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.
In line with the London Stock Exchange's changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code the Board have adopted the Quoted Companies Alliance (QCA) Corporate Governance Code.
The size and structure of the Board and its committees are kept under review to ensure an appropriate level of governance operates throughout the year. The Board has implemented a number of changes over the recent past to drive improved performance and accountability, including:
- the appointment of Chris Brinsmead as non-executive director in January 2018 and subsequent appointment as Chairman in July 2019 on the retiral of David Evans
- the appointment of Hilary Spence as CFO in January 2018
- the appointment of Wade Rosen as non-executive director in June 2019
On 13 November 2019 the Board was streamlined by limiting the Executive Officers on the Board to only the CEO and the CFO, reducing the Board in size from eight to six. Lou Ruggiero, CBO and Tom Hyland, then COO, who were appointed to the Board in September 2018, stepped down as directors on that date.
The Board comprises four non-executive directors and four executive directors who meet frequently during the year to discuss strategy and to review progress and outcomes against objectives. We believe the Board has a good mix of skills and experience and fosters a culture that easily enables the non-executive members of the Board to challenge and advise the Executive team as appropriate.
The Board has also taken steps to improve our engagement with shareholders by introducing commercial metrics to help shareholders better understand the future trajectory of the business based on leading metrics more helpful to the understanding of long-term growth than lagging metrics such as revenue.
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 in the Annual Report.
The non-executive directors have a 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 QCA Code encompasses ten principles. This report sets out in broad terms how we comply with these ten principles, and any changes that are planned for future compliance. We will provide annual updates on our compliance.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
The Group is a developer and manufacturer of biomaterials and regenerative medicines for the enhancement and extension of human life. The Group's strategy is to use our technical competencies and expertise and collaborative approach to move up the value chain in collagen and medical device manufacturing for our customers and embed ourselves in the supply chain of life-enhancing medical devices produced by them and also to produce medical devices ourselves.
The Group's business model and strategy are described in the Annual Report on pages 5 to 23. A link to this report can be found here.
The key challenges we face are:
Scale: we are a small company challenged to build sufficient scale to weather the somewhat irregular and lumpy revenue stream that is a result of the life sciences business sector that we are in since we are not in control of our customers' regulatory timeframes. We are building scale by moving up the value chain both in our customers' supply chains and in establishing our own proprietary products. We monitor customer acquisition and other key metrics to ensure that we are moving in the right direction.
Regulatory: regulatory approval is critical for our own proprietary products and for those of our customers. We adopt a very structured quality management system to ensure that we are compliant with regulatory requirements at all times and work closely with our customers and regulatory bodies to ensure we stay in line with changes in requirements or in the market.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Group is committed to listening to and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. To this end we engage in investor roadshows, private investor meetings, analyst and broker briefings and regular reporting. We also, when requested, meet outside of our annual cycle with individual investors.
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.
More specifically our engagement strategy with investors is as follows:
Our half yearly and yearly results roadshow is the key opportunity for engagement with investors. Twice yearly we host a private investor evening in London where Jamal Rushdy, CEO and Hilary Spence, CFO present on business progress and financial results. This evening is announced ahead of time, to the market, to allow interested parties time to plan and have an opportunity to attend. We receive feedback from these evenings either through our nominated PR firm, Walbrook, directly from investors during the evening or directly to our Chairman, Chris Brinsmead, after the event.
We also host our AGM which is open to all shareholders to attend. The Notice of Meeting is sent to shareholders before the meeting. The chairs of the Board and all committees, together with all other Directors, routinely attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are subsequently published on the Group's corporate website.
The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are managed primarily through our PR firm and brokers. Formal engagement is carried out half yearly where institutional shareholders are invited to receive direct presentation of the Group performance and results from the CEO, Jamal Rushdy and CFO, Hilary Spence. Where appropriate and when available other Board members may attend these meetings. Formal and informal feedback is sought at these meetings and afterwards.
The Board as a whole is kept informed of the views and concerns of shareholders by briefings from the CFO, CEO or Chairman at each Board meeting. Any investment reports or releases from analysts are circulated to the Board. The Chairman, CEO and CFO are available to meet with major shareholders if required to discuss issues of importance to them outside the regular structure outlined above but based on the same information.
Key contacts for all matters related to investors are Chris Brinsmead, Chairman, Jamal Rushdy, CEO and Hilary Spence, CFO or Anna Dunphy at our PR firm Walbrook, Tel +44 (0)207933 8780 Call: +44 (0)207933 8780 or [email protected]
Clearly Covid-19 has necessarily interrupted the director's ability to interact face to face in recent months with either private or institutional shareholders but where appropriate other forms of communication are adopted including telephone conferencing.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Group seeks to ensure it has good relations with internal stakeholders (employees) and external stakeholders including customers, suppliers and regulatory bodies.
