Materials for life
Collagen Solutions plc Annual report and accounts 2016
Collagen Solutions plc Annual report and accounts 2016 We are a global supplier, developer and manufacturer 
of collagen-based biomaterials and medical devices, 
including tissue scaffolds for use in regenerative 
medicine. Our aim is to create value with consistent 
and sustainable growth of this core business whilst 
developing novel medical devices for licensing to 
distribution partners.
Our vision – To become 
the industry’s first choice 
for regenerative biomaterials.
Financial highlights
Revenue and other income 
£3,244,257
Cash and cash equivalents 
£2,493,146
2016
2016
2015
2015
2014
2014
£3,244,257
£2,493,146
£3,391,356
£1,491,660
*  Before the credit for release of 
contingent consideration provision 
of £152,365 (2015: charge of £155,131) 
in relation to the Southern Lights 
Biomaterials acquisition.
STRATEGIC REPORT
Financial highlights to be updated
£1,035,500
£24,023
Gross profit margin 
74.1%
2016 2015 2014
74.1%
78.0%
49.7%
LBITDA* 
£(410,016)
2016 2015 2014
£(410,016)
£(689,816)
£(388,269) Operational highlights
• ChondroMimetic family IP and assets acquisition
• Strong sales and operating performance from Southern 
Lights Biomaterials acquisition
• Distribution channels set up with Sigma, part of Merck KGaA, 
BBI Solutions and through a Chinese joint venture with Cre8ive
• US patent granted for novel processing of pericardium 
for the benefit of heart surgery patients
• Expansion of our global customer and raw materials 
sourcing base
• Investment in our global R&D facilities
• Investment in our global sales and marketing operations
Strategic report
IFC Highlights
2 At a glance
4 Chairman’s statement
6 Chief Executive’s statement
8  Our business model
9 Customer approach and dynamics
10  Our core products and applications
13  Future innovation through  
research partnerships
14 Strategic initiatives for scalable growth
15 Strategic report
18 Financial review
Corporate governance
20 Board of directors
22 Corporate governance
24 Directors’ remuneration report
25 Directors’ report
Financial statements
27 Independent auditor’s report
28  Consolidated statement 
of comprehensive income
29  Consolidated statement 
of financial position
30  Company statement of financial position
31  Consolidated statement of changes 
in equity
32  Company statement of changes in equity
33 Consolidated statement of cash flows
34 Company statement of cash flows
35 Notes to the financial statements
56 Notice of Annual General Meeting
60 Officers and professional advisers
Visit our NEW website:
www.collagensolutions.com
1 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS At a glance
Our products and services are utilised in the 
research, diagnostics, medical devices and 
regenerative medicine markets worldwide.
Focused strategy...
We have a focused business model built upon a core 
biomaterials development supply and manufacturing 
platform, enhanced by our development of proprietary 
finished devices for licensing to distribution partners.
View our business model Page 8
Distribution  
and licensing
Owned products
Biomaterials core 
business
$1.5bn+
market opportunity*
Experienced team...
We have scientific expertise and a collaborative 
approach, providing a faster time to market, 
improved production and a superior product 
range for our customers.
View our Strategic Report Page 15
We aim to foster a culture of responsiveness and 
engagement, reflecting our global team’s talents 
in biomaterials science and production, and market 
knowledge. Collagen Solutions invests in talent review 
and development programmes to ensure our people 
enhance their technical, business and customer 
interaction skills.
• 
Experienced global team in collagen  
and biomaterials
• 
>50% of our employees have advanced 
technical degrees
• 
>85% of our employees have experience 
in customer markets
• 
Broad technology range, novel IP and unique 
experience and know-how
* Hardman research note, 24 September 2014 (Collagen Solutions website).
STRATEGIC REPORT
2 Collagen Solutions plc Annual report and accounts 2016 Global operations reach
Collagen Solutions is a global business serving a diverse and expanding 
customer base across North America, Asia Pacific and Europe.
Asia Pacific
North  
America
EMEA
USA
Global commercial headquarters
Minneapolis, MN
UK
European regional  
headquarters
Sterile supply and device  
manufacturing
Glasgow, Scotland
New Zealand
Asia Pacific regional headquarters
Primary processing
Sourcing and clean room manufacturing
Marton
USA
R&D and distribution
Formulations and device development
San Jose, CA
South Korea
Asia Pacific 
commercial office
Seoul
3 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Chairman’s statement
“ Our Board and management team have been 
strengthened this year and have set the vision and 
clear strategic initiatives to achieve our goals.”
 David Evans, Chairman
Summary
• We now have many additional customer 
opportunities in both North America and Asia.
• The benefits of having ‘sticky’ revenues from 
embedded products will ensure 70% of the 
Group’s ongoing revenues are secured.
• The acquisition of ChondroMimetic represents 
a significant value creating opportunity.
I am pleased to present Collagen Solutions’ annual report 
and accounts for the year ended 31 March 2016. 
Revenue growth
The year under review has been one of positive progress for 
the Group as a whole, with a very strong contribution to revenue 
growth from Southern Lights Biomaterials, which we acquired in 
December 2014. This has enhanced our global reach and provided 
access to safe new tissue and biomaterial sourcing in New Zealand 
and Australia, which are negligible BSE risk sources. In addition, we 
now have many additional customer opportunities in North America 
and especially in Asia, where we have now appointed an experienced 
Regional Commercial Manager in Korea. We have invested in a new 
multi-purpose processing facility in New Zealand to allow product 
development and prototyping to be carried out without disruption 
to our main contract manufacturing operations. As part of this 
investment we have also increased our headcount in quality 
assurance, R&D and production functions there.
Innovation and IP
In September, we were able to acquire an exclusive IP licence to 
a very exciting biomaterials platform technology based around 
a bi-layered collagen sponge which is the result of many years’ 
research at the University of Cambridge and MIT. It is my view that 
we have the ability to create significant strategic value through 
appropriate partnering and investment in a way that de-risks 
the Company’s opportunity in collagen biomaterial applications.
In May, we announced the granting of a US patent for the processing 
of a novel biomaterial for heart valve surgery patients and other 
applications. During the course of the last year we have announced 
collaborations with various academic and industry partners, 
including our participation in a prestigious European Horizon 2020 
consortium to develop a disease-modifying therapy for Parkinson’s 
which could slow down the progression of the disease rather than 
offer symptomatic benefits.
Board and management
In November 2015, we sadly lost the talents of Dr Kevin Wilson who 
passed away after a short illness. At a purely personal level, I lost a 
true friend and, at a corporate level, Collagen Solutions has lost one 
View our governance Page 20
STRATEGIC REPORT
4 Collagen Solutions plc Annual report and accounts 2016 of its founding shareholders who had a hugely positive influence 
on the Company. We have not yet replaced Kevin as a non-executive 
director as later this year Geoff Bennett will move from his current 
executive position to a non-executive position.
In May 2016, we announced a leadership change which will allow 
the Group to accelerate its strategic plans and initiatives. Jamal Rushdy, 
who initially joined the senior management team as Chief Business 
Officer and has over 20 years’ experience in the medical device 
arena, having most recently served as Vice President at Tornier Inc., 
took on the role of Chief Executive Officer. He has a track record of 
building businesses with successful exits and transforming organisations 
through integration and performance improvement, adding value 
through business development and leadership. In promoting Jamal 
to his new leadership position I did so in the knowledge that we are 
on a journey and that Jamal has the requisite leadership qualities 
for the next stage of our journey. 
Moving to the role of Chief Scientific Officer, Dr Stewart White, 
Collagen Solutions’ founder, now leads our R&D and product -related 
corporate activities and will focus on the Company’s product 
development and innovation platform whilst also realising value from 
innovative technologies such as the ChondroMimetic portfolio of assets. 
I have a huge admiration for Stewart and what we have achieved 
together in the formation and growth of Collagen Solutions, and it is 
a testimony to his professionalism that he has taken on his new role 
and has continued to provide the necessary support to Jamal in his 
recent appointment.
At the start of the year, we added the considerable experience of 
Tom Hyland to our management team, who joined the Company as 
Chief Operating Officer. Tom has over 20 years’ collagen chemistry 
knowledge having worked in senior roles in various global medical 
device and life science organisations. 
The Board is confident that we now have the right team in place 
to deliver the short to medium-term strategic goals and have also 
strengthened our functional teams to drive product innovation 
and take the business to the next level.
Overview
Our Board and management team have made substantial progress 
to put in place the clear organisation and detailed initiatives to drive 
our focused strategy in the current financial year and beyond, which 
is to build a leading global regenerative biomaterials business based 
upon a core supply, development and manufacturing platform, enhanced 
by developing our own novel products such as ChondroMimetic, across 
a range of clinical indications. This strategy remains our focus and we 
will continue to strengthen our core business through operational 
improvements and investing in innovation to create significant value.
The Group is still in its early stages of growth; however, we are 
pleased to report that progress has been made in terms of creating 
long-term shareholder value. In particular I would draw your attention 
to the following: 
• 
ChondroMimetic family IP and assets acquisition;
• 
distributor channels set up with Sigma, a part of Merck KGaA, 
BBI Solutions and a Chinese JV with Cre8ive; and
• 
expansion of our global customer base and investment in our 
global sales and marketing operations.
We have set ourselves a goal to accrete value by creating a leading 
biomaterials business through a combination of organic growth 
and exploitation of our own and licensed IP, as well as through 
appropriate acquisitions, and we believe the momentum for 
achieving this is increasing.
Results
The Group’s results for the year ended 31 March 2016 are set out 
in the Consolidated Statement of Comprehensive Income. Revenue 
and other income for the year was £3,244,257 (2015: £1,035,500). 
Administrative expenses (before separately identifiable items) were 
£2,473,689 (2015: £1,265,918) and selling and marketing costs were 
£333,426 (2015: £218,732). Losses before interest, tax, depreciation 
and amortisation (LBITDA) (before separately identifiable costs) 
decreased to £410,016 (2015: £689,816) and the loss per share 
was 0.57p (2015: 1.17p). 
Net cash used in operations during the year was £194,821 
(2015: £1,070,812), net cash used in investing activities was £660,012 
(2015: £2,404,496) and net cash (outflow)/inflow from financing activities 
was £(25,591) (2015: £5,363,304). The Group’s cash balances at 
31 March 2016 were £2,493,146 (2015: £3,391,356).
Outlook
We have made a positive start to the current financial year and I am 
emboldened by the knowledge that the positive benefits of having 
‘sticky’ revenues from embedded products will ensure about 70% 
of the Group’s ongoing revenues are already, in effect, secured. 
Our challenges are to win new customers and execute our pipeline 
in a timely manner; we have invested in personnel to achieve this. 
Additionally, we are looking to successfully execute our R&D pipeline 
where the investment that we have made, and continue to make, 
begins to produce cash flow.
ChondroMimetic represents a significant value creating opportunity 
but to deliver this we need to be smart about how we execute our 
plan to ensure we are not putting shareholder value at risk.
It was through my colleague Kevin Wilson that we had the opportunity 
to be introduced to Cre8ive, with which we have formed a joint venture. 
I am very excited by this opportunity because I believe in and trust 
the people Kevin introduced. The Company has an initial JV Board 
meeting in Hong Kong in July and, while the scale of the opportunity 
is significant and exciting, it will take time to gain traction. Consequently, 
the Board views contributions from the joint venture being realised 
largely in the years beyond this current one.
The Company is on a journey and, whilst we have continued our 
journey positively this year, we require a higher level of momentum 
as we move on to the next stage in our development as a Company 
dedicated to enhancing shareholder value. I remain hugely committed 
to ensuring the success of Collagen Solutions and I know that commitment 
is shared throughout the Company. I would like to thank all of our 
employees and my fellow directors for their hard work and 
dedication throughout 2015/16.
I look forward to updating you further throughout the year. 
Thank you for your support.
David Evans
Non-executive Chairman
8 July 2016
5 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Summary
• Revenue and other income grew 
by £2.209 million to £3.244 million.
• Southern Lights Biomaterials acquisition 
realised value and significant growth.
• ChondroMimetic asset acquisition enhanced 
our regenerative medicine pipeline.
• FY 2017 strategic initiatives established 
for improved execution and growth.
May I welcome you to the results for the year ended 31 March 2016 
for Collagen Solutions and convey my own excitement about the 
future of our Company.
Addressing our opportunity
Having joined the Company in November 2015 and having assumed 
the CEO role in May 2016, I believe we have a strong foundation of 
people, customers, technology and innovation upon which we can 
execute our strategy to achieve a leading position in the biomaterials 
and regenerative medicine market. 
We address a current opportunity in excess of $1.5 billion for collagen 
and tissue biomaterials applications. Our focused strategy is to 
strengthen and grow our core biomaterials supply and manufacturing 
business, and develop finished devices through both internal 
development and acquired technologies that we will commercialise 
via licensing and distribution partnerships.
During the reported financial year, the Company continued to make 
good progress towards achieving this strategy. We strengthened and 
grew our core biomaterials business, including a full year of contribution 
from our acquired Southern Lights Biomaterials business. We executed 
new customer agreements and late in the year established a commercial 
organisation focused on core business growth. We also completed 
the acquisition of the ChondroMimetic assets from Orthomimetics 
Limited to establish a basis for our finished devices platform. 
Revenue growth
During the reported financial year ended 31 March 2016, the Company 
added scale from a broad base of customers in North America 
and Asia.
