents and deposits
31 July 
2016
Group
£000
31 July 
2016
Company
£000
31 July 
2015
Group
£000
31 July 
2015
Company
£000
Short-term investments and cash on deposit — — 4,000 —
Cash and cash equivalents 1,328 1 3,485 1
1,328 1 7,485 1
Under IAS 7, cash held on deposits (being deposits with maturity of greater than three months and no more than 12 months) that cannot 
readily be converted into cash has been classified as a short-term investment. The maturity on this investment was less than 12 months 
at the prior reporting date.
Cash and cash equivalents at 31 July 2016 include deposits with original maturity of three months or less of £nil (2015: £485,000).
An analysis of cash, cash equivalents and deposits by denominated currency is given in note 25.
18. Trade and other payables
31 July
2016
Group
£000
31 July
2016
Company
£000
31 July
2015
Group
£000
31 July
2015
Company
£000
Current payables 392 — 448 —
Other payables 116 — 112 —
Deferred revenue 83 — 56 —
Accruals 201 — 133 —
792 — 749 —
19. Issued equity capital
The Company
Deferred
shares
Number
Ordinary
shares
Number
A ordinary
shares
Number
Share
capital
£000
Deferred
shares
£000
Share
premium
£000
Total
£000
Allotted, called up and fully paid 
ordinary shares of 1p:
At 31 July 2014 — 2 — — — — —
Share subdivision on 3 September 2014 — 198 — — — — —
Shares issued on the acquisition of C4X 
Discovery Limited on 13 October 2014 2,025,000 15,553,975 4,434,375 200 2,025 — 2,225
Redesignation on 17 October 2014 — 4,434,375 (4,434,375) — — — —
Issue of share capital — 11,000,000 — 110 — 10,890 11,000
Expenses of placing — — — — — (877) (877)
Ordinary and deferred shares 
at 31 July 2015 2,025,000 30,988,550 — 310 2,025 10,013 12,348
Issue of share capital — 1,508,207 — 15 — 1,584 1,599
Ordinary and deferred shares 
at 31 July 2016 2,025,000 32,496,757 — 325 2,025 11,597 13,947
C4X Discovery Holdings plc 
Annual report and accounts 2016 48
Financial statements 19. Issued equity capital continued
The Group
Share
capital
£000
Deferred
shares
£000
Share
premium
£000
Total
£000
Allotted, called up and fully paid ordinary shares of 1p:
At 31 July 2014 200 — — 200
Shares issued on the acquisition of C4X Discovery Limited on 13 October 2014 — 2,025 — 2,025
Issue of share capital 110 — 10,890 11,000
Expenses of placing — — (877) (877)
At 31 July 2015 310 2,025 10,013 12,348
Issue of share capital 15 — 1,584 1,599
Expenses of placing — — — —
Ordinary and deferred shares at 31 July 2016 325 2,025 11,597 13,947
On 16 July 2014, being the date of incorporation of C4X Discovery Holdings plc, two ordinary shares of £1 were subscribed for fully paid, 
and on 3 September 2014 such shares were each subdivided into 100 ordinary shares of £0.01 each.
On 13 October 2014, the Company issued 15,553,975 ordinary shares of £0.01 each and 4,434,375 ordinary shares of £0.01 each to the 
shareholders of C4X Discovery Limited in consideration for the transfer of the entire share capital of C4X Discovery Limited to the Company 
pursuant to a share exchange agreement. In accordance with the reverse acquisition requirements of IFRS 3, this transaction is recorded 
in the Group accounts as if this share capital had always been in existence; therefore, it is reflected in the comparative periods for the 
Group accounts. The Company balance sheet, however, reflects the legal transactions that have occurred during the period and therefore 
this share for share exchange is recorded in the current period in the Company balance sheet. This gives rise to the difference between 
the Group and Company share capital in the comparative period. 
On 13 October 2014, the Company executed an instrument constituting £2,025,000 unsecured loan notes, with a view to issuing them as 
consideration for the acquisition of the £2,025,000 unsecured loan notes of C4X Discovery Limited pursuant to a share exchange agreement. 
The Company’ s loan notes converted, at nominal value, into deferred shares of £1 in the Company having no rights to any vote or dividends 
as set out in the Articles.
