The directors present the strategic report for the year ended 31 December 2024.

The principal activity of the Company in the period under review was the manufacture and supply of unlicenced medicines.

The Company is a wholly owned subsidiary of the Target Healthcare Group.

The Directors consider the results of the financial year and the position of Company at the year-end to be resilient as the Company, and the Target Healthcare Group, positions itself for future growth and development.

The Directors are committed to long term creation of shareholder value by increasing market share through organic growth and will continue to seek every opportunity to increase profitable turnover, including realising the commercial advantages of investments made during the year and identifying prospects for future development.

Key performance indicators

Turnover for the year ended 31 December 2024 grew by 15% to £200.4m (2023: £174.8m). This growth in revenue has been driven by capital investment made both this year and in the prior period which increased manufacturing capabilities in the year under review.

Operating profit for the year ended 31 December 2024 declined to £12.3m (2023: £17.0m), with the Company’s operating profit margin reducing to 6% (2023: 10%). This decline reflects a combination of strategic investment in the cost base and short-term margin pressures.

As part of the Target Healthcare Group’s long-term growth strategy, the Company continued to make significant investments during the year in operational infrastructure, talent acquisition, and information technology. These investments are intended to strengthen manufacturing capabilities, accelerate product and process development, and improve our service to customers. In addition to these strategic investments made in the period, gross margin was impacted by inflationary pressures across our supply chain as well as transitional inefficiencies experienced during the introduction of new manufacturing capacity.

The Directors believe that the Company is well positioned to benefit from improved efficiency, higher output, and enhanced product offerings in 2025 and beyond, with the Company primed for sustainable growth in the years ahead.

The management of the business and the execution of the Company's strategy are subject to several key risks and uncertainties which are outlined below.

Regulation

The Company operates in a highly regulated market, governed and licenced by the laws and regulations set by the Medicines & Healthcare products Regulatory Agency (“MHRA”) including compliance with Good Manufacturing Practice (“GMP”) and Good Distribution Practice (“GDP”) standards. We continue to invest heavily to ensure full compliance with MHRA requirements and meet industry best practice standards.

Product sourcing

The Company’s ability to source products, raw materials, and finished goods at commercially viable terms is critical to maintaining service levels, controlling costs, and meeting customer demand. The Company maintains strong relationships across our supplier network, industry bodies, and customer base, enabling us to stay well informed of emerging supply chain issues and potential product shortages to plan mitigation strategies and respond swiftly to market developments. In addition, the Company works very closely with regulatory and commercial teams to qualify alternative suppliers and manage risks related to quality and continuity of supply.

Health and Safety

The nature of the Company’s operations, including pharmaceutical manufacturing, warehousing, and distribution, carries inherent health and safety risks. The Directors recognise their duty to provide a safe and healthy working environment and view effective health and safety management as fundamental to the Company’s operational success and reputation. We have comprehensive controls and procedures in place to minimise health and safety risk.

Human resources

The ability to attract, retain, and develop high-quality employees is critical to the ongoing success and competitiveness of the Company. Our people are the Company's most valuable resource, with their knowledge and experience critical to meeting customer requirements. As part of the Target Healthcare Group, the Company has increasingly invested in employee training and development; performance management and recognition; career progression arrangements; competitive reward and benefits; and providing a positive working environment and culture. Human resource risks are reviewed regularly by the Board and senior management team, with strategic workforce planning forming part of the Company’s broader business planning process.

Financial risk management

The Company is exposed to a range of financial risks in the ordinary course of business, including price risk, credit risk, liquidity risk, foreign exchange risk and interest rate risk. The Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework and are committed to managing these risks in a manner that supports the Company’s strategic objectives while preserving financial stability.

Price risk

The Company is exposed to price risk in both its input costs and the prices it is able to realise for its products due to competitive pressures, regulatory pricing controls, and tender-based pricing mechanisms. The Directors review pricing strategy and market positioning as part of regular commercial and financial planning processes.

Credit risk

The Company is exposed to credit risk, primarily in relation to trade receivables from our customers. Given the nature of the pharmaceutical sector and the Company’s customer base, we consider the overall credit risk as relatively low. Nonetheless, the Company has policies in place to require appropriate credit checks, maintain credit limits and regular dialogue with customers.

Liquidity risk

The Company actively maintains a mixture of long term and short-term debt finance that is designed to ensure the Company has sufficient available funds for operations and planned expansions. The Company actively monitors its cash flow forecasts with cash management centralised, where possible, to optimise liquidity of the Company as part of the Target Healthcare Group.

Foreign currency risk

While the greater part of the Company’s revenues and expenses are denominated in Sterling, the Company is exposed to some foreign exchange risk in the normal course of business. While the Company has not used financial instruments to date to hedge foreign exchange exposure, this position is kept constantly under review.

Interest rate risk

The Company has interest-bearing liabilities, including bank loans, on which interest charged varies in line with the bank’s base rate. The Company has a policy of maintaining debt at a competitive rate to ensure a reasonable degree of certainty over future interest cash flows. The Directors will revisit the appropriateness of this policy should the Company’s operations change in size in the future.