Revenue from North America grew by £1.262 million to £1.808 million, 
an increase of 231%, driven by a full year of contribution from the 
acquisition of Southern Lights Biomaterials as well as our organic 
growth from a broad base of existing customers. Revenue from Asia 
grew by £0.889 million to £1.175 million, an increase of 311%, our 
fastest-growing region, driven by customer growth from the existing 
Southern Lights Biomaterials base. Revenue from European customers 
was flat at £0.147 million from a small customer base; however, this 
region now has a dedicated commercial manager and we expect 
growth in customer base and sales during the coming year.
View our Financial Review Page 18
“ We have a strong foundation upon which to execute 
our strategy to achieve a leading position in the 
biomaterials and regenerative medicine market.”
 Jamal Rushdy, Chief Executive Officer
Chief Executive’s statement
STRATEGIC REPORT
6 Collagen Solutions plc Annual report and accounts 2016 Within our core biomaterials business, our mix of activities was 
approximately 61% contract manufacturing, 31% materials supply and 
8% development and other services. This is relatively consistent with 
the prior year’s mix of 56% contract manufacturing, 30% materials and 
14% services with a shift of service revenue to contract manufacturing 
as some of our customer development agreements matured into 
contract manufacturing. 
Our customer base includes a broad cross-section of the market in 
terms of end-user segments, geographies and customer sizes. Our 
opportunity is to penetrate deeper into these geographic markets 
with a focus on commercial execution to expand this customer base 
with improvements in sales operations and expansion of marketing, 
the direct sales team and channel partners. 
Innovation and product development
Since its founding, Collagen Solutions has had a commitment to 
innovation within regenerative biomaterials, with over 50% of the 
current employee base holding advanced scientific degrees. The 
R&D teams are chartered to support and develop our core biomaterials 
business as well as develop our intellectual property through internal 
development, partnering, and licensing and acquisitions. 
In September 2015, we acquired the assets and an exclusive worldwide 
licence for the associated intellectual property of the ChondroMimetic 
family of pipeline products from Orthomimetics Limited and Cambridge 
Enterprise Limited, representing a regenerative orthopaedics platform 
for cartilage, bone, meniscus, tendon and ligament surgery. The first lead 
product is ChondroMimetic, a regenerative scaffold intended for the 
repair of small defects in the cartilage of the knee, which had a successful 
pilot clinical study in Europe in 2010. We believe we have a unique 
opportunity to relaunch ChondroMimetic with the advantage of 
over six years of evidence from these early patients.
In addition, we are investing in internally developed technology for 
additional market access finished devices we can commercialise with 
partners, as well as basic research partnerships to advance regenerative 
medicine technology based on our biomaterials. For example, in 
March 2015 we announced a research collaboration with the Blond 
McIndoe Research Foundation to investigate the use of primary human 
skin cells used in formulation with Collagen Solutions’ products, with 
a view to developing more effective treatments for burns, thereby 
reducing the burden and limitation of skin grafting. 
During the reported financial year, we increased our R&D revenue 
expenditure by £0.207 million to £0.367 million, inclusive of the 
combined R&D spend of legacy Southern Lights Biomaterials. In 
addition, we spent £0.267 million in R&D-related capital expenditure to 
enhance our capabilities. The Group now has a global R&D organisation 
of eight scientific and engineering team members, led by our founder 
and Chief Scientific Officer, Dr Stewart White. We will continue to invest 
in R&D with the team’s focus on supporting the core biomaterials 
business, developing new finished devices for commercialisation, 
and continuing to develop innovative regenerative medicine technologies.
Strategic initiatives
In January our new combined leadership team from the UK, the USA 
and New Zealand met for our annual strategic planning session in order 
to set the vision, mission, goals and specific strategic initiatives for the 
Company in the current financial year in order to create long-term value.
The strategic platform for the growth and development of the 
Company is now built upon four interconnected pillars: customers, 
employees, products and capabilities and growth. Within each pillar 
we are focused on executing detailed strategic initiatives. These 
form the basis of our overall strategy: 
Customers: To improve our customer engagement and market 
share, we are investing in our sales teams, product development 
and processes. We have set goals to hire and on-board a motivated 
and responsive direct sales team of commercial managers focused 
on North America, Asia, and Europe, in addition to selected channel 
partners, such as our recent announcements about a joint venture 
in China and distribution arrangements with Sigma, part of Merck KGaA, 
and BBI Solutions. We are developing advanced training for this 
sales team to ensure a high level of engagement with our customers 
to better understand their needs and offer solutions in a more 
comprehensive and timely manner. We are also fully implementing a 
sales opportunity management process based on best practices to 
ensure we have a sufficient quality pipeline of business efficiently 
moving through the sales funnel process.
Employees: Within our employee base, over 85% of the organisation 
has direct experience working in our customers’ markets in either 
research organisations or medical device companies. Our goal is to 
foster a culture of responsiveness and engagement reflecting our 
global team’s talents in biomaterials science and production, and 
market knowledge aligned towards achieving our strategic goals. 
To further this aim we are implementing comprehensive talent 
review, development and reward processes this fiscal year.
Products and capabilities: We have multiple innovation and 
operational excellence initiatives to improve both near-term 
core business with OEM and manufacturing processes, as well as 
improving our R&D pipeline prioritisation and execution in order 
to ensure a consistent future flow of new finished device products.
Growth: We are very encouraged by the results of our January Voice 
of the Customer independent survey. Our current and potential 
customers gave us clear feedback that we offer a compelling value 
proposition but our complete range of products, services and 
capabilities needs to be articulated more fully to the wider market. 
As such, we are making investments in marketing in the current year, 
including a comprehensive new brand communications strategy and 
new website that was recently launched.
Conclusion
The financial year ended 31 March 2016 was transformational 
for the Company in terms of a step change in scale, product and 
technology breadth, and organisational development. We have a 
strong foundation as we continue to make progress in the current 
financial year, with a clear strategy, specific strategic initiatives, an 
engaged management team and a shared vision: to become the 
industry’s first choice for regenerative biomaterials.
Jamal Rushdy
Chief Executive Officer
8 July 2016
7 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Our business model
We create value via a partner and licensing 
model of finished devices supported 
by our core biomaterials business.
Biomaterials 
core  
business
• 
Expertise in collagen biomaterials
• 
Supply, development and manufacturing
Novel 
finished 
devices
• 
Internally developed finished devices
• 
Acquired and developed tissue engineering IP
Distribution  
and licensing
• 
Dedicated sales channels for core business
• 
Licensing partner model for owned devices
A $1.5bn+ 
biomaterials 
opportunity*
Value creation
Technology Innovation and IP Know-how
• 
Medical grade collagen – broad 
formulation chemistry of solutions, 
powder, sheets and gels
• 
Tissues – processed and 
semi-processed pericardium, 
bone, tendon and other
• 
Issued, pending and in-process 
processing technology IP
• 
Acquired ChondroMimetic – 
several orthopaedics applications
• 
GMP, EDQM, ISO 13485 and 
22442, materials sourced from 
BSE free countries
• 
Experienced global team 
in collagen and biomaterials
• 
>50% of our employees have 
advanced technical degrees
• 
>85% of our employees have 
experience in customer markets
* Hardman research note, 24 September 2014 (Collagen Solutions website).
STRATEGIC REPORT
8 Collagen Solutions plc Annual report and accounts 2016 Customer approach and dynamics
We serve three primary customer markets: research and diagnostics, 
medical devices and regenerative medicine. Within all of these customer 
segments, over time we create sustainable value by becoming ‘embedded’ 
in their critical processes.
Within medical devices and regenerative medicine, our customer relationships 
and revenue streams are strengthened as we progress with each customer 
from development services through to supply and manufacturing and our 
component biomaterials become embedded in their product lines.
Research and diagnostics
Within research and diagnostics, the quality and consistency 
of our medical grade collagen enables the development of 
repeatable processes with the potential to more readily translate 
to clinical applications.
Medical devices Regenerative medicine
Products
Approach
Customers
Medical grade collagen products
Pericardium and other tissue products
Research and 
diagnostics 
companies
Regenerative 
medicine  
companies
Medical device 
companies
Our products reach the right customers through our commercial approach
• Specialised distributors
• Catalogue products
• Direct sales and channel partners
• Consultative sales process
• Development, supply, manufacture and finished devices
9 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Our core products and applications
Collagen and tissue biomaterials
• Medical grade collagen – broad range of solutions, powder, sheets and gels.
• Tissues – processed pericardium, bone, tendon and other materials.
Applications in medical devices, regenerative medicine and research
• Major markets are cardiovascular, orthopaedics, dental and wound care.
Heart valves
Vascular closures
Vascular grafts
Stent coatings
Wound sponges
Wound scaffolds
Burn grafts
Dressings
Bone graft substitutes
Demineralised bone matrix
Tendon and ligament repair
Cartilage reconstruction
Markets
Cardiovascular
Dental
Ear, nose and throat
General and  
gastroenterology surgery
Oncology
Ophthalmic
Orthopaedic
Neurology
Plastic and  
reconstructive surgery
Preclinical research
Tissue engineering
Trauma
Urinary
Wound repair
Cardiovascular Orthopaedics Wounds
Typical applications
STRATEGIC REPORT
10 Collagen Solutions plc Annual report and accounts 2016 Finished product categories
Market access
Premier
• Owned products or co-developed to partner specification
• Demand in orthopaedics, dental, cardiovascular, etc.
• Leverage development across many customers
• Owned products through acquired or developed IP 
• Selective partner choice with more exclusive licensing
• Cartilage regeneration as an example: ChondroMimetic
Our products
Medical grade collagen
Pericardium and other tissues
• Broad range of solutions, powders, sheets and gels
• Standard and custom formulations
• Examples of uses: tissue engineering scaffolds, 
medical device components and research assays
• Natural and semi-processed tissues
• Ideal physical and biological properties for medical devices
• Examples of uses: heart valves and dental membranes
11 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Our core products and applications 
continued
Orthomimetics IP portfolio
* Markets and markets.com – orthobiologics market.
Finished product categories continued
• Acquisition of assets and licensing of IP in September 2015
• IP portfolio represents a broad orthopaedic regenerative platform 
with multiple applications for cartilage, bone, meniscus, tendon 
and ligament
• Lead product, ChondroMimetic, is a collagen-based implant for the 
treatment of small osteochondral (cartilage and underlying bone) 
defects, and was previously used in Europe with 6+ years of history 
in patients
•   Global orthobiologics market valued at $3.7 billion (2013) 
reaching $5.5 billion by 2018, at a CAGR of 5.9%*
• Strategic commercialisation plan in progress
STRATEGIC REPORT
12 Collagen Solutions plc Annual report and accounts 2016 In memoriam
Kevin sadly passed away on 20 November 2015, aged 64, after a short 
illness and has been sorely missed on our Board. He was instrumental 
in establishing Collagen Solutions and fiercely supportive of everything 
we are trying to achieve. He was an immensely engaging, generous and 
positive person with a tremendous sense of humour, and his ability to 
focus on particular value propositions and make these relevant to the 
Company, industry and markets alike was outstanding.
After completing his PhD at Bradford University, he was part of the 
distinguished finance faculty of the Graduate School at Manchester 
Business School. He held numerous senior positions in the Manchester 
finance community, where he 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, 
but still had time to contribute to courses at the Manchester and 
Lancaster Business Schools as a visiting fellow, and as a visiting 
professor at the University of Geneva Institute for Monetary and 
Banking Studies and the University of Lausanne.
Robert sadly passed away on 4 February 2016, aged 64. His lifelong 
comprehension of all things collagen started whilst working towards 
his PhD at Manchester University before joining the UCL Institute of 
Orthopaedics and Musculoskeletal Science, Royal National Orthopaedic 
Hospital, Stanmore, in 1984. He set up the UCL Tissue Engineering 
Centre and was a founding member of the British Tissue Engineering 
community and a past president of the Tissue and Cell Engineering 
Society (TCES) UK. 
He was a pioneer in developing 3D models and elucidating the effects of 
mechanics in 3D models and his research innovation (the plastic compression 
– rapid, biomimetic fabrication process for collagen tissues) established 
him as an international leading scientist for biomimetic tissue engineering.
He leaves behind a rich legacy of scientific innovations, motivated students 
and scientifically productive collaborations across the UK, Europe and 
internationally through his passion for science and we feel honoured to 
have worked with him during his time on our Scientific Advisory Board.
Professor Robert A Brown 
(1952–2016) 
Scientific Advisory Board
Dr Kevin W Wilson  
(1951–2015) 
Non-executive director
Partner Partner Funding Funding
Future innovation through 
research partnerships
13 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Our senior leadership team developed and is committed to several 
initiatives this year in order to deliver strong revenue growth, enhance 
and broaden our customer base and advance our R&D pipeline.
Strategic initiatives for scalable growth
Customers
Our people
Products 
and capabilities
Growth
Objectives are aligned to our long-term goals for each of our four strategic pillars
Deliver greater value to customers by superior 
engagement and understanding of our customers 
and their market segments to grow our market share.
Foster a culture of responsiveness and engagement 
reflecting our global team’s talents in biomaterials science 
and production, and market knowledge aligned towards 
achieving the Company’s goals.
Continuously develop and expand our offering 
of products and capabilities.
Grow revenue across the value chain, through core 
competencies of supply, development and manufacturing, 
leading to increased profitability via leverage.