By a resolution dated 17 October 2014 each of the issued A ordinary shares of £0.01 each was converted into and redesignated as an 
ordinary share of £0.01 each ranking equally with the existing ordinary shares of £0.01 each in the Company. 
On 23 October 2014 11,000,000 shares were issued in a placing at a price of £1 resulting in share proceeds of £11,000,000. Share issue 
costs of £877,000 were incurred and have been deducted from share premium.
On 1 March 2016, together with £72,000 cash, 1,508,207 shares were issued at a price of 106p, being a 3% premium to the closing 
mid-market price of a C4XD share on 29 February 2016, for the purpose of acquiring the whole of the share capital of Adorial Limited 
and its subsidiaries.
49
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
20. Share-based payment reserve
The Group £000
At 31 July 2014 29
Share-based payments 22
At 31 July 2015 51
Share-based payments 59
At 31 July 2016 110
The Company £000
At the start of the period 22
Share-based payments  59
At 31 July 2016 81
The share-based payment reserve accumulates the corresponding credit entry in respect of share-based payment charges. Movements 
in the reserve are disclosed in the consolidated statement of changes in equity.
A charge of £59,000 has been recognised in the statement of comprehensive income for the year (2015: £22,000).
Share option schemes
The Group operates the following share option schemes, all of which are operated as Enterprise Management Incentive (“EMI”) 
schemes insofar as the share options being issued meet the EMI criteria as defined by HM Revenue & Customs. Share options issued 
that do not meet EMI criteria are issued as unapproved share options, but are subject to the same exercise performance conditions.
C4X Discovery Holdings plc Long T erm Incentive Plan (“LTIP”)
Grant in September 2009
Share options were granted to a staff member on 29 September 2009. The options granted are exercisable in the event of the listing of the 
Company, its acquisition or at the absolute discretion of the Board. The exercise price was set at 2.05 pence (the original exercise price 
of £22.00 was adjusted for a subdivision of 1,075 share options in C4X Holdings plc for each share option originally held in C4X Discovery Limited), 
being the estimated fair value of the shares on the day preceding the issue of the share options. The fair value benefit is measured using 
a Black Scholes model, taking into account the terms and conditions upon which the share options were issued.
Grant in August 2012
Share options were granted to staff on 28 August 2012. The options granted are exercisable in the event of the listing of the Company, 
its acquisition or at the absolute discretion of the Board. The exercise price was set at 5.58 pence (the original exercise price of £60.00 
was adjusted for a subdivision of 1,075 share options in C4X Holdings plc for each share option originally held in C4X Discovery Limited), 
being the estimated fair value of the shares on the day preceding the issue of the share options. The fair value benefit is measured using 
a Black Scholes model, taking into account the terms and conditions upon which the share options were issued.
Grant in July 2013
Share options were granted to staff on 4 July 2013. The options granted are exercisable in the event of the listing of the Company, 
its acquisition or at the absolute discretion of the Board. The exercise price was set at 5.58 pence (the original exercise price of £60.00 
was adjusted for a subdivision of 1,075 share options in C4X Holdings plc for each share option originally held in C4X Discovery Limited), 
being the estimated fair value of the shares on the day preceding the issue of the share options. The fair value benefit is measured using 
a Black Scholes model, taking into account the terms and conditions upon which the share options were issued.
C4X Discovery Holdings plc 
Annual report and accounts 2016 50
Financial statements 20. Share-based payment reserve continued
Share option schemes continued
C4X Discovery Holdings plc Long T erm Incentive Plan (“LTIP”) continued
Grant in May 2014
Share options were granted to staff on 27 May 2014. The options granted are exercisable in the event of the listing of the Company, 
its acquisition or at the absolute discretion of the Board. The exercise price was set at 5.58 pence (the original exercise price of £60.00 
was adjusted for a subdivision of 1,075 share options in C4X Holdings plc for each share option originally held in C4X Discovery Limited), 
being the estimated fair value of the shares on the day preceding the issue of the share options. The fair value benefit is measured using 
a Black Scholes model, taking into account the terms and conditions upon which the share options were issued.
Grant in June 2015
Share options were granted to staff and Directors on 8 June 2015. The options granted are exercisable at any time between three years 
and ten years of them being granted. There are no performance criteria attached to the options. The exercise price was set at 100.0 pence, 
being the price at which shares were placed in the IPO in October 2014. The fair value benefit is measured using a Black Scholes model, 
taking into account the terms and conditions upon which the share options were issued.
