The directors present their annual report and financial statements for the 18 months ended 31 January 2026.

The company extended its accounting period from 31 July 2025 to 31 January 2026, an 18 month period, to bring its accounting year end in line with the parent and rest of the group.

The results for the 18 months are set out on page 7.

Interim ordinary dividends were paid amounting to £600,000 (period ended 31 July 2024 £500,000). The directors do not recommend payment of a final dividend.

The directors who held office during the 18 months and up to the date of signature of the financial statements were as follows:

The directors are responsible for preparing the Directors' 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) including Financial Reporting Standard 101: Reduced Disclosure Framework ("FRS 101").

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, including FRS 101, 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.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

We have audited the financial statements of Orchard Funding Limited (the 'company') for the 18 months ended 31 January 2026 which comprise the statement of comprehensive income, statement of financial position, 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 FRS 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 January 2026 and of its profit for the 18 months 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 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 directors' report for the financial 18 months for which the financial statements are prepared is consistent with the financial statements; and

• the directors' report has 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 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; or

• the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report or in preparing the directors' report.

As explained more fully in the directors' responsibilities statement set out on page 1, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud.

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

• obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework;

• inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

• discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud, having obtained an understanding of the effectiveness of the control environment.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 101, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and considering whether any matters have come to light during our audit which could have a material impact on the tax calculations.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to FCA compliance. We performed audit procedures to inquire of management and those charged with governance whether the company is in compliance with these law and regulations and inspected correspondence with regulatory authorities.

The audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing a sample of manual journal entries and other adjustments made in the preparation of the financial statements, assessing accounting estimates and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.

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 member 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 member those matters we are required to state to the member 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 member, 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 10 to 23 form part of these financial statements.

The notes on pages 10 to 23 form part of these financial statements.

The notes on pages 10 to 23 form part of these financial statements.

Orchard Funding Limited is a private company limited by shares incorporated in England and Wales. The registered office is 222 Armstrong Road, Luton, Bedfordshire, UK, LU2 0FY.

The financial statements of the company are consolidated into the financial statements of Orchard Funding Group plc.

The consolidated financial statements of Orchard Funding Group plc are available from its registered office, 222 Armstrong Road, Luton, Bedfordshire LU2 0FY.

The company provides funding and funding support to insurance brokers and other entities within the United Kingdom.

The company extended its accounting period from 31 July 2025 to 31 January 2026, an 18 month period.

This was to bring its accounting year end in line with the parent and rest of the group.

For the above reason, comparative amounts are not directly comparable

These financial statements were prepared in accordance with Financial Reporting Standard 101: Reduced Disclosure Framework ("FRS 101").

The financial statements have been prepared under the historical cost convention. and in accordance with the Companies Act 2006.

In preparing these financial statements, the company applies the recognition and measurement requirements of UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.

The following exemptions from the requirements of UK-adopted International Accounting Standards have been applied in the preparation of these financial statements and, where relevant, equivalent disclosures have been made in the group accounts of the parent, in accordance with FRS 101:

• Presentation of a Statement of Cash Flows and related notes;

• Disclosure of key management personnel compensation;

• Disclosure of the future impact of new International Accounting Standards in issue but not yet effective at the reporting date;

• The requirements of IFRS 7 - Financial Instrument Disclosures;

• Comparative narrative information; and

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

The financial statements have been prepared on a going concern basis which assumes that the company will be able to continue its operations for the foreseeable future.true

The directors have prepared and reviewed financial projections, on an annual basis, covering a period of just under four years from the date of signing of these financial statements, with a particular focus on the period of 12 to 18 months from the date of signing. Based on the projected income and expenditure, the level of existing cash (£0.25m) (at 31 July 2024 £0.37m) and the excess of our trade receivables over external debt (amounting to approximately £18.93m at the period end, (at 31 July 2024 £15.75m)), the directors have a reasonable expectation that the company has adequate resources to continue in business for the foreseeable future. Accordingly, the going concern basis has been used in preparing the financial statements.

Revenue consists of interest income.

Interest arising from funding activities (interest income from financial assets at amortised cost) is not within the scope of IFRS15 but is the primary source of revenue for the company. It is calculated using the effective interest method and recognised in the Statement of Comprehensive Income. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life or duration of the financial instrument to the carrying amount of the instrument.