Channel development
We are developing a specialised direct sales team, focused 
regionally on medical devices and regenerative medicine companies 
in North America, Asia and Europe, that represents our full integrated 
product and service offering of our multiple business operations. We 
are developing distribution for our research and diagnostic markets. 
In addition to hiring, we are putting in place the tools, processes 
and training to enable success with these customers.
Marketing brand launch
Our ‘Voice of Customer’ results from an earlier independent 2016 
survey confirmed the strength of our value proposition, as well as 
the opportunity to improve awareness, especially of our full product 
portfolio with the Southern Lights Biomaterials acquisition. Our 
‘brand launch’ initiative entails a global brand and website update 
and harmonisation and targeted marketing campaigns to increase 
awareness and leads.
Operational excellence
Our aim is to improve execution of our OEM (original equipment 
manufacturer) and R&D programmes though continuous process 
improvement and global alignment of our multiple sites. This will 
improve our speed and success rate to close new customer 
opportunities as well as accelerate our R&D pipeline.
Our strategic initiatives
STRATEGIC REPORT
14 Collagen Solutions plc Annual report and accounts 2016 Strategic report
Collagen Solutions strives to become the industry’s first choice for 
regenerative biomaterials and will advance and enhance customers’ 
collagen-based products for the timely benefit of patients.
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, and by superior 
engagement and understanding of our customers and their market 
segments. 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 the 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 research and diagnostics, medical 
device and regenerative medicine markets in all geographical areas. 
We offer foundational products in the large regenerative biomaterials 
sector which can be used in the repair, replacement or regeneration 
of damaged organs or tissue in tissue engineering and are used in 
many major markets including cardiovascular, orthopaedics, dental 
and wound care. We will continue to invest in our sales and marketing 
operations and channel development, including a JV to penetrate 
the Chinese market entered into after the financial year end.
Key performance indicators
Financial KPIs
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;
• 
development of distribution partners and channels to market;
• 
collaboration with strategic partners to develop embedded value 
products and IP;
• 
maintaining GMP processes and building capability and capacity; and
• 
enhancing customer and employee engagement survey scores.
Gross profit 
£2,318,535
2016 2015 2014
£2,318,535
EPS 
(0.57p)
2016 2015 2014
(0.57p)
(1.17p)
(1.10p)
Gross profit margin 
74.1%
2016 2015 2014
74.1%
78.0%
49.7%
Cash and cash equivalents 
£2,493,146
2016 2015 2014
£2,493,146
£3,391,356
Revenue and other income 
£3,244,257
2016 2015 2014
£3,244,257
£24,023
LBITDA* 
£(410,016)
2016 2015 2014
£(410,016)
£(689,816)
£(388,269)
* Before the credit for release of contingent consideration provision of £152,365 (2015: charge of £155,131) in relation to the Southern Lights Biomaterials acquisition.
£1,035,500
£758,926
£11,939
£1,491,660
15 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Strategic report continued
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. We are particularly proud of our team in New Zealand 
which is positively impacting the communities where we work and 
live. Over the last year, in Marton, we provided flood relief and 
sponsored a market garden for the needy, along with sponsoring 
the NZ National Art Exhibition which directs all proceeds to charitable 
endeavours in Napier.
Employee involvement
Collagen Solutions fosters a culture of responsiveness and customer 
engagement reflecting our global team’s talents in biomaterials science 
and production, and market knowledge.
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. An option scheme is 
operated within the Enterprise Management Incentive Scheme. We 
have recently conducted an Employee Satisfaction Survey and will 
monitor the improvements in the scores arising from increased 
employee engagement.
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
8 July 2016
Our products
Our standard product range includes raw tissue supply, including 
pericardium which is used in heart valves and dural patches, various 
strengths of soluble and acid soluble collagen, acid swollen gels, 
freeze-dried powders, collagen sheets 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 licensed IP for wider patient benefits and development 
of formulations from novel sources of raw materials. In addition to 
developing market access products we also will develop the platform 
technology within the ChondroMimetic portfolio to address unmet 
need in segments of the regenerative medicine market.
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, having surety of supply through high grade 
collagen sourcing from negligible BSE risk sources.
Review of the business
The Group’s results are set out in the Consolidated Statement 
of Comprehensive Income on page 28 and are explained within 
the Financial Review on pages 18 and 19. In September 2015, the 
Group announced the acquisition of the assets and an exclusive IP 
licence with Cambridge Enterprise Limited for the ChondroMimetic 
family of pipeline products. A full review of the Group’s activities and 
future developments is incorporated into the Chairman’s and the 
Chief Executive’s statements.
STRATEGIC REPORT
16 Collagen Solutions plc Annual report and accounts 2016 Principal risks and uncertainties
The principal risks and uncertainties that could have an adverse impact on the performance of the Group are detailed below:
Risk and impact Mitigating controls
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 be required 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;
• 
invest in sales and marketing to increase sales pipeline funnel; 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 careful 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.
The Group has an experienced management team and a clear strategy 
for any required integration and management of business growth.
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
Technologies 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.
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 
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 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 cash and bank balances, which are 
exposed to varying degrees to the following risks: liquidity risk, credit risk and 
foreign currency risk. The policy for managing these risks is outlined below:
• 
Liquidity risk – the Group maintains pro-active 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 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, with 
minimal income in NZ dollars and euros, and is exposed to minimal trading 
foreign currency risk. The functional currency of the Company is sterling. 
Revenues in US dollars are utilised in 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.
17 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Financial review
Group results
Group revenue and other income increased to £3,244,257 
(2015: £1,035,500) for the year ended 31 March 2016. During the 
year turnover continued to increase in all geographic territories.
LBITDA (before credit/(charge) for separately identifiable items of 
£152,365 (2015: £(155,131)) for the year was £410,016 (2015: £689,816) 
and the loss before tax (before separately identifiable items) was 
£1,018,655 (2015: £947,246). Separately identifiable items comprise 
a release of contingent consideration provision in relation to the 
Collagen Solutions LLC asset acquisition (2015: acquisition and integration 
costs in relation to the Southern Lights Biomaterials acquisition).
Cash and borrowings
As at 31 March 2016, the Group had cash balances of £2.49 million 
(2015: £3.39 million) and financial liabilities in relation to the contingent 
consideration and other borrowings of £2.55 million (2015: £4.43 million). 
The Statement of Cash Flows shows the movements in funds during 
the year.
Overheads
The Group has continued to invest in both its sales, marketing and R&D 
resources during the year in order to support the growth in global 
demand for its products and services. R&D expenditure increased 
to £367,496 (2015: £160,811) and selling and marketing costs 
increased to £333,426 (2015: £218,732).
Asset acquisition
During the year the Group acquired an exclusive IP licence and the 
assets of the ChondroMimetic product pipeline. The consideration 
payable included issuing 869,900 ordinary shares. 50% of the 
consideration was payable on completion, and 434,950 ordinary 
shares have been issued, with the balance deferred over the next 
two years and included within the shares to be issued reserve in 
the Consolidated Statement of Changes in Equity. In addition, 
a single-digit royalty is payable on future sales of product.
“ During the year turnover continued to 
increase in all geographic territories.”
 Gill Black, Chief Financial Officer
Summary
• Increased R&D expenditure to £367,496.
• Growth in sales to Asia reaching £1.175 million.
• Positive cash generated from operations before 
interest and tax.
• LBITDA fell to £410,016 from £689,816.
• The Group invested in capital expenditure 
additions of £565,740 (2015: £158,792) to its 
manufacturing and research facilities to increase 
capabilities for expected future demand.
View our business model Page 8
  Europe £146,744
 (2015: £141,355)
  North America £1,808,103
 (2015: £545,659)
  Asia £1,175,015
 (2015: £285,832)
2016 geographical sales 
£3,129,862
STRATEGIC REPORT
18 Collagen Solutions plc Annual report and accounts 2016 Capital expenditure
During the year the Group invested in capital expenditure additions 
of £565,740 (2015: £158,792) to its manufacturing and research facilities 
in both New Zealand and the UK to increase capabilities for expected 
future demand.
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 and pipeline with multiple products.
Key performance indicators (KPIs)
The Group monitors the following KPIs to ensure the business 
performs in line with expectations, issues are identified promptly 
and efficiency measures can be quantified:
• 
turnover growth;
• 
gross margin %;
• 
operating costs;
• 
earnings per share; and
• 
cash and cash equivalents.
Operational
The Group’s most important assets are its employees, its 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 appropriate;
• 
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 recognises the importance of its IT infrastructure 
and back office systems to deliver its services; and
• 
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
The Group made a provision of £1.74 million in December 2014 
for the contingent consideration payable resulting from the acquisition 
of Southern Lights Biomaterials. 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. This is in addition 
to the provision made in the year ended 31 March 2014 of £2.4 million 
in relation to the contingent consideration arising from the acquisition 
of the Collbio Group. During the year there was a revision to the estimate 
of the cash earn-out payable under the Collbio Group provisions 
resulting in a release in the provision of £0.152 million which is shown 
in the Consolidated Statement of Comprehensive Income as a separately 
identifiable item. The amount of the contingent consideration in relation 
to the Collbio Group to be satisfied in shares of £2 million is now shown 
as part of the shares to be issued reserve following resolution of the 
variability in the number of shares to be issued during the current year. 
We anticipate issuing next month 8 million shares in relation to the first 
‘earn-out’ tranche to the vendors of Collbio pursuant to our obligations 
under the sale and purchase agreement dated January 2014. The total 
contingent consideration now provided in the accounts at 31 March 2016 
is £2.41 million with the unwinding of discount being charged within 
finance costs and charged to the Consolidated Statement of 
Comprehensive Income.
Gill Black
Chief Financial Officer
8 July 2016
19 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Board of directors
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 previously Chairman 
of Immunodiagnostics Systems Holdings Plc, 
EKF Diagnostics Holdings plc, Venn Life 
Sciences Holdings Plc, Scancell Holdings Plc 
and Epistem Holdings Plc.
David is currently Chairman of Omega 
Diagnostics Group Plc, OptiBiotix Health Plc 
and Premaitha Health plc.
Jamal was appointed to the Board of 
Directors on 3 May 2016 after initially 
serving as the Group’s Chief Business Officer 
from November 2015. He has over 20 years’ 
experience in the medical device arena, 
specifically within two mid-size high growth 
public companies and three successful 
start-ups. He has a track record of building 
businesses with successful exits and 
transforming organisations through integration 
and performance improvement, adding 
value through business development 
and leadership.
Prior to Collagen Solutions, Jamal was a 
Vice President at Tornier, Inc., a Minneapolis 
orthopaedics and biologics company, since 
2007, where he served in various leadership 
roles in US sales operations, global sports 
medicine and biologics marketing, and 
business and corporate development. 
Jamal also played a key role in Tornier’s 
successful 2011 initial public offering. 
Jamal holds an MBA in Finance and Marketing 
from the Paul Merage School of Business 
at the University of California and also has 
a Bachelor of Science degree in Mechanical 
Engineering from the University of California.
The Board appreciates the value of good corporate 
governance and is responsible to shareholders for 
the proper management of the Group.
David Evans
Non-executive Chairman
Jamal Rushdy
Chief Executive Officer
Gill brings extensive board-level financial 
experience to the Group, having been 
Financial Director and Company Secretary 
of A&E Russell Ltd, and was instrumental in 
its expansion before taking it 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 in 2013 
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.
Gill Black
Chief Financial Officer 
and Company Secretary
R A N
20 Collagen Solutions plc Annual report and accounts 2016
CORPORATE GOVERNANCE Geoff co-founded Southern Lights 
Biomaterials in 2003 and, as CEO, was 
responsible for guiding the company to 
a dominant position in biomaterials and 
regenerative medicine. He has financial and 
operational experience, including previously 
holding the chief financial role at three publicly 
traded Canadian companies (Pelorus 
Navigation Systems Inc., Circle Energy Inc. 
and Solid State Geophysical Inc.) as well 
as experience of early stage enterprises 
specialising in technology commercialisation, 
such as InnerVision Medical Technologies Inc., 
where he held the position of Chief Operating 
Officer and is currently a director. Geoff holds 
a Bachelor of Commerce degree from the 
University of Alberta and is a member of the 
Canadian Institute of Chartered Accountants.
Malcolm is a director in several 
private companies mostly involved in the 
healthcare area, including Antoxis Limited, 
Plasmox Limited, Roadvert Limited, 
Recircle Limited and Ohmedics Limited. 
Malcolm was a director of Aircraft Medical 
until November 2015, when it was sold to 
Medtronic for $110 million. 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 and Wedderburn.
Remuneration Committee
Audit Committee
Nomination Committee
R A N
R
A
N
Stewart 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. 
He is a non-executive director of Taragenyx 
Limited, an entrepreneurial medical 
technologies company focused on 
regenerative medicine.
Dr Stewart White
Chief Scientific Officer
Geoff Bennett
Executive director
Malcolm Gillies
Non-executive director
21 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Corporate governance
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 page 26. 
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, 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 the 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 two non-executive directors 
(David Evans and Malcolm Gillies). It is chaired by Malcolm Gillies.
Audit and Risk Committee
The Audit and Risk Committee comprises two non-executive directors 
(David Evans and Malcolm Gillies) and is chaired by David Evans. In light 
of the recent passing of non-executive director Kevin Wilson, who 
previously held the Chair of the Audit and Risk Committee, it was 
considered an appropriate interim measure by the Board to appoint 
David Evans (non-executive Chairman) as the Chair of this Committee.
