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

Principal Activities

Nucleus Cashflow Finance4 Limited (NCFF4) is a subsidiary within the Nucleus Group, it’s UK Holding Company being Nucleus Commercial Group Limited, company number 09646728.

The SPV was set up with the sole purpose to manage the Recovery Loan Scheme (RLS) portfolio.

The RLS scheme started in 2021 following on from the CBILs scheme managed by the British Business Bank (BBB). Nucleus was accredited in September 2021. Nucleus originated c.£142m of loans before the scheme was concluded in June 2022.

General Business Overview

The CBILs scheme concluded in March 2021 and no further loans have been originated in this SPV after this date or will be going forward. The loan portfolio is managed by Nucleus Services Limited, company number 09914635, via a servicing agreement entered into at the outset of the scheme.

Capital and interest repayments continue to be collected on the performing portfolio which are in turn paid back to the senior lenders under the agreed terms of the facility agreement. Once the Senior lenders have been re-paid in full any excess will be re-paid to the Mezzanine debt / equity funder, Nucleus Cashflow Finance Limited (NCFF).

The SPV has agreed facilities in place which extend beyond the term of the longest dated loan and we continue to manage out collections on an ongoing basis in line with agreed facility terms and internal policies.

Key Performance Indicators – Results

A summary of the Key Performance Indicators is shown below:

The SPV originated c.£39m of new loans before the scheme finished in June 2022, thereby fully utilising the funding level set by the BBB.

In a challenging market the portfolio defaulted loans are above initial expectations. This has not been due to one specific underlying issue but what appears to be a combination of factors. Loan portfolios which are similar in nature, and with loans being underwritten with similar criteria have performed at a slightly better level. We continue to closely monitor the performance of the portfolio and underlying trends to ensure improved performance where possible.

The Nucleus Group benefits from a servicing fee, comprised of a base and conditional (based on performance) servicing fee. Income (interest) and capital repayments are re-paid to the lender under an agreed cash waterfall after interest costs, third party fees and other incidental costs associated with managing the portfolio and SPV.

Income for FY25 was £11.20m against £14.68m in FY24, in line with the performing loans and no new originations. The Company does not directly benefit from the income generated on the portfolio as this is subject to cash waterfalls and retentions on performing and non-performing loans.

Operating Profit has fallen from £4.08m in FY24 to £3.24m in FY25. Again, in line with expectations of ongoing costs.

The SPV made a total loss for FY25 of (£1.66m) against (£3.11m) in FY24. This loss is directly due to the level of defaulted loans, lower interest and the capital provisions associated with these.

Whilst NCFF4 is a subsidiary of NCFF and consolidated for accounting purposes this remains ringfenced on a Group basis for any losses exceeding the Juniors notes provided by NCFF. There are no cross guarantees or negative pledges on a Group basis.

Principal Risk and Uncertainties

There are various risks uncertainties which face the Group as whole, though are not specific to this SPV. These risks and uncertainties are integrated with the principal risks of the Group and are not managed separately. They include Strategic risk, Economic risk, Funding risk, Credit risk, Regulatory risk, Reputational risk, Information Security, Technology risk, Data risk, Financial crime and Client money risk.

Economic risk

Economic risk is the biggest risk to the portfolio. Micro and Macro economic factors are likely to have a direct impact on our clients and therefore their ability to continue to service their loans. Performance of the loan book has remained within covenants during a period that has seen increased interest rate rises, a cost of living crisis and political changes. Robust underwriting of the portfolio at origination coupled with a comprehensive collections and recovery policy will continue to be used to mitigate this risk.

Environmental, Social and Governance

The Group has a firm wide ESG policy and it is not managed individually in SPV’s. Further details on the Group’s ESG policy and commitment to it can be found in the Group Consolidated accounts.

Section 172 Statement

The directors, in line with their duties under s172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the group for the benefit of its members, and in doing so have regard, amongst other matters. While the board accepts that not every decision it makes will result in an equally positive outcome for all of the Group’s stakeholders, by considering the Company’s purpose, mission and values together with its strategic objectives and having a process in place for decision making, the Directors aim to make sure that the Board’s decisions are consistent and do not create unexpected outcomes for stakeholders.

The Group’s key stakeholders are, but not limited to, its people, its customers, its lenders and, the communities in which it operates and the shareholders. The impact of any decisions made by the Directors take account off the impact on the Group’s activities and on those actions on the Groups stakeholders.

On behalf of the board

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

The principal activity of the company is the provision of alternative business financing.

The results for the year are set out on page 9.

No interim dividends were paid. The directors do not recommend payment of a final dividend.

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

The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.

We have audited the financial statements of Nucleus Cash Flow Finance4 Limited (the 'company') for the year ended 31 March 2025 which comprise the Statement of Comprehensive Income, the Balance Sheet, the 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 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 March 2025 and of its loss 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.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

• We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.

• We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

• We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

• We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

• Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Nucleus Cash Flow Finance4 Limited is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is 4th Floor, 120 Regent Street, London, W1B 5FE.

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.

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

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

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

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

The financial statements of the company are consolidated in the financial statements of Nucleus Commercial Holdings. These consolidated financial statements are available from its registered office, 120 Regent Street, London, United Kingdom, W1B 5FE.