- All employees are invited to participate in a bi-annual survey on which they can give anonymised feedback on a range of issues. The results are collated and presented to all employees along with actions taken by management to address any issues raised.
- The CEO presents business progress updates to management at all sites each month and to the wider staff body at least twice a year or when there is any Group news of note.
- All staff undergo performance and development reviews with their managers twice a year to ensure that everyone is aligned with the Group's main business objectives. These sessions also allow for staff training needs to be addressed.
- The Group conducts formal customer surveys on a regular basis. Follow up on any customer complaints and technical enquiries received is an integral part of the Quality Management System. Customer feedback is also sought through formal and informal meetings during customer visits and exhibition meetings.
- The Groups materials are sourced from transmissible spongiform encephalopathy (“TSE” which includes scrapie and Bovine Spongiform Encephalopathy or “BSE”) free territories, with suppliers who have the necessary quality systems, certifications and export health attestations in pace to ensure reduced risk. Supplier performance is regularly measured, monitored and reviewed and any concerns are escalated through a well-defined process as part of the Quality management System. We pay suppliers to an average of 29 days.
- The Group maintains and operates quality standards in line with ISO 13485 and ISO 22442 and the Group is regularly audited by several bodies including BSI.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Group's approach to identifying and understanding key risks to the business is outlined on pages 33 to 36 of our Annual Report 2019. This report can be accessed from here.
The independent auditor's report has now been expanded to cover key risks from an audit perspective and the auditor's response to those risks. The 2019 audit report is contained within pages 48 to 50 of the annual report which can be accessed from the above link.
Further, 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 to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded, and that material errors and irregularities are either prevented or would be detected within a timely period.
However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.
The key elements of the control system in operation are:
- the Board meets regularly with a formal schedule of matters for decision and has put in place an organisational structure with clear lines of responsibility defined and with appropriate delegation of authority; and
- there are procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group's financial performance against approved budgets and forecasts.
The Audit 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 2019 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.
Principle 5: maintain the board as a well-functioning, balanced team led by the chair
The Board members have a collective responsibility and legal obligation to promote the interests of the Group and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the Board.
The Board currently comprises one Non-Executive Chairman, three Non-Executive Directors and two Executive Directors who are the Chief Executive and the Chief Financial Officer.
The Board meets at regular intervals and has a schedule of matters reserved for the Board including setting corporate strategy, monitoring performance against business objectives, approving the annual budget, reviewing financial performance, agreeing the renewal of and any new banking/treasury facilities, approving major items of capital expenditure and reviewing and approving acquisitions. The Board is provided with appropriate information in advance of Board meetings to enable it to discharge its duties effectively in the form of a full presentation pack and any appropriate supporting documentation including management accounts.
The Group also has an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee. Roles and structures are described under Principle 9.
The board believes, based on its experience and demonstrated through behaviour at Board meetings, that all the non-executive directors act independently in character and judgement. It is recognised however that according to the Code Provisions on Independence of the Board outlined in the UK Corporate Governance Code that there are two apparent exceptions to this code:
- Geoff Bennett has been involved within the last 5 years as a material shareholder in Southern Lights Ventures, a company purchased by the Group in 2014, but for which the earn out period only recently concluded. The Board recognises this and has assessed Geoff as independent in character and judgement. In reaching this conclusion, the board considered the objective manner in which Geoff has provided support to the Chairman and other board members and his strength of character and attitude of mind, in particular when faced with the restructuring of the New Zealand operations, of which he was previously the owner.
- Three Non-Executive Directors receive consultancy fees from the Group which are capped to a fixed level. As disclosed in note 19 on page 84 of the Annual Report the Board has considered this situation and does not consider that payment of consulting fees has any bearing on the Boards ability to function independently.
It is noted that David Evans, the recently retired Non-Executive Chairman has previously been granted share options as disclosed on page 44 of the 2019 Annual Report. David also holds substantial shareholdings in the Group. In accordance with the Code Provisions subsequent to appointment the test of independence is not appropriate in relation to the Chairman.
We believe the Board has a good mix of skills and experience and functions with a culture that easily enables the Non-Executive members of the Board to challenge and advise the Executive team as appropriate.
The Non-Executive Directors are committed to providing not less than 10 - 12 days annually to the Group. In reality, the Non-Executive Directors consistently provide more than this minimum time requirement. The executive directors are all full-time positions. The non-executive directors have all confirmed that they are able to allocate sufficient time to meet the expectations of their role, and they are required to obtain the Chairman's agreement (or, in the case of the Chairman, the Chief Executive's agreement) before accepting additional commitments that might affect the time they are able to devote.
