Material for life
Collagen Solutions plc
Annual report and 
accounts 2014
Collagen Solutions plc Annual report and accounts 2014 Collagen Solutions plc supports a 
range of medical-device and life-science 
customers, manufacturing a wide range 
of products made from, or containing, 
collagen and other active ingredients. 
Collagen Solutions, which operates from Glasgow and San Jose, 
provides medical-grade, fully traceable, functional collagen 
formulations and components which can be manufactured to 
customer requirements. Our current products range from 
minimally-processed to highly-purified collagen, processed 
in our accredited GMP contract manufacturing facilities.
For more information
www.collagensolutions.com Collagen Solutions plc Annual report and accounts 2014
Strategic report
1
Key highlights Contents
Financial 
 – £3.6 million successful equity placing, net of expenses
 – Simultaneous acquisition of Collbio Limited and 
business and assets of Collagen Solutions LLC
 – Net cash balances £1.49 million
Operational
 – Maintained notified body certification of our 
GMP facility
 – Smooth integration of Collbio and Collagen Solutions’ 
business and management team
 – Significant advances in customer development work
Strategic report
1  Key highlights
2 At a glance
4 Chairman’s statement
6 Chief Executive’s statement
8 Our business model and strategy
10 Strategic report
14 Financial review
Directors and governance
16 Board of directors
18 Corporate governance
20 Directors’ remuneration report
21 Directors’ report
24 Independent auditors’ report
Financial statements
25  C onsolida t ed s ta t ement 
of comprehensive income
26  C onsolida t ed s ta t ement 
of financial position
2 7  C ompan y s ta t ement 
of financial position
28  Consolidated statement of changes 
in equity
29  Company statement of changes 
in equity
30  Consolidated statement of cash flows
31 Company statement of cash flows
32 Notes to the financial statements
49 Notice of Annual General Meeting
IBC Officers and professional advisers
1 Collagen Solutions plc Annual report and accounts 2014
At a glance
Collagen Solutions plc’s activities include the  
provision of functional collagen biomaterials, 
the development of collagen formulations  
and products, and the contract manufacture  
of collagen-based medical devices.
Collagen Solutions is comprised of two main divisions. Collagen Solutions (US) Inc, which is based 
in San Jose, forming our main Research & Development. The second is Collagen Solutions (UK) Ltd, 
based in Glasgow where we have GMP Clean room Manufacturing Facilities.
Our business focus
Our customers
Collagen Solutions plc services customers with products that are medical grade and 
meet the regulatory requirements of notified bodies and competent authorities for use 
in medical devices. We manufacture medical-grade collagen components for use in:
1. Regenerative medicine
2. Medical devices 
3. In-vitro diagnostics
Collagen Solutions  
(US) Inc
Research &  
Development
Collagen Solutions  
(UK) Ltd
Clean room  
Manufacturing
Collagen  
Solutions plc
See page 8 for our business model
2 Collagen Solutions plc Annual report and accounts 2014
Strategic report
Our strategy
Our market
Our strategy allows us to supply customers in a range of markets, using our technical and operational 
experience to provide both standard and bespoke materials for a range of applications across the globe.
The market for collagen products continues to grow, with the estimated global biomaterials market set 
to reach $88 billion by 2017. We provide collagen products globally to Europe and the USA. A significant 
part of this market already comprises collagen-based products which have decades of precedent use. 
2 3
Markets Distinctive
Competencies
Our experienced team enables 
us to service global markets 
with collagen materials for use 
as medical devices, research 
reagents and in regenerative 
medicine. Our customer base 
has an extremely diverse 
portfolio of products.
Sourcing, traceability, 
collagen chemistry, 
product development and 
contract manufacturing.
1
Operations
The development and 
manufacture of collagen 
materials and components in 
an approved GMP facility.
US & Europe
Regions we supply to:
UK & US
Countries of operation:
See page 9 for our detailed strategy
Collagen Solutions  
(US) Inc
San Jose
Collagen Solutions  
(UK) Ltd
Glasgow
US$88bn
(2017) 
Global biomaterials market:
3 Collagen Solutions plc Annual report and accounts 2014
I am pleased to present Collagen 
Solutions’ maiden annual report and 
accounts as a publicly listed company. 
Since being admitted to the AIM market 
of the London Stock Exchange as 
Healthcare Investment Opportunities plc 
in April 2013, we made our first strategic 
acquisition in the healthcare sector 
following a review and assessment of 
thirty different proposals in the fields 
of in-vitro diagnostics, biopharma, 
biomaterials, medical devices and 
software. The criteria used to evaluate 
the proposals included whether 
the target was or had:
 – revenue or near revenue generating;
 – capable of generating embedded 
or protected IP;
 – UK-based;
 – capable of significant growth 
potential; or
 – a capable management team.
The acquisition of Collbio Limited 
and Collagen Solutions LLC, in 
the Board’s view, met the key criteria 
above. The acquisition was approved 
by shareholders on 27 December 2013 
and the ordinary shares exchanged 
in relation to this transaction were 
admitted to AIM on 2 January 2014.
It involved combining businesses in the 
UK and USA, and provides the Company 
with a management team with extensive 
contacts, that has previously worked 
together servicing the medical devices 
industry, and which has the ability 
to generate long-term revenues and 
opportunities through investment 
and strategic input from the Board. 
The objective is to build a significant 
global biomaterials business by 
assisting customers in expediting 
the transition of their products from 
development through to manufacture 
by the provision of cost-effective, 
functional collagen materials and 
devices, across a range of clinical 
indications, for the ultimate benefit 
of providing effective and affordable 
treatment to patients.
Overview
The enlarged Group has only been 
trading for a relatively short period. 
However we are pleased to report that 
some of the key foundation stones 
have been laid in terms of creating 
long-term shareholder value.
In particular I would draw your 
attention to the following: 
 – The management teams in Glasgow 
and San Jose have been integrated 
and are working effectively as a 
cohesive unit.
 – The appointment of Gill Black 
as Chief Financial Officer.
 – The technology transfer of the 
first product from San Jose to 
GMP contract manufacturing 
in Glasgow is well underway.
 – We have made significant advances 
in our work with one of our partners, 
Jellagen, on the processing of jellyfish 
into vector-free collagen.
Chairman’s statement
Summary
 – In January 2014, we made 
our first strategic acquisition 
in the healthcare sector
 – Licence agreement signed with 
UCL for polymeric collagen
 – We are looking to develop strong 
collaborative partnerships with 
key players in the regenerative 
medicine space
‘‘
The enlarged Group has only been trading 
for three months; however, the key foundation 
stones have been laid in terms of creating 
long-term shareholder value.
4 Collagen Solutions plc Annual report and accounts 2014
Strategic report
5
 – The licence agreement with UCL, 
signed in June 2014, for polymeric 
collagen accesses a breakthrough 
platform technology for the 
production of stronger, more durable, 
living collagen-based “tissues”.
We have set ourselves a target by 
2020 to create a biomaterials business 
with a value of £100 million through 
a combination of organic growth and 
exploitation of licensed IP, as well as 
through appropriate acquisitions, and 
we look forward to that journey, having 
already made some significant progress.
Results
The Group’s results for the period 
ended 31 March 2014 are set out 
in the Consolidated Statement of 
Comprehensive Income. Revenue for 
the first three months’ trading was 
a nominal £24,023. Administrative 
expenses (before separately identifiable 
items) were £303,647, reflecting the 
costs of operating a public company 
and the related regulatory costs. Selling 
and marketing costs were £71,914. 
LBITDA (before separately identifiable 
costs) were (£388,269) and the loss 
per share was (1.1p).
Net cash used in operations during 
the period was £524,839, net cash used 
in investing activities was £1,357,278 
and net cash flow from financing 
activities was £3,373,777. The Group’s 
cash balances at 31 March 2014 
were £1,491,660.
As highlighted in my opening 
paragraphs, the acquisition of Collbio 
Limited and Collagen Solutions LLC 
was approved by shareholders on 
27 December 2013 and the ordinary 
shares exchanged in relation to the 
transaction were admitted to AIM 
on 2 January 2014. The passage of six 
days has given rise to an additional 
amount of goodwill of £466,250 shown 
in the accounts, reflecting the increase 
in the share price from 27 December 
(12.5p) to 2 January (14.5p), the date 
on which control technically passed.
Dividend
Due to the loss incurred for 
the period since incorporation, 
no dividends are payable.
Board and management
On the acquisition of Collbio Limited, 
Dr Stewart White was appointed 
Chief Executive Officer of the Group. 
Stewart has significant experience of 
the biomaterials space and has a clear 
strategic vision to build the Company 
into a major player in the industry.
In early March, Gill Black was appointed 
Chief Financial Officer and Company 
Secretary. Gill has considerable 
experience of working with early stage 
companies and also those within a 
manufacturing environment.
On the acquisition of Collagen 
Solutions LLC, the founders Jacci 
Burgin and Diane Mitchell became key 
members of the management team, 
as Chief Scientific Officer and Chief 
Commercial Officer respectively. They 
both have extensive knowledge and 
contacts within the industry and 
are also significant shareholders 
in the Company.
I am very pleased to see the team 
gel and work together as a cohesive 
unit under Stewart’s leadership. 
The challenge will be as we grow 
to retain that sense of purpose 
and camaraderie.
Outlook
The year 2014/15 will see a continued 
investment in people and facilities 
as we continue to expand our sales 
pipeline. We are looking to develop 
strong collaborative partnerships 
with key players in the regenerative 
medicine space, and we have seen 
since the year end the first product 
being transferred from our core 
R&D facility in San Jose to our 
manufacturing unit in Glasgow.
We are recognised within the industry 
for the quality of the materials that we 
produce, and our ability to do that within 
a GMP environment. That gives me 
confidence that our long-term revenue 
generation is secure as those revenues 
are effectively embedded into our 
customers’ products. What is more 
difficult to judge, is the exact timing 
of such revenues as our customers take 
their products through to launch and 
beyond. We have yet to reach a critical 
mass of manufactured products and 
we see this happening by the end 
of 2015, unless we see value-adding 
opportunities to shorten this timescale.
We are looking to continue to leverage 
opportunities to develop and exploit IP, 
and I will update you later on in the year 
as we formalise such arrangements. 
This investment will come from our 
existing resources.
Your Group is one of the most 
innovative and exciting that I have ever 
been involved in, and I see the ability to 
secure significant value accretion in a 
relatively low-risk manner, by adopting 
a portfolio approach with regard to 
development for our customers and 
ensuring our revenues are secured 
long term by taking that from R&D 
through to manufacturing.
Thank you for your support.
David Evans
Non-executive Chairman
9 July 2014
See page 14 for our financial review Collagen Solutions plc Annual report and accounts 2014
I am pleased to report that all parts 
of the Group have integrated well in 
the relatively short period since the 
acquisition. The reported pre-tax loss 
of £479,998 is after charging separately 
identifiable items relating to acquisition 
costs of £74,769. The Group’s cash 
position remains strong at £1.49 million, 
which is sufficient for ongoing funding 
requirements of the Group and its 
planned investment in manufacturing 
and research and development.
Operational trading
Revenue has come from both 
development work and direct 
sales of existing collagen products. 
We believe the continued interest 
from new customers is due to an 
appreciation for the historic, and 
now combined, capabilities, but also 
reflects that the market recognises 
the value offering of the newly formed 
Collagen Solutions plc Group.
A number of customers are well 
advanced through the regulatory 
approval process for their own 
products, which contain our 
embedded collagen formulations 
or components. The Group has 
considerable experience of supporting 
customers through such regulatory 
processes with notified bodies or 
competent authorities and this is a 
bespoke service which we provide. 
When contributing to customers’ 
development requirements, it is 
always our intention to establish 
long-term partnerships with the 
aim of providing an increased scale 
of production or indeed contract 
manufacturing of the finished device. 
Our relationship with T axus Cardium 
Pharmaceuticals, is an excellent 
example of this. 
In order to provide materials 
and components into a regulated 
industry we must continue to make 
investment in our manufacturing base. 
Such investments will ensure we not 
only have the correct capabilities and 
capacities our customers require, but 
also that we ensure we retain our ISO 
13485 and ISO 22442 certifications. 
Notified body approval of our Quality 
Management System, and thereby 
extension, our own suppliers, is 
critical to demonstrate the safety 
and traceability of materials we supply 
and the production processes we carry 
out. Maintaining such systems and 
processes takes significant resources 
and of course the commitment from 
our dedicated team.
Our extensive research and 
development activities serve to 
demonstrate to customers that 
Collagen Solutions is committed to 
evolving by developing new collagen 
formulations which can be readily and 
quickly modified to meet customer 
requirements. As the Group responds 
to market forces, our development 
team will provide the know-how 
and innovation which will meet our 
customers’ expectations. We have 
a number of products undergoing 
development and proceeding through 
our design control process. We have 
been reviewing the market potential 
of these formulations and exploring 
the benefits and necessities of further 
regulatory approvals to expedite their 
use in our own devices. The value placed 
on our offering can be seen in the 
margins we can achieve on materials 
which are competitively priced.
Chief Executive’s statement
Summary
 – The Group’s cash position 
remains strong at £1.49 million
 – The Group has considerable 
experience of supporting 
customers through regulatory 
processes as a bespoke service
 – The strategic vision is being 
supported by the technology 
transfer from our US operation 
to full GMP manufacturing 
in the UK
‘‘
I share the Board’s view that there is a strong 
opportunity for the Group to be a global 
leading player in the biomaterials field.
6 Collagen Solutions plc Annual report and accounts 2014
Strategic report
7
In addition to such direct commercial 
activities listed above, the Group is 
also open to closer collaborations. An 
example of this is the work being done 
with our strategic partner Jellagen Pty 
Ltd, in which we have a 10.5% interest. 
In this case the Group is providing 
development expertise to assist 
Jellagen to develop and move towards 
commercialising a range of novel 
jellyfish collagen-based products. 