Its prime tasks are to review the scope of the external audit, to 
receive regular reports from RSM 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 and Risk Committee met to consider the reports of the 
auditors prior to the submission of the annual financial statements 
to the Board.
Nomination Committee
The Nomination Committee comprises two non-executive directors 
(David Evans and Malcolm Gillies) and is chaired by Malcolm Gillies. 
Its duties include the review of the structure, size and composition 
of the Board, including skills, knowledge, experience and diversity, 
succession planning, review of leadership needs and identification, 
evaluation and nomination of candidates to fill Board vacancies, 
as necessary.
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.
22 Collagen Solutions plc Annual report and accounts 2016
CORPORATE GOVERNANCE 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; 
• 
the subsidiaries’ boards also meet regularly with a formal 
schedule of matters for decision; and
• 
there are procedures for the planning, approval and monitoring 
of capital expenditure and information systems for monitoring 
the Group’s financial performance against approved budgets 
and forecasts.
The Audit and Risk Committee receives 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 year ended 31 March 2016 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 control 
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.
23 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Directors’ remuneration report
Remuneration Committee
The Company has a Remuneration Committee. The Committee 
comprises two non-executive directors (Malcolm Gillies and 
David Evans). 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 marketplace, thereby enhancing shareholder value.
Directors’ remuneration
The table below summarises all directors’ emoluments and pension contributions.
2016 2015
Salary, bonus
 and fees
£
Pension
£
Salary, bonus
 and fees
£
Pension
£
D E Evans 40,000 — 40,000 —
Dr K W Wilson 20,000 — 30,000 —
M J Gillies 30,000 — 30,000 —
Dr S White 100,000 3,000 100,000 2,250
G N Black 85,000 2,550 90,000 1,688
B G Bennett 78,786 2,364 24,545 736
353,786 7,914 314,545 4,674
Pension payments of £7,914 were made on behalf of the directors to the Company’s Group Personal Pension Plan or a KiwiSaver Plan in the 
year ended 31 March 2016 (2015: £4,674).
Directors’ share options
At 31 March 2016, the following directors held options over the shares of the Company:
At
31 March 2016
At
31 March 2015
Date
exercisable Expiry date
D E Evans 4,050,000 4,050,000 29 March 2013 28 March 2023
G N Black 1,000,000 1,000,000 1 January 2017 23 November 2024
Jamal Rushdy, who was appointed as a director on 3 May 2016, was granted options over 3,300,000 shares on 15 December 2015 as an 
employee. Details of the share options are covered in notes 18 and 20.
24 Collagen Solutions plc Annual report and accounts 2016
CORPORATE GOVERNANCE Directors’ report
The directors submit their report and consolidated financial statements 
of Collagen Solutions plc for the year ended 31 March 2016.
Principal activities
The principal activity of the Company is as a holding company. 
The principal activity of the Group is the supply, development 
and manufacture of medical grade collagen components and 
biomaterials 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 
15 to 17:
• 
review of the business;
• 
corporate social responsibility; and
• 
employee involvement.
Results and dividends
The trading results for the year and the Group’s financial position 
at the end of the year are shown in the attached financial statements. 
The directors do not recommend a final dividend.
At the date of acquisition of Southern Lights Biomaterials the Group 
made a provision of £1.7 million for the contingent consideration 
payable. 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 £1.97 million 
on revenues to 31 March 2018 at the exchange rate on acquisition. 
The provision is recorded at £1.75 million at 31 March 2016.
Directors 
The directors of the Company during the year are listed below:
• 
David Evans;
• 
Dr Kevin Wilson (deceased 20 November 2015);
• 
Malcolm Gillies;
• 
Jamal Rushdy (appointed 3 May 2016); 
• 
Dr Stewart White;
• 
Gill Black; and
• 
Geoff Bennett.
Directors’ and officers’ insurance cover is provided by the Company.
At 31 March 2016, the directors had beneficial interests in the Company’s shares as listed below:
Class of share
At
31 March 2016
Number
At
31 March 2015
Number
D E Evans Ordinary shares of 1p each 13,888,730 12,888,730
B G Bennett Ordinary shares of 1p each 6,325,988 6,325,988
Dr S White Ordinary shares of 1p each 3,464,327 3,464,327
M J Gillies Ordinary shares of 1p each 1,653,000 1,214,286
G N Black Ordinary shares of 1p each 357,143 357,143
There are 500,000 deferred shares of 9p in issue at 31 March 2016 and directors’ interests are held as follows: David Evans – 125,000 and 
Malcolm Gillies – 250,000. The deferred shares do not confer any voting rights.
Substantial shareholdings 
As at 30 June 2016, other than the directors’ beneficial interests, there were the following substantial shareholdings:
Class of share Number
Helium Rising Stars Fund Ordinary shares of 1p each 13,014,000
NVM Private Equity Ordinary shares of 1p each 12,728,579
Legal and General Ordinary shares of 1p each 11,175,000
Calculus Capital Ordinary shares of 1p each 10,714,000
Peter French Meyer & Family Trust Ordinary shares of 1p each 6,240,502
Hargreave Hale Ordinary shares of 1p each 6,095,000
Rathbones Investment Management Ordinary shares of 1p each 5,821,250
Share capital
On 11 September 2015, 434,950 ordinary shares were issued 
to Orthomimetics Limited for a consideration of £50,706 for 
ChondroMimetic assets. Further ordinary shares are required to 
be issued by the Company under the asset purchase agreement of 
£50,706. 50% is due to Orthomimetics Limited on 11 September 2016 
and the remaining 50% is due on 11 September 2017.
The total number of issued ordinary shares at 31 March 2016 was 
171,403,815. The total number of deferred shares at 31 March 2016 
was 500,000.
25 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Directors’ report continued
Research and development
The Group invests in research and development in the UK, the USA and 
NZ 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 2016, average 
creditor days were 50 days.
Charitable and political contributions
£3,500 of charitable donations were made by the Group in the year ended 
31 March 2016. No political donations were made during 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 have 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. Details of financial 
risk management objectives and policies, including exposure to 
price risk, credit risk, liquidity risk and cash flow risk, are shown 
in the Strategic Report on page 17.
Directors’ responsibilities in the preparation of the 
financial statements
The directors are responsible for preparing the Strategic Report, 
the Directors’ Report and the financial statements in accordance 
with applicable law and regulations.
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 (IFRSs) as adopted by the European Union (EU) 
and have elected under company law to prepare the Company 
financial statements in accordance with IFRSs as adopted by the EU.
The financial statements are required by law and IFRSs 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; and
• 
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 24 August 2016 at 3 Robroyston Oval, Nova Business Park, Glasgow 
G33 1AP can be found on the Company’s website.
Auditors
A resolution to re-appoint RSM UK Audit LLP (formerly 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
8 July 2016
26 Collagen Solutions plc Annual report and accounts 2016
CORPORATE GOVERNANCE 27 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
We have audited the Group and Parent Company financial statements 
(the “financial statements”) on pages 28 to 55. 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 auditor
As more fully explained in the Directors’ Responsibilities Statement 
set out on page 26 the directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a true 
and fair view. Our responsibility is to audit and express an opinion 
on the financial statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland). Those standards 
require us to comply with the Auditing Practices Board’s (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 Financial Reporting Council’s website at  
http://www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion: 
• 
the financial statements give a true and fair view of the state 
of the Group’s and the parent’s affairs as at 31 March 2016 
and of the Group’s loss for the year 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 
the Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 
the Companies Act 2006 requires us to report to you if, in our opinion:
• 
adequate accounting records have not been kept by the parent 
company, or returns adequate for our audit have not been received 
from branches not visited by us; or
• 
the parent company financial statements are not in agreement 
with the accounting records and returns; or
• 
certain disclosures of directors’ remuneration specified by law 
are not made; or
• 
we have not received all the information and explanations we 
require for our audit. 
Alan Aitchison (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor 
Chartered Accountants
Third Floor
Centenary House
69 Wellington Street
Glasgow
G2 6HG
8 July 2016
Independent auditor’s report
to the members of Collagen Solutions plc 28 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes
Before
separately
identifiable
items
£
Separately
identifiable
items
(note 4)
£
Total
2016
£
Before
separately
identifiable
items
£
Separately
identifiable
items
(note 4)
£
Total
2015
£
Revenue 3,129,862 — 3,129,862 972,846 — 972,846
Cost of sales (811,327) — (811,327) (213,920) — (213,920)
Gross profit 2,318,535 — 2,318,535 758,926 — 758,926
Share-based compensation (35,831) — (35,831) (26,746) — (26,746)
Administrative expenses (2,473,689) 152,365 (2,321,324) (1,265,918) (155,131) (1,421,049)
Selling and marketing costs (333,426) — (333,426) (218,732) — (218,732)
Other income 114,395 — 114,395 62,654 — 62,654
Operating loss before interest, tax, 
depreciation and amortisation (410,016) 152,365 (257,651) (689,816) (155,131) (844,947)
Amortisation and depreciation (346,569) — (346,569) (129,778) — (129,778)
Finance income 5 10,262 — 10,262 1,470 — 1,470
Finance expense 5 (272,332) — (272,332) (129,122) — (129,122)
Loss before taxation 2 (1,018,655) 152,365 (866,290) (947,246) (155,131) (1,102,377)
Taxation 6 (114,174) — (114,174) (21,215) — (21,215)
Loss for the year (1,132,829) 152,365 (980,464) (968,461) (155,131) (1,123,592)
Currency translation difference (113,585) — (113,585) 317,669 — 317,669
Other comprehensive (loss)/income (113,585) — (113,585) 317,669 — 317,669
Total comprehensive loss for the year (1,246,414) 152,365 (1,094,049) (650,792) (155,131) (805,923)
Basic and diluted loss per share – pence 7 (0.57p) (1.17p)
Consolidated statement of comprehensive income
for the year ended 31 March 2016 29 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Notes
2016
£
2015
£
ASSETS
Non-current assets
Intangible assets 8 12,971,078 12,918,911
Property, plant and equipment 9 1,160,852 793,725
14,131,930 13,712,636
Current assets
Inventories 11 264,074 218,544
Trade and other receivables 12 636,044 644,475
Cash and cash equivalents 13 2,493,146 3,391,356
3,393,264 4,254,375
Total assets 17,525,194 17,967,011
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent company
Share capital 20 1,759,038 1,754,689
Share premium 7,892,330 7,845,973
Share-based payment reserve 87,224 51,393
Shares to be issued reserve 2,050,706 —
Merger reserve 4,531,798 4,531,798
Translation reserve 159,418 273,003
Retained deficit (2,584,054) (1,603,590)
Total equity 13,896,460 12,853,266
Non-current liabilities
Deferred tax 16 253,112 285,022
Other financial liabilities 14 2,437,100 4,319,891
Borrowings 19 62,837 87,563
2,753,049 4,692,476
Current liabilities
Trade and other payables 14 829,354 359,273
Income tax liabilities — 40,153
Other financial liabilities 14 25,353 —
Borrowings 19 20,978 21,843
875,685 421,269
Total liabilities 3,628,734 5,113,745
Total liabilities and equity 17,525,194 17,967,011
These financial statements were approved by the Board of directors and authorised for issue on 8 July 2016 and are signed on its behalf by:
Gill Black David Evans 
Chief Financial Officer Chairman
Company number: 8446337
Consolidated statement of financial position
as at 31 March 2016 30 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes
2016
£
2015
£
ASSETS
Non-current assets
Financial asset investments 10 12,684,905 12,684,805
Intangible assets 8 75,399 60,832
Property, plant and equipment 9 77,607 13,951
12,837,911 12,759,588
Current assets
Trade and other receivables 12 2,500,560 1,116,721
Cash and cash equivalents 13 1,321,938 2,980,509
3,822,498 4,097,230
Total assets 16,660,409 16,856,818
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent company
Share capital 20 1,759,038 1,754,689
Share premium 7,892,330 7,845,973
Share-based payment reserve 87,224 51,393
Shares to be issued reserve 2,050,706 —
Merger reserve 4,531,798 4,531,798
Retained deficit (1,602,290) (996,042)
Total equity 14,718,806 13,187,811
Non-current liabilities
Financial liabilities 14 1,754,665 3,588,815
Current liabilities
Trade and other payables 14 186,938 80,192
Total liabilities 1,941,603 3,669,007
Total liabilities and equity 16,660,409 16,856,818
These financial statements were approved by the Board of directors and authorised for issue on 8 July 2016 and are signed on its behalf by:
Gill Black David Evans
Chief Financial Officer Chairman
Company number: 8446337
Company statement of financial position
as at 31 March 2016 31 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Share
capital
£
Share
premium
£
Share-based
payment
reserve
£
Shares to
be issued
reserve
£
Merger
reserve
£
Translation
reserve
£
Retained
deficit
£
Total
£
At 1 April 2014 683,260 3,230,105 24,647 — 2,842,683 (44,666) (479,998) 6,256,031
Issue of shares for cash 857,143 5,142,857 — — — — — 6,000,000
Issue of consideration shares 
on acquisition 214,286 — — — 1,740,000 — — 1,954,286
Share issue costs — (526,989) — — (50,885) — — (577,874)
Total transactions with 
owners in their capacity 
as owners 1,071,429 4,615,868 — — 1,689,115 — — 7,376,412
Share-based compensation — — 26,746 — — — — 26,746
Loss for the year — — — — — — (1,123,592) (1,123,592)
Currency translation difference — — — — — 317,669 — 317,669
Loss and total comprehensive 
income for the year — — — — — 317,669 (1,123,592) (805,923)
At 1 April 2015 1,754,689 7,845,973 51,393 — 4,531,798 273,003 (1,603,590) 12,853,266
Issue of shares on acquisition 
of assets 4,349 46,357 — — — — — 50,706
Total transactions with 
owners in their capacity 
as owners 4,349 46,357 — — — — — 50,706
Share-based compensation — — 35,831 — — — — 35,831
Shares to be issued to 
Collagen Solutions (UK) 
vendors as contingent 
consideration — — — 2,000,000 — — — 2,000,000
Shares to be issued on 
acquisition of assets — — — 50,706 — — — 50,706
Loss for the year — — — — — — (980,464) (980,464)
Currency translation difference — — — — — (113,585) — (113,585)
Loss and total comprehensive 
expense for the year — — — — — (113,585) (980,464) (1,094,049)
At 31 March 2016 1,759,038 7,892,330 87,224 2,050,706 4,531,798 159,418 (2,584,054) 13,896,460
Consolidated statement of changes in equity