Interest income is calculated by applying the effective interest rate to the carrying amount of a financial asset before any allowance for expected credit losses except for credit impaired assets in stage 3 (see note on expected credit losses below for an explanation of the stages of debt).

Interest income includes default and settlement fees on loans and fees for not making use of the loan facility granted (non-use fees). Revenue from non-use fees, default and settlement fees is recognised at a point in time.

Other interest receivable is recognised over time.

Cancellations identified by the date of approval of the accounts are provided for in full.

Property, plant and equipment are stated at historical cost less depreciation. Historical cost consists of

expenditure that is directly attributable to the acquisition of the items.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful

life or, if held under a finance lease, over the lease term, whichever is the shorter.

The depreciation charge is included as part of administrative expenses.

All assets were disposed of by 31 July 2024.

Financial assets

Under IFRS 9 financial assets are classified and measured as:

- amortised cost;

- fair value through other comprehensive income; or

- fair value through profit or loss;

on the basis of both the business model for managing the financial assets and the contractual cash flow

characteristics of the financial asset.

Fair value is the price a willing buyer and willing seller would exchange an asset. It assumes that both parties have the same understanding of the transaction that they are entering into (one party does not have information that the other does not) and they enter into it freely.

In most cases initial cost will be a fair estimate of fair value.

The financial assets of the company consist of trade receivables, other receivables and cash at bank.

The company's business model is to hold financial assets to collect cashflows, being payments of interest and capital. Financial assets are not held for resale. The contractual characteristics of the financial assets are that both interest and capital are due from the borrower during the life of the asset.

Trade receivables are primarily amounts due from borrowers for monies loaned to them. They are therefore contractual payments of interest and capital. If collection is expected wholly within one year they are classified as current assets. If not, the elements which are due after one year are presented as amounts falling due after more than one year by way of note. Trade receivables are initially recognised at fair value and subsequently recognised at amortised cost using the effective interest rate method, less provision for impairment.

Expected credit losses (ECLs) are the probability-weighted estimate that the present value of all cash flows expected to be received fall short of those actually contracted to be received. An ECL occurs even if the full amount is received but later than contractually due. No loss event is needed for an impairment allowance to be recognised.

The company uses the general approach to ECLs. This means that the credit risk for each financial asset is assessed at each reporting date and an impairment allowance calculated and provided as necessary.

Calculations are made using the probability of default method. A probability is applied to the exposure at default, under different scenarios, to arrive at a weighted probability of default.

A three-stage model for calculating ECLs is used, based on changes in credit quality since initial recognition.

IFRS 9 also requires either 12 month or lifetime ECLs to be recognised depending on which of the three stages to which the asset is assigned. While ECLs are applied to all financial assets, in Orchard Funding Limited the assets to which they predominantly apply are trade receivables.

• Stage 1. When a financial asset is first recognised it is assigned to stage 1. If there is no significant increase in credit risk since initial recognition the financial asset remains in stage 1. Stage 1 also includes financial assets where the credit risk has improved and the financial asset has been reclassified back from stage 2.

• Stage 2. When a financial asset shows a significant increase in credit risk from initial recognition it is moved to stage 2. Stage 2 also includes financial assets where the credit risk has improved and the financial asset has been reclassified back from stage 3.

• Stage 3. When there is objective evidence of impairment and the financial asset is considered to be in default, or otherwise credit impaired, it is moved to stage 3.

The assessment process for evaluating the quality of financial assets is ongoing to enable early identification of credit impairment. These assets are reclassified if there has been any change in credit quality and, where necessary, they are moved to another stage.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Under IFRS 9 financial liabilities are classified as:

• measured at amortised cost;

• measured at fair value through profit or loss; or

• designated at fair value through profit or loss.

The company has three principal classes of financial liabilities: trade payables, bank borrowings and amounts owed to the parent.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are initially recorded at fair value and thereafter at amortised cost using the effective interest rate method. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. After initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the borrowings on an effective interest basis.

Charges consist of interest payable and associated costs (bank charges and legal fees for setting up the facility).

Where the facility is not fully utilised and there is a non-utilisation charge, this is recognised as a transaction cost, as incurred at amortised cost, in the Statement of Comprehensive Income.

Amounts owed to the parent are interest free and repayable on demand.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in other comprehensive income or in equity respectively.