Collbio and Collagen 
Solutions acquisitions
A key driver for acquiring Collbio 
Limited and Collagen Solutions LLC 
was the revenue synergies that could 
be achieved from combining the sales 
offerings of both development and 
manufacturing capabilities. These 
competencies, alongside our collegial 
approach will ensure that Collagen 
Solutions becomes a globally recognised 
centre of excellence in the chemistry, 
supply, development and manufacture 
of medical-grade collagen biomaterials. 
I am pleased to report that this 
strategic vision is being supported 
by the technology transfer, from our 
US operation to full GMP manufacturing 
in the UK, of material which we supply 
to a major medical device customer 
for use in their approved product, 
which is already available in the USA. 
Markets served
The Group is ideally positioned 
to have greater access to our 
main markets. We have a range 
of collagen-based products which 
typically have a common starting 
material or platform technology. 
Therefore, we can assess the potential 
of specific formulations and how they 
might be applied as reagents in in 
vitro diagnostics, for use in medical 
devices and as carriers or scaffolds 
for therapies in regenerative medicine 
and cellular therapies. Not only does 
the Group have the capability to 
supply different market segments, 
we can supply materials to a range 
of companies within each segment. 
That is, although the majority of our 
volume of materials is supplied for 
use in medical devices which require 
regulatory approval, we are active 
in multiple markets, with multiple 
customers using multiple collagen 
products, providing significant 
contingency in our business model. 
It should be noted for the initial 
three-month revenue-generating 
period, the directors consider, in 
view of the total volume generated 
through the sale of collagen products, 
that this comprised one operational 
segment for the purposes of 
segmental reporting.
Business development
Following the acquisition, the Group 
now has prime locations in the largest 
markets for value-added medical 
devices. Our facility in San Jose is ideally 
positioned to serve the North American 
markets and our manufacturing site in 
Glasgow, Scotland, is well placed within 
the UK to serve the European market. 
We expect this global reach to provide 
significant benefits moving forward, 
allowing the Group to benefit from 
available public sector support 
where possible, and to capitalise on 
the benefit of these locations for 
cost-effective conference and trade 
show attendance. In addition to typical 
business development activities, much 
of our business has been won through 
direct contacts. The team at Collagen 
Solutions has an extensive network 
across the industry and continues to 
utilise this to identify new opportunities.
Business development activities 
will continue to evolve, specifically, to 
investigate the potential to move into 
newer territories which will require the 
necessary skilled business development 
personnel to ensure we obtain rapid 
and meaningful traction.
Strategic risks and mitigation 
The combined entity provides medical-
grade collagen formulations for medical, 
diagnostics and research applications 
using specialised sourcing knowledge, 
relationships and agreements with 
a variety of leading suppliers of raw 
biomaterials. Our intentionally diversified 
approach on markets, products and 
customers, is key to supporting a robust 
strategy which we believe provides the 
contingency of a maximised number 
of opportunities, with least risk, and the 
greatest potential for shareholder return. 
Post-balance sheet events 
 – Retaining ISO 13485/ISO 22442 
certification for our manufacturing 
facility in Glasgow following 
external audit during April 2014.
 – Jellagen, our strategic partner, 
has secured the external funding 
required to undertake further 
research, with the aim of taking 
their products to market.
 – In May 2014, Professor Robert 
Brown, UCL, joined the Company as 
an exclusive consultant and an initial 
member of our Scientific Advisory 
Board. Professor Brown’s expertise 
will be invaluable in driving 
new and exciting product 
development activities.
 – In June 2014, a Licence Agreement 
was entered into with UCL, providing 
the Group with exclusive rights 
to commercialise a collagen 
formulation process which has 
been patented and already 
been granted in the USA.
Outlook/current trading
The next financial year will be a period of 
further consolidation when we continue 
to develop new revenue streams and 
work to exploit opportunities which 
will build value to the business. This will 
be in line with our strategic objectives 
to invest in the areas of Research and 
Development and Manufacturing in 
order to support our customers, 
win new business, and remain at the 
forefront of collagen biomaterials. 
Whilst we will strive to expand our 
direct sales, it is also likely we will 
look to work closely with an increased 
number of strategic partners who may 
have technology, facilities, know-how, 
distribution or market access 
that we can mutually exploit.
I share the Board’s view that there 
is a strong opportunity for the Group 
to be a global leading player in the 
biomaterials field.
Dr Stewart White
Chief Executive Officer
9 July 2014
See page 14 for our financial review Collagen Solutions plc Annual report and accounts 2014
8
Our business model and strategy
Our business model
Collagen is the ultimate biomaterial. With decades of precedent use in millions of products ranging 
from cosmetics to tissue scaffolds, there is no halt in the desire to utilise this material to develop new 
and exciting therapeutic products. Collagen Solutions provides the raw materials and know-how to 
add functionality and value to the customers’ products. The Company can apply this same know-how 
to its own products across multiple markets, thereby providing the widest possible exposure for our 
products to customers, using collagen products as a reagent, medical device or within regenerative 
medicine applications. Our model ensures we can service multiple markets, containing multiple 
customers with multiple products.
Collagen  
Solutions plc
Bulk Collagen Supply
Added Value Collagen Supply
Development Service for Collagen Formulations
Development of Medical Devices 
Contract Manufacture of Medical Devices
Finished Devices Collagen Solutions plc Annual report and accounts 2014
Strategic report
9
Our strategy
Our strategy is to provide functional collagen raw materials, device development and contract 
manufacturing to our global customer base.
Distinctive
competencies
Markets Operations
Research, development and 
contract manufacturing 
Diagnostic reagents, medical 
devices, regenerative medicine
Development of collagen 
formulations and medical 
devices, and the contract 
manufacturing thereof
Strategic objectives
 – Utilise capacity for new products
 – Extend range of manufacturing 
activities and necessary certification
 – Increase number of products 
through our Glasgow facility
 – Invest in regenerative medicine
 – Distribution partnerships 
for collagen products
 – Facilitate products’ applications 
in a wider range of territories 
and finished products
 – Increase process and product 
activities in manufacturing
 – Register know-how and IP
 – Licence know-how and/
or medical device capability 
to blue chip companies
Focus for future
 – Increase product range
 – Support other collagen 
companies, e.g. Jellagen
 – Expand capabilities 
through partnering
 – Retain and expand 
regulatory certifications
 – Increase testimony from key 
opinion leaders (KOL)/companies 
using our materials 
 – Association with preferred partners 
for specific device products
 – Demonstrate increased traction 
in regenerative medicine
 – Use collagen knowledge 
to increase our academic 
collaborations
 – Register device specific IP 
 – Progress already licensed IP Collagen Solutions plc Annual report and accounts 2014
Strategic report
Collagen Solutions strives to become a 
globally recognised centre of excellence 
in the chemistry, supply, development 
and manufacture of medical-grade 
collagen biomaterials. 
Our strategy
Our mission is to increase the 
profitability of our business by 
growing revenue through continual 
improvement and development of 
our product offering, innovation and 
harnessing IP. Our aim is to develop 
sales channels around the world, 
while investing in our manufacturing 
facilities to enable the Group to meet 
that sales growth. Our progress to 
date is noted in both the Chairman’s 
and Chief Executive’s Statements.
Our markets
Our extensive technical expertise in the 
area of collagen formulations and our 
GMP capacity and capabilities make 
us very well placed to meet the needs 
of customers in the reagent, medical 
device and regenerative medicine 
markets in all geographical areas.
Our products
Our standard product range includes 
various strengths of soluble and acid 
soluble collagen, acid swollen gels, freeze 
dried powders and fibrous collagen. The 
Group manufactures the FDA-cleared 
product Excellagen, a collagen gel used 
in wound care and cell therapy fields, in 
addition to other collagen components 
for approved medical devices for use in 
bone void fillers and in sponges for cell 
therapy skin substitute applications. 
Future plans include commercialising 
additional products by harnessing 
the IP from the licence agreement 
with UCL, signed after the year 
end, for wider patient benefits 
and development of formulations 
from novel sources of raw materials, 
such as jellyfish.
Competitive advantage
The Group’s competitive advantages 
are based on both the ability to source 
quality raw materials from accredited 
sources and to develop novel and 
relevant formulations from different 
types of materials to meet customer 
needs. We can also assist customers 
through the regulatory approval 
process for their medical devices, 
and then offer the GMP facilities 
for large scale production thereby 
taking their products to market. 
We are uniquely placed to add value 
throughout the entire supply chain.
Review of the business
The Group’s results are set out 
in the Consolidated Statement 
of Comprehensive Income on 
page 25 and are explained within 
the Financial Review on pages 14 
and 15. On 2 January 2014 the Group 
Our mission is to increase the profitability 
of our business by growing revenue through 
continual improvement and development 
of our product offering, innovation and 
harnessing IP.
Summary
 – Our extensive technical 
expertise in the area of 
collagen formulations makes 
us very well placed to meet 
the needs of customers
 – Strategies in place to develop 
long-term partnerships with 
customers resulting in our 
products becoming embedded in 
their end devices and therapies
 – Future plans include 
commercialising additional 
products by harnessing IP 
for wider patient benefits
10 Collagen Solutions plc Annual report and accounts 2014
Strategic report
11
announced the acquisition of the entire 
issued share capital of Collbio Limited 
and its subsidiary Collagen Solutions 
(US) Inc. A full review of the Group’s 
activities and future developments 
are incorporated into the Chairman’s 
and Chief Executive’s Statements. 
Key performance indicators
Financial KPIs
2014
£
Revenue 24,023
Gross profit 11,939
Gross profit margin 49.7%
LBITDA* (388,269)
EPS (1.1p)
Cash and cash equivalents 1,491,660
*  Before the charge for acquisition 
costs of £74,769 in relation to 
Collbio Group acquisition
The Directors consider the principal 
financial performance indicators 
of the Group to be:
 – revenue and revenue growth;
 – gross profit;
 – gross profit margin;
 – LBITDA;
 – EPS; and
 – cash and cash equivalents.
The Directors consider the principal 
non-financial performance indicators 
to be:
 – development of collagen 
product portfolio;
 – collaboration with strategic 
partners to develop embedded 
value products and IP; and
 – maintaining GMP processes and 
building capability and capacity.
Principal risks and uncertainties
The principal risks and uncertainties 
that could have an adverse impact 
on the performance of the Group 
are detailed below.
Sales pipeline
The impact of our customers’ stage 
of regulatory approval of their medical 
device or product is critical to Collagen 
Solutions’ revenue streams. Our collagen 
component or formulation may have 
been developed, embedded and listed 
as part of a customer’s regulatory 
admission, but contract manufacturing 
revenues may be delayed until such 
approval is obtained in the relevant 
geographical market from the 
relevant agencies.
Customers in early stage 
development may require to secure 
external funding before committing 
to volume manufacturing and this 
can delay revenues for the Group.
The Group continues to focus on 
building and diversifying the customer 
pipeline and has strategies in place to:
 – increase production scheduling 
flexibility;
 – accelerate revenues by use 
of minimum order quantities 
and non-refundable fees for 
engineering and set up costs 
for a specific GMP process; and
 – develop long-term collaborative 
and development partnerships 
with our customers, resulting in 
our products becoming embedded 
in their end devices and therapies.
Growth
The ability of the Group to manage 
growth effectively, and implement its 
strategy, requires effective planning 
and management control systems. 
The pace of change required could 
place a significant strain on the 
Group’s management, operational, 
financial and personnel resources 
and could have a detrimental impact 
on the trading performance of the 
Group. However, the Group has an 
experienced management team and 
a clear strategy for any required 
integration and management 
of business growth. Collagen Solutions plc Annual report and accounts 2014
12
Strategic report continued
Principal risks and uncertainties 
continued
Competition
Many of the Group’s competitors 
have access to greater funds; however, 
the directors believe that the Group 
can compete strongly and that there 
are sufficient barriers to entry to other 
competitors entering the same markets. 
The Group’s investment in marketing 
and business development will support 
sales in territories across the world.
Technology
T echnologies in the medical device 
market continue to evolve and there 
is a risk the Group’s offering may 
become outdated as improvements 
in technology are made. However, the 
Board has confidence in the Group’s 
research and development capabilities 
to respond to such eventualities. The 
Group relies on information technology 
systems to run the business, and its 
continued commitment to investment 
in this area will ensure robust effective 
management information systems to 
allow management to make key financial 
decisions affecting the business.
Suppliers
The Group has a limited number 
of suppliers for some of our raw 
materials which we may not be 
able to find replacements for, or 
immediately transition to alternative 
suppliers. These materials are used in 
validated processes, and substitution 
of replacement raw materials may 
have a revenue impact as a result 
of potential delays in validation and 
approval. The Group’s materials are 
sourced from BSE-free territories, 
with suppliers who have the necessary 
quality systems, certifications and 
export health attestations in place 
to ensure reduced risk. Any change 
to the status in BSE-free status of 
our suppliers could impact our supply 
chain and ultimately revenues.
Treasury policy and financial risk
The Group maintains a centralised 
treasury function, which operates 
under policies and guidelines approved 
by the Board. These cover funding, 
management of foreign exchange 
exposure and interest rate risk. The 
purpose is to manage the financial 
risks of the business and to secure 
the most cost-effective funding.
The Group’s principal financial assets 
are bank balances, which are exposed 
to varying degrees to the following 
risk: liquidity risk, credit risk and foreign 
currency risk. The policy for managing 
these risks is outlined below:
 – Liquidity risk – The Group maintains 
good relationships with its banks 
and investors and its working capital 
requirements are anticipated via the 
forecasting and budgetary process.
 – Credit risk – The Group is mainly 
exposed to credit risk from its 
trade and other receivables, 
short-term deposits and bank 
balances. An allowance for 
impairment is made when where 
there is an identified loss event 
which, based on previous experience, 
is evidence of a reduction in the 
recoverability of the cash flows. 
Cash is held on deposit with a 
highly reputable financial institution. 