Attendance at board and committee meetings during the last financial year ended 31 March 2020 is as follows:
|Board Meetings||Remuneration Committee Meetings||Nomination Committee Meetings||Audit and Risk Committee Meetings|
|David Evans Chairman (now retired)||1||N/A||N/A||N/A|
|Geoff Bennett Non-Exec||7||2||1||2|
|Malcolm Gillies Non-Exec||7||2||1||1|
|Chris Brinsmead Chairman||7||1||1||2|
|Wade Rosen Non-Exec||N4||1||N/A||1|
|Jamal Rushdy CEO||7||N/A||N/A||N/A|
|Hilary Spence CFO||7||N/A||N/A||N/A|
|Tom Hyland COO||4||N/A||N/A||N/A|
|Lou Ruggiero CBO||4||N/A||N/A||N/A|
With Board members in different time zones across the world we attempt to ensure we have at least two full face to face meetings each year, with the others being held virtually with main attendance in the Glasgow head office, Covid-19 permitting.
The directors consider that the board is well-balanced and has the right number of members for the size of the Group.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
Full details of the experience of each of the Board members can be found in the Annual Report and by following this link. The Board is satisfied that, between the Directors, it has an effective and appropriate balance of functional skills and experience, including in the areas of strategy, corporate acquisitions, finance, sales and marketing, manufacturing, international trade and also appropriate industry experience not only in bio tech and pharma but across a number of industries.
All Directors retire by rotation at regular intervals in accordance with the Company's Articles of Association.
Appointment, removal and re-election of Directors
The Board makes decisions regarding the appointment and removal of Directors and there is a formal, rigorous and transparent procedure for appointments 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.
At the AGM on 28 August 2019 Tom Hyland, Lou Ruggiero, Wade Rosen and Jamal Rushdy retired from office and were re-elected. Tom Hyland and Lou Ruggiero subsequently stepped down from the Board on 13 November 2019.
Directors ensure their skills and capabilities are kept up to date including:
- Attending continuing professional development courses as part of a professional qualification.
- Attending industry trade shows and exhibitions to remain up to date with competitor activities.
Neither the Board nor any committee has sought external advice on a significant matter in the current financial year nor has the board or any of its committees engaged with external advisors.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Since the adoption of the QCA Code the Board has adopted a new process for assessing the individual and joint performance of the Board to ensure that:
- Each individual's and the overall joint contribution are relevant and effective;
- Each individual and the overall Board is committed and
- Where relevant, each individual and the Board in totality has maintained independence
This new process for the Group commenced last financial year. The review is conducted via anonymous survey and we will use a summary of the answers to inform a discussion. This review is designed to assess the performance of the team as a unit to ensure that the members of the board collectively function in an efficient and productive manner.
The Nomination Committee is responsible for ensuring succession planning and determining board and other senior management appointments. As chair, Chris Brinsmead invites all Board members to suggest any candidates who they feel may be capable of adding value to the Board as a whole.
Principle 8: Promote a culture that is based on ethical values and behaviours
Earlier last year, and building on previous Group values, the CEO led an internal exercise with the senior management team to revisit and reemphasise a set of core values that had been adopted throughout the entire Group. These core values were revisited and then represented to all staff across all sites early in 2018 to re-emphasise their importance. These core values are as follows:
- Customer Focus - At the centre of what we do
- Accountability - Own it first, and then get it done
- Simplicity - Keep the goal in mind, act faster, be flexible
- Integrity - Do the right thing
- Aspiration - Think bigger than today
- Celebration - Share and recognize our wins!
The Executive members of the Board are very aware of the importance in living up to these core values and in setting examples for all staff to follow.
The Group carries out an annual employee survey that includes a question about how we are living up to these core values. We also periodically perform an executive team self-assessment on performance.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Board is collectively responsible for defining and implementing a strategy to deliver long-term value to shareholders, but which operates within a framework of good corporate governance and in line with the Board's assessment of risk.
The roles and responsibilities of the various Board positions are as follows:
Chairman - has responsibility for leading an orderly and effective Board and providing overall guidance to other members of the Board to ensure it delivers on its stated strategy. The chair also attends some results presentations demonstrating a level of commitment which is visible to shareholders. The chair is also responsible for overseeing the Group's corporate governance practices to ensure they remain relevant for an organisation of our size.
Non-Executive Directors (NEDs) - have responsibility to be independent in judgement and thought and for scrutinising and, if necessary, challenging the Chief Executive and Executive Directors to ensure the Group delivers its strategy whilst maintaining acceptable levels of risk. The NEDs also provide a sounding board for the Chairman if and when necessary.