Grant in December 2015
Share options were granted to a Director on 8 December 2015. The options granted are exercisable, subject to meeting certain performance 
criteria, at any time between three years and ten years of them being granted. The exercise price was set at 77 pence, being the average 
of the mid-market closing price over the three days prior to 8 December 2015. The fair value benefit is measured using a Black Scholes model, 
taking into account the terms and conditions upon which the share options were issued.
Share options are awarded to management and key staff as a mechanism for attracting and retaining key members of staff. The options are 
granted at no lower than either: (i) market price on the day preceding grant; or (ii) in the event of abnormal price movements at an average 
market price for the week preceding grant date. Options may be granted at prices higher than the market price on the day preceding grant 
where the Board believes it is appropriate to do so. These options vest over a three-year period from the date of grant and are exercisable 
until the tenth anniversary of the award. Exercise of the award is subject to the employee remaining a full-time member of staff at the point 
of exercise. The fair value benefit is measured using a binomial valuation model, taking into account the terms and conditions upon which 
the share options were issued. 
The following tables illustrate the number and weighted average exercise prices of, and movements in, share options during the year.
The Group and Company
 2016
Number
 2015
Number
Outstanding at 1 August 2,177,325 1,699,575
Granted during the year 500,000 477,750
Lapsed/cancelled (20,000) —
Outstanding at 31 July 2,657,325 2,177,325
Exercisable at 31 July* 1,699,575 1,699,575
During the year ended 31 July 2016, no options were exercised (2015: nil).
*  Coincidental with the Company’ s listing on AIM in October 2014, holders of options to acquire 1,699,575 ordinary shares, undertook not to exercise 
such options (subject to certain exceptions) within the 12-month period from admission.
51
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
20. Share-based payment reserve continued
Weighted average exercise price of options
The Group and Company
2016
Pence
2015
Pence
Outstanding at 1 August 22.55 5.41
Granted during the year 77.00 83.50
Forfeited/cancelled 83.50 —
Outstanding at 31 July 32.33 22.55
The weighted average fair value of options granted during the year to 31 July 2016 was 77.0 pence (2015: 83.5 pence). The range 
of exercise prices for options outstanding at the end of the year was 2.05 pence–83.5 pence (2015: 2.05 pence–83.5 pence).
For the share options, outstanding as at 31 July 2016, the weighted average remaining contractual life is 7.8 years (2015: 8.4 years).
No share options were exercised during the year (2015: none).
The following table lists the inputs to the models used for the years ended 31 July 2016 and 31 July 2015.
The Group and Company 2016 2015
Expected volatility (%) 52.5% 52.5%
Risk-free interest rate (%) 0.78%–1.75% 1.34%–2.00%
Expected life of options (years average) 3 years 4 years
Weighted average exercise price (pence) 77.00 83.50
Weighted average share price at date of grant (pence) 32.33 22.55
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur . The expected 
volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
No other features of options granted were incorporated into the measurement of fair value.
21. Merger reserve 
The Group £000
At 31 July 2014, 31 July 2015 and 31 July 2016 920
The merger reserve arises as a result of the reverse acquisition requirements of IFRS 3 meaning the consolidated accounts are presented as a 
continuation of the C4X Discovery Limited accounts along with the share capital structure of the legal parent company (C4X Discovery Holdings plc). 
22.  Capital contribution reserve
The Group £000
At 31 July 2014 —
Waiver of loan interest payable 195
At 31 July 2015 and 2016 195
23.  Revenue reserve
The Group £000
At 31 July 2014 (2,482)
Loss for the year (3,064)
At 31 July 2015 (5,546)
Loss for the year (5,321)
At 31 July 2016 (10,867)
C4X Discovery Holdings plc 
Annual report and accounts 2016 52
Financial statements 24. Commitments
Operating lease commitments
The Group leases premises under non-cancellable operating lease agreements. The future aggregate minimum lease and service charge 
payments under non-cancellable operating leases are as follows:
31 July 2016
Group
£000
31 July 2015
Group
£000
Land and buildings:
Not later than one year 62 95
After one year but not more than five years 119 228
After five years — —
181 323
25. Financial risk management
Overview
This note presents information about the Group’ s exposure to various kinds of financial risks, the Group’ s objectives, policies and processes 
for measuring and managing risk, and the Group’ s management of capital. 