Management considers the above 
measures to control the credit 
risk exposure.
 – Foreign currency risk – The Group 
has overseas revenue in US dollars 
and is exposed to minimal foreign 
currency risk. The functional currency 
of the Company is sterling. Revenues 
in US dollars are utilised in firstly 
funding US operations and forward 
exchange rate contracts may be 
used to hedge any such exposure. 
The Group seeks to negotiate 
contracts in the functional 
currency where possible. 
Corporate social responsibility 
The Group embraces working in a 
way that delivers financial, socially 
responsible and environmentally 
sustainable business performance 
and ensures adherence to the law 
and conducts its affairs to the highest 
ethical standards. We expect our 
customers and suppliers to embrace 
these same principles. The Group 
values teamwork, taking personal 
responsibility, positive attitudes 
and working hard to deliver positive 
outcomes for all our stakeholders 
– customers, staff and shareholders 
alike. We encourage the personal 
learning, growth and development 
of our team and voluntarily try 
to eliminate practices that harm 
the environment. Collagen Solutions plc Annual report and accounts 2014
Strategic report
13
Employee involvement
The Group recognises and seeks 
to encourage the involvement of its 
employees, with the aim being the 
recruitment, motivation and retention 
of quality employees throughout the 
Group. It is the intention to introduce 
a share option scheme operated 
within the Enterprise Management 
Incentive Scheme.
The Group’s employment policies, 
including the commitment to 
equal opportunity, are designed 
to attract, retain and motivate 
employees regardless of sex, race, 
religion or disability. Equality of 
treatment includes full and fair 
assessment of applications and 
extends to training and continuing 
career development.
The Group is committed to 
ensuring and communicating the 
requirements for a safe and healthy 
working environment for all employees, 
consistent with health and safety 
legislation, and, wherever practicable, 
gives full consideration to applications 
for employment from disabled persons.
On behalf of the Board 
Gill Black
Chief Financial Officer
9 July 2014
-  The global biomaterials market 
is predicted to reach US$88 billion 
by 2017
(1)
-  Compound annual growth rate 
(CAGR) of global biomaterials 
market is 15%
(1)
-  The global medical device market is 
to grow at 6.2% annually until 2018
(2)
-  The collagen-based (and related 
materials) market is set to reach 
US$3.7 billion in 2015
(3)
(1) http://www.marketsandmarkets.com/Market-Reports/biomaterials-393.html
(2)  Market research reports 2014
( 3)  h t t p : / / w w w . eb er s m e d i c a l . c o m / en t er p r i s e / 2 2 3 : g l o b a l - c o l l a g en - a n d - h a - b a s e d -
b i om a t e r i a l s - m ar k e t - t o - r eac h - u s 37 - b i l l i o n - b y - 2 0 1 7 - ac c or d i n g - t o - n e w - r e p or t - 
by-global-industry-analysts-inc Collagen Solutions plc Annual report and accounts 2014
14
Financial review
Group results
Group revenue was £24,023 for the 
period ended 31 March 2014, which 
represented three months’ trading 
since the acquisition of the Collbio 
Group was made. During this initial 
period the Group established its 
presence in the market for the 
development and production 
of collagen formulations. 
LBITDA (before separately identifiable 
items) for the period was (£388,269) 
and the loss before tax (before 
separately identifiable items) was 
(£405,229). Separately identifiable 
items comprise acquisition costs 
in relation to the Collbio acquisition.
Cash and borrowings
As at 31 March 2014, the Group had cash 
balances of £1.49 million and financial 
liabilities of £2.41 million in relation to the 
contingent consideration. The Statement 
of Cash Flows shows the movements 
in funds during the period, including 
the placing of ordinary shares and 
cash flows relating to the acquisition 
of Collbio Limited and the business and 
net assets of Collagen Solutions LLC.
Overheads
The Group has made investment 
in its resources during the period in 
order to meet the anticipated demand 
for its products and services.
Financing
In April 2013, the Company was 
successful in an equity placing of 
£3.6 million net of expenses, and 
the Company’s first investment in 
the healthcare sector took place at 
the beginning of January 2014 with 
the acquisition of the Collbio Group.
Business risks
Risk management is an important 
element of the management process 
throughout the Group, and internal 
controls have been developed to 
address the main business risks 
which are considered to be:
Strategic
The Group operates in a global 
market and is dependent on 
enhancing revenues by leveraging 
existing customers, products and 
facilities in order to provide a 
comprehensive offering of a broad 
range of collagen raw materials, 
development services and contract 
manufacturing for collagen-based 
medical devices. One of the risks 
to the business is that of timing 
of customer projects, where, as 
a component supplier, we rely on 
customer demand, which is not 
within our control, so in order to 
mitigate this risk we constantly 
strive to have a diversified customer 
base with multiple products.
Summary
 – As at 31 March 2014, the 
Group had cash balances 
of £1.49 million and financial 
liabilities of £2.41 million
 – The Company’s first investment in 
the healthcare sector took place 
at the beginning of January 2014 
with the acquisition of the 
Collbio Group
 – At the date of acquisition 
the Group made a provision 
of £2.41 million for contingent 
consideration payable resulting 
from the acquisition of Collbio 
and Collagen Solutions LLC
‘‘
The Group has established its presence 
in the market for the development and 
production of collagen formulations. Collagen Solutions plc Annual report and accounts 2014
Strategic report
15
Key performance indicators
The Group monitors the following KPIs 
to ensure the business performs in line 
with expectations and that issues are 
identified promptly and efficiency 
measures can be quantified:
 – turnover growth;
 – gross margin %;
 – operating costs measured 
against budget;
 – earnings per share; and
 – cash and cash equivalents.
Operational
The Group’s most important assets 
are its employees, customers and 
the development of know-how and 
intellectual property rights (IPR):
 – Employees are recruited carefully 
to address the needs of the business. 
Appropriate training is provided 
to support the development 
of employees. 
 – The needs of the Group’s customers 
are addressed to ensure that they 
are appropriately addressed.
 – The Group has controls in place to 
safeguard the IPR that it develops. 
The Group also has established 
procedures to maintain its appropriate 
accreditations. The Group also 
recognises the importance of its IT 
infrastructure and back office systems 
to deliver its services. The Group has 
the appropriate controls in place 
to secure its data and maximise the 
operational efficiency of its systems. 
Controls exist to ensure information is 
made available to enable management 
to monitor the performance of 
the Group.
The controls address the performance 
of the Group based on monthly 
management accounts which 
include details of sales, gross 
margin and costs. 
Treasury policies and financial risk
The Group maintains a treasury 
function, which operates under 
policies and guidelines approved 
by the Board. These cover funding, 
management of foreign exchange 
exposure and interest rate risk. The 
purpose is to manage the financial risks 
of the business effectively and to secure 
the most cost-effective funding. 
Contingent consideration
At the date of acquisition the Group 
made a provision of £2.41 million for 
contingent consideration payable 
resulting from the acquisition of 
Collbio and Collagen Solutions LLC. 
This provision was made from an 
estimate of the maximum to be paid 
under the ‘earn out conditions’. The 
directors believe that the provision 
represents the best estimate of the 
eventual outcome of the ‘earn out’. 
Any future revision to the consideration 
will be charged/credited to the income 
statement in accordance with IFRS 3 
(revised) in future periods. 
Gill Black
Chief Financial Officer 
9 July 2014 
  Collagen Solutions plc Annual report and accounts 2014
16
Board of directors
The Board appreciates the value of good 
corporate governance and is responsible 
to shareholders for the proper management 
of the Group. 
Board of directors
1
4 5
2 3
1. David Evans
2. Stewart White
3. Gill Black
4. Kevin Wilson
5. Malcolm Gillies
David Evans 
R
Chairman
David has a proven track record in acquiring, integrating 
and growing businesses in the diagnostic area and in value 
creation, exemplified by his role at BBI Holdings Plc where 
he grew the company through acquisition and organic growth 
from a value of £4 million to a value of £84 million in 2007, 
when BBI was sold to Inverness Medical Innovations Inc. 
He was Chairman of DxS Limited, which was sold in 2009 for 
£82 million. David was also Chairman of Sirigen Group Limited, 
an early-stage medical technology company that was sold 
in 2012 to Becton, Dickinson and Company, a global medical 
technology company. David was also previously Chairman 
of Immunodiagnostics Systems Holdings Plc.
David is currently Chairman of Epistem Holdings Plc, 
EKF Diagnostics Holdings Plc and Scancell Holdings Plc. 
David is also Chairman of Omega Diagnostics Group Plc 
and Venn Life Sciences Holdings Plc, which floated on 
AIM in December 2012.
Stewart White
Chief Executive Officer
Dr Stewart White was CEO of Collbio and has 
recent and direct board experience of an AIM quoted 
company. Stewart has international experience in operations, 
business and product development, and Good Manufacturing 
Practices (GMP) compliant manufacturing of collagen medical 
devices, advanced biologics and Active Pharmaceutical 
Ingredients in both small to medium enterprises as well 
as global pharmaceutical companies. Stewart is a graduate 
of the University of Strathclyde and holds a first-class 
degree in Applied Microbiology, a PhD in Fermentation 
Technology and Bioprocessing and an MBA. Collagen Solutions plc Annual report and accounts 2014
Directors and governance
17
R Remuneration Committee
A Audit Committee
Gill Black
Chief Financial Officer and Company Secretary
Gill Black brings with her extensive financial board-level 
experience to the Group, having been Financial Director and 
Company Secretary of A&E Russell Ltd, and was instrumental 
in their expansion before taking them through the subsequent 
acquisition by Bunzl plc in 2008. After spending two years 
as Head of Finance at AKP Scotland Ltd, she became Head 
of Finance and Company Secretary of GVA James Barr Ltd, 
a privately owned property consultancy business which 
merged with top five UK independent GVA Grimley. Previously, 
Gill was a Senior Manager at KPMG, Glasgow where she led 
a team advising many high growth businesses.
Gill holds an MA in Accountancy and Economics from 
the University of Dundee and is a Chartered Accountant 
and ICAS member.
Malcolm Gillies 
R
 
A
Non-Executive Director
Malcolm is a director in several private companies mostly 
involved in the healthcare area including Aircraft Medical, 
Antoxis and Ohmedics. He has previously held positions 
as a non-executive director in public companies and was 
Company Secretary at Axis-Shield Plc. He has a background 
as a corporate finance lawyer, having been a senior partner 
with Shepherd+Wedderburn.
Kevin Wilson 
R
 
A
Non-Executive Director
Dr. Kevin Wilson was Corporate Finance Director and Head 
of the Manchester office for Arbuthnot Securities. Kevin 
has spent over 25 years as a securities analyst and corporate 
finance adviser in both stockbroking and investment banking, 
providing advice to a wide range of smaller public and private 
companies. He is a visiting fellow at Lancaster and Manchester 
Business Schools and a visiting professor at Lausanne and 
Geneva. Kevin is a director of AIM listed EKF Diagnostics 
Holdings Plc and a former director of BBI Holdings Plc. Collagen Solutions plc Annual report and accounts 2014
18
Corporate governance
The Group’s key objective is to enhance 
and protect shareholder value. 
Principles of corporate governance
The Board appreciates the value 
of good corporate governance not 
only in the areas of accountability 
and risk management but also as 
a positive contribution to business 
prosperity. It believes that corporate 
governance involves more than a 
simple “box ticking” approach to 
establish whether a company has 
met the requirements of a number of 
specific rules and regulations. Rather 
the issue is one of applying corporate 
governance principles (including those 
set out in the Corporate Governance 
Code for Small and Mid-Size Quoted 
Companies published by the Quoted 
Companies Alliance) in a sensible 
and pragmatic fashion having regard 
to the individual circumstances of 
a particular company’s business. 
The key objective is to enhance 
and protect shareholder value.
Board structure
The Board is responsible 
to shareholders for the proper 
management of the Group. 
A statement of directors’ 
responsibilities in respect 
of the financial statements 
is set out on pages 22 and 23. 
The non-executive directors have 
a particular responsibility to ensure 
that the strategies proposed by the 
executive directors are fully considered. 
All non-executive directors receive 
a fixed fee for their services.
To enable the Board to discharge its 
duties, all directors have full and timely 
access to all relevant information and 
there is a procedure for all directors, 
in furtherance of their duties, to take 
independent professional advice, 
if necessary, at the expense of the 
Group. The Board is responsible for 
overall Group strategy, approval of 
major capital expenditure projects 
and consideration of significant 
financing matters. 
The following Committees, which have 
written terms of reference adopted on 
24 February 2014 and 28 March 2013 
respectively, deal with specific aspects 
of the Group’s affairs:
Remuneration Committee
The Remuneration Committee 
is responsible for making 
recommendations to the Board on 
the Group and Company’s framework 
of executive remuneration and its 
cost. The Committee determines 
the contract terms, remuneration 
and other benefits for each of 
the executive directors, including 
performance-related bonus schemes, 
pension rights and compensation 
payments. The board itself determines 
the remuneration of the non-executive 
directors. The Committee comprises 
three non-executive directors 
(David Evans, Malcolm Gillies 
and Kevin Wilson). It is chaired 
by Malcolm Gillies.
Audit and Risk Committee
The Audit Committee comprised two 
non-executive directors (Malcolm Gillies 
and Kevin Wilson), and is chaired by 
Kevin Wilson.
Its prime tasks are to review the scope 
of external audit, to receive regular 
reports from Baker Tilly UK Audit LLP, 
and to review the half yearly and annual 
accounts before they are presented 
to the Board, focusing in particular 
on accounting policies and areas of 
management judgement and estimation.
The Committee is responsible for 
monitoring the controls which are 
in force to ensure the integrity of the 
information reported to shareholders.
The Committee acts as a forum for 
discussion of internal control issues and 
contributes to the Board’s review of the 
effectiveness of the Group’s internal 
control and risk management systems 
and processes. It advises the Board on 
the appointment of external auditors 
and on their remuneration for both 
audit and non-audit work, and discusses 
the nature and scope of the audit with 
the external auditors. It reviews and 
monitors the independence of the 
auditors, especially with regard 
to non-audit work. 
