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

The Group contains wholly owned subsidiary companies carrying out unregulated, property secured UK business lending activity. One subsidiary also carries out FCA regulated, marketplace lending on a run-off basis. We originate property development loans, commercial mortgages, buy-to-let loans and bridging loans and these are funded by a combination of retail, corporate and institutional investors via our proprietary marketplace technology. Our aim is to provide a stable and secure income producing asset class for all investors who engage with our platform and to address a funding gap in under-served UK SME Lending segments.

The Group’s revenues arise principally from fee income charged to borrowers for both facilitating and then servicing their loans.

The Group has property lending credit knowledge and deep experience at its core, having invested in people with extensive UK SME property-backed lending experience to allow us to facilitate sustainable and profitable lending opportunities for investors.

Developments and performance during the year

Following the closure of the retail platform to new investment in FY23 the business made significant headcount and cost reductions to reach the core level of resource required to safely continue to manage both the retail and institutional loan books and ensure that the quality of new business we originate is maintained. These foundations – a combination of a team with many years of experience, investment in technology, and robust systems - are designed to maintain adequate resources to ensure a successful run-off of the retail platform and support significant growth in lending without the need to increase costs materially. As a result, headcount and overheads have fallen in FY25 as the Group has had the benefit of the lower cost base for the full year.

Our focus on improving and expanding our panel of institutional funding lines, whilst ensuring that the resources and processes were in place to support origination for them and increasing our lending volume capability led to a 3 times increase in lending from FY24 to over £50m in FY25.

The directors monitor the progress of the Company by reference to the following financial measures, alongside complimentary KPIs:

Despite the return to a small loss for the group in the year, the Directors take the growth in lending as evidence that the changes described above, which have been made to the business over recent times, are taking effect and will provide the foundations for future growth.

As custodian of loans originated for other investors, the Group has significant resources dedicated to assessing and managing the risk that borrowers may default on their loans.

In addition to credit risk, the Group manages other risks, including:

Liquidity Risk

The risk that the Group will not be able to meet its financial obligations as they fall due. This is managed by ensuring that there is always sufficient liquidity to meet liabilities when due both under normal and stressed conditions. The directors monitor the liquidity position on an ongoing basis.

Market risk

The Group’s business is the facilitation of property secured UK SME lending and the directors are aware that a general and persistent weakening of the UK economy and, in particular, property values, may impact on investor appetite for property secured loans. The Group has sought to mitigate these risks by increasing its range of loan funding sources including institutional investors and also by maintaining a modest level of Loan to Value across the loan book.

Operational risk

The Group maintains robust operational systems and controls through its investment in people and technology. A risk committee reports regularly to the directors, and the Group continues its development of strong operational, risk and compliance function.

Capital Management

The Group’s objective when managing capital is to safeguard its ability to continue as a going concern (referred to in liquidity risk above) and to meet the FCA regulatory capital requirement in its regulated subsidiary. Financial performance is regularly reviewed by various committees within the business, focusing on the amount of regulatory and working capital needed.

Since the end of FY25 the SME housebuilding market has faced sustained headwinds which have slowed the Group’s lending growth for a short period, alongside competitors. The planning system inefficiencies have imposed significant delay and cost on development projects, mortgage rates have remained elevated for much of the period, political uncertainty has weighed on confidence, and the ongoing cost of living pressures have slowed buyer decision-making. Together, these factors have led to slower sales rates than many developers had anticipated, in turn delaying refinancing, capital recycling and the commencement of new projects.

A combination of a benign budget in November, and the launch of the National Planning Policy Framework as the latest suite of planning reform proposed or enacted, alongside a base rate cut in December are now giving SME housebuilders significant hope that the viability of projects previously considered marginal will now improve and a significant increase in new project starts will occur in the new year (2026). The NPPF proposed presumption of planning approval changes, in particular, could lead to a substantial flow in permissioned land and that may impact land values negatively which for our SME housebuilder borrowers without landbanks would be a positive project viability change. The Group expects that changes in market sentiment and project viabilities will drive lending growth through the remainder of FY26 and beyond.

Alongside continuing to work with our existing marketplace funders to enhance product competitiveness, one of the most significant milestones for the Group has been the establishment of our new relationship with Cambridge and Counties Bank. While the recently announced £150 million facility is an important starting point, it represents the beginning of what we would hope becomes a broad, long-term partnership. The corporate finance adviser who introduced Cambridge and Counties Bank to us remain engaged and are looking to actively source additional institutions to add to our funding panel and capital stack in the future.

With the base rate expected to reduce further in 2026, the Group expects to see significant opportunities in the commercial mortgage space and we will continue to work with our panel of funders to grow our lending in this core product area as well.

Overall, the combination of an improved market outlook for SME Development Lending and commercial mortgage lending and an increased appetite by institutional funders for our products creates significant opportunities for growth for the Group and the Directors have a very positive outlook for 2026 and beyond.