for the year ended 31 March 2016 32 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Share
capital
£
Share
premium
£
Share-based
payment
reserve
£
Shares to
be issued
reserve
£ 
Merger
reserve
£
Retained
deficit
£
Total
£
At 1 April 2014 683,260 3,230,105 24,647 — 2,842,683 (262,626) 6,518,069
Issue of shares for cash 857,143 5,142,857 — — — — 6,000,000
Issue of consideration shares on acquisition 214,286 — — — 1,740,000 — 1,954,286
Share issue costs — (526,989) — — (50,885) — (577,874)
Total transactions with owners in their 
capacity as owners 1,071,429 4,615,868 — — 1,689,115 — 7,376,412
Share-based compensation — — 26,746 — — — 26,746
Loss and total comprehensive 
expense for the year — — — — — (733,416) (733,416)
At 1 April 2015 1,754,689 7,845,973 51,393 — 4,531,798 (996,042) 13,187,811
Issue of shares on acquisition of assets 4,349 46,357 — — — — 50,706
Total transactions with owners in their 
capacity as owners 4,349 46,357 — — — — 50,706
Share-based compensation — — 35,831 — — — 35,831
Shares to be issued to Collagen Solutions (UK) 
vendors as contingent consideration — — — 2,000,000 — — 2,000,000
Shares to be issued on acquisition of assets — — — 50,706 — — 50,706
Loss and total comprehensive expense  
for the year — — — — — (606,248) (606,248)
At 31 March 2016 1,759,038 7,892,330 87,224 2,050,706 4,531,798 (1,602,290) 14,718,806
Company statement of changes in equity
for the year ended 31 March 2016 33 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
2016
£
2015
£
Cash flow from operating activities
Loss before taxation (866,290) (1,102,377)
Share-based compensation 35,831 26,746
Depreciation 175,039 75,110
Amortisation 171,530 54,668
Decrease in contingent consideration (192,393) —
Finance expense 272,332 129,122
Finance income (10,261) (1,470)
(Gain)/loss on sale of property, plant and equipment (689) 4,834
Increase in inventories (47,773) (122,743)
Increase in trade and other receivables (9,954) (194,770)
Increase in trade and other payables 479,308 89,909
Cash generated from/(used in) operations 6,680 (1,040,971)
Interest paid (7,844) (3,822)
Taxation paid (193,657) (26,019)
Net cash used in operations (194,821) (1,070,812)
Investing activities
Proceeds from sale of property, plant and equipment 746 12,716
Payments to acquire property, plant and equipment (464,327) (158,792)
Payments to acquire licensed IP and patents (206,692) (68,222)
Payments to acquire Southern Lights Ventures 2002 Limited — (2,191,668)
Interest received 10,261 1,470
Net cash used in investing activities (660,012) (2,404,496)
Financing activities
Net proceeds on issue of ordinary shares — 5,422,126
Repayment of director’s loan — (53,468)
Repayment of related party loan (25,591) (5,354)
Net cash (used in)/generated from financing activities (25,591) 5,363,304
Net (decrease)/increase in cash and cash equivalents (880,424) 1,887,996
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies (17,786) 11,700
Net (decrease)/increase in cash and cash equivalents (898,210) 1,899,696
Cash and cash equivalents at the beginning of the financial year 3,391,356 1,491,660
Cash and cash equivalents at the end of the financial year 2,493,146 3,391,356
Consolidated statement of cash flows
for the year ended 31 March 2016 34 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
2016
£
2015
£
Cash flow from operating activities
Loss before taxation (606,248) (733,416)
Share-based compensation 35,831 26,746
Depreciation 17,041 3,306
Finance expense 205,878 102,000
Finance income (8,574) —
Decrease/(increase) in trade and other receivables 88,219 (36,906)
Increase in trade and other payables 106,746 21,365
Decrease in contingent consideration (40,028) —
Net cash used in operations (201,135) (616,905)
Investing activities
Payments to acquire property, plant and equipment (80,697) (17,257)
Payments to acquire licensed IP (14,567) (60,832)
Interest received 8,574 —
Payments to acquire Southern Lights Ventures 2002 Limited — (2,462,448)
Net cash used in investing activities (86,690) (2,540,537)
Financing activities
Proceeds on issue of ordinary shares — 5,422,126
Movement in Group borrowings (1,370,746) (761,997)
Net cash (used in)/generated from financing activities (1,370,746) 4,660,129
Net (decrease)/increase in cash and cash equivalents (1,658,571) 1,502,687
Cash and cash equivalents at the beginning of the financial year 2,980,509 1,477,822
Cash and cash equivalents at the end of the financial year 1,321,938 2,980,509
Company statement of cash flows
for the year ended 31 March 2016 35 Annual report and accounts 2016 Collagen Solutions plc
Notes to the financial statements
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
General information
Collagen Solutions plc is incorporated and domiciled in the United Kingdom. The locations and principal activities of the subsidiaries are set 
out in note 10. The registered office is c/o Shepherd and Wedderburn LLP, Condor House, 10 St. Paul’s Churchyard, London EC4M 8AL.
The financial statements of Collagen Solutions plc and its subsidiaries (the ‘Group’) for the year ended 31 March 2016 were authorised for 
issue by the Board of directors on 8 July 2016.
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 IFRS Interpretations Committee (IFRICs) 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.
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 year 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 Consolidated 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 year of the parent company amounted to £606,248 (2015: £733,416).
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 12 months from the date of the approval of the financial statements. As at 31 March 2016 the Group had cash and cash equivalents 
of £2.49 million and net current assets of £2.52 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 2017 and take into account sensitivities on revenues and costs. Having made 
relevant and appropriate enquiries, including consideration of the Company’s and the Group’s current cash resources and the working 
capital forecasts, the directors have a reasonable expectation that the Company and the Group will have adequate cash resources to 
continue to meet the requirements of the business for at least the next 12 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 Consolidated 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 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 will be paid for all work performed to the termination date. 36 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
Accounting policies continued
Government grants
The Group receives government grants in relation to research and development, business development and employment costs. 
Government grants receivable for the reimbursement of costs charged to the income statement are credited to the income statement 
within other income in the year in which the costs are incurred.
Segmental reporting
The Group’s Chief Operating Decision Maker, the Chief Executive Officer, is responsible for resource allocation and the assessment of performance. 
In the performance of this role, the Chief Executive Officer reviews the Group’s activities, in 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, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units 
to which the goodwill is allocated shall represent the lowest level within the entity at which goodwill is monitored for internal management 
purposes and not be larger than an operating segment.
Contingent consideration is measured at its acquisition-date fair value and is included as part of the consideration transferred. Changes in the 
fair value of the contingent consideration that qualify as measurement adjustments are adjusted retrospectively, with corresponding adjustments 
against goodwill. The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement 
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as an asset or a 
liability is remeasured at subsequent reporting dates with the corresponding gain or loss being recognised in profit or loss for the relevant 
financial period.
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 contracts and relationships – over two to ten years, depending on terms of contract, on a straight-line basis
Licensed IP and patents – over estimated useful lives – ten to 25 years
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. 37 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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, or diminishing value over the following estimated useful lives:
Leasehold property improvements  – over life of lease
Plant, equipment and machinery  – 8%–60%
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 (or 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 (or 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. The subsequent measurement of contingent consideration is recognised through the income statement. 
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 the share price at 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 products, raw materials 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.
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. 38 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
Accounting policies continued
Financial instruments continued
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 Consolidated 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 
12 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 Consolidated 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.
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 presentational 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 Consolidated 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.  39 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Accounting policies continued
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, directors and suppliers. 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 is credited to the share-based payment reserve.
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 the share premium account 
(for the excess over nominal value).
Fair value is measured by use of the Trinomial Barrier Option and Black-Scholes models. 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
The Group and Company financial statements have been prepared in accordance with IFRSs, International Accounting Standards (IASs) 
and IFRS Interpretations Committee (IFRICs) interpretations effective as at 31 March 2016. The Group and Company have not chosen 
to adopt any amendments or revised standards early.
IFRSs issued but not yet effective
The following IFRSs, IASs, IFRICs and amendments have been issued, are not yet effective, and have not been adopted by the Group or the 
Company in these financial statements. The directors do not believe the adoption will have a material impact on the business; however, the 
Group is continuing to assess the impact of the adoption of IFRS 15 and IFRS 16. 
IAS 1 Presentation of Financial Statements – effective 1 January 2016
IAS 28 Investments in Associates and Joint Ventures – effective 1 January 2016
IFRS 9 Financial Instruments – effective 1 January 2018
IFRS 10 Consolidated Financial Statements – effective 1 January 2016
IFRS 11 Joint Arrangements – effective 1 January 2016
IFRS 12 Disclosure of Interests in Other Entities – effective 1 January 2016
IFRS 14 Regulatory Deferral Accounts – effective 1 January 2016
IFRS 15 Revenue from Contracts with Customers – effective 1 January 2018 40 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
Accounting policies continued
New standards and interpretations not applied continued
IFRSs issued but not yet effective continued
IFRS 16 Leases – effective 1 January 2019
Amendments to IAS 16 Property, Plant and Equipment – effective 1 January 2016
Amendments to IAS 38 Intangible Assets – effective 1 January 2016
Amendments to IAS 1 Disclosure Initiative – effective 1 January 2016 
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations – effective 1 January 2016
Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities – Applying the Consolidation Exception – effective 1 January 2016
Annual improvements to IFRS 2012–2014 Cycle – effective 1 July 2016
Amendments to IAS 27 Equity Method in Separate Financial Statements – effective 1 January 2016 
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses – effective 1 January 2017
Amendments to IAS 7 Disclosure Initiative – effective 1 January 2017
IFRSs adopted in the year
The following IFRSs, IASs and IFRICs have been adopted for the first time in the year. As expected their adoption has not had a material 
impact on these financial statements.
IAS 19 Employee Benefits – Defined Benefit Plans (Amended) – effective 1 July 2014
IFRS 2 Share-based Payment (Amended) – effective 1 July 2014
IFRS 3 Business Combinations (Amended) – effective 1 July 2014
IFRS 8 Operating Segments (Amended) – effective 1 July 2014
IAS 16 Property, Plant and Equipment (Annual Improvements 2012) – effective 1 July 2014
IAS 24 Related Party Disclosures – effective 1 July 2014
IAS 38 Intangible Assets (Annual Improvements 2012) – effective 1 July 2014
Critical accounting estimates and judgements
The preparation of the financial information in conformity with IFRSs 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: 
Contingent consideration
Contingent consideration is measured at its acquisition-date fair value and is included as part of the consideration transferred. Changes in the 
fair value of the contingent consideration that qualify as measurement adjustments are adjusted retrospectively, with corresponding adjustments 
against goodwill. The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement 
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as an asset or a 
liability is remeasured at subsequent reporting dates with the corresponding gain or loss being recognised in profit or loss for the relevant 
financial period.
Amounts provided represent management’s best estimate of the likely outcome to be paid out under the individual earn-out provisions. 
Unwinding discount costs applied to the contingent considerations in relation to acquisitions made are charged through the income statement 
and included within finance costs. 41 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Accounting policies continued
Critical accounting estimates and judgements continued
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. These are detailed in note 8.
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 IAS 38 are applied to intangibles before allocating to 
goodwill in relation to development expenditure.
Management’s significant judgements in relation to customer contracts and relationships and patents as intangible assets are set out 
in note 8.
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.
Deferred tax
Taxation management judgement is required to determine the amount of tax assets that can be recognised, based upon the likely timing 
and level of future taxable profits together with an assessment of future tax planning strategies.
Research and development
Careful judgement by the directors is applied when deciding whether the recognition requirements for development costs have been met. 
This is necessary as the economic success of any product development is uncertain until such time as technical viability has been proven 
and commercialisation is likely to be achieved. Judgements are based on the information available at each reporting date, which includes 
progress with testing and data and commercial feasibility. Activities in relation to research and development are continuously monitored 
by the directors.