The Audit Committee met to consider 
the reports of the auditors prior to the 
submission of the annual financial 
statements to the Board. Collagen Solutions plc Annual report and accounts 2014
19
Directors and governance
Internal control 
The directors are responsible for the 
Group’s system of internal control and 
reviewing its effectiveness. The Board 
has designed the Group’s system of 
internal control in order to provide the 
directors with reasonable assurance 
that its assets are safeguarded, that 
transactions are authorised and 
properly recorded and that material 
errors and irregularities are either 
prevented or would be detected 
within a timely period.
However, no system of internal 
control can eliminate the risk of failure 
to achieve business objectives or 
provide absolute assurance against 
material misstatement or loss.
The key elements of the control 
system in operation are:
 – the Board meets regularly with 
a formal schedule of matters for 
decision and has put in place an 
organisational structure with clear 
lines of responsibility defined and 
with appropriate delegation 
of authority; and
 – the subsidiaries boards also meet 
regularly with a formal schedule 
of matters for decision; and
 – there are procedures for planning, 
approval and monitoring of capital 
expenditure and information systems 
for monitoring the Group’s financial 
performance against approved 
budgets and forecasts.
The Audit Committee receive reports 
from the external auditors on a regular 
basis and from executive directors of 
the Group. The Board receives periodic 
reports from all Committees.
There are no significant issues 
disclosed in the report and financial 
statements for the period ended 
31 March 2014 and up to the date of 
approval of the report and financial 
statements that have required the 
Board to deal with any related 
material internal control issues.
The Board has considered whether 
the Group’s internal controls processes 
would be significantly enhanced by 
an internal audit function and has taken 
the view that, at the Group’s current 
stage of development, this is not a 
necessity. The Board will continue 
to review this matter.
The Group is compliant with 
industry standard quality assurance 
measures and undergoes regular 
external audits to ensure that 
accreditation is maintained.
Relations with shareholders 
The Group values its dialogue with 
both institutional and private investors. 
Effective two-way communication with 
the investment community is actively 
pursued and this encompasses 
issues such as performance, 
policy and strategy. 
The directors have had meetings with 
actual and potential investors and they 
will continue to do so on a regular basis. 
The Group maintains an informative 
website containing information likely 
to be of interest to existing and new 
investors. In addition, the Group retains 
the services of financial PR consultants, 
providing an additional contact point 
for investors.
There is also an opportunity, at the 
Company’s annual general meeting, 
for individual shareholders to raise 
general business matters with the full 
Board, and notice of the Company’s 
annual general meeting is circulated to 
all shareholders before such meeting.
Going concern
The directors believe that the use of 
the going concern basis of accounting 
is appropriate because they consider 
that the Group has considerable 
financial resources, together with a 
robust sales pipeline and commitments 
from a number of customers. As such 
the directors believe that the Group 
is well placed to manage its business 
risks successfully. The directors have 
a reasonable expectation that the 
Group has adequate resources to 
continue in operational existence 
for the foreseeable future. Thus they 
continue to adopt the going concern 
basis of accounting in preparing 
the financial statements. Collagen Solutions plc Annual report and accounts 2014
20
Directors’ remuneration report
The policy of the committee is to recruit, 
motivate and retain high quality executives, 
thereby enhancing shareholder value. 
Remuneration committee
The Company has a Remuneration 
Committee. The Committee 
comprises three non-executive 
directors (Malcolm Gillies, 
David Evans and Kevin Wilson). 
It is chaired by Malcolm Gillies.
Remuneration policy
The policy of the committee is to 
reward executive directors in line with 
the current remuneration of directors 
in comparable businesses in order 
to recruit, motivate and retain high 
quality executives within a competitive 
market place, thereby enhancing 
shareholder value.
Directors’ remuneration
The table below summarises all 
Directors’ emoluments and pension 
contributions for the current period.
There were no pension payments made 
on behalf of the directors in the period 
to 31 March 2014. 
Directors’ share options
At 31 March 2014, the following 
directors held options over the 
shares of the Company:
Details of the options are covered 
in note 18 and 20. The only movement 
in the period was the granting of 
options to D E Evans.
Date of 
incorporation At 31 March 2014 Date exercisable  Expiry date 
D E Evans — 4,050,000 29 March 2013 28 March 2023
Salary and fees
£
D E Evans 12,000
Dr K W Wilson 12,000
M J Gillies 12,000
Dr S White 18,750
G N Black 6,250
61,000 Collagen Solutions plc Annual report and accounts 2014
21
Directors and governance
Directors’ report
The principal activity of the Group 
is development and manufacture of 
medical‑grade collagen components 
for use in regenerative medicine, medical 
devices and in‑vitro diagnostics. 
The directors submit their report and 
consolidated financial statements of 
Collagen Solutions plc for the period 
ended 31 March 2014.
Principal activities
The Company was incorporated 
on 15 March 2013 under the 
Companies Act as Healthcare 
Investment Opportunities plc, 
a public company limited by 
shares. On 27 December 2013 
the Company changed its name 
to Collagen Solutions plc.
The principal activity of the Company 
is as a holding company. The principal 
activity of the Group is development 
and manufacture of medical-grade 
collagen components for use in 
regenerative medicine, medical 
devices and in-vitro diagnostics. 
Strategic Report
The following matters are dealt with 
in the Strategic Report on pages 10 
to 13:
 – review of the business;
 – corporate social responsibility; and
 – employee involvement.
Results and dividends
The trading results for the period and 
the Group’s financial position at the end 
of the period are shown in the attached 
financial statements. The directors do 
not recommend a final dividend.
At the date of acquisition the Group 
made a provision of £2.41 million for 
the contingent consideration payable 
resulting from the acquisition of 
Collbio and Collagen Solutions (US) Inc. 
This provision was made on the basis 
of the best estimate of the outcome 
of the earn out revenues under the 
sale and purchase agreement, which 
provides for a maximum payout 
of £2.75 million on revenues to 
February 2017.
Directors 
The directors of the Company during 
the period are listed below.
At 31 March 2014, the directors had 
beneficial interests in the Company’s 
shares as listed below.
There are 500,000 deferred shares 
of 9p in issue at 31 March 2014 and 
these are held as follows: D E Evans – 
125,000, Dr K Wilson – 125,000 
and M J Gillies – 250,000.
M S Thorne appointed 15 March 2013; resigned 22 March 2013
M P Harris appointed 15 March 2013; resigned 22 March 2013
D E Evans appointed 22 March 2013
Dr K Wilson appointed 22 March 2013
M J Gillies appointed 22 March 2013
Dr S White appointed 2 January 2014
G N Black appointed 3 March 2014
At 
31 March 2014
Class of share No.
D E Evans Ordinary shares of 1p each 5,495,874
Dr S White Ordinary shares of 1p each 3,107,184
Dr K Wilson Ordinary shares of 1p each 1,078,010
M J Gillies Ordinary shares of 1p each 500,000 Collagen Solutions plc Annual report and accounts 2014
22
Directors’ report continued
Investment in research and development is 
essential for the maintenance of the Group’s 
market position and for future growth. 
Share capital
On incorporation the issued share 
capital of the Company was £1 divided 
into one ordinary share of £1 of which 
one was issued fully paid.
On 26 March 2013, the ordinary share 
of £1 each was subdivided into ten 
ordinary shares of 10p each.
On 26 March 2013, the Company 
issued 499,990 ordinary shares 
of 10p each at par.
On 28 March 2013, each ordinary 
share of 10p was subdivided into one 
ordinary share of 1p and one deferred 
share of 9p in the capital of the 
Company, resulting in 500,000 
ordinary shares and 500,000 
deferred shares in issue.
On 5 April 2013 40,000,000 
ordinary shares were issued for a 
cash consideration of 10p per share.
On 2 January 2014 as part of the 
initial consideration for the acquisition 
of Collbio Limited the Company issued 
16,000,000 ordinary shares of £1 each 
at a price of 12.5p per share. On the 
same dated a further 7,326,007 
ordinary shares of £1 each were issued 
at a price of 12.5p per share as part 
of the initial consideration for the 
acquisition of business and assets of 
Collagen Solutions LLC via a subsidiary 
undertaking. The fair value of these 
shares at 2 January 2014 was 14.5p.
The total number of issued 
ordinary shares at 31 March 2014 
was 63,826,007. The total number 
of deferred shares at 31 March 2014 
was 500,000.
Research and development
The Group invests in the research 
and development in the UK and 
USA and collaborates with partners 
and academia. In the opinion of the 
directors, continuity of investment 
in this area is essential for the 
maintenance of the Group’s market 
position and for future growth.
Supplier payment policy
It is Group policy to agree and clearly 
communicate the terms of payment as 
part of the commercial arrangements 
negotiated with suppliers and then to 
pay according to those terms based 
upon the timely receipt of an accurate 
invoice. At 31 March 2014, average 
creditor days were 45–60 days.
Charitable and political contributions
No charitable or political donations 
were made by the Group in the period. 
Statement as to disclosure 
of information to auditors
The directors who were in office on 
the date of approval of these financial 
statements have confirmed that, as far 
as they are aware, there is no relevant 
audit information of which the auditors 
are unaware. Each of the directors has 
confirmed that they have taken all the 
steps that they ought to have taken as 
directors in order to make themselves 
aware of any relevant audit information 
and to establish that it has been 
communicated to the auditors.
Directors’ responsibilities in the 
preparation of the financial statements
The directors are responsible for 
preparing the Strategic Report 
and the Directors’ Report and the 
financial statements in accordance 
with applicable law and regulations.
Substantial shareholdings 
As at 30 June 2014, other than the directors’ beneficial interests, there were the following substantial shareholdings:
Class of share No.
Legal and General Ordinary shares of 1p each 6,000,000
Hargreave Hale Ordinary shares of 1p each 4,000,000
Diane Mitchell Ordinary shares of 1p each 3,663,004
Jacqueline Burgin Ordinary shares of 1p each 3,663,003
Killik & Co Ordinary shares of 1p each 3,408,000
Neil McArthur Ordinary shares of 1p each 2,470,873
Rathbones Investment Management Ordinary shares of 1p each 2,425,000 Collagen Solutions plc Annual report and accounts 2014
23
Directors and governance
Company law requires the directors to 
prepare Group and Company financial 
statements for each financial year. The 
directors are required by the AIM Rules 
of the London Stock Exchange to 
prepare Group financial statements 
in accordance with International 
Financial Reporting Standards 
(IFRS) as adopted by the European 
Union (EU) and have elected under 
company law to prepare the Company 
financial statements in accordance 
with IFRS as adopted by the EU.
The financial statements are required 
by law and IFRS adopted by the EU to 
present fairly the financial position of 
the Group and the Company and the 
financial performance of the Group. 
The Companies Act 2006 provides in 
relation to such financial statements 
that references in the relevant part of 
that Act to financial statements giving 
a true and fair view are references to 
their achieving a fair presentation.
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 the Company and of the profit 
or loss of the Group for that period.
In preparing the Group and Company 
financial statements, the directors 
are required to:
 – select suitable accounting policies 
and then apply them consistently;
 – make judgements and accounting 
estimates that are reasonable 
and prudent;
 – state whether they have been 
prepared in accordance with 
IFRSs adopted by the EU;
 – prepare the financial statements 
on the going concern basis unless 
it is inappropriate to presume that 
the Group and the Company will 
continue in business.
The directors are responsible 
for keeping adequate accounting 
records that are sufficient to show 
and explain the Group’s and the 
Company’s transactions and disclose 
with reasonable accuracy at any 
time the financial position of the 
Group and the Company and enable 
them to ensure that the financial 
statements comply with the 
Companies Act 2006. They are 
also responsible for safeguarding 
the assets of the Group and the 
Company and hence for taking 
reasonable steps for the prevention 
and detection of fraud and 
other irregularities.
The directors are responsible for 
the maintenance and integrity of the 
corporate and financial information 
included on the Collagen Solutions plc 
website.
Legislation in the United Kingdom 
governing the preparation and 
dissemination of financial statements 
may differ from legislation in 
other jurisdictions.
Annual General Meeting
The notice convening the Annual 
General Meeting to be held at 11.00am 
on 27 August 2014 at 3 Robroyston Oval, 
Nova Business Park, Glasgow 
G33 1AP can be found on the 
Company’s website.
Auditors
During the period Baker Tilly UK 
Audit LLP were appointed as the first 
auditors of the Company. A resolution 
to re-appoint Baker Tilly UK Audit LLP 
as auditors will be proposed at the 
Annual General Meeting.
On behalf of the Board 
Gill Black
Chief Financial Officer
9 July 2014 Collagen Solutions plc Annual report and accounts 2014
24
Independent auditors’ report
to the members of Collagen Solutions plc
We have audited the Group and Parent Company financial statements (the financial statements) on pages 25 to 48. 
The financial reporting framework that has been applied in their preparation is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted by the European Union 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. To the fullest extent permitted 
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members 
as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As more fully explained in the Directors’ Responsibilities Statement set out on pages 22 and 23 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 (APB’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 APB’s website  
at http://www.frc.org.uk/auditscopeukprivate.
Opinion on the financial statements
In our opinion:
 – the financial statements give a true and fair view of the state of the Group’s and the parent’s affairs 
as at 31 March 2014 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 European Union;
 – the parent company financial statements have been properly prepared in accordance with IFRSs as adopted 
by the European Union and as applied in accordance with 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 Directors’ Report for the financial period 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.
