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

The principal activity of the Group in the year under review was the manufacture and supply of generic, branded and unlicensed medicines.

The principal activity of the Company was that of a holding company.

The Directors consider the results of the financial year and the position of the Group at the year-end to be resilient as the 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 £249.3m (2023: £216.1m). 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 £9.7m (2023: £15.4m), with the Group’s operating profit margin reducing to 4% (2023: 7%). This decline reflects a combination of strategic investment in the cost base and short-term margin pressures.

As part of the Group’s long-term growth strategy, it 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 Group is well positioned to benefit from improved efficiency, higher output, and enhanced product offerings in 2025 and beyond, with the Group primed for sustainable growth in the years ahead.

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

Regulation

The Group 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 Group’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 Group 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 Group 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 Group’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 Group’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 Group. Our people are the Group's most valuable resource, with their knowledge and experience critical to meeting customer requirements. The Group 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 Group’s broader business planning process.

Financial risk management

The Group 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 Group’s risk management framework and are committed to managing these risks in a manner that supports the Group’s strategic objectives while preserving financial stability.

Price risk

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

Liquidity risk

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

Foreign currency risk

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

Interest rate risk

The Group has interest-bearing liabilities, including bank loans, on which interest charged varies in line with the bank’s base rate. The Group 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 Group’s operations change in size in the future.

Cybersecurity Risk

The Group 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, the Group 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 Group 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 Group’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 Group’s employees is a key focus and consideration of the Directors. The Group is committed to attracting, developing and retaining a skilled and diverse workforce. During the year, we continued to invest in the Group’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 Group 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 Group to support.

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

Attracting new talent into the Group 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 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 Group 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 Group 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

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 Group 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 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 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 Group 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 Group 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 Group 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 Group’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 Group’s digital infrastructure and data capabilities.

The Group 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 Company was incorporated and commenced trading on 1 May 2024.

The results for the year are set out on page 13.

Ordinary dividends were paid amounting to £1,355,000. The directors do not recommend payment of a further dividend.

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

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 Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The Group 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 Group's intranet site. The Group acknowledges that not all employees have access to the intranet site and therefore ensure that communications are visible on noticeboards.

Consilium Audit Limited were appointed as auditor to the Group in the year and is deemed reappointed under section 487(2) of the Companies Act 2006.

The Group has followed the 2019 HM Government Environmental Reporting Guidelines. The Group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

All calculations have been performed using actual data across the reporting period. Data and electricity usage was obtained from utility invoices

The chosen intensity measurement ratio is total gross emissions in kilograms CO2e per employee.

• The Group formalised its commitment to Netzero through its Carbon Reduction Plan.

• Appointed a Board member to lead on sustainability.

• A focus on any new company car being EV.

• Building construction to reduce the energy consumption on the largest site.

• Implemented fleet management software purchased to ensure optimal routes are planned for vehicles to allow us to track the fleet mileage.

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 Group and Company, and of the profit or loss of the Group 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;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and 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 Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 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 auditor of the Company 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 auditor of the Company is aware of that information.

We have audited the financial statements of Target Healthcare Group Holdings Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Group statement of comprehensive income, the Group balance sheet, the Company balance sheet, the Group statement of changes in equity, the Company statement of changes in equity, the Group statement of cash flows 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Group's and the parent company's affairs as at 31 December 2024 and of the Group's 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 Group and parent 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 Group's and parent 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 Group and the parent company and their 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 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.

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 parent 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 parent 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 Group 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 Group'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.

Use of our 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 notes on pages 19 to 38 form part of these financial statements.

The notes on pages 19 to 38 form part of these financial statements.

The notes on pages 19 to 38 form part of these financial statements.

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s profit for the year was £1,413,761 (2023 - £0 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The notes on pages 19 to 38 form part of these financial statements.

The notes on pages 19 to 38 form part of these financial statements.

The notes on pages 19 to 38 form part of these financial statements.

Target Healthcare Group Holdings Limited (“the Company”) is a private limited Company domiciled and incorporated in Scotland. The registered office is 8 Redwood Crescent, East Kilbride, Glasgow, Scotland, G74 5PA.

The Group consists of Target Healthcare Group Holdings Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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.

The Company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this Company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. The Company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

In the Group financial statements, as a consequence of the formation of a new group holding company and the subsequent group reorganisation, merged subsidiary undertakings are treated as if they had always been a member of the Group. The results of such a subsidiary are included for the whole period in which it joins the Group. The corresponding figures for the previous period include its results for that period, the assets and liabilities at the previous balance sheet date and the shares issued by the Company as consideration as if they had always been in issue. Any difference between the nominal value of the shares acquired by the Company and those issued by the Company to acquired them is taken to the merger reserve.

The consolidated group financial statements consist of the financial statements of the parent company Target Healthcare Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the Group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the Group holds an interest and which are jointly controlled by the Group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the Group balance sheet at cost plus post-acquisition changes in the Group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the Group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the Group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the Group’s interest in the entity.

At the time of approving the financial statements, the directors have a reasonable expectation that the Group 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.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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.

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.

Other intangible assets

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

The cost of an intangible asset acquired in a business combination is its fair value at the acquisition date.

The estimated useful life of other intangible assets is 10 years.

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.

See amortisation rates in the above paragraphs.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

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

There is no depreciation charge on assets under 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 profit and loss account.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the Company holds a long-term interest and where the Company has significant influence. The Group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets 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 it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Stocks 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 are basic financial assets and 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.

The Group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Group's balance sheet when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow Group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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 profit and loss account 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 Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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 profit and loss account, 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 if, and only if, there is 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 stock or fixed 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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leased asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the Group’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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

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

Their aggregate remuneration comprised:

As total directors' remuneration was less than £200,000 in the prior year, no disclosure is provided for that year.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Freehold property additions comprise of two properties acquired during the year. These are either fully or in part occupied by various Group companies. These are included at the agreed purchase price. The directors have reviewed the valuation of these properties as at 31/12/2024 and have confirmed no revision to the stated valuation is necessary.

During the year the Company acquired the entire share capital of Target Healthcare Group Limited via a share for share exchange.

Other additions in the year relate to the newly incorporated 2628709 Alberta Ltd and Quantum Pharmaceutical Property Holdings Limited, the transfer of the shareholdings from Target Healthcare Group of Biotech Pharma Limited and Target Pharmaceuticals Limited and the acquisition of HKIP (Orbital House) Ltd as detailed in note 25.

Details of the Company's subsidiaries at 31 December 2024 are as follows:

Details of associates at 31 December 2024 are as follows:

The finance lease creditors are secured on the assets to which they relate.

Included within other creditors is an invoice discounting facility of £22,221,414 (2023: £13,530,060). This is secured by a fixed charge over the purchased debts and a floating charge over all assets and undertakings.

The finance lease creditors are secured on the assets to which they relate.

The bank loan is secured by a fixed charge over the freehold and leasehold property.

The following are the major deferred tax liabilities and assets recognised by the Group and Company, and movements thereon:

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.

On incorporation, 1 ordinary share was issued at par value.

The change in the value of the Group share capital relates to the application of merger accounting in the preparation of the current year accounts. Please see note 1.2 for more details.

On 28 August 2024 the Group acquired 100 percent of the issued capital of HKIP (Orbital House) Ltd.

The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the Group.

Transactions between Group entities which have been eliminated on consolidation are not disclosed within the financial statements.

No other transactions with related parties were undertaken such as are required to be disclosed under Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

The ultimate controlling party is L Campbell.

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