The financial statements are prepared on a going concern basis as the Directors are satisfied that the Company has the resources to continue for the foreseeable future (which has been taken at least 12 months from the date of approval of the financial statements). In making this assessment, the Directors have considered the performance of the Company and the ongoing business prospects. true

The company closed loan originations in June-2022 and the book has been in collect out since this point. It is non-trading will not originate further loans or incur further liabilities other than those contractually in place. The SPV benefits from a senior facility at +95% with a junior note making the first loss piece.

All cash collections, both principal and interest, are managed by way of a cash waterfall with the senior lender. Nucleus Services benefits from ongoing servicing fees of this portfolio.

The SPV does not retain a cash balance under the agreement, rather this is repaid back to the senior lender on a monthly basis after all costs have been met.

The Company by way of monthly portfolio reports continues to report on performance to the senior lender as it services the book.

Subject to the cash management agreement in place the SPV will generate sufficient returns to meet its ongoing obligations as they fall due. Any future capital losses will be limited to the Junior notes in the first instance on a Group basis, and then the senior lender, should default occur at a higher level than the junior notes and excess spread.

The directors have reviewed the financial covenants that they must adhere to under the terms of the various finance agreements such as unencumbered cash and group tangible net worth and any breach of these covenants under both scenarios is considered remote.

Having carefully reviewed the short, medium and long term prospect of the business in detail the Directors consider that the Group has the ability to remain in operation for the foreseeable future for a period not less than 12 from the date of approval of the Company financial statement and have therefore continued to adopt the going concern basis in preparing the financial statements.

Nucleus Commercial Holdings Limited has agreed in writing to provide sufficient financial support to the company to enable it to continue to trade and to meet its liabilities as they fall due, for a period of at least one year from the date of signature of the audit report for the year ended 31 March 2025. On this basis, the directors consider that the going concern basis is appropriate for these financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT.

RLS interest receivable is recognised on a monthly basis.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

Basic financial instruments are measured at amortised cost. The company has no financial instruments or basic financial instruments measured at fair value.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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

The other reserve represents a capital contribution reserve.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current valuation of the assets that the company has security on, the ageing profile of debtors and historical experience, applying this to both the principal and interest elements of the loans. See note 8 for the net carrying amount of the debtors which includes an associated impairment provision of £14,043,437 (2024: £14,248,840) within trade debtors.

For the RLS loan book the company consider collection data and historical experience. A specific provision is recognised in respect of loans where an assessment has been made that recovery of the principal is doubtful, with the unbacked element recognised as a bad debt expense and the backed element recognised as an other debtor.

The audit fee in the financial statements is £nil and differs to the presentational figure above. This is due to the audit fee being borne by the servicing company, Nucleus Services Limited, as a result of an arrangement with the funder.

There were no persons employed by the company during the year or the comparative period.

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

The principal risks arising from the Company’s financial instruments are liquidity, credit and market risk.

The Company has established policies for managing these risks as outlined below.

Credit Risk

Credit risk is the risk of impairment and partial or total loss of a receivable due to the deterioration of credit quality on the part of the counterparty. The primary asset of the Company is the loan portfolio. Credit risk is monitored and managed on a regular basis through preparation and review of monthly servicer reports which are reviewed in detail by senior management. The maximum exposure to credit risk at the period end is £79,667,950 (2024: £102,487,278) which consists of cash at bank and the loan book assets.

Liquidity Risk

Liquidity risk is defined as the risk of being unable to fulfil current or future payment obligations in full on the due date. The objective of the Company’s liquidity management is to ensure the sufficient funds are available to meet the Company’s commitments. Liquidity risk is minimised by the fact that the collateral underlying the Loan Receivables is of a good quality and provides a steady cash flow for the Company to discharge all expenses.

Market Risk

Market risk refers to the potential loss arising from changes in interest rates and foreign currency rates. The Company’s financial assets and liabilities are denominated in GBP and therefore the Company has minimal exposure to foreign currency risk. The Company has no non-GBP transactions.

Interest Rate Risk

Interest rate risk is a major component of market risk. The net interest margin is dependent on the movements of interest rates and can create mismatches in cash flows (fixed assets or liabilities) or repricing dates (floating assets or liabilities).

The company’s exposure to interest rate risk arises from its lending and funding activities. The company provides loans to customers at fixed rates of interest and funds these loans through a facility that also carries a fixed, blended rate of interest. As a result, the company is not significantly exposed to fluctuations in market interest rates on its existing loan book or related borrowings.

The company earns a positive interest margin, as the average interest rate earned on customer loans exceeds the fixed rate payable on its funding facility. Consequently, the company’s profitability is not materially sensitive to movements in market interest rates during the term of these instruments. Accordingly, a sensitivity analysis of the impact of market interest rate changes on current instruments is not presented, as it would show no material effect.

Included within debtors is £52,656,307 (2024: £83,614,506) falling due in more than one year, gross of the bad debt provision.

Other creditors due after more than one year are secured by fixed and floating charges over the company's assets in their entirety.

The company has taken advantage of the exemption available in accordance with FRS 102 section 33 'Related Party Disclosures' not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group with which it is party to the transactions.

The parent company of Nucleus Cash Flow Finance4 Limited is Nucleus Cash Flow Finance Limited, whose parent is Nucleus Commercial Holdings Limited, a company incorporated in England and Wales who prepare consolidated accounts for the group. Copies of the consolidated accounts are available from 120 Regent Street, London, United Kingdom, W1B 5FE.

The ultimate parent undertaking is Nucleus Holdings Limited, a company incorporated in Isle of Man.