GRAHAM BOND FCA (Senior Statutory Auditor)
For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor
Chartered Accountants
3 Hardman Street
Manchester M3 3HF
9 July 2014 Collagen Solutions plc Annual report and accounts 2014
25
Financial statements
Consolidated statement  
of comprehensive income
for the period ended 31 March 2014
Before Separately
separately identifiable
identifiable items Total
items (Note 5) 2014
Notes £ £ £ 
Revenue 24,023 — 24,023
Cost of sales  (12,084) — (12,084)
Gross profit 11,939 — 11,939
Share-based compensation (24,647) — (24,647)
Administrative expenses (303,647) (74,769) (378,416)
Selling and marketing costs (71,914) — (71,914)
Loss before interest, tax, depreciation and amortisation (388,269) (74,769) (463,038)
Amortisation and depreciation (16,960) — (16,960)
Operating loss before taxation 2 (405,229) (74,769) (479,998)
Taxation 6  — — —
Loss for the period (405,229) (74,769) (479,998)
Currency translation difference (44,666) — (44,666)
Other comprehensive loss (44,666) — (44,666)
Total comprehensive expense for the period (449,895) (74,769) (524,664)
Basic and diluted loss per share – pence 7 (1.10p) Collagen Solutions plc Annual report and accounts 2014
26
Consolidated statement of financial position
as at 31 March 2014
2014
Notes £
Assets
Non-current assets
Intangible assets 8 6,894,398
Property, plant and equipment 9 232,484
 7,126,882
Current assets
Inventories 11 39,265
Trade and other receivables 12 167,036 
Cash and cash equivalents 13 1,491,660
 1,697,961
Total assets 8,824,843
Equity and liabilities
Equity attributable to equity holders of the parent company
Share capital 20 683,260
Share premium 3,230,105
Share-based compensation 24,647
Merger reserve 2,842,683
Translation reserve (44,666)
Retained deficit (479,998)
Total equity 6,256,031
Non-current liabilities
Other financial liabilities 14 2,409,236
Current liabilities
Trade and other payables 14 159,576
Total liabilities 2,568,812
Total liabilities and equity 8,824,843
These financial statements were approved by the Board of directors and authorised for issue on 9 July 2014 
and are signed on its behalf by: 
G N Black Dr S White
Chief Financial Officer Chief Executive Officer
Company Number: 8446337 Collagen Solutions plc Annual report and accounts 2014
27
Financial statements
Company statement of financial position
as at 31 March 2014
2014
Notes £
Assets
Non-current assets
Financial asset investments 10 6,563,378
Current assets
Trade and other receivables 12 317,818
Cash and cash equivalents 13 1,477,822
1,795,640 
Total assets 8,359,018
Equity and liabilities
Equity attributable to equity holders of the parent company
Share capital 20 683,260
Share premium 3,230,105
Share-based compensation 24,647
Merger reserve 2,842,683
Retained deficit (262,626)
Total equity 6,518,069
Non-current liabilities
Financial liabilities 14 1,782,122
Current liabilities
Trade and other payables 14 58,827
Total liabilities 1,840,949
Total liabilities and equity 8,359,018
These financial statements were approved by the Board of directors and authorised for issue on 9 July 2014 
and are signed on its behalf by:
G N Black Dr S White
Chief Financial Officer Chief Executive Officer
Company Number: 8446337 Collagen Solutions plc Annual report and accounts 2014
28
Consolidated statement of changes in equity
for the period ended 31 March 2014
Share Share-based
Share premium payment Merger Translation Retained
capital account reserve reserve reserve deficit Total
£ £ £ £ £ £ £
Issue of shares for cash 450,000 3,600,000 — — — — 4,050,000
Issue of consideration 
shares on acquisition 233,260 — — 3,149,011 — — 3,382,271
Issue costs of shares — (369,895) — (306,328) — — (676,223)
Total transactions 
with owners in their 
capacity as owners 683,260 3,230,105 — 2,842,683 — — 6,756,048
Share-based 
compensation — — 24,647 — — — 24,647
Loss for the period — — — — — (479,998) (479,998)
Currency translation 
difference — — — — (44,666) — (44,666)
Total comprehensive 
loss for the period — — — — (44,666) (479,998) (524,664)
At 31 March 2014 683,260 3,230,105 24,647 2,842,683 (44,666) (479,998) 6,256,031 Collagen Solutions plc Annual report and accounts 2014
29
Financial statements
Company statement of changes in equity
for the period ended 31 March 2014
Share Share-based
Share premium payment Merger Retained
capital account reserve reserve deficit Total
£ £ £ £ £ £
Issue of shares for cash 450,000 3,600,000 — — — 4,050,000
Issue of consideration 
shares on acquisition 233,260 — — 3,149,011 — 3,382,271
Issue costs of share — (369,895) — (306,328) — (676,223)
Total transactions with owners  
in their capacity as owners 683,260 3,230,105 — 2,842,683 — 6,756,048
Share-based compensation — — 24,647 — — 24,647
Total comprehensive loss  
for the period — — — — (262,626) (262,626)
At 31 March 2014 683,260 3,230,105 24,647 2,842,683 (262,626) 6,518,069 Collagen Solutions plc Annual report and accounts 2014
30
Consolidated statement of cash flows
for the period ended 31 March 2014
2014
Note £
Cash flow from operating activities
Loss before taxation (479,998)
Share-based compensation 24,647
Depreciation 12,647
Amortisation 4,313
Increase in inventories (13,337)
Increase in trade and other receivables (65,511)
Decrease in trade and other payables (6,876)
Translation movement 43,942
Foreign exchange (44,666)
Net cash used in operations (524,839)
Investing activities
Payments to acquire property, plant and equipment (426)
Payments to acquire business and assets of Collagen Solutions LLC 10 (1,398,985)
Net cash acquired with acquisition of business and assets of Collagen Solutions LLC 10 26,662
Net cash acquired with subsidiary undertaking 10 15,471
Net cash used in investing activities (1,357,278)
Financing activities
Net proceeds on issue of ordinary shares 3,373,777
Net cash generated from financing activities 3,373,777
Net increase in cash and cash equivalents 1,491,660
Cash and cash equivalents at the end of the financial period 1,491,660 Collagen Solutions plc Annual report and accounts 2014
31
Financial statements
Company statement of cash flows
for the period ended 31 March 2014
2014
£
Cash flow from operating activities
Loss before taxation (262,626)
Share-based compensation 24,647
Increase in trade and other receivables (122,496)
Increase in trade and other payables 58,827
Net cash used from operations (301,648) 
Investing activities
Movement in Group borrowings (1,398,985)
Financing activities
Proceeds on issue of ordinary shares 3,373,777
Movement in Group borrowings (195,322)
Net cash generated from financing activities 3,178,455
Net increase in cash and cash equivalents 1,477,822
Cash and cash equivalents at the end of the financial period 1,477,822 Collagen Solutions plc Annual report and accounts 2014
32
Notes to the financial statements 
1 Accounting policies 
Basis of preparation 
The financial statements have been prepared in accordance with International Financial Reporting Standards as 
adopted by the European Union (IFRSs), including International Financial Reporting Interpretations Committee 
(IFRIC) interpretations as endorsed by the European Union (EU) and in accordance with those parts of the 
Companies Act 2006 applicable to companies reporting under IFRSs. 
Collagen Solutions plc is incorporated and domiciled in the United Kingdom. The financial statements have been 
prepared on the historical cost basis except for certain financial liabilities incorporated at fair value. The consolidated 
financial statements are presented in sterling which is also the functional currency of the Company. The principal 
accounting policies adopted are set out below. 
Basis of consolidation 
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. 
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement 
of Comprehensive Income from the date of their acquisition and until their date of disposal. 
The Group uses the acquisition method of accounting to account for business combinations. The consideration 
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and 
the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability 
resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable 
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at 
their fair values at the acquisition date. 
The excess of the consideration transferred over the fair value of the Group’s share of the identifiable net assets 
acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the 
case of a bargain purchase, the difference is recognised directly in the Statement of Comprehensive Income. 
Intra-group balance transactions and any unrealised income and expenses arising from intra-group transactions, 
are eliminated in preparing the consolidated financial statements. 
The Company Statement of Comprehensive Income has not been disclosed in accordance with section 408 
of the Companies Act 2006. The loss for the period of the parent company amounted to £262,626.
Going concern 
As part of its going concern review the Board has followed the guidelines published by the Financial Reporting 
Council entitled “Going Concern and Liquidity Risk Guidance for UK Companies 2009”. In determining the 
appropriate basis of preparing the financial statements, the Directors are required to consider whether the Company 
can continue in operational existence for the foreseeable future, being a period of not less than twelve months from 
the date of the approval of the financial statements. As at 31 March 2014 the Group had cash and cash equivalents 
of £1.5 million and net current assets of £1.5 million.
Management prepares detailed working capital forecasts which are reviewed by the Board on a regular basis. Cash 
flow forecasts and projections have been prepared through to 30 September 2015, and take into account sensitivities 
on revenues, and costs. Having made relevant and appropriate enquiries, including consideration of the Company’s 
and Group’s current cash resources and the working capital forecasts, the Directors have a reasonable expectation 
that the Company and Group will have adequate cash resources to continue to meet the requirements of the business 
for at least the next twelve months. Accordingly, the Board continues to adopt the going concern basis in preparing 
the financial statements. 
Revenue 
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable 
for goods and services provided in the normal course of business, net of discounts and other sales related taxes. 
Depending on the contractual terms, revenue is recognised based on the level of work completed to date in respect 
of each individual element of the contract. Laboratory services are recognised on a fee-for-service basis. The difference 
between the amount of revenue recognised and the amount invoiced on a particular contract is included in the 
Statement of Financial Position as deferred income.
Normally amounts become billable in advance on the achievement of certain milestones, in accordance with agreed 
payment schedules included in the contract or, on submission of appropriate detail. Any cash payments received as 
a result of this advance billing are not representative of revenue earned on the contract, as revenues are recognised 
over the period in which the specified contractual obligations are fulfilled. Amounts included in deferred income 
are expected to be recognised within one year and are included within current liabilities. In the event of contract  Collagen Solutions plc Annual report and accounts 2014
33
Financial statements
1 Accounting policies continued
Revenue continued
termination, if the value of the work performed and recognised as revenue is greater than aggregate milestone 
billings at the date of termination, cancellation clauses provide that the Group be paid for all work performed 
to the termination date. 
Segmental reporting
The Group’s Chief Operating Decision Maker, the Chief Executive Officer, is responsible for resource allocations 
and the assessment of performance. In the performance of this role, the Chief Executive Officer reviews the Group’s 
activities, in the aggregate. The Group has therefore determined that it has only one reportable segment under 
IFRS 8, Operating Segments, which is biomaterials.
Goodwill
Goodwill arising on consolidation represents the excess of the consideration transferred and the fair value of the 
identifiable assets and liabilities of the acquiree at the date of acquisition. Goodwill on acquisitions of subsidiaries is 
included in ‘intangible assets’. Goodwill is not amortised but is tested annually for impairment and is carried at cost 
less accumulated impairment losses. See note 8 for detailed assumptions and methodology. Impairment losses are 
not subsequently reversed. 
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those 
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination 
in which the goodwill arose identified according to operating segment. 
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the 
acquisition date, about facts or circumstances existing at the acquisition date. Other changes in provisional fair 
values are recognised through profit or loss. 
Changes in contingent consideration arising from additional information, obtained within one year of the acquisition 
date, about facts or circumstances that existed at the acquisition date are recognised as an adjustment to goodwill. 
Other changes in contingent consideration are recognised through profit or loss, unless the contingent consideration 
is classified as equity. In such circumstances, changes are recognised within equity. 
Purchased goodwill arising on the acquisition of a business and its net assets represents the excess of the 
consideration and the fair value of the identifiable assets and liabilities of that business at the date of acquisition. 
It is included within intangible assets and subject to annual impairment reviews noted above.
Intangible assets
Intangible assets acquired as part of a business combination are recognised outside goodwill if the asset is separable 
or arises from contractual or other legal rights and its fair value can be measured reliably. 
Intangible assets are stated at cost, net of any amortisation and any provision for impairment. Amortisation is 
calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life 
of that asset as follows: 
Customer contacts –  over two to five years, depending on terms of contract, on a straight line basis. 
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it 
is incurred. Expenditure arising from the Group’s development is recognised only if all of the following conditions 
are met: 
 – an asset is created that can be identified (such as new processes or products);
 – it is probable that the asset created will generate future economic benefits;
 – the development cost of the asset can be measured reliably;
 – the Group has the intention to complete the asset and the ability and intention to use or sell it;
 – the product or process is technically and commercially feasible; and
 – sufficient resources are available to complete the development and to either sell or use the asset. 
Where no internally generated intangible asset can be recognised, development expenditure is recognised 
as an expense in the period in which it is incurred. 
Intangible assets acquired as part of a business combination are recognised at fair value. Collagen Solutions plc Annual report and accounts 2014
34
Notes to the financial statements continued Notes to the financial statements continued
1 Accounting policies continued
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. 
Cost comprises purchase price and other directly attributable costs. Depreciation is charged so as to write off the 
cost or valuation of assets to their residual values over their estimated useful lives, using the straight line method, 
on the following basis:
Plant, equipment and machinery – five years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds 
and the carrying amount of the asset and is recognised in the Consolidated Statement of Comprehensive Income. 
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. 
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount 
is greater than its estimated recoverable amount. 
Impairment
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangibles, 
including goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. 
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the 
impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the 
Group estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. 
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future 
cash flows have been adjusted. 
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount 
of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. 
Where an impairment loss subsequently reverses, the carrying amount of the asset (CGU) is increased to the revised 
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount 
that would have been determined had no impairment loss been recognised for the asset (CGU) in prior years. A reversal 
of an impairment loss is recognised as income immediately. 
Detailed assumptions with regard to discount, growth and inflation rates are set out in note 8 to the accounts.
Investments 
Investments are initially recorded at cost including directly attributable acquisition costs. The subsequent measurement 
of contingent consideration is recognised as an adjustment to cost. The fair value of the contingent consideration is 
recognised by discounting the estimated sums payable by the discount rate of equity financing. Unwinding of the discount 
is charged to finance costs over the relevant period. The fair value of share price at the date of acquisition for shares 
issued as part of the consideration is reflected in the cost of the investment. Investments are reviewed for impairment 
if events or changes in circumstances indicate the carrying value may not be recoverable.
Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow 
moving items. Inventories comprise completed product and work in process. The cost of inventories is calculated on 
a weighted average cost method. The cost included within inventories comprises direct materials and, where applicable, 
direct labour costs and an attributable portion of production overheads in bringing them to their present location 
and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated 
costs of completion and selling expenses.
Financial instruments
Financial assets and financial liabilities are recognised when the Group has become a party to the contractual 
provisions of the instrument. Collagen Solutions plc Annual report and accounts 2014
35
Financial statements
1 Accounting policies continued
Financial instruments continued
Trade receivables
Trade receivables, classified as loans and receivables, are recognised initially at fair value and subsequently measured 
at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of 
trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts 
due according to the original terms of receivables. The amount of provision is the difference between the asset’s 
carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.
Trade payables
Trade payables, classified as other liabilities, are initially recognised at fair value and subsequently at amortised 
cost using the effective interest method.
Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into. An instrument 
will be classified as a financial liability when there is a contractual obligation to deliver cash or another financial asset 
to another enterprise. Instruments that are settled through the delivery of a variable number of equity shares are 
classified as financial liabilities.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks and other short-term 
highly liquid investments with original maturities of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as 
defined above, net of any outstanding bank overdraft when it forms an integral part of the Group’s cash management.
Borrowings
Interest-bearing bank loans and overdrafts are initially recorded at fair value, which represents the fair value of the 
consideration received, net of any issue costs associated with the borrowings. Borrowings are subsequently stated 
at amortised cost.
Finance charges, including premiums payable on settlement or redemption, are accounted for on an accrual basis 
and are added to the carrying amount of the instrument to the extent that they are not settled in the period in 
which they arise. 
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement 
of the liability for at least twelve months after the reporting date. 
Contingent consideration 
Contingent consideration amounts arising from acquisitions are recorded at fair value having regard to the relevant 
discount rate of equity capital. The finance costs arising from unwinding the instrument over the period are charged 
through the Statement of Comprehensive Income. Amounts are reviewed annually against criteria for payment set 
out within the relevant sale and purchase agreements. 
Derecognition of financial instruments
The derecognition of financial assets takes place when the Group no longer controls the contractual rights that 
comprise the financial instrument, which is normally the case when the instrument is sold, or all of the cash flows 
attributable to the instrument are passed through to an independent third party. 
Leasing commitments
Rentals payable under operating leases, where substantially all the benefits and risks remain with the lessor, are 
charged to income on a straight line basis over the term of the relevant lease, except where another more systematic 
basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.  Collagen Solutions plc Annual report and accounts 2014
36
Notes to the financial statements continued
1 Accounting policies continued
Foreign currencies 
Items included in the financial statements of each of the Group’s entities are measured using the currency of the 
primary economic environment in which the entity operates (the functional currency). The consolidated financial 
statements are presented in sterling, which is the Company’s functional and the Group’s presentation currency. 
Amounts included within non-current assets in respect of amounts loaned to foreign subsidiaries have no fixed 
terms of repayment and there is no intention or expectation that repayment of such amounts will be demanded. 
Transactions in overseas currencies are translated at the exchange rate ruling at the date of the transaction. Foreign 
exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end 
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement 
of Comprehensive Income. 
The results and financial position of subsidiaries that have a functional currency different from the presentation 
currency are translated into the presentation currency as follows: 
(a)    assets and liabilities for each reporting date are translated at the closing rate at that date; and 
(b)   income and expenses are translated at average exchange rates (unless this average is not a reasonable 
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income 
and expenses are translated at the rate on the dates of the transactions). 
All resulting exchange differences are recognised in other comprehensive income in the translation reserve. 
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities 
of the foreign entity and translated at the closing rate. 
Taxation
Current tax is the expected corporation tax payable or receivable in respect of the taxable profit/loss for the financial 
period using tax rates enacted or substantively enacted at the reporting date, less any adjustments to tax payable 
or receivable in respect of previous periods.
Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and 
liabilities included in the financial statements and the amounts used for tax purposes that will result in an obligation 
to pay more, or a right to pay less or to receive more tax, with the following exceptions:
No provision is made relating to the initial recognition of assets or liabilities that affect neither accounting nor taxable 
profit other than those acquired as part of a business combination.
Provision is made for deferred tax that would arise on all taxable temporary differences associated with investments 
except where the Group can control the reversal of the temporary differences.
Deferred tax assets are recognised only to the extent that the directors consider that it is probable that there will be 
suitable taxable profits from which the future reversal of the underlying temporary differences and unused tax losses 
and credits can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods 
in which the asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted 
at the reporting date. 
Provisions 
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable 
that it will result in an outflow of economic benefits that can be reliably estimated. 
Share-based payment transactions 
The Group has applied the requirements of IFRS 2 Share-based payment. 
The Group issues equity-settled share-based payment transactions to certain employees and directors. Equity-settled 
share-based payment transactions are measured at fair value at the date of grant. The fair value determined at the 
grant date of equity-settled share-based payment transactions takes into account any non-vesting conditions and is 
expensed on a straight line basis over the vesting period, based on the Group’s estimate of share options that will 
eventually vest and a corresponding amount credited to the share-based payment reserve.  Collagen Solutions plc Annual report and accounts 2014
37
Financial statements
1 Accounting policies continued
Share-based payment transactions continued
Non-vesting conditions which are not satisfied during the vesting period are treated as cancellations and any 
remaining expense is accelerated in the period of failure. 
Share-based payments associated with share options granted to employees of subsidiaries of the parent company 
are treated as an expense of the subsidiary company to be settled by equity of the parent company. The share-based 
payment expense increases the value of the parent company’s investment in the subsidiaries and is credited to the 
share-based payment reserve. 
The proceeds received on exercise of share options are credited to share capital (for the nominal value) and share 
premium account (for the excess over nominal value). 
Fair value is measured by use of the Trinomial Barrier Option model. The expected life used in the model has been 
adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions and 
behavioural considerations. 
New standards and interpretations not applied
IASB and IFRIC have issued the following standards and interpretations, which are considered relevant to the Group, 
with an effective date after the date of these financial statements.
IFRS 10, IFRS 12, IAS 27, IAS 28 Investment Entities ( amended )
IFRS 2 Share-based Payment – Improvements 
IFRS 3 Business Combinations – Improvements
IFRS 8 Operating Segments – Improvements
IFRS 13 Fair Value Measurement – Improvements
IAS 24 Related Party Disclosures – Improvements
IFRS 9 Financial Instruments
IFRS 11 Joint Arrangements
IAS 16, IAS 38 Depreciation and Amortisation
IFRS 15 Revenue from Contracts with Customers 
IAS 19 Employee Benefits – Amendment 
The directors anticipate that the adoption of these standards and interpretations in future periods will have no 
material impact on the financial information when the relevant standards and interpretations come into effect. 
Critical accounting estimates and judgements 
The preparation of the financial information in conformity with IFRS requires management to make judgements, 
estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, 
income and expenses. The estimates and associated assumptions are based on historical experience and various 
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of 
making the judgements about carrying values of assets and liabilities that are both readily apparent from other 
sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed 
on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 
if the revision affects only that period or in the period of the revision and future periods if the revision affects both 
current and future periods. These assumptions include but are not limited to the following areas: 
Impairment of goodwill
The amount of goodwill initially recognised is dependent on the allocation of the purchase price to the fair value 
of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and 
liabilities is based, to a considerable extent, on management’s judgement. Goodwill is tested annually for impairment. 
The test considers future cash flow projections of cash-generating units that give rise to the goodwill. Where the 
discounted cash flows are less than the carrying value of goodwill, an impairment charge is recognised for 
the difference. The key assumptions for the value in use calculations are those regarding the discount rates, 
growth rates and expected changes to revenue and direct costs during the period.  Collagen Solutions plc Annual report and accounts 2014
38
Notes to the financial statements continued
1 Accounting policies continued
Critical accounting estimates and judgements continued
Fair values of acquired intangibles 
In respect of business combinations the purchase price is allocated to the identifiable assets and liabilities of the 
acquired entity. The Group makes judgements and estimates in relation to the fair value allocation of the purchase 
price and whether any value should be attributable to assets and liabilities not recognised in the acquiree’s individual 
financial statements such as customer contracts and relationships. If any unallocated portion is positive it is recognised 
as goodwill. The recognition criteria in IAS38 are applied to intangibles before allocating to goodwill in relation 
to development expenditure.
Management’s judgement is also required to estimate the useful lives of intangible assets, having reference to future 
economic benefits expected to be derived from the use of the asset. Economic benefits are based on the fair values 
of estimated future cash flows.
2 Loss from operations 
Loss from operations is stated after charging:
2014 
£ 
Amortisation 4,313
Depreciation of plant and equipment 12,647
Auditor’s remuneration
– as auditor 26,500
– other services 65,461
Operating lease costs:
Land and buildings, property plant and equipment 18,131
Research and development 37,446
Amounts payable to Baker Tilly UK Audit LLP and their associates in respect  
of both audit and non-audit services:
Audit Services:
– audit of Company 13,500
– audit of subsidiary undertakings 13,000
26,500
Non-Audit Services:
Fees payable to the Company’s auditor and its associates for other services:
– tax services 2,500
– corporate finance transactions 62,961
65,461
3 Particulars of employees 
The average number of staff employed by the Group, including executive directors, during the financial period 
amounted to:
2014
No. 
Operations 4
Administration 1
Management 2
7 Collagen Solutions plc Annual report and accounts 2014
39
Financial statements
3 Particulars of employees continued
The aggregate payroll costs, including directors’ emoluments, of the above were:
2014 
£ 
Wages and salaries 98,066
Social security costs 9,802
107,868
4 Directors’ emoluments
The directors’ aggregate emoluments in respect of qualifying services were:
2014 
£ 
Emoluments receivable 25,000
Fees 36,000
61,000
Emoluments of highest paid director:
2014
£
Total emoluments 18,750
5 Separately identifiable items 
2014
£
Included within administrative expenses:
Acquisition costs 74,769
74,769
6 Taxation
 2014
£
Current tax —
The charge for the period can be reconciled to the loss per the Consolidated Statement of Comprehensive Income as follows:
2014
£
Loss on ordinary activities before tax (479,998)
Tax at the UK corporation tax rate of 20% (96,000)
Expenses not deductible for tax purposes 34,915
Tax losses not recognised as a deferred tax asset 61,085
Tax for period —
Unrecognised deferred tax asset 61,085
The unrecognised deferred tax asset relates to losses. This has not been recognised as an asset in the Consolidated 
Statement of Financial Position due to the uncertain timing of its crystallisation. Collagen Solutions plc Annual report and accounts 2014
40
Notes to the financial statements continued
7 Loss per share 
The calculation of basic loss per ordinary share is based on losses of £(479,998) and on 43,668,474 ordinary shares 
being the weighted average number of shares in issue during the period. 
The loss for the period and the weighted average number of ordinary shares for calculating the diluted loss per share 
for the period ended 31 March 2014 are identical to those for the basic loss per share. This is because the outstanding 
share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive under 
the terms of International Accounting Standard (IAS) No. 33.
8 Intangible assets
 Goodwill on Purchased Customer
Group acquisition goodwill contracts Total
2014 £ £ £ £
Cost
Arising on the acquisition of subsidiary undertaking 3,953,334 — 34,496 3,987,830
Arising on the acquisition of business of Collagen Solutions LLC — 2,958,586 — 2,958,586
Currency translation — (47,705) — (47,705)
At 31 March 2014 3,953,334 2,910,881 34,496 6,898,711
Amortisation
Charge for the period — — (4,313) (4,313)
At 31 March 2014 — — (4,313) (4,313)
Net book value 
At 31 March 2014 3,953,334 2,910,881 30,183 6,894,398
Impairment review 
The goodwill which arises from the acquisition of the Collbio Group on 2 January 2014 has been reviewed for impairment, 
and in the opinion of the directors there is no adjustment required in view of the relatively short time between that 
date and the end of the financial period. The impairment test involves calculating the recoverable amount which is 
based on the present value of expected future cash flows of the CGUs. The key assumptions underlying the cash flow 
projections within the impairment review are revenue growth, margins, the level of operating expenditure and the 
amount of capital expenditure. The cash flow projections are based on formally approved management cash flow 
projections for a three year period, and extrapolated for a further two years based based on similar levels of growth. 
A terminal value is calculated based on estimated real growth rate in perpetuity of 2.25% and rate of inflation in 
perpetuity of 3%, together with a pre-tax discount rate of 10%. Collagen Solutions plc Annual report and accounts 2014
41
Financial statements
9 Property, plant and equipment 
Plant,
equipment
Group and machinery
2014 £
Cost
Additions 426
Arising on the acquisition of business of Collagen Solutions LLC 20,215
Arising on acquisition of subsidiary undertaking 224,490
At 31 March 2014 245,131
Depreciation
Charge for the period 12,647
At 31 March 2014 12,647
Net book value
At 31 March 2014 232,484
10 Financial asset investments 
2014
Company: £
Investments in subsidiaries:
Acquisition of Collbio Limited 2,320,000
Contingent consideration 1,782,122
4,102,122
Inter-company loan 2,461,256
At 31 March 2014 6,563,378
Details of subsidiaries, all wholly owned and included in the consolidated financial statements, are as follows:
Proportion of
voting rights
Country of and shares
 incorporation Holding held Nature of business
Collagen Solutions (UK) Limited
(formerly Collbio Limited) England Ordinary shares 100% Collagen Manufacture 
Collagen Solutions (US) Inc. USA Ordinary shares 100% Collagen Manufacture
Impairment review 
The recoverable amount of investments is determined from value in use calculations when there is an indication of 
impairment. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates 
and future expected changes to revenue and direct costs in relation to the particular investment, and are set out 
in note 8. 