Chief Executive - has responsibility for leading the organisation and implementing the Group's objectives in line with its agreed strategy, assessing risks to ensure they are managed and mitigated, safeguarding the Group's assets with appropriate policies and controls, leading an investor relations programme to ensure effective communication with shareholders and ensuring effective communication and reporting between the Executive members of the Board and the Non-Executive members.
Executive Directors - have responsibility for safeguarding the Group's assets with appropriate policies and controls and supporting the CEO in promoting the interests of the Group. Executive Directors support the CEO in day-to-day operational, finance and commercial issues, providing support and leadership to the senior management team and support in the delivery of the organisation's strategic plan.
The Board has a schedule of matters which it reserves for its review including:
- setting corporate strategy
- monitoring performance against Group objectives
- approving the annual budget
- reviewing financial performance
- agreeing the renewal of and any new banking/treasury facilities
- approving major items of capital expenditure
- reviewing and approving acquisitions
The Board delegates authority to three committees which operate under terms of reference and include:
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 three non-executive directors (Wade Rosen, Malcolm Gillies and Geoff Bennett). It is chaired by Wade Rosen.
Audit and Risk Committee
The Audit and Risk Committee comprises three non-executive directors (Geoff Bennett, Malcolm Gillies and Wade Rosen) and is chaired by Geoff Bennett.
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 meet to consider the reports of the auditors prior to the submission of the annual financial statements to the Board.
The Nomination Committee comprises all four non-executive directors (Wade Rosen, Malcolm Gillies, Chris Brinsmead and Geoff Bennett) and is chaired by Chris Brinsmead.
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.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Group has not previously issued a formal Audit and Risk Committee Report although the Principal Risks and Uncertainties highlighted on pages 33 and 36 of the Annual Report are effectively this.
The Group communicates with shareholders through the Annual Report and Accounts, full year and half-year announcements, the Annual General Meeting AGM) and one-to-one meetings with large existing or potential new shareholders. Existing shareholders are given the opportunity to engage with the CEO and CFO formally twice yearly as part of our results announcements process. We employ a Public Relations agency, Walbrook, to provide investors with a port of call for information related to the Group. A range of corporate information (including all Group announcements, presentations, videos and Annual Reports) is also available to shareholders, investors and other interested parties on the Group's website at www.collagensolutions.com. The engagement process is described under Principle 2.
The Group also completes annual employee survey to maintain an open dialogue with employees. Customer feedback is encouraged and prized, commercial KPI's published in our Annual Report monitor customer retention.
The most recent Group AGM was on 28 August 2019 and the votes cast at the meeting were as follows:
|Resolution||Description||Total Votes For||% Votes||Total Votes Against||% Votes||Votes cast as a % of ISC|
|1||Report & Accounts||141,776,764||100||0||0||32|
|2||Re-elect Tom Hyland||141,776,764||100||0||0||32|
|3||Re-elect Lou Ruggiero||141,776,764||100||0||0||32|
|4||Re-elect Wade Rosen||141,776,764||100||0||0||32|
|5||Re-elect Jamal Rushdy||141,776,764||100||0||0||32|
Ordinary Resolutions were as follows:
1. To receive and adopt the Company's accounts for the financial year ended 31 March 2019, together with the Directors' Report and the Auditor's Report on those accounts.
2. To re-elect Tom Hyland as a director of the Company.
3. To re-elect Lou Ruggiero as a director of the Company.
4. To re-elect Wade Rosen as a director of the Company.
5. To re-elect Jamal Rushdy, who retires by rotation, as a director of the Company.
6. To reappoint RSM UK Audit LLP as auditors of the Company.
7. To authorise the directors to fix the auditor's remuneration.
(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 £1,478,943;
(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 £1,478,943 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 2020, or, if earlier, at the end of the next Annual General Meeting of the Company to be held in 2020, 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 Offed 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.
Special Resolutions were as follows:
(A) subject to the passing of resolution 8 set out in the Notice of Annual General Meeting dated 23 JuIy 2019 (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:
- in connection with a Pre-Emptive Offer (as defined in the Allotment Authority); or
- otherwise than in connection with a Pre-Emptive Offer, up to a maximum nominal amount of £443,683; 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
(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.
The directors believe that the use of the going concern basis of accounting is appropriate because they consider that the Group has adequate 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, in particular in light of the successful fund raise completed on 6 June 2019. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
UK City Code on Takeovers and Mergers
As an AIM traded UK registered company, Collagen Solutions Plc is subject to the UK City Code on Takeovers and Mergers legislation.