The directors present the strategic report for the year ended 31 December 2025.

The company provides the services of a firm of stockbrokers. Investment products offered include ISAs, SIPPs, AIM portfolios, CTFs, Junior ISAs and nominee holdings.

Essentially, three levels of service can be provided to clients:

- Execution only dealing services, where the company acts only on the instructions to buy and sell investments provided by clients;

- Investment management services, where the company provides advice to clients but the ultimate decision on what to buy and sell remains with the client;

- Discretionary management services, where the company is given the authority to make the decisions on what to buy and sell and perform those transactions for the client.

Income in the year end 31 December 2025 has been subject to multiple competing external forces:

- Uncertainty over both UK tax policy and US foreign policy has generated enough uncertainty to increase commission revenue by 11%;

- Increased value in the markets has benefitted portfolio management fees to the tune of 4%;

- However, the trend of interest rates dropping steadily throughout 2025 has led to a 20% fall in interest recognisable by the company leading to a decrease in aggregate revenues of £136K (a fall of 1.44% year on year).

Custody fees have dropped again this year and remain a candidate for price increases after remaining unchanged for many years. However, with interest receipts still high compared to historic levels, these increases remain on hold.

With fewer changes in staffing through 2025, overall overheads have increased £234K.

With revenue dropping slightly compared to 2024 and overheads increasing slightly, profit before tax for the year was down on last year’s record performance by 8.6% to £9,308K. This is still the second best in recent memory, up £100K on 2023.

There are three principal risks that affect the business:

• Activity in and values of the markets. Revenues earned from services to clients are dependent on both the levels of activity in the markets (which generate commissions for the company) and the values of those markets (which determine the management and custody fees chargeable to clients);

• Regulation. The company is regulated by the Financial Conduct Authority (FCA). The rules set by and charges levied by the FCA can have a significant impact on the earning potential of the company. The Consumer Duty has now been in place for a couple of years and there remain no major upheavals in regulation expected in the near future. The FCA continued with their lengthy and complex Annual Wealth Data Surveys in 2025, believed to be a prime method of determining firms they wish to visit.

The UK Government can also affect the potential of the company by introducing/withdrawing new investment vehicles or adding/subtracting features of existing ones. For example, Chancellor Rachel has clearly stated a preference for individuals to invest in stocks and shares, curtailing cash ISA allowances to reinforce the point. Further changes to tax policy, would not be a surprise, particularly relating to inheritance tax or taxes on wealth;

• Financial Crime. Methods criminals use to defraud businesses and individuals continue to evolve and increase in sophistication. In 2025, several high-profile cyber-attacks hit the headlines. Though the company continues to employ stringent procedures and controls to minimise the risk of itself or its customers suffering any harm during the second half of the year it took out a cyber insurance policy for the first time. The company has also seen evidence of the increase in sophistication and magnitude of frauds.

For 2026, there are additional specific matters the firm will regularly review, though they have become inextricably linked to each other:

• The War in Iran. There’s so much uncertainty and volatility in the markets even just a month into this war. How long will it go on for? What are the conditions for it to stop? Are The Straits of Hormuz going to be blocked or at least dangerous to traverse for a lengthy period of time? What will be the long-lasting consequences when it is over?

• US Trade Tariff Policy. Another source of great uncertainty in the world economy, even though the US Supreme Court deemed sweeping tariffs illegal, this does not appear to be taking them off the table.

• The wars in Ukraine and Gaza. Efforts to resolve these conflicts have apparently been ongoing for well over a year, there is a fragile ceasefire in one but no signs of any imminent long-term resolution in the other. The risks of further sanctions, market volatility and harms to countries remain.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

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

A final dividend of £700,000 was paid on 14 February 2025 in respect of the financial year ended 31 December 2024. (2024 : £468,000)

Interim dividends have been declared amounting to £2,320,000 during the year in respect of the financial year ended 31 December 2025. (2024 : £2,932,000 )

The directors recommend that a final dividend be paid in respect of the financial year ended 31 December 2025; however the value of the final dividend has not yet been determined.