1 Segmental reporting
2016
£
2015
£
Revenue information by geographical location
Europe 146,744 141,355
North America 1,808,103 545,659
Asia 1,175,015 285,832
3,129,862 972,846
Major customers
Three customers individually represented more than 10% of Group revenue at 30% in Asia and 18% and 11% in North America 
(2015: two customers – 29% in Asia and 16% in North America). These revenues arise from the only operating segment, which is biomaterials.
The Group does not manage its business by reference to separate geographical locations. Consequently, an analysis of net assets and operating 
profit by location is not monitored and is therefore not provided. 42 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
2 Loss from operations
Loss from operations is stated after charging:
2016
£
2015
£
Amortisation 171,530 54,668
Depreciation of property, plant and equipment 175,039 75,110
(Gain)/loss on sale of fixed assets (689) 4,834
Auditors’ remuneration:
– as auditors 40,965 38,975
– other services 11,710 77,050
Operating lease costs:
– land and buildings; property, plant and equipment 169,125 94,492
Foreign exchange gains (99,527) (15,251)
Research and development 367,496 160,811
Amounts payable to RSM UK Audit LLP and their associates in respect of both audit and non-audit services:
Audit services:
– audit of Company 16,525 15,750
– audit of subsidiary undertakings 24,440 23,225
40,965 38,975
Non-audit services:
Fees payable to the Company’s auditors and their associates for other services:
– tax advisory services 6,750 9,050
– tax compliance services 4,960 5,500
– corporate finance transactions — 62,500
11,710 77,050
3 Particulars of employees
The average number of staff employed by the Group, including executive directors, during the financial year amounted to:
2016
Number
2015
Number
Operations 18 8
Administration 8 2
Management 4 4
30 14
The aggregate payroll costs, including directors’ emoluments, of the above were:
2016
£
2015
£
Wages and salaries 1,358,399 689,504
Social security costs 104,972 56,166
Pension costs 33,739 10,246
Share-based compensation 35,830 26,746
1,532,940 782,662 43 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
3 Particulars of employees continued
Directors’ emoluments
The directors’ aggregate emoluments in respect of qualifying services were:
2016
£
2015
£
Emoluments receivable 263,786 214,545
Fees paid to third parties 90,000 100,000
Pension costs 7,914 4,674
361,700 319,219
There were three directors accruing retirement benefits with money purchase schemes during the year (2015: three).
The emoluments of the highest paid director were:
2016
£
2015
£
Emoluments 100,000 100,000
Contributions to defined contribution pension scheme 3,000 2,250
Total emoluments 103,000 102,250
There were no share options exercised at 31 March 2016.
4 Separately identifiable items 
2016
£
2015
£
Included within administrative expenses:
Release of contingent consideration provision
1
152,365 —
Acquisition and integration costs
2
— (155,131)
152,365 (155,131)
1.  The release of the contingent consideration provision in the year ended 31 March 2016 relates to the reassessment of the earn-out payable for the acquisition 
of Collagen Solutions LLC.
2. The acquisition and integration costs are for the acquisition of Southern Lights Ventures 2002 Limited t/a Southern Lights Biomaterials in December 2014.
5 Finance expense/(income)
2016
£
2015
£
Unwinding of discount – contingent consideration 264,488 125,300
Interest charged on related party loan (note 19) 7,143 3,822
Other interest expense 701 —
272,332 129,122
Interest income on cash deposits (10,262) (1,470)
262,070 127,652
6 Taxation
Current tax
2016
£
2015
£
Current tax on profit arising in overseas subsidiary 146,593 34,612 44 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
6 Taxation continued
Deferred tax (note 16) 
2016
£
2015
£
Deferred tax credit associated with amortisation of fair value intangibles (30,304) (7,576)
Origination and reversal of temporary differences (2,115) (5,821)
Total deferred tax credit (32,419) (13,397)
Total tax charge 114,174 21,215
The charge for the year can be reconciled to the loss per the Consolidated Statement of Comprehensive Income as follows:
2016
£
2015
£
Loss on ordinary activities before tax (866,290) (1,102,377)
Tax at the UK corporation tax rate of 20% (2015: 20%) (173,258) (220,475)
Impact of different tax rates in other jurisdictions 41,092 (9,876)
Expenses not deductible for tax purposes 12,978 45,922
Amortisation of goodwill deductible for tax purposes – US (32,566) —
Prior period adjustments 27,040 —
Income not assessed for tax purposes (47,780) —
Tax losses not recognised as a deferred tax asset 286,668 205,644
Tax charge for the period 114,174 21,215
Unrecognised deferred tax asset 286,668 205,644
The unrecognised deferred tax asset relates to losses. Whilst the directors consider that there is a significant stream of income in the pipeline 
that may come to fruition, they consider that there is sufficient uncertainty surrounding the timing of those cash flows to warrant not recognising 
a deferred tax asset.
During the year ended 31 March 2016 Collagen Solutions (UK) Limited created and surrendered tax losses under research and development 
expenditure claims. Payments of £43,168 for the year ended 31 March 2015 and £28,699 for the period ended 31 March 2014 were receivable 
at 31 March 2016 under these claims and have been included in ‘Other revenues’ in accordance with IAS 20 Accounting for Government Grants.
7 Loss per share
The calculation of basic loss attributable to the equity holders of the parent is based on losses of £980,464 (2015: £1,123,592) and on 
171,210,108 (2015: 96,409,178) ordinary shares, being the weighted average number of shares in issue during the year. 
The loss for the year and the weighted average number of ordinary shares for calculating the diluted loss per share for the year ended 
31 March 2016 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 IAS 33.
8 Intangible assets
Group
Goodwill on
acquisition
£
Purchased
goodwill
£
Customer
contracts and
relationships
£
Patents and
licensed IP
£
Total
£
Cost
At 1 April 2014 3,953,334 2,910,881 34,496 — 6,898,711
Additions — — — 68,222 68,222
Arising on acquisition of subsidiary undertaking 4,044,681 — 1,356,649 241,723 5,643,053
Currency translation — 367,596 — 310 367,906
At 31 March 2015 7,998,015 3,278,477 1,391,145 310,255 12,977,892
Amortisation
At 1 April 2014 — — (4,313) — (4,313)
Charge for the year — — (51,164) (3,504) (54,668)
At 31 March 2015 — — (55,477) (3,504) (58,981)
Net book value
At 31 March 2015 7,998,015 3,278,477 1,335,668 306,751 12,918,911 45 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
8 Intangible assets continued
Group
Goodwill on
acquisition
£
Purchased
goodwill
£
Customer
contracts and
relationships
£
Patents and
licensed IP
£
Total
£
Cost
At 1 April 2015 7,998,015 3,278,477 1,391,145 310,255 12,977,892
Additions — — — 257,398
 1
257,398
Currency translation (90,210) 94,687 (30,258) (6,453) (32,234)
At 31 March 2016 7,907,805 3,373,164 1,360,887 561,200 13,203,056
Amortisation
At 1 April 2015 — — (55,477) (3,504) (58,981)
Charge for the year — — (152,912) (18,618) (171,530)
Currency translation — — 3,425 (4,892) (1,467)
At 31 March 2016 — — (204,964) (27,014) (231,978)
Net book value
At 31 March 2016 7,907,805 3,373,164 1,155,923 534,186 12,971,078
1.  Included in patents and licensed IP additions during the year ended 31 March 2016 are £105,132 of ChondroMimetic assets acquired from Cambridge Enterprise Limited. 
£54,425 was settled in cash on the signing of the asset purchase agreement and £50,706 is included in current and non-current deferred consideration payments due. 
Impairment review
Total goodwill of £11,280,969 comprises goodwill arising on acquisition of subsidiary undertakings of £7,907,805 and goodwill arising on 
the purchase of a business of £3,373,164. Goodwill relates to the acquisition of Collagen Solutions (UK) Limited, the purchase of the assets 
of Collagen Solutions LLC in January 2014 and the acquisition of Southern Lights Ventures 2002 Limited in December 2014. This goodwill has 
been allocated to the combined Group as a single CGU for the purposes of the impairment review, since this is the lowest level within the entity 
at which management monitors goodwill for internal purposes. The whole Group is expected to benefit from the synergies of the business 
combinations through cross-selling opportunities, market reputation, cost savings and surety of supply. Synergies are represented by those 
unrecognised assets of the acquired entities that are effectively transferred to the CGU, rather than by the recognised assets.
The impairment review involves a value in use calculation which is based on the present value of expected future cash flows of the CGU to 
be generated. The key assumptions underlying the cash flow projections within the impairment review are revenue growth, margins and the 
level of operating expenditure. The cash flow projections are based on formally approved management cash flow projections for a three-year 
period. A terminal value is calculated based on estimated real growth rate in perpetuity of 3.5% (2015: 2.4%) and rate of inflation in perpetuity 
of 2.5% (2015: 3%), together with a pre-tax discount rate of 11.0% (2015: 11.1%).
Key assumptions used in the growth calculations for years ended 2017 to 2019 are:
• 
Gross margins    – 73%
• 
Revenue growth   – between 32% and 64%
• 
Increase in operating costs  – between 14% and 60%
The recoverable amount of the CGU exceeds the carrying amount of the CGU by 196.7%. The directors consider the revenues to be the most 
sensitive assumption used in the impairment reviews. A reduction in certain revenues in excess of 11.42% would result in the recoverable 
amount of the CGU being equal to its carrying amount.
Company
Patents and
licensed IP
£
Cost
At 1 April 2014 —
Additions 60,832
At 31 March 2015 60,832
Amortisation
At 1 April 2014 and 31 March 2015 —
Net book value
At 31 March 2015 60,832 46 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
8 Intangible assets continued
Company
Patents and
licensed IP
£
Cost
At 1 April 2015 60,832
Additions 14,567
At 31 March 2016 75,399
Amortisation
At 1 April 2015 and 31 March 2016 —
Net book value
At 31 March 2016 75,399
9 Property, plant and equipment
Group
Leasehold
improvements
£
Plant, equipment
 and machinery
£
Total
£
Cost
At 1 April 2014 — 245,131 245,131
Additions 7,138 151,654 158,792
Arising on acquisition of subsidiary undertaking 282,212 200,561 482,773
Disposals — (20,547) (20,547)
Currency translation 6,521 6,065 12,586
At 31 March 2015 295,871 582,864 878,735
Depreciation
At 1 April 2014 — 12,647 12,647
Charge for the year 10,812 64,298 75,110
Disposals — (2,997) (2,997)
Currency translation 84 166 250
At 31 March 2015 10,896 74,114 85,010
Net book value
At 31 March 2015 284,975 508,750 793,725
Cost
At 1 April 2015 295,871 582,864 878,735
Additions 174,369 391,371
 1
565,740
Disposals — (57) (57)
Currency translation (14,727) (8,763) (23,490)
At 31 March 2016 455,513 965,415 1,420,928
Depreciation
At 1 April 2015 10,896 74,114 85,010
Charge for the year 45,418 129,621 175,039
Currency translation — 27 27
At 31 March 2016 56,314 203,762 260,076
Net book value
At 31 March 2016 399,199 761,653 1,160,852
1.  Included in plant, equipment and machinery additions during the year ended 31 March 2016 are £112,632 of ChondroMimetic assets acquired from Orthomimetics Limited. 
£11,220 was settled in cash and £50,706 was settled in ordinary shares on the signing of the asset purchase agreement. £50,706 is included in the shares to be issued reserve 
as future shares to be issued. 47 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
9 Property, plant and equipment continued
Company
Leasehold
improvements
£
Plant, equipment
 and machinery
£
Total
£
Cost
At 1 April 2014 — — —
Additions — 17,257 17,257
At 31 March 2015 — 17,257 17,257
Depreciation
At 1 April 2014 — — —
Charge for the year — 3,306 3,306
At 31 March 2015 — 3,306 3,306
Net book value
At 31 March 2015 — 13,951 13,951
Cost
At 1 April 2015 — 17,257 17,257
Additions 33,662 47,035 80,697
At 31 March 2016 33,662 64,292 97,954
Depreciation
At 1 April 2015 — 3,306 3,306
Charge for the year 5,533 11,508 17,041
At 31 March 2016 5,533 14,814 20,347
Net book value
At 31 March 2016 28,129 49,478 77,607
10 Financial asset investments
Company
2016
£
2015
£
Investments in subsidiaries:
– Southern Lights Ventures 2002 Limited 6,121,427 6,121,427
– ChondroMimetics Limited 100 —
– Collagen Solutions (UK) Limited 4,102,122 4,102,122
10,223,649 10,223,549
Loans to subsidiary undertakings 2,461,256 2,461,256
12,684,905 12,684,805
Details of subsidiaries, all wholly owned and included in the consolidated financial statements, are as follows:
Country of incorporation Holding
Proportion of
voting rights
and shares held Nature of business
Collagen Solutions (UK) Limited England Ordinary shares 100% Collagen manufacture
Collagen Solutions (US) Inc. (held indirectly) USA Ordinary shares 100% Collagen manufacture and R&D
ChondroMimetics Limited England Ordinary shares 100% Medical device development
and manufacture
Southern Lights Ventures 2002 Limited New Zealand Ordinary shares 100% Collagen manufacture and supply 48 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
10 Financial asset investments continued
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. 
The Group prepares forecasts derived from the most recent financial budgets. Changes in revenue and direct costs are based on management’s 
plans to cross-sell the Group’s expanded range of current and pipeline products into existing customers and markets, and also to exploit 
opportunities with new customers, including extending into new market territories. These are approved by management and cash flows are 
extrapolated thereafter in perpetuity.