Cybersecurity Risk

The Company faces ongoing exposure to cyber security risks. These include the potential for data breaches, ransomware attacks, unauthorised access to sensitive systems, and business interruption due to cyber incidents. The Directors recognise the increasing sophistication and frequency of cyber threats and view cyber security as a critical area of operational risk, requiring continual vigilance and investment. To counter this risk, as part of the Target Healthcare Group, the Company has established a multi-layered framework to reduce the likelihood and impact of such risks, including IT security controls, data protection policies, user awareness training and external security testing.

The Directors are fully aware of their duty under section 172(1) of the Companies Act 2006 to act in the way they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole, having regard (among other matters) to the interests of its employees, the fostering of business relationships with customers and suppliers, and the impact of its operations on the environment.

The Company’s strategy is focused on the supply and manufacture of pharmaceuticals, delivered with exceptional care and precision, underpinned by unparalleled customer service, to meet the unique needs of customers and patients. In fulfilling their duty, the Directors have regard to all relevant stakeholders and aim to balance short-term and long-term considerations in key decisions focused towards this strategic goal.

Employees

Our people are fundamental to our success and, therefore, the interests of the Company’s employees is a key focus and consideration of the Directors. The Company is committed to attracting, developing and retaining a skilled and diverse workforce. During the year, we continued to invest in the Company’s physical workplace environments; training and development; enhanced employee engagement through regular communication; and supported many wellbeing initiatives to deliver an attractive employee proposition.

The Company actively promotes colleagues to participate in a number of different forums and committees which are encouraged to identify events and causes (including local charities) that they wish the Company to support.

The Target Healthcare Group’s Intranet is used to gather feedback and share information with colleagues, including Group and Company wide developments, opportunities and updates.

Attracting new talent into the Company to support its anticipated growth is a key objective. To assist in achievement of this goal, we operate a Candidate Referral Scheme which has been successful in identifying high quality candidates.

Customers

Customer focus and service is central to the Quantum Pharmaceutical, and wider Target Healthcare Group, mission. We work closely with all customer groups and attend an extensive range of trade shows and customer events throughout the year. This ensures that we can understand the requirements of both primary and secondary care in the United Kingdom, with regular feedback mechanisms helping tailor our service to evolving customer needs.

Suppliers

The Company has longstanding relationships with our global network of suppliers with whom we collaborate closely to ensure supply chain resilience, quality, innovation and cost-effectiveness. As with customers, our regular attendance at a range of trade shows and supplier events throughout the year ensures that the Company is ideally positioned to source products to service the needs of our customers.

Supplier audits and compliance with ethical sourcing standards are embedded in our procurement processes, and we value open and transparent relationships that foster shared opportunity and responsibility.

Environment

Quantum Pharmaceutical, as part of the Target Healthcare Group, is committed to reducing its environmental impacts, energy consumption and carbon footprint. The Directors’ continued aim is to comply with all applicable environmental legislation, preventing pollution and minimising waste wherever possible. The Company actively identifies risk and mitigation strategies associated with Environmental, Social and Governance (“ESG”) practices, including appointment of “Carbon Champions” to explore opportunities for us to undertake positive initiatives in this regard.

The Target Healthcare Group and Directors are fully engaged with NetZero and supporting the sustainability objectives of our customers, most notably the NHS who have set the objective of Net Zero by 2045. NetZero is a Group wide initiative, in which Quantum Pharmaceutical participate, which includes:

• Increase in Electric Vehicles (“EV”) across the Group’s fleet along with provision of EV chargers across our estate.

• Launch of EV and cycle to work salary sacrifice schemes;

• Environmentally conscious practices including increased use of recycled and sustainable materials and waste reduction across our manufacturing and distribution activities;

• Consideration of the environmental impact of employee business travel, utilising sustainable options whenever possible;

• Encouragement of suppliers, customers and partners to align with our environmental standards.

Board Decision-Making

All decisions made by the Directors on behalf of the Company follow a thorough review of the potential consequences, both positive and negative, as well as the possible impact on the business and colleagues in the long term. Throughout the year, the Board receive regular updates from management on stakeholder engagement and consider these insights when setting strategy, reviewing performance, and approving key initiatives.

Future Outlook and Prospects

The Company remains confident in its long-term growth prospects and is well positioned to respond to the evolving needs of our customers and the healthcare sector. The Directors are positive that the Company is well placed to navigate the current market landscape and deliver continued value to all stakeholders through focus on customer service, quality, reliability, and responsible growth.

Key areas of strategic focus over the coming period include:

• Continued investment in the Company’s facilities to provide additional capacity and capability to service our customers demand across multiple geographies;

• Development of new and existing customer relationships across the UK and select international markets;

• Strengthening of the Company’s digital infrastructure and data capabilities.

The Company also remain alert to opportunities for growth through strategic partnerships, licensing arrangements, and / or selective acquisitions that align with our long-term objectives.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £1,500,000 (2023: £2,350,000). The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The Company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

The Company's current policy concerning the payment of trade creditors is to:

• settle the terms of payment with suppliers when agreeing the terms of each transaction;

• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

• pay in accordance with the Company's contractual and other legal obligations.