Management estimates that there has been no impairment since the date of acquisition on 2 January 2014. 
The Group prepares forecasts derived from the most recent financial budgets. Changes in revenue and direct costs 
are based on past practices and expectations of future changes in the market. These are approved by management 
and cash flows extrapolated thereafter in perpetuity. 
Based on the assumptions and estimates discussed above, management believes that no impairment provision 
is required. Collagen Solutions plc Annual report and accounts 2014
42
Notes to the financial statements continued
10 Financial asset investments continued
Acquisition 
On 2 January 2014 the Company completed the acquisition of the entire issued share capital of Collbio Limited, now 
Collagen Solutions (UK) Limited, for a maximum consideration of up to £4 million. Initial consideration of £2 million 
was satisfied by £2 million in new ordinary shares issued at 12.5p per share, although the actual share price on date 
of admission had increased to 14.5p. In addition, a performance consideration payable is contingent on the future 
sales revenues up to the period ended 28 February 2017 and successfully entering into three new supply agreements 
by the end of the same period.
The contingent consideration is to be satisfied by £2 million through the issue of new ordinary shares. It is anticipated 
at this time that the consideration will be payable in full and has been provided for on that basis. The fair value of this 
contingent consideration included at the balance sheet date is £1,782,122.
Also on 2 January 2014, Collagen Solutions (UK) Limited acquired the net assets of Collagen Solutions LLC through its 
wholly owned subsidiary company, Collagen Solutions (US) Inc., for a maximum consideration of up to £3,092,133. Initial 
consideration was £1,398,985 in cash and £1,062,271 of new ordinary shares, at 14.5p per share in Collagen Solutions plc. 
In addition, a performance consideration payable in two tranches is contingent on the future sales revenues up to the 
period ended 28 February 2017. The contingent consideration is to be satisfied by two payments of up to £630,877 
in total in cash when the target criteria are met. 
At the date of acquisition the relevant Collbio Limited assets comprised the following: 
Fair value
Book value adjustment Fair value
£ £ £ 
Assets
Non-current assets
Intangible assets – customer contracts — 34,496 34,496
Property, plant and equipment 24,490 200,000 224,490
24,490 234,496 258,986
Current assets
Inventories 2,500 — 2,500
Trade and other receivables 38,283 — 38,283
Cash and cash equivalents 15,471 — 15,471
56,254 — 56.254
Total assets 80,744 234,496 315,240
Current liabilities
Trade and other payables 166,452 — 166,452
Total liabilities 166,452 — 166,452
Net (liabilities)/assets (85,708) 234,496 144,788
Goodwill arising on acquisition 3,953,334
4,102,122
Settled by:
16,000,000 ordinary shares at 14.5p per share 2,320,000
Contingent consideration 1,782,122
4,102,122
Net cash acquired with subsidiary undertaking 15,471
This strike price at which the consideration shares were issued was 12.5p per share per the Admission document, 
and that on 27 December 2013, when the transaction was approved by the shareholder in general meeting. 
It was 2 January 2014 until the shares were admitted to AIM.
Acquisition costs relating to the acquisition of Collbio Limited and under IFRS 3 (revised) are written off 
to comprehensive income as incurred.  Collagen Solutions plc Annual report and accounts 2014
43
Financial statements
10 Financial asset investments continued
Acquisition continued
At the date of acquisition the relevant Collagen Solutions LLC assets acquired comprised the following:
Fair value
Book value adjustment Fair value
£ £ £ 
Assets
Non-current assets
Property, plant and equipment 20,215 — 20,215
Current assets
Inventories 23,428 — 23,428
Trade and other receivables 63,242 — 63,242
Cash and cash equivalents 26,662 — 26,662
113,332 — 113,332
Total assets 133,547 — 133,547
Total liabilities — — —
Net assets 133,547 — 133,547
Goodwill arising on acquisition 2,958,586
3,092,133
Settled by:
Cash consideration 1,398,985
7,326,007 ordinary shares at 14.5p per share 1,062,271
Contingent consideration 630,877
3,092,133
Net cash outflow resulting from acquisition
Cash consideration 1,398,985
Net cash acquired on acquisition (26,662)
The strike price at which the consideration shares were issued was 12.5p being the price per the Admission document 
and that on 27 December 2013 when the transaction was approved by the shareholders in general meeting. It was 
2 January 2014 until the shares were admitted to AIM.
Goodwill arising from the acquisition consists mainly of the anticipated synergies and economies of scale from combining 
and integrating the UK and US businesses as one Group. The know-how, and products under development in both 
businesses acquired were reviewed against the recognition and definition criteria in IAS38 and it was considered 
that as a result of that review none of the expenditure met the criteria or was separately identifiable.
11 Inventories
2014
Group £
Consumables and finished goods for resale 39,265
Inventories expensed in the Consolidated Statement of Comprehensive Income are shown within cost of sales. 
All inventories are carried at the lower of cost or net realisable value.  Collagen Solutions plc Annual report and accounts 2014
44
Notes to the financial statements continued
12 Trade and other receivables
Group Company
2014 2014 
£ £ 
Trade receivables 18,048 —
Other receivables 107,889 93,129
Amounts owed by Group undertakings (note 19) — 195,322
Prepayments and accrued income 41,099 29,367
167,036 317,818
The directors consider that the carrying amount of trade and other receivables approximates to their fair value. 
Included within trade receivables is £15,798 denominated in US dollars. 
The amounts presented in the Statement of Financial Position are net of impairment allowances. The ageing profile 
of trade receivables is shown below.
2014
£ 
Current 3,000 
31–60 days old 5,188 
60–90 days old 1,215 
Over 90 days 8,645 
18,048
The directors are of the opinion that none of the overdue debts require impairment. 
13 Cash and cash equivalents 
Cash and cash equivalents comprise cash held by the Group. The carrying amount of the asset approximates the fair value. 
Balances are held in sterling (£1,480,465) and US dollars ($18,654). Cash and cash equivalents held by the Company 
was £1,477,822.
14 Current liabilities 
Group Company
2014 2014 
Trade and other payables : £ £ 
Trade payables 45,775 12,000
Social security and other taxes 9,589 —
Director’s loan 53,468 —
Accruals and deferred income 50,744 46,827
159,576 58,827
The carrying amount of trade and other payables approximates to their fair values. 
Group Company
2014 2014 
Other financial liabilities : £ £ 
Contingent consideration 2,409,236 1,782,122
The contingent consideration becomes payable if certain sales targets are reached over the course of the period to 
28 February 2017 and/or if a number of supply contracts are concluded. In making the maximum provision under the 
agreement, management has taken the view that based on current information the relevant targets will be reached. Collagen Solutions plc Annual report and accounts 2014
45
Financial statements
15 Financial liabilities and assets 
The Group’s treasury policy and management of financial instruments, which form part of these financial statements, 
are set out in the financial review. 
Group 2014 Company 2014
Loans and Other Loans and Other
receivables liabilities receivables liabilities
£ £ £ £
Contingent consideration — 2,409,236 — 1,782,122
Trade and other receivables 167,036 — 317,818 —
Cash and cash equivalents 1,491,660 — 1,477,822 —
Trade and other payables — 159,576 — 58,827
Total 1,658,696 2,568,812 1,795,640 1,840,949
Currency derivatives 
The Group and Company have not utilised forward contracts to hedge future purchase transactions and cash flows 
in the financial period.
Credit risk 
The Group and Company’s credit risk is primarily attributable to trade receivables and cash and cash equivalents 
although all cash is held on deposit with a highly reputable financial institution. 
Credit risk with respect to trade receivables is due to the Group and Company’s trading with a limited number of companies 
who are generally large listed or blue chip medical device companies. Therefore the Group or Company does not expect 
in the normal course of events that these debts are at significant risk. The Group and Company’s maximum exposure 
to credit risk is reflected in the carrying amounts of its financial assets as set out in the table in this note. 
The Group and Company have no significant concentration of credit risk in respect of their trade receivables 
as the exposure is spread over a number of customers. 
Interest rate risk 
The Group and Company’s interest rate exposure is limited to its cash and cash equivalents. Cash and cash 
equivalents are held on short-term deposit attracting variable rates of interest. 
Liquidity risk 
All trade and other payables and currency derivatives contracted at the reporting date have a settlement date 
of less than twelve months. 
Contingent consideration
The contingent consideration relating to the purchase consideration on the acquisitions made during the period has 
been discounted to reflect the fair value of the future cash outflows based on the Directors’ best estimate of when 
such sums will become payable under the terms of the agreement.
Interest rate risk profile of financial assets 
The Group and Company’s financial assets at 31 March 2014 comprise cash and trade receivables. The cash balances of 
£1,491,660 (Group) and £1,477,822 (Company) are floating rate financial assets. Trade receivables are non-interest bearing. 
Fair values of financial liabilities and financial assets
The fair values based upon the market value or discounted cash flows of financial liabilities and financial assets, 
held in the Group and Company were not materially different from their book values. 
Finance and interest rate risk
Where appropriate, the Group and Company manage their exposure to interest rate fluctuations on their borrowings 
to reduce the impact of adverse variations in the market rates on the Group’s profit and cash flow. 
Currency risk 
The Group and Company have overseas revenues in US dollars. 
The Group and Company’s activities expose them primarily to currency risk. However this risk is mitigated by the fact that 
there is a requirement to settle the costs including salary and fixed overheads of the facility in San Jose in US dollars, thus 
reducing the exposure to currency risk. The Group and Company can use foreign exchange forward contracts if required 
to hedge this exposure. There were no foreign exchange rate contracts at the balance sheet date. The Group does not use 
derivative financial instruments for speculative purposes. The use of financial derivatives is governed by the Group’s 
policies approved by the Board of Directors, which provides written principles for the use of financial derivatives. Collagen Solutions plc Annual report and accounts 2014
46
Notes to the financial statements continued
16 Deferred taxation  
At the reporting date, the Group has unused tax losses of £305,423 available for offset against future profits. 
A deferred tax asset of £61,085 has not been recognised in respect of such losses.
17 Commitments under operating leases  
At 31 March 2014 the Group had outstanding commitments for future minimum lease payments under non-cancellable 
operating leases, which fall due as follows:
Group Company
2014 2014
£ £ 
Land and buildings:
Within one year 41,905 —
Between one and five years 53,319 53,319
95,224 53,319
Operating lease charge for the period amounted to £18,131 The remaining lease term for property is five years.
18 Share-based payment transactions 
The Company has granted equity-settled share options to one of the directors. The exercise price is the market value 
of the shares at the date of grant of 10p. The vesting period is up to ten years. If the options remain unexercised after 
a period of ten years from the date of grant, the options expire. The first vesting criterion has been achieved and the 
second criterion is for share price to reach 20p. 
A reconciliation of option movements over the period to 31 March 2014 is shown below: 
2014
Weighted
Number average
of share exercise price
options (in p)
Granted during the period 4,050,000 10
Outstanding at the end of the period 4,050,000 10
Exercisable at 31 March 2014 — —
The Group recognised the following expense in relation to share-based payment transactions: 
2014 
£ 
Charged to Consolidated Statement of Comprehensive Income 24,647
The options outstanding at 31 March 2014 had a weighted average exercise price of 10p and a weighted average 
remaining contractual life of nine years.
The fair value of options granted under the scheme is measured by use of the Trinomial Barrier Option model.
The inputs into the model for options granted during the period are as follows: 
Director Option
Grant date 29/03/2013
Share price at grant date 10p
Exercise price 10p
Number of employees 1
Share options granted 4,050,000
Vesting period (years) 1–10
Expected volatility 30%
Option life (years) 10
Expected life (years) 1–10
Risk free rate 2.6%
Expected dividends expressed as a dividend yield 0%
Fair value per option 4p Collagen Solutions plc Annual report and accounts 2014
47
Financial statements
18 Share-based payment transactions continued
Expected volatility was based upon the historical volatility over the expected life of the schemes. The expected 
life is based upon historical data and has been adjusted based on management’s best estimates for the effects 
of non-transferability, exercise restrictions and behavioural considerations.
19 Related party transactions 
Transactions with key management 
Key management personnel compensation comprised:
2014 
£ 
Equity-settled share options 24,647
Short-term benefits (including NIC) 64,348
Total remuneration 88,995
At 31 March 2014, one of directors participated in a share option arrangement as noted in the Directors’ Report. 
At 31 March 2014, there was an outstanding loan due to a shareholder director of £53,468. 
A number of these entities transacted with the Group in the reporting period. The terms and conditions of the 
transactions with key management personnel and their related parties were no more favourable than those available, 
or which might reasonably be expected to be available, on similar transactions to non-key management personnel related 
entities on an arm’s length basis.
Transactions between Group companies 
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation 
and are not disclosed in this note. The transactions during the period were mainly made up of management charges 
and amounts transferred to subsidiaries. 
The outstanding balance due to the Company from its subsidiaries as at 31 March 2014 was £2,656,578. During the 
period the Company provided net funding of £1,560,000. 
Investment 
An investment of 50 ordinary 1p shares at nominal value was made by Collagen Solutions (UK) Limited in July 2013 
in Jellagen Pty Limited, a company involved in the production of jellyfish collagen. This represented a 5% holding. 
In March 2014, a further 100 shares were purchased at nominal value from David Evans, increasing the holding to 15%. 
In April 2014, Jellagen completed a second funding round which diluted the holding to 10.5%. No value is carried on 
the balance sheet. Collagen Solutions (UK) Limited provided development services to Jellagen Pty Limited under 
terms in the normal course of business. 
Other 
Diagnostic Capital Limited, a company in which David Evans and Kevin Wilson have an interest, provided outsourced 
finance director services to Collagen Solutions (UK) Limited (formerly Collbio) on a time and materials basis , and 
corporate finance services in relation to the acquisition made in the period. These services were charged at normal 
market rates. 
