The director presents the strategic report for the period ended 31 December 2024.

Montu Pharmaceutical Ltd (The Company) is a world leading cannabis care company operating in the United Kingdom selling canabis related products and accessories to patients prescribed for by Alternaleaf and other licensed medical cannabis clinics as well as B2B sales to other distributors. Most of the company's revenue is derived from sales to patients (94%) and small amount from B2B sales to other distributors (6%).

Financial performance and key performance indicators

The Company experienced rapid revenue growth increasing from £1.1m for the year ended 31 March 2024 to £6.1m for the 9 month period to 31 December 2024, a 480% increase period on period. The revenue growth is due to a rapidly increasing flow of active patients through the clinic as a result of effective product marketing and brand awareness activity through the Alternaleaf clinic. Investment in headcount and larger premises ensured the increased volumes were handled efficiently. The operating loss of £445k for the year to 31 March 2024 turned to an operating profit of £82k for the 9 months to 31 December 2024. The operating profit achieved in the 9 months to 31 December 2024 is due to managing costs effectively with total costs increasing by £4.5m or 301% compared to revenue increasing by 480% over the same period. The increase in total costs were mostly as a result increases in cost of sales (£3.1m) and employment costs (£671k).

The Company also monitors headcount changes which increased from an average of 8 employees for the year to 31 March 2024 to 25 for the period to 31 December 2024, as well as cash balances which increased from £130k at the end of March 2024 to £348k at the end of December 2024.

Future plans

The Company forecasts continued rapid revenue growth in 2025 driven by increasing investment in marketing and brand awareness campaigns in the Alternaleaf clinic.To support this growth the Company will increase investment in headcount and access larger premises.

Main risks and uncertainties

The main risks the Company face is:

• Headcount and premises capacity constraints as a result of rapidly growing volumes,

• Complying with General Pharmaceutical Council (GPhC) regulatory requirements,

• Availability of local and international supply chains.

Capacity risk

To mitigate these risks the company has recruited an in-house recruitment team and developed headcount forecasts and capacity planning to ensure future headcount requirements is identified timely and the Company has the ability to recruit efficiently. The Company is also planning ahead to ensure larger premises is available to ensure the Company can cope with growing volumes.

Supply chain risk

To mitigate these risks the company has Employed a General Manager Commercial and a Supply Chain Manager to build long lasting relationships with international and local supply chains and to open doors to new supply chain routes.

Financial risk management

The main financial risks to the Company is Liquidity risk due to rapidly increasing costs in line with rapidly increasing sales volumes. To mitigate this risk the Company has developed stock management tools, KPI tracking and financial forecasting tools to ensure current and future cash requirements are identified and measures put in place to ensure the Company can meet liabilities as they fail due.

On behalf of the board

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

The director of the company has elected not to include a copy of the income statement within the financial statements.

Montu Pharmaceutical Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 140 Wharfedale Road, Winnersh Triangle, Wokingham, Berkshire, England, RG41 5RB.

The financial statements presented are for the nine month period from the date of the last year end, 01 April 2024, until 31 December 2024. This is a shorter reporting period than the standard 12 months.

As a result, the amounts presented in both statement of profit and loss, balance sheet and statement of cash flows are not entirely comparable with the prior year figures, which covered the 12 months to the period ended 31 March 2024.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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.

These financial statements have been audited for the first time for the period to 31 December 2024. Comparative financial statements and disclosures for the prior period ended 31 March 2024 have not been audited.

The director has at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover represents income arising from the sale of medical products to legally prescribed patients in the United Kingdom. The Company operates as a remote/online‑only pharmacy dispensing a wide range of medical products tailored to individual patient needs.

Revenue from the sale of products is recognised when control of the goods transfers to the customer, which occurs at the point the products are dispatched to the patient via the pharmacy’s courier service.

Revenue is measured at the fair value of the consideration received or receivable, net of refunds, discounts, and VAT where applicable.