Based on the assumptions and estimates discussed above, and in note 8, management believes that no impairment provision is required.
11 Inventories
Group
2016
£
2015
£
Raw materials 42,118 19,457
Work in progress 73,172 19,885
Consumables and finished goods for resale 148,784 179,202
264,074 218,544
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. Inventories consumed in cost of sales amounted to £728,557 (2015: £145,675).
12 Trade and other receivables
Group
2016
£
Company
2016
£
Group
2015
£
Company
2015
£
Trade receivables 403,699 — 418,972 —
Other receivables 70,516 22,280 150,618 112,894
Amounts owed by Group undertakings (note 19) — 2,429,377 — 957,319
Prepayments and accrued income 161,829 48,903 74,885 46,508
636,044 2,500,560 644,475 1,116,721
Included within trade receivables is £303,765 (2015: £387,419) denominated in US dollars, £nil (2015: £20,807) denominated in euros 
and £60,364 (2015: £7,416) denominated in NZ dollars. £39,570 (2015: £3,330) is denominated in GBP sterling.
The amounts presented in the Consolidated Statement of Financial Position are net of impairment allowances. The ageing profile of trade 
receivables is shown below.
2016
£
2015
£
Current 317,340 297,671
31–60 days old 65,296 75,109
60–90 days old 6,560 40,344
Over 90 days 14,503 5,848
403,699 418,972
The directors are of the opinion that no overdue debts require impairment. 49 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
13 Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group as noted. The carrying amount of the asset approximates the fair value. Group 
balances are held in the following currencies:
2016 2015
GBP sterling 1,406,149 3,012,652
Euro 255,197 14,962
US dollar 742,356 347,064
NZ dollar 89,444 16,678
2,493,146 3,391,356
Cash and cash equivalents held by the Company were £1,321,938 (2015: £2,980,509). All balances were held in GBP sterling.
14 Liabilities
Current liabilities
Group
2016
£
Company
2016
£
Group
2015
£
Company
2015
£
Trade and other payables
Trade payables 352,356 113,120 214,927 36,488
Social security and other taxes 18,478 — 13,749 —
Accruals and deferred income 458,520 73,818 130,597 43,704
829,354 186,938 359,273 80,192
The carrying amount of trade and other payables approximates to their fair values. 
2016
£
2016
£
2015
£
2015
£
Other financial liabilities
Deferred consideration 25,353 — — —
Non-current liabilities
Group
2016
£
Company
2016
£
Group
2015
£
Company
2015
£
Other financial liabilities
Contingent consideration 2,411,747 1,754,665 4,319,891 3,588,815
Deferred consideration 25,353 — — —
2,437,100 1,754,665 4,319,891 3,588,815
The movements in the contingent consideration provision for the years are as follows:
Group
£
Company
£
At 1 April 2014 2,409,236 1,782,122
Acquisition of Southern Lights Ventures 2002 Limited 1,704,693 1,704,693
Unwinding of discount 125,300 102,000
Translation movement 80,662 —
At 31 March 2015 4,319,891 3,588,815
Release of contingent consideration provision – Collagen Solutions LLC (152,365) —
Unwinding of discount 264,488 205,878
Transfer of shares to be issued to Collagen Solutions (UK) vendors to reserves (2,000,000) (2,000,000)
Translation movement gain (20,267) (40,028)
At 31 March 2016 2,411,747 1,754,665 50 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
14 Liabilities continued
Non-current liabilities continued
Elements of the contingent consideration become payable if certain sales targets are reached over the course of the period to 31 March 2018 and/or 
if a number of supply contracts are concluded. There are three separate sets of earn-out conditions relating to the acquisitions of Collagen 
Solutions (UK) Limited, Collagen Solutions LLC and Southern Lights Ventures 2002 Limited. During the year ended 31 March 2016 management 
reviewed the probability that relevant targets will be achieved. Based on current information it was considered that the full Collagen Solutions LLC 
contingent consideration payment in 2017 would not be likely and a reversal of £152,365 in relation to this provision has been included in the 
Consolidated Statement of Comprehensive Income. All other earn-outs have been retained at the maximum provision under the agreement.
The amounts recognised as of the date of relevant acquisitions are as follows: Collagen Solutions (UK) Limited – £1,782,122; 
Collagen Solutions LLC – £627,113; and Southern Lights Ventures 2002 Limited – £1,704,693.
The terms for Collagen Solutions (UK) Limited require the Group to pay the vendors two tranches of up to £1 million in ordinary shares 
based on a 12.5p strike price, i.e. 8 million ordinary shares dependent on Group turnover reaching £2.25 million and securing three manufacturing 
contracts respectively. The expected shares to be issued under this arrangement are included in the shares to be issued reserve at 31 March 2016. 
We anticipate next month issuing 8 million shares in respect of the first earn-out tranche to the vendors pursuant to our obligations under 
the sale and purchase agreement dated January 2014.
The terms for Collagen Solutions LLC require the Group to pay the vendors two tranches of up to $0.625 million in cash dependent on sales 
of certain deferred consideration products and sales to certain deferred consideration customers reaching $3.5 million in any two consecutive 
years ending before 31 March 2018.
The terms for Southern Lights Ventures 2002 Limited require the Group to pay the vendors two tranches of NZ$2 million in cash dependent 
on turnover for any two years ending before 31 March 2018. The maximum amount is payable if turnover of NZ$6.5 million is achieved.
In the case of both Collagen Solutions LLC and Southern Lights Ventures 2002 Limited, pro-rata amounts will be payable if the maximum 
turnover levels are not achieved.
The deferred consideration relates to the purchase of ChondroMimetic assets. Under the asset purchase agreement £25,353 is due to 
Cambridge Enterprise Limited in September 2016 and £25,353 is due in September 2017.
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 2016 Group 2015
Cash
and cash
equivalents
Loans and
receivables
Other
liabilities
Cash
and cash
equivalents
Loans and
receivables
Other
liabilities
Contingent and deferred consideration — — 2,462,453 — — 4,319,891
Trade and other receivables — 636,044 — — 644,475 —
Cash and cash equivalents 2,493,146 — — 3,391,356 — — 
Borrowings – related party loan — — 83,815 — — 109,406
Trade and other payables — — 810,876 — — 345,524
Total 2,493,146 636,044 3,357,144 3,391,356 644,475 4,774,821
Company 2016 Company 2015
Cash 
and cash
equivalents
Loans and
receivables
Other
liabilities
Cash
and cash
equivalents
Loans and
receivables
Other
liabilities
Contingent consideration — — 1,754,665 — — 3,588,815
Trade and other receivables — 2,500,560 — — 1,116,721 —
Cash and cash equivalents 1,321,938 — — 2,980,509 — —
Trade and other payables — — 186,938 — — 80,192
Total 1,321,938 2,500,560 1,941,603 2,980,509 1,116,721 3,669,007
Currency derivatives
The Group and the Company have not utilised forward contracts to hedge future purchase transactions and cash flows in the financial year.
Credit risk
The Group and the Company’s credit risk is primarily attributable to trade receivables and cash and cash equivalents, although all cash is held 
on deposit with highly reputable financial institutions. 51 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
15 Financial liabilities and assets continued
Credit risk continued
Credit risk with respect to trade receivables is due to the Group and Company trading with a limited number of companies which are generally 
large listed or blue-chip medical device companies. Therefore, the Group and the Company do not expect in the normal course of events that 
these debts are at significant risk. Where there is perceived to be a greater risk, a standby letter of credit or similar is sought. The Group’s and the 
Company’s maximum exposure to credit risk is reflected in the carrying amounts of their financial assets as set out in the table above.
The Group and the 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’s and the Company’s interest rate exposure is limited to their cash and cash equivalents. Cash and cash equivalents are held 
on short-term deposit-attracting variable rates of interest.
Liquidity risk
The Group and Company manage liquidity risk to ensure that they will have sufficient liquidity to meet their liabilities as they fall due. 
All trade and other payables contracted at the reporting date have a settlement date of less than 12 months.
Contingent consideration
The contingent consideration relating to the purchase consideration on the acquisitions made 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’s and the Company’s financial assets at 31 March 2016 comprised cash and trade receivables. The cash balances of £2,493,146 
(2015: £3,391,356) (Group) and £1,321,938 (2015: £2,980,509) (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 the 
Company were not materially different from their book values.
Finance and interest rate risk
Where appropriate, the Group and the 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 the Company’s activities expose it primarily to currency risk as overseas revenues are primarily in USD. This risk is mitigated 
by the requirement to settle the costs, including salary and fixed overheads of operations in the US in US dollars. The Group is required to 
settle salary costs and cover overheads of the NZ facility in NZ dollars, which presents a currency risk as revenues are primarily denominated 
in USD. Management monitors these risks on an ongoing basis and would use foreign exchange forward contracts if required to hedge this 
exposure. There were no forward 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 provide 
written principles for the use of financial derivatives.
16 Deferred tax liabilities
Group
£
At 1 April 2014 —
On acquisition of subsidiaries 298,522
Translation movement (103)
Accelerated capital allowances 28,430
Utilisation of tax losses (28,430)
Credited to income statement (13,397)
At 31 March 2015 285,022
Translation movement 509
Accelerated capital allowances 49,269
Utilisation of tax losses (49,269)
Credited to income statement (32,419)
At 31 March 2016 253,112
At the reporting date, the Group has unused tax losses of £2,766,985 (2015: £1,333,645) available for offset against profits. A cumulative deferred 
tax asset of £553,397 (2015: £266,729) has not been recognised in respect of such losses. 52 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
17 Commitments under operating leases
At 31 March 2016 the Group and the Company had outstanding commitments for future minimum lease payments under non-cancellable 
operating leases, which fall due as follows:
Group
2016
£
Company
2016
£
Group
2015
£
Company
2015
£
Land and buildings
Within one year 134,699 87,574 150,473 50,000
Between one and five years 236,440 231,745 226,550 183,233
371,139 319,319 377,023 233,233
Equipment
Within one year 658 658 658 658
Between one and five years 1,645 1,645 2,304 2,304
2,303 2,303 2,962 2,962
Operating lease charges for the year amounted to £169,125 (2015: £94,492). The remaining lease term for property is three years.
18 Share-based payment transactions
The Company has granted equity-settled share options to five employees, two of whom are directors.
David Evans’ options
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.
Gill Black’s options
The exercise price is the market value of the shares at the date of grant of 7.75p. 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 vesting criterion is either for the share price to reach 
27p or EPS to reach 1p.
Employee options granted 31 July 2014
The exercise price is the market value of the shares at the date of grant of 7.88p. 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 vesting criteria are as follows:
(i) 64,724 options exercisable after 2 January 2016; no performance conditions apply;
(ii) 64,725 options exercisable after 2 January 2018; no performance conditions apply;
(iii) 64,725 options exercisable if either share price reaches 27p or EPS reaches 1p;
(iv) 64,725 options exercisable if annual sales reach £2.25 million and three new manufacturing contracts are entered into before 31 March 2017;
(v) 64,725 options exercisable if 90% of operational targets are met for two consecutive years; and
(vi) 64,725 options exercisable if 90% of operational targets are met for four consecutive years.
Employee options granted 1 April 2015
The exercise price is the market value of the shares at the date of grant of 9.63p. 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 vesting criterion is either for the share price to reach 
27p or EPS to reach 1p.
Employee options granted 15 December 2015 (employee appointed as a director on 3 May 2016)
The exercise price is the market value of the shares at the date of grant of 8.89p. The vesting period is up to ten years. The options were granted 
in three equal tranches with different vesting conditions. If the options remain unexercised after a period of ten years from the date of grant, 
the options expire. The vesting criteria for each tranche are as follows:
(i) 1,100,000 options exercisable if either share price reaches 27p or EPS reaches 1p; 
(ii) 1,100,000 options exercisable if the share price reaches 58p; and
(iii)  1,100,000 options exercisable if non-market-based performance conditions relating to the creation and realisation of value in the 
ChondroMimetic business are achieved. 53 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
18 Share-based payment transactions continued
A reconciliation of option movements over the year to 31 March 2016 is shown below:
2016 2015
Number
of share
options
Weighted
average
exercise
price
(in p)
Number
of share
options
Weighted
average
exercise
price
(in p)
Outstanding at the beginning of the year 5,438,349 9.43 4,050,000 10.00
Granted during the year 3,800,000 8.98 1,888,349 8.37
Lapsed during the year — — (500,000) 10.00
Outstanding at the end of the year 9,238,349 9.25 5,438,349 9.43
Exercisable at 31 March 2016 64,724 7.88 — —
Warrants 
On 26 June 2015, the Company entered into a warrant instrument in respect of the subscription for 1,709,688 new ordinary shares. Each warrant 
confers the right to subscribe for one ordinary share at a subscription price of 30p per ordinary share. The subscription rights under the warrants 
may be exercised at any time up to 25 June 2018.
The Group recognised the following expense in relation to share-based payment transactions:
2016
£
2015
£
Charged to Consolidated Statement of Comprehensive Income 35,831 26,746
The options and warrants outstanding at 31 March 2016 had a weighted average exercise price of 12.49p and a weighted average 
remaining contractual life of 7.4 years. The range of exercise prices of outstanding options and warrants at 31 March 2016 was 7.88p 
to 30p (2015: 7.88p to 10p).