Trade creditors of the Company at the year end were equivalent to 79 day's purchases, based on the average daily amount invoiced by suppliers during the year.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Company's continues and that the appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The Company places a high value on the involvement of its employees and continues to keep them informed on matters affecting them as colleagues. This is achieved through formal and informal meetings and the Company’s intranet site. The Company acknowledges that not all employees have access to the Intranet site and will ensure that communications are visible on noticeboards.

The auditor, Consilium Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The Company has taken exemption from preparing an Energy and Carbon report as their information is included in the group report of Target Healthcare Group Holdings Limited.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 Company and of the profit or loss of the Company for that period. In preparing these 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 applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the Company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company’s auditor is aware of that information.

We have audited the financial statements of Quantum Pharmaceutical Limited (the 'Company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• 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; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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

• the 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.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.

• We identified the laws and regulations applicable to the Company through discussions with directors and management and from our knowledge of the regulatory environment relevant to the Company.

• We assessed the extent of compliance with laws and regulations through making enquiries of management and inspecting legal correspondence.

• We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud.

• To address the risk of fraud through management bias and override of controls, we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias and we investigated the rationale behind significant or unusual transactions.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

The income statement has been prepared on the basis that all operations are continuing operations.

The notes on pages 14 to 27 form part of these financial statements.

The notes on pages 14 to 27 form part of these financial statements.

The notes on pages 14 to 27 form part of these financial statements.

Quantum Pharmaceutical Limited is a rivate company limited by shares incorporated in England and Wales. The registered office is Quantum House, Hobson Industrial Estate, Burnopfield, Co Durham, United Kingdom, NE16 6EA. The Company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions from the requirements of IFRS:

• presentation of a statement of cash flows and related notes;

• disclosure of key management personnel compensation; and

• related party disclosures for transactions with the parent or wholly owned members of the group.

Where required, equivalent disclosures are given in the group accounts of Target Healthcare Group Holdings Limited. The group accounts are available from its registered office, 8 Redwood Crescent, East Kilbride, Glasgow, Scotland, G74 5PA.

The directors have at the time of approving the financial statements, a reasonable expectation that the trueCompany and the group of which the Company is a member has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales-related taxes.

Revenue from the supply of products is recognised at a point in time, when the Company has transferred control of the product to the buyer and it is probable that the Company will receive the previously agreed upon payment. These criteria are considered to be met when the goods are delivered. Revenue is recognised at the fair value of consideration received or receivable.

Research and development

Expenditure on research activities is recognised in the profit and loss account as an expense as incurred.

Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Company intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the profit and loss account as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Other intangible assets

Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and less accumulated impairment losses.

Amortisation

Amortisation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use.

The estimated useful life of product development costs are to be determined on an individual basis for each medicine developed but are typically 3 to 5 years.

The software costs are amortised at a rate of 30% per annum.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

No depreciation is provided on freehold land or assets in the course of construction.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Inventories are stated at lower of cost and net realisable value. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used. For work in progress and finished goods cost is taken as production cost, which includes an appropriate proportion of attributable overheads.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial assets are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The Company recognises financial debt when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the Company’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

At inception, the Company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain modifications of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the Company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the Company's estimate of the amount expected to be payable under a residual value guarantee; or the Company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding modification adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

In the application of the Company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. 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.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Estimates are made in respect of the recoverable value of trade and other debtors. When assessing the level of provision required, factors including current trading experience, and the ageing profile of the debtors are considered.

Net realisable value of stock is the estimated selling price in the ordinary course of business, less the necessary costs to make the sale. Provision for obsolete stock is made based on historical experience.

The Company's turnover primarily derives in the UK and is attributable to the Company's principal activity.

Auditors remuneration is borne by a fellow group entity in the current and previous year.

The average monthly number of persons (including directors) employed by the Company during the year was:

Their aggregate remuneration comprised:

The charge for the year can be reconciled to the profit per the income statement as follows:

Property, plant and equipment includes right-of-use assets, as follows:

Included within other payables is an invoice discounting facility of £15,115,140 (2023: £6,828,030). This is secured by a fixed charge over the purchased debts and a floating charge over all assets and undertakings.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior reporting period.

Deferred tax assets and liabilities are offset in the financial statements only where the Company has a legally enforceable right to do so. Deferred tax has been calculated at a rate of 25%.

The Company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 101 'Reduced Disclosure Framework', not to disclose related party transactions with wholly owned subsidiaries within the group.

No further transactions with related parties were undertaken such as are required to be disclosed under the provisions of Financial Reporting Standard 101 "Reduced Disclosure Framework".

The intermediate parent company is Target Healthcare Group Limited. The Company is included within the consolidated financial statements of Target Healthcare Group Holdings Limited, available at the registered address 8 Redwood Crescent, East Kilbride, Glasgow, Scotland, G74 5PA.

The ultimate parent company is Target Healthcare Group Limited, a Company registered in the Isle of Man. No consolidated accounts are required at this level.

The ultimate controlling party is L Campbell.