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 group in the year under review was that of a marketplace lender. The main focus is secured business and property lending to SME business borrowers. Whilst the majority of lending to date has been retail investor funded under our regulated activity, this has begun to rebalance following the closure of our peer to peer platform to new investment in December 2022, and since then we have been solely focussed on originating loans for institutional funders, which is unregulated activity.

The results for the year are set out on page 10.

No ordinary dividends were paid for the year ended 31 March 2025.

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

The group has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

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 group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the company's ability to continue as a going concern.

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.

Each director in office at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

• the director has taken all the steps that he ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

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

We have audited the financial statements of Assetz Capital Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 March 2025 which comprise the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 group's and of the parent company's affairs as at 31 March 2025 and of the group's loss for the year then ended;

• the group financial statements have been properly prepared in accordance with UK adopted international accounting standards and the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• the financial statements 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 group and parent 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 group's and parent 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 group and parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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 parent 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 parent 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.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance

with laws and regulations we have considered the following:

• the nature of the industry and sector, control environment and business performance;

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

• any matters we have identified having obtained and reviewed the company's documentation of their policies and

• procedures relating to:

• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

• detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or

• alleged fraud;

• 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.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

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 UK Companies Act, employment law, health and safety, pensions legislation 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.

Audit response to risks identified

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;

• enquiring of management concerning actual and potential litigation and claims; - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

• 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.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £468,387 (2024 - £546,957 loss).

Assetz Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is Assetz House, 335 Styal Road, Manchester, Greater Manchester, United Kingdom, M22 5LW. The company's principal activities and nature of its operations are disclosed in the directors' report.

The group consists of Assetz Capital Limited and all of its subsidiaries.

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

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments which are measured at fair value. The principal accounting policies adopted are set out below.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.

The consolidated group financial statements consist of the financial statements of the parent company Assetz Capital Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The financial statements have been prepared on a going concern basis, applying a historical cost convention except for certain financial instruments that are carried at fair value.true

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Group Strategic Report on pages 1 to 3. In addition, the financial statements include the Group's objectives, policies, and processes for managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.

As described in the Group Strategic Report, the economic environment for our key customer base of SME housebuilders has been difficult, and although lending growth was delivered in FY25 the Group has reported an operating loss for the year. The Group has grown its panel of institutional funding lines sine the year end adding Cambridge & Counties Bank, and between them the panel can support annual lending well in excess of the capacity of the peer to peer platform, but at much lower cost of delivery. Market expectations of reducing interest rates and an overhaul of planning regulations are expected to positively boost sentiment in the housebuilding sector and the directors consider it will trigger a return to lending growth for the Group in the coming months.

The Groups forecasts and projections, taking account of changes in trading, show that the group should be able to operate within the level of its current and anticipated funding arrangements. Further, the Group's recent operational re-structure, to reflect the substantial productivity improvements of working with larger loans enabled by institutional funders, has made the core operations of the Group more resilient to future uncertainties which may arise.

After making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Revenue recognition Revenue represents fees receivable for the arranging and servicing of finance through the marketplace lending platform.

Revenue earned for the arrangement of finance is classified as arrangement fees and is recognised immediately once loans are fully funded on the marketplace and after the loans are accepted by the borrowers. Such fees are automatically deducted from the amount borrowed and recognised at that point as the group has the right to consideration.

Revenue earned from servicing of finance via the marketplace lending platform is recognised at the beginning of the contract to the extent of the minimum revenue entitlement to be contractually received by the group in relation to the loan agreement, and thereafter on receipt.

Revenue comprises the fair value of the consideration received or receivable in the ordinary course of the group's activities. All revenue recorded in the financial statements is generated in the UK and sourced from financing transactions. All fees are calculated based on the above revenue recognition policies.

Capitalised development costs

Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the company are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use;

• management intends to complete the software product and use or sell it;

• there is the ability to use or sell the software product;

• it can be demonstrated how the software product will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use or sell;

• the software product are available; and

• the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs.

Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use over their estimated useful lives of five years. These items relate to the development of the Group's technology platform.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

At each balance sheet date, the group reviews the carrying amounts of its fixed assets to determine whether

there is any indication that any items have suffered an impairment loss. If any such indication exists, the

recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

Where it is not possible to estimate the recoverable amount of the asset, the group estimates the recoverable

amount of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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

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

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

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

The group determines the classification of its financial assets at initial recognition. From 1 April 2018 the requirements of IFRS 9 for classification and subsequent measurement have been applied which require financial assets to be classified based on the group's business model for managing the asset, and the contractual cash flow characteristics of the asset:

- Financial assets are measured at amortised cost if they are held within a business model the objective of which is to hold financial assets in order to collect contractual cash flows, and their contractual cash flows represent solely payments of principal and interest.

- Financial assets are measured at fair value through profit or loss if they are held within a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets and their contractual cash flows represent solely payments of principal and interest.

- Financial assets that do not meet the criteria to be amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. In addition, the group may, at initial recognition, designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

The group does not recognise on its balance sheet loans arranged between borrowers and investors as it is not a principal party to the contracts and is not exposed to the risks and rewards of these loans.