20 Share capital
2014
£
Authorised:
93,826,007 ordinary 1p shares  938,260
500,000 deferred 9p shares 45,000
No. £ 
Issued and fully paid:
Issued ordinary shares of 1p 63,826,007 638,260
Issued deferred shares of 9p 500,000 45,000
Balance at 31 March 2014 64,326,007 683,260 Collagen Solutions plc Annual report and accounts 2014
48
Notes to the financial statements continued
20 Share capital continued
Ordinary shares 
The total number of issued shares at 31 March 2014 was 63,826,007. 
On incorporation the issued share capital of the Company was £1 divided into one ordinary share of £1. 
On 26 March 2013, the ordinary share of £1 each was subdivided into ten ordinary shares of 10p each and these were 
issued for a cash consideration of 10p per share.
on 26 March 2013, the Company issued 499,990 ordinary shares of 10p each at par. 
On 28 March 2013, each ordinary share of 10p was subdivided into one ordinary share of 1p and one deferred share of 
9p in the capital of the Company, resulting in 500,000 ordinary shares and 500,000 deferred shares of 9p each in issue. 
On 5 April 2013, 40,000,000 shares were issued pursuant to a placing for cash consideration at a price of 10p per share. 
On 2 January 2014 as part of the initial consideration for the acquisition of Collbio Limited 16,000,000 shares were 
issued pursuant to a placing at a price of 12.5p per share and at the same time a further 7,326,007 shares were issued 
at a price of 12.5p as part of the initial consideration for the acquisition of the net assets of Collagen Solutions LLC. 
The fair value of these shares at 2 January 2014 was 14.5p.
Deferred shares
The total number of deferred shares at 31 March 2014 was 500,000. The deferred shares do not confer any voting rights.
Options
At 31 March 2014 the Company had 4,050,000 unissued ordinary shares of 1p each under the Company’s share option 
schemes, details of which are as follows: 
Option price Date from
Grant date Number pence which exercisable Expiry date
29 March 2013 4,050,000 10 2 January 2014 28 March 2023
Details of share options are disclosed in note 18 of the accounts. 
Capital management 
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern 
in order to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to 
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 
Both share capital and the share premium account arise on the issue of shares. The retained deficit reflects losses 
incurred to date. 
Share‑ based payment reserve
This reserve is the result of the Company’s grant of equity-settled share options to selected employees and measured 
in accordance with IFRS 2 Share-based payment. 
Translation reserve
The translation reserve arises from the retranslation of the foreign subsidiary into the presentational currency 
of the Group on consolidation.
Merger reserve
This reserve arises from the premium on the difference between the fair value share price of Collagen Solutions plc 
shares issued as consideration shares on 2 January 2014 and the nominal value of those shares. Consideration shares 
were issued to satisfy part of the consideration in the acquisition of Collbio Limited and the business and assets of 
Collagen Solutions LLC.
21 Contingent liabilities  
Group and Company
At 31 March 2014, there were no contingent liabilities. Collagen Solutions plc Annual report and accounts 2014
49
Financial statements
Notice of Annual General Meeting
Collagen Solutions plc
(Registered number 8446337)
Notice is hereby given that an Annual General Meeting of Collagen Solutions plc (the “Company”) will be held at 
3 Robroyston Oval, Nova Business Park, Glasgow G33 1AP at 11.00am on 27 August 2014 for the following purposes:
To consider and, if thought fit, pass the following as ordinary resolutions: 
1.  To receive and adopt the Company’s accounts for the financial period ended 31 March 2014, together with the Directors’ 
Report and the Auditors’ Report on those accounts.
2. To re-elect Gillian Black as a director of the Company. 
3. To re-elect David Evans as a director of the Company.
4. To re-elect Malcolm Gillies as a director of the Company.
5. To re-elect Stewart White as a director of the Company.
6. To re-elect Kevin Wilson as a director of the Company.
7. To re-appoint Baker Tilly UK Audit LLP as auditors of the Company. 
8. To authorise the directors to fix the auditors’ remuneration.
9. That:
 (A)  the directors be generally and unconditionally authorised to allot shares in the Company, or to grant rights 
to subscribe for or to convert any security into shares in the Company, up to a maximum nominal amount 
of £212,753.36;
 (B)  in addition to the authority contained in sub-paragraph (A) of this resolution, the directors be authorised to 
allot shares in the Company, or to grant rights to subscribe for or to convert any security into shares in the 
Company, comprising equity securities (within the meaning of section 560(1) of the Companies Act 2006 
(the “Act”)) up to a maximum nominal amount of £212,753.36 in connection with a Pre-Emptive Offer 
undertaken by means of a rights issue;
 (C) the authorities given in this resolution:
  (1)  are given pursuant to section 551 of the Act and shall be in substitution for all pre-existing authorities under 
that section; and
  (2)  unless renewed, revoked or varied in accordance with the Act, shall expire on 30 September 2015, or, if earlier, 
at the end of the next annual general meeting of the Company to be held in 2015, save that the Company 
may before such expiry make an offer or agreement which would or might require the allotment of shares 
in the Company, or the grant of rights to subscribe for or to convert any security into shares in the 
Company, after such expiry; and
 (D) for the purpose of this resolution, “Pre-Emptive Offer” means an offer of equity securities to:
  (1)  holders of ordinary shares (other than the Company) on a fixed record date in proportion to their 
respective holdings of such shares; and
  (2)  other persons entitled to participate in such offer by virtue of, and in accordance with, the rights attaching 
to any other equity securities held by them,
   in each case, subject to such exclusions or other arrangements as the directors may deem necessary or 
appropriate in relation to fractional entitlements, legal, regulatory or practical problems under the laws 
or the requirements of any regulatory body or stock exchange of any territory or otherwise. Collagen Solutions plc Annual report and accounts 2014
50
Notice of Annual General Meeting continued
Collagen Solutions plc
(Registered number 8446337)
To consider and, if thought fit, pass the following as a special resolution:
10. That:
 (A)  subject to the passing of resolution 9 set out in the notice of Annual General Meeting dated 29 July 2014 
(the “Allotment Authority”), the directors be given power pursuant to section 570 of the Companies Act 2006 
(the “Act”) to allot equity securities (within the meaning of section 560(1) of the Act) for cash, pursuant to the 
Allotment Authority as if section 561(1) of the Act did not apply to any such allotment, provided that such 
power shall be limited to the allotment of equity securities:
  (1) in the case of paragraph (A) of the Allotment Authority: 
   (a) in connection with a Pre-Emptive Offer (as defined in the Allotment Authority); or
   (b) otherwise than in connection with a Pre-Emptive Offer, up to a maximum nominal amount of £63,826;
  (2)  in the case of paragraph (B) of the Allotment Authority, in connection with a Pre-Emptive Offer undertaken 
by means of a rights issue; and
 (B) the power given in this resolution:
  (1) shall be in substitution for all pre-existing powers under section 570 of the Act; and
  (2)  unless renewed in accordance with the Act, shall expire at the same time as the Allotment Authority, 
save that the Company may before such expiry make an offer or agreement which would or might require 
equity securities to be allotted after such expiry.
By Order of The Board
Gill Black
Company Secretary
29 July 2014
Registered Office:
c/o Shepherd and Wedderburn LLP
Condor House
10 St Paul’s Churchyard
London EC4M 8AL
England Collagen Solutions plc Annual report and accounts 2014
51
Financial statements
Notes
1.  A member of the Company entitled to attend and vote at the meeting convened by this notice is entitled to 
appoint one or more proxies to exercise any of his/her rights to attend, speak and vote at that meeting on his/her 
behalf. If a member appoints more than one proxy, each proxy must be entitled to exercise the rights attached 
to different shares. A proxy need not be a member of the Company. 
2.  A proxy may only be appointed using the procedures set out in these notes and the notes to the proxy form. 
To appoint a proxy, a member may complete, sign and date the enclosed proxy form and deposit it at the office 
of the Company’s Registrars, Capita Asset Services, at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 
4TU by 11.00am on 25 August 2014. Any power of attorney or any other authority under which the proxy form is 
signed (or a duly certified copy of such power or authority) must be enclosed with the proxy form.
3.  In order to revoke a proxy appointment, a member must sign and date a notice clearly stating his/her intention 
to revoke his/her proxy appointment and deposit it at the office of the Company’s Registrars, Capita Asset Services, 
at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU prior to the commencement of the meeting.
4.  Any corporation which is a member of the Company may authorise one or more persons (who need not be a 
member of the Company) to attend, speak and vote at the meeting as the representative of that corporation. 
A certified copy of the board resolution of the corporation appointing the relevant person as the representative 
of that corporation in connection with the meeting must be deposited at the office of the Company’s Registrars 
prior to the commencement of the meeting.
5.  The right to vote at the meeting shall be determined by reference to the register of members of the Company. 
Only those persons whose names are entered on the register of members of the Company at 6.00pm 
on 25 August 2014 shall be entitled to attend and vote in respect of the number of shares registered in their 
names at that time. Changes to entries on the register of members after that time shall be disregarded in 
determining the rights of any person to attend and/or vote at the meeting. Collagen Solutions plc Annual report and accounts 2014
52
Notice of Annual General Meeting continued
Collagen Solutions plc
(Registered number 8446337)
Explanatory notes to the Notice of Annual General Meeting
These notes give an explanation of the proposed resolutions. Resolutions 1 to 9 are proposed as ordinary resolutions. 
This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the 
resolution. Resolution 10 is proposed as a special resolution. This means that for resolution 10 to be passed, at least 
three-quarters of the votes cast must be in favour of the resolution.
Resolution 1 – Annual report and accounts
The directors must lay the Company’s accounts, the Directors’ Report and the Auditors’ Report before the shareholders 
in a general meeting. This is a legal requirement after the directors have approved the accounts and the Directors’ 
Report, and the auditors have prepared their report.
Resolutions 2 to 6 – Re-election of directors
The Company’s Articles of Association require that at the first Annual General Meeting of the Company all the 
directors must retire from office. Accordingly, Gillian Black, David Evans, Malcolm Gillies, Stewart White and Kevin 
Wilson will offer themselves for re-election at the Annual General Meeting.
Biographical details of the directors are set out on pages 16 and 17 of the annual report and accounts. 
Resolutions 7 and 8 – Re-appointment and remuneration of auditors
The Company is required to appoint auditors for each financial year of the Company. Resolution 7 proposes the 
re-appointment of Baker Tilly UK Audit LLP as the Company’s auditors for the current financial year of the Company 
ending on 31 March 2015. Resolution 8 seeks authority for the directors to decide the auditors’ remuneration.
Resolution 9 – Renewal of authority to allot shares 
The purpose of this resolution is to renew the directors’ power to allot shares. Section 551 of the Companies Act 2006 
(the “Act”) provides that the directors may not allot new shares (other than for employee share schemes) without 
shareholder approval. This resolution proposes that authority be granted in substitution of the existing authority to 
allot securities up to a maximum amount of £212,753.36, representing approximately one-third of the Company’s total 
issued ordinary share capital as at 15 July 2014, being the latest practicable date prior to publication of this document.
In addition, following guidance issued by the ABI in December 2008 and updated in November 2009, the Company 
is seeking additional authority to allot securities in connection with a fully pre-emptive rights issue up to a maximum 
amount of £212,753.36, representing approximately one-third of the Company’s total issued ordinary share capital as 
at 15 July 2014, being the latest practicable date prior to publication of this document. The benefit to the Company 
of obtaining such authority on an annual basis is that it would allow the Company to implement a rights issue of 
an amount equal to two-thirds of the issued ordinary share capital without the need to call an additional general 
meeting. This would shorten the implementation timetable of such a rights issue. 
The directors consider that the authorities sought pursuant to resolution 9 are desirable to allow the Company to 
retain flexibility although they have no present intention of exercising these authorities. The authorities will expire at 
the end of the 2015 annual general meeting or, if earlier, on 30 September 2015, unless previously cancelled or varied 
by the Company in general meeting. 
Resolution 10 – Disapplication of pre-emption rights
Section 561(1) of the Act provides that if the directors wish to allot any equity securities, or sell any treasury shares 
(if it holds any), for cash, it must first offer them to existing shareholders in proportion to their existing shareholdings. 
Section 561 does not apply in connection with an employee share scheme. The purpose of this resolution is to allow 
the directors to allot equity securities for cash as if section 561(1) of the Act does not apply, in connection with rights 
issues, open offers and other pre-emption offers pursuant to the authority granted by resolution 9, and otherwise up 
to a total amount of £63,826, representing approximately 10% of the Company’s total issued ordinary share capital 
as at 15 July 2014, being the latest practicable date prior to publication of this document. This power is being sought 
in order to give the Company the flexibility to raise funds in the future should it choose to do so. 
The authority will expire at the end of the 2015 annual general meeting or, if earlier, on 30 September 2015, 
unless previously cancelled or varied by the Company in general meeting. Collagen Solutions plc Annual report and accounts 2014
Directors
D E Evans – Non-executive Chairman
MJ Gillies – Non-executive Director 
Dr K W Wilson – Non-executive Director
Dr S White – Chief Executive Officer
G N Black – Chief Financial Officer
Company secretary
G N Black
Registered office
C/o Shepherd and Wedderburn LLP
Condor House
10 St. Paul’s Churchyard
London EC4M 8AL
Nnminated adviser and broker
Zeus Capital Limited
23 Berkeley Square
London W1J 6HE
Auditors
Baker Tilly UK Audit LLP
Chartered Accountants
3 Hardman Street
Manchester M3 3HF
Registrar
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
PR
Walbrook PR Limited
4 Lombard Street
London EC3V 9HD
Officers and professional advisers Collagen Solutions plc Annual report and accounts 2014
C/o Shepherd and Wedderburn LLP
Condor House
10 St. Paul’s Churchyard
London EC4M 8AL
www.collagensolutions.com Collagen Solutions plc Annual report and accounts 2014