The fair value of options granted under the scheme and the warrants granted is measured by use of the Trinomial Barrier Option and Black-Scholes 
models. The inputs into the models for options and warrants granted during the year are as follows:
Employee
option
Employee
option Warrant
Grant date 01/04/2015 15/12/2015 26/06/2015
Share price at grant date 9.63p 8.89p 8.63p
Exercise price 9.63p 8.89p 30p
Number of employees/suppliers 1 1 1
Share options/warrants granted 500,000 3,300,000 1,709,688
Vesting period (years) 1–10 1–10 1–3
Expected volatility 30% 30% 30%
Option/warrant life (years) 10 10 3
Expected life (years) 1–10 1–10 1–3
Risk free rate 1.7% 1.8% 1.7%
Expected dividends expressed as a dividend yield 0% 0% 0%
Fair value per option/warrant 3.5p 1.2p–3.8p 0.04p
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. 54 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Notes to the financial statements continued
19 Related party transactions
Transactions with key management
Key management personnel compensation comprised:
2016 2015
Equity-settled share options 28,147 26,746
Short-term benefits (including NIC) 395,526 356,586
Pension costs 7,914 4,674
Total remuneration 431,587 388,006
At 31 March 2016, two of the directors participated in a share option arrangement, as noted in the Directors’ Report and note 18.
Related party loan
Group
2016
£
Group
2015
£
Borrowings – current 20,978 21,843
Borrowings – non-current 62,837 87,563
83,815 109,406
1615915 Alberta Limited is a minority shareholder of Collagen Solutions plc. The Alberta loan is secured over equipment with a fixed interest 
rate of 8.2% per annum and a repayment term of five years. The total amount outstanding at 31 March 2016 was £83,815 (2015: £109,406). 
The fair value of these borrowings represents their carrying value as the effect of discounting is not significant.
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. The transactions 
during the year were management charges of £626,144 (2015: £186,613). In addition, the Company provided net funding of £815,863 
(2015: £761,997).
The outstanding balance due to the Company from its subsidiaries as at 31 March 2016 was £4,789,220 (2015: £3,418,575).
Investment
The Company holds a 5.34% investment in ordinary 1p shares in Jellagen Pty Limited at 31 March 2016 (31 March 2015: 10.5%), a company 
involved in the production of jellyfish collagen. No value is carried on the balance sheet. Collagen Solutions (UK) Limited provided development 
services amounting to £9,960 (2015: £32,000) to Jellagen Pty Limited under terms in the normal course of business.
Other
Diagnostic Capital Limited, a company of which David Evans is a director, provided corporate finance services amounting to £80,167 for the year 
ended 31 March 2015 in relation to the acquisition made during that year. There were no services provided in the year ended 31 March 2016. 
These services were charged at normal market rates.
Non-executive director Malcolm Gillies received a monthly consultancy fee of £1,000 from Shepherd and Wedderburn LLP, the Company’s 
legal advisers, during the year.
20 Share capital
2016
Number
2016
£
2015
Number
2015
£
Issued and fully paid
Issued ordinary shares of 1p 171,403,815 1,714,038 170,968,865 1,709,689
Issued deferred shares of 9p 500,000 45,000 500,000 45,000
Balance at the end of the year 171,903,815 1,759,038 171,468,865 1,754,689 55 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
20 Share capital continued
Ordinary shares 
The total number of issued shares at 31 March 2016 was 171,403,815 (2015: 170,968,865).
On 11 September 2015 434,950 ordinary shares were issued to Orthomimetics Limited in the sum of £50,706 for consideration of ChondroMimetic 
assets. Further ordinary shares are required to be issued by the Company under the asset purchase agreement of £50,706. 50% is due 
to Orthomimetics Limited on 11 September 2016 and the remaining 50% is due on 11 September 2017. These shares have been included 
in the shares to be issued reserve at 31 March 2016.
We anticipate issuing next month 8 million shares in relation to the first ‘earn-out’ tranche to the vendors of the Collbio Group pursuant to 
our obligations under the share purchase agreement dated January 2014.
Deferred shares
The total number of deferred shares at 31 March 2016 was 500,000 (2015: 500,000). The deferred shares do not confer any voting rights.
Options and warrants
At 31 March 2016 the Company had 9,238,349 (2015: 5,438,349) unissued ordinary shares of 1p each under the Company’s share option 
schemes, details of which are as follows:
Grant date Number
Option
price
(in p) 
Date
from which
exercisable 
Expiry
date
29 March 2013 4,050,000 10 29 March 2013 28 March 2023
31 July 2014 388,349 7.88 2 January 2016 30 July 2024
24 November 2014 1,000,000 7.75 1 January 2017 23 November 2024
1 April 2015 500,000 9.63 1 April 2018 31 March 2025
15 December 2015 3,300,000 8.89 15 December 2018 14 December 2025
On 26 June 2015 1,709,688 warrants were granted with an option price of 30p. They are exercisable from grant date and expire on 25 June 2018.
Details of share options and warrants 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 is measured in accordance 
with IFRS 2 Share-based Payment. 
Shares to be issued reserve
This reserve arises from ordinary shares that are due to be issued under deferred and contingent consideration arrangements.
Translation reserve
The translation reserve arises from the retranslation of the foreign subsidiaries to 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 10 December 2014 and the nominal value of those shares. Consideration shares were issued to satisfy part of 
the consideration in the acquisition of Collagen Solutions (UK) Limited, the acquisition of the business and assets of Collagen Solutions LLC, 
and the acquisition of Southern Lights Ventures 2002 Limited.
21 Contingent liabilities
Group and Company
At 31 March 2016, there were no known contingent liabilities (2015: nil). 56 Collagen Solutions plc Annual report and accounts 2016
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 24 August 2016 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 year ended 31 March 2016, together with the Directors’ Report and the 
Auditors’ Report on those accounts.
2. To re-elect Jamal Rushdy as a director of the Company. 
3. To re-appoint RSM UK Audit LLP as auditors of the Company. 
4. To authorise the directors to fix the auditors’ remuneration.
5.  That the rules of the Collagen Solutions plc 2014 Enterprise Management Incentive Scheme, inclusive of the US Incentive Stock Option 
Sub-Plan, referred to in the explanatory notes to the Notice of the Annual General Meeting dated 26 July 2016, produced to the meeting 
and, for the purposes of identification, initialled by the Chairman of the meeting, be approved.
6. 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 £731,346;
 (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 £571,346 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 2017, or, if earlier, at the end of the 
next Annual General Meeting of the Company to be held in 2017, 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 or legal, regulatory or practical problems under the laws or the requirements of any regulatory body 
or stock exchange of any territory or otherwise.
To consider and, if thought fit, pass the following as a special resolution:
7. That:
 (A)  subject to the passing of resolution 6 set out in the Notice of Annual General Meeting dated 26 July 2016 (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 £257,105.70; and
  (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 57 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
7. continued
 (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 Registered office
Company Secretary c/o Shepherd and Wedderburn LLP
26 July 2016  Condor House 
 10 St. Paul’s Churchyard 
 London 
EC4M 8AL 
 England
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 22 August 2016. 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 close of business on 22 August 2016 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. 58 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
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 6 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 7 is proposed as a 
special resolution. This means that for resolution 7 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.
Resolution 2 – Re-election of directors
The Company’s Articles of Association require that at the Annual General Meeting of the Company any directors who have been appointed 
since the last Annual General Meeting, or any who were not appointed or re-appointed at one of the preceding two Annual General Meetings, 
must retire from office. Accordingly, Jamal Rushdy will offer himself for re-election at the Annual General Meeting.
Biographical details of the directors are set out on pages 20 and 21 of the annual report and accounts.
Resolutions 3 and 4 – Re-appointment and remuneration of auditors
The Company is required to appoint auditors for each financial year of the Company. Resolution 3 proposes the re-appointment of RSM UK Audit LLP 
as the Company’s auditors for the current financial year of the Company ending on 31 March 2017. Resolution 4 seeks authority for the 
directors to decide the auditors’ remuneration.
Resolution 5 – US Incentive Stock Option Sub-Plan
As explained in the Circular that was sent to shareholders on 21 November 2014 in respect of the acquisition of Southern Lights Biomaterials 
(the ‘2014 Circular’), the Company has, since July 2014, operated a tax-efficient Enterprise Management Incentive share option scheme (called 
the Collagen Solutions plc 2014 Enterprise Management Incentive Scheme (the ‘Scheme’)) pursuant to which participating UK resident employees 
of the Company and its subsidiary companies (the ‘Group’) have been granted rights to acquire shares in the capital of the Company. On 
26 November 2015, the Company adopted the US Incentive Stock Option Sub-Plan annexed to and forming part of the Scheme (the ‘Sub-Plan’) 
in order to allow the Company to grant tax-efficient share options to participating employees who are resident in the United States of America. 
On 15 December 2015, the Company granted an option under the Sub-Plan to Jamal D Rushdy, who is now the Chief Executive Officer. This 
option, which will normally vest on or after 15 December 2018, entitles Mr Rushdy to acquire up to a maximum of 3,300,000 shares on payment 
of an exercise price of £0.0888 per share. The ability to exercise the option is, however, dependent on continued employment, the satisfaction 
of certain performance conditions and the rules of the Scheme (as amended by the operation of the Sub-Plan). In order for options granted 
pursuant to the Sub-Plan to qualify for the advantageous Incentive Stock Option tax treatment in the US, the Scheme must be formally approved 
by the Company’s shareholders no later than 12 months after the date on which it is adopted. This is the purpose of resolution 5. 
The terms of the Scheme are set out in the 2014 Circular.
The terms of options granted pursuant to the Sub-Plan, including the option granted to Mr Rushdy, are the same as described above for the 
Scheme save for such changes as are necessary to comply with US tax requirements, including:
• 
The options may be granted as tax-efficient Incentive Stock Options. The aggregate market value of shares in respect of which options 
granted to any employee become exercisable for the first time by that employee during any calendar year (under all share option plans of 
the Group) cannot exceed $100,000 and qualify as an Incentive Stock Option. To the extent that this limit is exceeded such options will be 
treated as non-tax advantaged ‘non-statutory options’.
• 
The Company dilution limit is specified as 25,710,572 shares (being 15% of the Company’s issued ordinary share capital as at the date of 
adoption of the Sub-Plan). 
• 
In the event that a participant owns shares representing more than 10% of the voting rights of the Company then his or her options may 
not continue after the fifth anniversary of grant. 
A copy of the rules of the Scheme (inclusive of the Sub-Plan) will be available for inspection at the Company’s registered office during normal 
business hours on weekdays from the date of this notice to the date of the meeting convened by this notice and at the meeting itself for at 
least 15 minutes prior to, and during, the meeting.  59 Annual report and accounts 2016 Collagen Solutions plc
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Explanatory notes to the Notice of Annual General Meeting continued
Resolution 6 – 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 £731,346. Of this amount, 
£571,346 represents approximately one-third of the Company’s total issued ordinary share capital as at 26 July 2016, being the latest practicable 
date prior to publication of this document, and £160,000 represents the nominal amount of shares which the directors anticipate will require 
to be issued in satisfaction of its obligations to the vendors of Collbio Limited under the acquisition agreement dated 9 December 2013, the 
first tranche of which the directors anticipate will fall due prior to or shortly after the AGM and a second and final tranche will potentially fall 
due at some point thereafter depending on the performance of Collbio Limited (the ‘Collbio Allotments’). The directors confirm that they would 
not use the authority in excess of £571,346 other than for the Collbio Allotments.
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 £571,346, representing approximately one-third 
of the Company’s total issued ordinary share capital as at 26 July 2016, 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 6 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 2017 Annual General Meeting or, 
if earlier, on 30 September 2017, unless previously cancelled or varied by the Company in general meeting. 
Resolution 7 – 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 did not apply, in connection with rights issues, open offers and other pre-emption offers pursuant to the authority granted by resolution 
6, and otherwise up to a total amount of £257,105.70, representing approximately 15% of the Company’s total issued ordinary share capital 
as at 26 July 2016, 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 2017 Annual General Meeting or, if earlier, on 30 September 2017, unless previously cancelled 
or varied by the Company in general meeting. 60 Collagen Solutions plc Annual report and accounts 2016
FINANCIAL STATEMENTS
Officers and professional advisers
Directors
David Evans – non-executive Chairman 
Malcolm Gillies – non-executive director  
Jamal Rushdy – Chief Executive Officer 
Dr Stewart White – Chief Scientific Officer 
Gill Black – Chief Financial Officer 
Geoff Bennett – executive director
Company Secretary
Gill Black
Registered office
c/o Shepherd and Wedderburn LLP
Condor House 
10 St. Paul’s Churchyard 
London 
EC4M 8AL
Nominated adviser and broker
Panmure Gordon (UK) Limited
One New Change 
London 
EC4M 9AF
Auditor
RSM UK Audit LLP
Chartered Accountants 
Third Floor 
Centenary House 
69 Wellington Street 
Glasgow 
G2 6HG
Registrars
Capita Asset Services
The Registry 
34 Beckenham Road 
Beckenham 
Kent 
BR3 4TU
PR
Walbrook PR Limited
4 Lombard Street 
London 
EC3V 9HD  
Design Portolio is committed to planting 
trees or every corporate communications 
project, in association with Trees or Cities. 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 2016