The Board has overall responsibility for the establishment and oversight of the Group’ s risk management framework. The Executive Directors 
report regularly to the Board on Group risk management.
Capital risk management
The Group reviews its forecast capital requirements on a half-yearly basis to ensure that entities in the Group will be able to continue 
as a going concern while maximising the return to stakeholders.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, reserves 
and retained earnings as disclosed in notes 19 to 23 and in the Group statement of changes in equity. T otal equity was £4,305,000 
at 31 July 2016 (£7,968,000 at 31 July 2015).
The Group is not subject to externally imposed capital requirements.
Liquidity risk
The Group’ s approach to managing liquidity is to ensure that, as far as possible, it will always have sufficient liquidity to meet its liabilities 
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’ s reputation.
The Group manages all of its external bank relationships centrally in accordance with defined treasury policies. The policies include the 
minimum acceptable credit rating of relationship banks and financial transaction authority limits. Any material change to the Group’ s principal 
banking facility requires Board approval. The Group seeks to mitigate the risk of bank failure by ensuring that it maintains relationships 
with a number of investment grade banks.
At the reporting date the Group was cash positive with no outstanding borrowings.
53
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
25. Financial risk management continued
Categorisation of financial instruments
Financial assets/(liabilities)
Loans and
receivables
£000
Financial
liabilities at
amortised
cost
£000
Group
£000
Company
£000
31 July 2016
Trade receivables 39 — 39 —
Inter-company short-term loan to subsidiary — — — 12,075
Cash, cash equivalents and deposits 1,328 — 1,328 —
Trade and other payables* — (591) (591) —
1,367 (591) 776 12,075
Financial assets/(liabilities)
Loans and
receivables
£000
Financial
liabilities
£000
Group
£000
Company
£000
31 July 2015
Trade receivables 31 — 31 —
Inter-company short-term loan to subsidiary — — — 12,147
Cash, cash equivalents and deposits 7,485 — 7,485 —
Trade and other payables* — (616) (616) —
7,516 (616) (6,900) 12,147
* Excluding accruals.
The values disclosed in the above table are carrying values. The Board considers that the carrying amount of financial assets and liabilities 
approximates to their fair value.
The main risks arising from the Group’ s financial instruments are credit risk and foreign currency risk. The Board of Directors reviews 
and agrees policies for managing each of these risks which are summarised [below].
Credit risk
The Group’ s principal financial assets are cash, cash equivalents and deposits. The Group seeks to limit the level of credit risk on the 
cash balances by only depositing surplus liquid funds with multiple counterparty banks that have investment grade credit ratings.
The Group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with 
the result that the Group’ s exposure to bad debts is not significant. The Group’ s maximum exposure is the carrying amount of trade 
receivables as disclosed in note 15, which was neither past due nor impaired. All trade receivables are ultimately overseen by the 
Chief Executive Officer and are managed on a day-to-day basis by the finance team. Credit limits are set as deemed appropriate 
for the customer.
The maximum exposure to credit risk in relation to cash, cash equivalents and deposits is the carrying value at the balance sheet date.
Foreign currency risk
The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional 
currency of the Group. These are primarily US Dollars (“USD”) and Euros. Transactions outside of these currencies are limited.
The Group may use forward exchange contracts as an economic hedge against currency risk, where cash flow can be judged with reasonable 
certainty. Foreign exchange swaps and options may be used to hedge foreign currency receipts in the event that the timing of the receipt 
is less certain.
There were no open forward contracts as at 31 July 2016 or at 31 July 2015 and the Group did not enter into any such contracts during 
2016 nor 2015.
C4X Discovery Holdings plc 
Annual report and accounts 2016 54
Financial statements 25. Financial risk management continued
Foreign currency risk continued
The split of Group assets between Sterling and other currencies at the year end is analysed as follows:
The Group
GBP
£000
USD
£000
EUR
£000
2016
Total
£000
GBP
£000
USD
£000
EUR
£000
2015
Total
£000
Cash, cash equivalents and deposits 1,328 — — 1,328 7,485 — — 7,485
Trade receivables 39 — — 39 31 — — 31
Trade payables (378) (12) (2) (392) (445) (1) (2) (448)
989 (12) (2) 975 7,071 (1) (2) 7,068
Sensitivity analysis to movement in exchange rates
Given the immaterial net payable balances in foreign currency, the exposure to a change in exchange rate is negligible.