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

Mr D L Morgan

Mr C D Hodgson

Disclosure in the strategic report

Details of future developments have been disclosed in the strategic report.

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 including FRS 102). 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; 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 the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors

The auditors, Xeinadin Audit Limited, are deemed to be re-appointed under section 487(2) of the Companies Act 2006.

We have audited the financial statements of Pilling & Co Stockbrokers Ltd (the 'company') for the year ended 31 December 2025 which comprise the statement of income and retained earnings, the balance sheet, the 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 company's affairs as at 31 December 2025 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

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

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

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

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

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

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

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

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

the nature of the industry and sector, control environment and business performance including the nature of any bonus or performance targets;

• results of our enquiries of management about their own identification and assessment of the risks of irregularities;

• any matters we identified having obtained and reviewed the company's policies and procedures relating to identifying, evaluating and complying with laws and regulations;

• the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

• the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. These included compliance with Financial Conduct Authority regulations.

Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiry of management around actual and potential litigation and claims;

• reviewing minutes of meetings of those charged with governance and reviewing regulatory correspondence with the Financial Conduct Authority;

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or 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 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 profit and loss account has been prepared on the basis that all operations are continuing operations.

Pilling & Co Stockbrokers Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Henry Pilling House, 29 Booth Street, Manchester, M2 4AF.

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.

Preparation of consolidated financial statements

The financial statements contain information about Pilling & Co Stockbrokers Ltd as an individual company and do not contain consolidated financial information as the parent of a group.

The company has taken the option under Section 402 of the Companies Act 2006 not to prepare consolidated financial statements, as under Section 405 its subsidiary undertaking can be excluded from consolidation as its inclusion is not material for the purposes of giving a true and fair view.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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 represents brokerage commission, interest receivable and fees receivable from investment administration, dealing and custody services for both client assets and client money provided in the UK, net of VAT, revenue is measured and based on the consideration specified in a contract with a customer.

Fees and commissions are recognised as revenue when there is no obligation to provide further services.

Interest receivable on client money is recognised on an accruals basis.

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

Amortisation 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:

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:

Tangible fixed assets are initially recorded at cost. Those assets transferred to the company from Pilling & Co were transferred at their fair value. These assets are now fully written down.

Investment in subsidiary undertakings are recognised at cost less accumulated impairment losses.

Cash and cash equivalents comprise cash at bank and in hand.

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with 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.

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.

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 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 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 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 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.

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 leases asset are consumed.

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.

Amounts due from/to clients and counterparties

Amounts due from/to clients and counterparties are included within debtors and creditors in the financial statements being the amounts due to/from the broker. They represent the obligation arising from open transactions at the year end.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Critical judgements in applying the entity's accounting policies

None

(b) Critical accounting estimates and assumptions

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(i) Accrued income

A significant proportion of the company's income is generated over a period of time with the actual remuneration not receivable until the end of the relevant period. The company makes estimates of these amounts based on the information available on the variable factors (number of clients and market value of their various portfolios) at the date the estimates are made. See note 12 for the carrying amount of accrued income.

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

Their aggregate remuneration comprised:

Key Management Personnel

Key management personnel compensation in the year totalled £264,637 (2024: £274,389) of which £6,000 (2024: £15,000) remained owing at the year end.

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 company has an overdraft facility with HSBC Bank Plc that is secured by a debenture including fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertaking both present and future.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

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

The two classes of ordinary shares have equal rights and carry no right to fixed income.

At the balance sheet date the amount owed to director was £339,277 (2024: £234,855). This amount is interest free and repayable on demand.

At the balance sheet date the amount owed from M.H. Financial Services Limited was £139,901 (2024: £135,171). This amount is interest free and repayable on demand.

Outstanding balances due from the company are unsecured and are expected to be settled in cash.

The company was under the control of Mr D L Morgan and Mr C D Hodgson during the year.