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Registered number: 11387725










GFS 1 LTD










FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2024

 
GFS 1 LTD
REGISTERED NUMBER: 11387725

BALANCE SHEET
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

  

Current assets
  

Debtors: amounts falling due within one year
 5 
10,436,822
13,642,644

Cash at bank and in hand
 6 
4,032,070
3,965,401

  
14,468,892
17,608,045

Creditors: amounts falling due within one year
 7 
(4,032,100)
(2,846,650)

Net current assets
  
 
 
10,436,792
 
 
14,761,395

Total assets less current liabilities
  
10,436,792
14,761,395

  

Net assets
  
10,436,792
14,761,395


Capital and reserves
  

Called up share capital 
  
1
1

Profit and loss account
  
10,436,791
14,761,394

  
10,436,792
14,761,395


A dividend of £10,000,000 (2023: £Nil) was distributed to the parent, Glenhawk Financial Services Limited, in the year.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

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

The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
Mr G Harrington
Director

Date: 30 January 2025

The notes on pages 2 to 9 form part of these financial statements.

Page 1

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

1.


General information

GFS 1 is a private company, limited by shares, and incorporated in England and Wales. The company registration number is 11387725 and the registered office is 2nd Floor, Mutual House, 70 Conduit Street, London, W1S 2GF.
The principal activity of the company is to provide short term bridging finance secured against UK properties.
In addition, the company has entered into agreements, with three special purpose vehicles ("SPV") called Glenhawk Funding 1 Limited ("GF1"), Glenhawk Funding 2 Limited ("GF2") and Glenhawk Funding 3 Limited (''GF3''), to sell all qualifying loans that the company originates to these SPVs. The company retains no residual beneficial interest in the loans it sells down to GF1, GF2 and GF3. GF3 was incorporated in December 2023 whilst GF1 ceased trading in March 2024.
In exchange for the sales of these qualifying loans, the company receives income in the form of both a share of the residual profits of GF1, GF2 and GF3 and servicing fees for managing the loans which have been sold down. These residual profits are referred to as "Deferred Consideration" and are included within other income. This is via a separate agreement with the SPVs and all income in the year related to these qualifying loans.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The financial statements have been prepared in the functional currency, pounds sterling, rounded to the nearest £1.

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have considered that there will not be any material impact on trading over the course of the next twelve months.
Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the directors' report and accounts.

Page 2

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably using the loan book value held in each SPV;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

  
2.4

Other income

Other income is comprised of distribution income receivable from Glenhawk Funding 1 Limited, Glenhawk Funding 2 Limited and Glenhawk Funding 3 Limited. These amounts relate to Deferred Consideration receivable as a result of the company originating and selling short term bridging loans to these SPVs and orignator fees.

 
2.5

Taxation

The tax expense for the year comprises current tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 3

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.6

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.7

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.8

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.9

Financial instruments

The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly
Page 4

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)


2.9
Financial instruments (continued)

traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial assets
Page 5

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)


2.9
Financial instruments (continued)


Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

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

 
2.10

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 6

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Management considers that their use of estimates, assumptions and judgements in the application of the Company's accounting policies are inter-related and therefore discuss them together below with the major sources of estimation uncertainty and significant judgements separately identified.
The following are critical judgements, apart from those involving estimations that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Derecognition of the Mortgage Portfolio
As part of the agreements with GF1,GF2 and GF3 all qualifying loans that have been originated by the Company have been sold. Management have determined that the criteria for the derecognition of financial assets as set out in FRS 102 "paragraph 11.33" have been met; in particular, that the Company has transferred substantially all the risks and rewards of ownership to another entity.
Rewards
Interest receivable on the loans which have been sold is not physically retained by the Company, rather ier is transferred to GF1, GF2 and GF3 in line with the underlying facility agreements. Further, Deferred Consideration is received by the Company in return for the transfer of the beneficial interest of loans which have been originated. The return of Deferred Consideration is not wholly dependent on the direct performance of the underlying loans, the beneficial interest of which, have been sold, rather is it dependent on the performance of each SPV as whole. As such, the rewards that the Company is entitled to are too remote to state that the rewards of ownership are held by the Company and the key judgement is therefore that the rewards of ownership have transferred to the SPVs.
Risks
There exists provisions within the agreements where the Company will be obliged to repurchase loans which have been transferred, however, the Company has entered into an agreement with Glenhawk Financial Services Limited, the immediate parent company, and Glenhawk Holdings Ltd, a fellow group company, whereby the ultimate risk of the SPV loan book has and will continue to be borne by these entities. It is therefore the case that the substantial risks of ownership of the loans have been transferred to these entities.
 

Page 7

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

4.


Employees

The average monthly number of employees, including directors, during the year was 2 (2023 - 2).


5.


Debtors

2024
2023
£
£


Amounts owed by group undertakings
10,436,822
13,642,644



6.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
4,032,070
3,965,401



7.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank loans
4,032,100
-

Amounts owed to group undertakings
-
2,846,650

4,032,100
2,846,650


The bank loan is secured by the company.

Page 8

 
GFS 1 LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

8.


Related party transactions

GFS1 Ltd is a subsidiary of Glenhawk Financial Services Limited and is included in the group financial statements of Glenhawk Group Limited. GFS1 Ltd has taken advantage of exemption contained in FRS 102 "paragraph 1AC.35" and has not therefore disclosed transactions and balances with the parent company and subsidiary companies of the parent.
During the year, servicing fees totalling £265,954, £2,380,284 and £1,612,794 were received from Glenhawk Funding 1 Limited, Glenhawk Funding 2 Limited and Glenhawk Funding 3 Limited respectively (2023: £111,663, £1,179,188 and £nil respectively), all being Special Purpose Vehicles included within the consolidated financial statements of the immediate parent.
During the year, deferred consideration totalling £723,422 and £692,944 were received from Glenhawk Funding 1 Limited and Glenhawk Funding 3 Limited (2023: £3,026,519 and £Nil respectively), both being Special Purpose Vehicles included within the consolidated financial statements of the immediate parent.
Transactions in the year have led to balances of £Nil, £86,157 and £89,247 being due from Glenhawk Funding 1 Limited, Glenhawk Funding 2 Limited and Glenhawk Funding 3 Limited respectively (2023: £1,457,834, £1,388,816 and £Nil due to the respective entities). These amounts are unsecured, interest free and are payable in line with the facility's priority of payments.
The audit fee of GFS 1 Ltd is borne by Glenhawk Financial Services Limited, the immediate parent company.


9.


Parent entity and controlling party

The immediate parent is Glenhawk Financial Services Limited, a company incorporated in England and Wales, with a registered office of 2nd Floor, Mutual House, 70 Conduit Street, London, W1S 2GF.
The ultimate parent company of Glenhawk Group Limited is GLEU GHK S.a.r.l, a company incorporated in Luxembourg.
 
The ultimate controlling party is Marc Lasry by virtue of their controlling interest in the ultimate parent company.


10.


Auditors' information

The auditors' report on the financial statements for the year ended 30 September 2024 was unqualified.

The audit report was signed on 31 January 2025 by Tasneem Bharmal FCCA (Senior statutory auditor) on behalf of MHA.

 
Page 9