The company recognises revenue when the following criteria are satisfied:

• The significant risks and rewards of ownership of the goods have transferred to the customer.

• The amount of revenue can be measured reliably.

• It is probable that economic benefits will flow to the company.

• Costs associated with the transaction can be measured reliably.

For product sales, these conditions are met upon dispatch, as clinical suitability and prescribing have been completed beforehand and the patient assumes control of the goods during delivery.

The company recognises revenue from the following major sources:

• Sale and distribution of prescribed cannabis

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

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:

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.

At each reporting end date, the company reviews the carrying amounts of its tangible 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

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.

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

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 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 adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated 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, and is periodically reduced by impairment losses, if any.

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 reassessed at each financial period end to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding 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.

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

The director considers that the carrying amount of trade and other receivables differs from fair value as follows:

No significant receivable balances are impaired at the reporting end date.

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

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.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report is qualified and includes the following:

Qualified opinion

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 for the period 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 qualified opinion

We were not appointed auditor of the company until after the 31 March 2024 and thus did not observe the physical stock take for the prior period as at the 31 March 2024. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 March 2024, which were included in the balance sheet at £331,940 for the year ended 31 March 2024, by using other audit procedures. Consequently, we were unable to determine whether any adjustments to this amount was necessary, within last year's balance sheet. Consequently, we are unable to determine whether cost of sales for this period, to 31 March 2024, require any adjustment.

The stock figure impacts the Income Statement, Statement of Financial Position and Statement of Cash Flows. In addition, were any adjustments to the stock balance to be required the strategic report might also need to be amended.

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.

In respect solely of the limitation on our work relating to stock, described above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records had been maintained.

At the year end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases (excluding the right-of-use asset), which full due as follows:

Within 1 year : £32,150

Within 2-5 years : £257,200

The Company has entered into a lease agreement for an office building used for its administrative operations. The lease has a fixed term of 5 years with fixed monthly payments. Extension or termination options are included but were not considered reasonably certain and therefore are not reflected in the measurement of lease liabilities.

The Company may be exposed to future cash outflows not included in lease liabilities, such as payments arising from rent reviews linked to an index and potential costs to restore the property to its original condition at the end of the lease.

At the reporting end date the total future minimum sublease payments expected to be received under non-cancellable subleases was £320,722.

The Company has not entered into any sale‑and‑leaseback transactions.

The Company applies the exemption for short‑term and low‑value asset leases, with related expenses recognised on a straight line basis.

The company is not subject to any externally imposed capital requirements.

The company has taken advantage of the exemption available whereby it has not disclosed transactions and balances with any wholly owned group companies.

During the year, there were a number of transaction made with Montu Group Pty Ltd, a partly owned subsidiary of MG Invest Ltd, an entity in which holds the ultimate controlling interest, in which they hold approximately 86% of issued share capital of Montu Group Pty Ltd as at 31 December 2024 (31 March 2024: 86%).

These transactions included recharge costs in relation to the following:

• Cost of goods amounting to £225,256

All these transactions have been expensed to the Income Statement.

Included within amounts owed to fellow group undertaking are amounts owed to Montu Group Pty Ltd as at 31 December 2024 of £2,603,808 (31 March 2024: £1,016,608), with interest being charged on a monthly basis at a rate of 8.27%.

The amount is repayable on demand.

Included in creditors is the sum of £22,050 due to a Director. At no point did this balance go overdrawn. This balance is interest free and repayable on demand.

The immediate parent company is Montu UK Holdings Ltd a company registered in England and Wales.

The ultimate parent company is MG Invest Ltd, a company registered in the Hong Kong.

During the current year, the company has restated its comparative financial statements for the period ended 31 December 2024, to correct material errors identified in the financial year ended 31 March 2024.

In the current year, the directors have identified an error relating to the accounting treatment to the right-of-use asset and lease liabilities recognised in accordance with IFRS 16.

The above adjustment has been accounted for retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The comparative figures have been restated while there has been no impact to the opening balance of retained earnings.