The current tax charge is calculated on the basis of tax laws enacted in the United Kingdom, where the company exclusively operates.

Deferred tax is recognised on temporary differences arising between the tax based assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates that are expected to apply when the liability or asset reverses.

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements.

Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

Current and deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the Statement of financial position date.

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 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.

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

The directors are required to select suitable accounting policies, apply them consistently and make judgements and estimates that are reasonable and prudent. The financial position at the year end and the financial performance during it are sensitive to these. Estimates and judgements made by the board are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances. The following are considered critical in so far as use of alternative estimates would have an impact on the reported results of the next financial year.

The evaluation of expected credit losses requires a number of significant judgements and estimates to be made against a background of uncertainty. This is so, not only in assessing whether credit risk has moved since the original recognition of the financial asset, particularly as regards trade receivables, but also in estimating future cash flows. Assumptions have to be made based on past experience together with what is anticipated to happen in the future. The level of expected credit loss allowance would be different if these estimates were replaced by another set.

The company recognises one class of revenue - lending. The nature of loans made are so similar in terms of risk, reward and processes that any separate disclosure would give no meaningful information to the users of the financial statements..

The average monthly number of persons (including directors) employed by the company during the 18 months was:

Their aggregate remuneration comprised:

The actual charge for the 18 months can be reconciled to the expected charge for the 18 months based on the profit or loss and the standard rate of tax as follows:

Capital consists of net debt (borrowings less cash and cash equivalents) plus total equity. The company's objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

To maintain or adjust the capital structure, the board may adjust the amount of dividends paid, return capital to shareholders issue new shares or sell assets to reduce debt.

Consistent with market practices the company monitors capital on the basis of Return on Capital Employed ("ROCE"). This is calculated as earnings before interest (excluding finance costs in cost of sales), tax, depreciation and amortisation divided by capital as defined above. The ROCE for this period was 5.22% (year to 31 July 2024 - 4.45%).

Standard credit terms for trade debtors are based on the length of the loan but repayments are due on a monthly basis. Detail of impairment reviews are shown in the accounting policies note under expected credit losses.

The expected credit losses on receivables not past due have been assessed as very low, because of the following factors:

• No loan is made until the first repayment has been received by the company;

• In the event of default, in most cases the company has recourse to the underlying borrower;

• Charges are made for late payments;

• In the case of insurance receivables, the Financial Services Compensation Scheme provides additional cover to the company; and

• For insurance receivables, the cover ceases, premiums paid are refunded, and the company has access to these refunds.

£19,036 of debt was in stage 1 at 31 July 2024. At 31 January 2026 this had been moved to stage 3.

There was a fraud in previous years caused by a fraudulent introducer creating fraudulent credit agreements. This led to a loss of £391,241 which was included in the year to 31 July 2024 as part of administrative expenses.

Provision was also made in the previous year for an additional £324,555 of debts from one introducer which had defaulted on repayment during that year.

Amounts shown as owed to group undertakings are interest free and repayable on demand.

The current facility was renewed in April 2026.

The maximum drawdown on the facility is currently £5.00m (at 31 July 2024 £5.00m) of which £2.50m was undrawn at the period-end (2024 £2.50m).

The company has given security for the facility consisting of a fixed and floating charge over all the assets of the company. The interest rate charged in the year was 7.16% excluding associated costs (2024 7.95% on the same basis).The loans were repayable within one year of the advance.

There were no events after the balance sheet date which fall to be included in these financial statements.

The company has taken advantage of the exemptions available from the adoption of FRS 101 not to disclose transactions with group companies.

The company is related to the following entity with which it has had transactions or balances during the current or previous year:

Associated Premium Funding Limited

A company wholly owned by R Takhar.

Associated Premium Funding Limited acts as a funding company for a number of clients of Orchard Funding Limited. In this respect, payments to or receipts from this company are on behalf of third parties. No costs are incurred by the company in this respect.

The only parent company and controlling party is Orchard Funding Group plc, a company listed on the AIM market of the London Stock Exchange. That company's accounts can be obtained from its registered office at 222 Armstrong Road, Luton, Bedfordshire, UK, LU2 0FY or from the website at http://www.orchardfundinggroupplc.com.

The ultimate controlling party is R Takhar who owns 57.20% of the issued share capital of the ultimate parent company.