Interest rate risk
As the Group has no borrowings the risk is limited to the reduction of interest received on cash surpluses held at bank which receive a floating 
rate of interest. The principal impact to the Group is the result of interest-bearing cash and cash equivalent balances held as set out below:
31 July 2016 31 July 2015
Fixed
rate
£000
Floating
 rate
£000
Total
£000
Fixed
rate
£000
Floating
rate
£000
Total
£000
The Group
Cash, cash equivalents and deposits — 1,328 1,328 7,000 485 7,485
The Company
Cash, cash equivalents and deposits — 1 1 — 1 1
As the majority of cash and cash equivalents are held on floating deposit and the overall level of interest rates is low, the exposure 
to interest rate movements is immaterial.
Maturity profile
Set out below is the maturity profile of the Group’ s financial liabilities at 31 July 2016 based on contractual undiscounted payments 
including contractual interest.
2016
Less than
one year
£000
One to five
years
£000
Total
£000
Financial liabilities
Trade and other payables* 591 — 591
591 — 591
2015
Less than
one year
£000
One to five
years
£000
Total
£000
Financial liabilities
Trade and other payables* 616 — 616
616 — 616
* Excluding accruals. Trade and other payables are due within three months.
The Directors consider that the carrying amount of the financial liabilities approximates to their fair value.
As all financial assets are expected to mature within the next 12 months an aged analysis of financial assets has not been presented.
55
C4X Discovery Holdings plc 
Annual report and accounts 2016
www.c4xdiscovery.com
Financial statements Notes to the financial statements continued
for the year ended 31 July 2016
26. Related party transactions
During the year, shareholder Aquarius Equity Partners Limited charged the Group £15,450 (2015: £20,000) for monitoring fees and was 
owed £1,545 at 31 July 2016 (2015: £1,545).
During the year, The Aquarius IV Fund LLP , a fund managed by shareholder Aquarius Equity Partners Limited, held 2,025,000 deferred 
shares of £1 each (2015: £2,025,000).
The Group:
There were no sales to, purchases from, or at the year end, balances with any related party.
The Company:
The following table summarises inter-company balances at the year end between C4X Discovery Holdings plc and subsidiary entities:
Notes
31 July
2016
£000
31 July
2015
£000
Short-term loans owed to C4X Discovery Holdings plc by:
C4X Discovery Limited 15 12,075 12,147
C4X Drug Discovery Limited — —
Adorial Limited — —
12,075 12,147
There are no formal terms of repayment in place for these loans and it has been confirmed by the Directors that the long-term loans 
will not be recalled within the next 12 months.
None of the loans are interest bearing.
27. Compensation of key management personnel (including Directors)
2016
£000
2015
£000
Short-term employee benefits 906 561
Pension costs 59 5
Benefits in kind — —
Share-based payments 45 16
1,010 582
C4X Discovery Holdings plc 
Annual report and accounts 2016 56
Financial statements Directors
Dr S C Williams (Non-Executive Interim Chairman) 
Dr C Dix  (Chief Executive Officer) 
Dr H Finch (Non-Executive Director) 
Dr A Stevenson (Non-Executive Director)
Secretary
Mr M J Sullivan
Nominated adviser and broker
Zeus Capital Limited
41 Conduit Street 
London W1S 2YQ
and
82 King Street 
Manchester M2 4WQ
Auditors
KPMG LLP
One St Peter’ s Square 
Manchester M2 3AE
Legal adviser
Schofield Sweeney
76 Wellington Street 
Leeds LS1 2AY
Financial PR consultants
Consilium Strategic Communications
41 Lothbury 
London EC2R 7HG
Registrar
Capita Registrars Limited
The Registry 
34 Beckenham Road 
Beckenham 
Kent BR3 4TU
Registered office
Manchester One 
53 Portland Street 
Manchester M1 3LD
Website
www.c4xdiscovery.com
Corporate information
 
Design Portolio is committed to planting 
trees or every corporate communications 
project, in association with Trees or Cities. C4X Discovery Holdings plc
Manchester One 
53 Portland Street 
Manchester 
M1 3LD
www.c4xdiscovery.com
C4X Discovery Holdings plc Annual report and accounts 2016