Financial assets recognised in the balance sheet as trade and other receivables are classified as loans and receivables (from 1 April 2018: amortised cost). They are recognised at fair value and subsequently measured at amortised cost less provision for impairment.

Financial instruments

The group applied the impairment requirements of IFRS 9. The IFRS 9 impairment model introduces a three-stage approach:

Stage 1 includes financial instruments that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the reporting date. For these assets, 12-month expected credit losses (that is, expected losses arising from the risk of default in the next 12 months) are recognised and interest revenue is calculated on the gross carrying amount of the asset (that is, without deduction for credit allowance).

Stage 2 includes financial instruments that have had a significant increase in credit risk since initial recognition (unless they have low credit risk at the reporting date) but are not credit-impaired. For these assets, lifetime ECL (that is, expected losses arising from the risk of default over the life of the financial instrument) are recognised, and interest revenue is still calculated on the gross carrying amount of the asset.

Stage 3 consists of financial assets that are credit-impaired, which is when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. For these assets, lifetime ECL are also recognised, but interest revenue is calculated on the net carrying amount (that is, net of the ECL allowance).

The introduction of the 'expected credit loss' model has not significantly impacted the group's accounting as it does not have any complex financial instruments or material credit risks. The group uses its historical experience, external indicators and forward-looking information to calculate expected credit losses.

Derecognition of financial assets

Derecognition of financial assets Financial assets are derecognised only when the contractual rights to the cash flows from the financial assets expire or the group has either transferred the contractual right to receive the cash flows from that asset, or has assumed an obligation to pay those cash flows to one or more recipients.

The group derecognises a transferred financial assets if it transfers substantially all the risks and rewards of ownership.

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

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

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.

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

The tax expense represents the sum of the tax currently payable and deferred tax.

Current and deferred tax The tax expense for the period comprises current and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate, based on amounts expected to be paid to the tax authorities.

Deferred tax assets for unused tax losses, tax credits and deductible temporary are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities and there is an intention to settle the balances on a net basis.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affect neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted at the year-end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax balances are not discounted.

The group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17.

At inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group uses the definition of a lease in IFRS 16.

The group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimated of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight line method from the commencement date to the end of the lease term.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the group 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.

Interest receivable

Interest receivable is recognised on an accrual basis within 'Finance income' in the statements of comprehensive income.

Administrative expenses

Expenses are recognised as an expense in the statement of comprehensive income in the period in which they are incurred on an accrual basis.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the group’s estimate of the amount expected to be payable under a residual value guarantee, if the group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.

The group presents right of use assets separately on the statement of financial position and has elected not to recognise right of use assets and lease liabilities for leases of low value assets or short-term leases. The group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Research and development

Expenditure on research is expensed in the profit or loss in the year in which it occurred. Development expenditure is capitalised in the year in which it is incurred.

Other receivables

Where funds held by the Group have been used to pursue recovery action in relation to non-performing loans on the peer to peer platform in order to create a favourable outcome for investors in those loans, in accordance with the Provision Fund policy operated by the peer to peer platform, these amounts have been recognised as Other Receivables. The Group would then recover these amounts funded from the recoveries made on those peer to peer platform loans before distributions were made to investors.

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

The following are the key sources of estimation uncertainty that the Directors have made in the process of applying the group's accounting policies and have the most significant effect on the amounts recognised in the financial statements:

Assessment of Subsidiary carrying value

In the financial year end 2025 group accounts reflect the cost of the investment by the parent company in the subsidiary Assetz SME Capital Ltd, with a book value of £13m (at cost). This is supported by:

- Equity value of Assetz SME in its FY25 accounts of £4.8m - including key elements accounted for such as Intellectual Property relating to the IT systems it has built and developed over the years and continues to be develop, but which has now been significantly amortised and the Group believes its economic value to the Group in the future to be substantially higher than its current book value;

- Tax losses of some £6.5m - these losses may in time be surrendered as part of R&D claims which the company routinely makes each year, or are available to other group companies to offset against future profits. In terms of realisable value these are estimated to be worth at least £1.6m;

- Brand value and sales relationships - not recognised formally as an asset, the Assetz Capital brand has been built up over 10 years as a marketplace lender, and at any one time has substantial live finance opportunities it works on (to generate future income). The Group has clear plans in place to leverage that brand into future income generation.

Although the Brand and Intellectual property in IT have not formally been valued, the Group estimates them be sufficient, along with the other asset values listed above, to support the carrying value of its investment in Assetz SME Capital at March 2025.

Useful life of intangible assets

The assessment of the useful economic life of the group's internally developed and acquired software and licences is judgemental and can change due to obsolescence due to unforeseen technological developments, and other factors.

The useful life of licences represents management's view of the expected term over which the group will receive benefits from the software, and does not exceed the licence term.

For internally developed and acquired software the life is based on historical experience with similar products as well as anticipation of future events which may impact their useful economic life.

Provisions for liabilities

The group holds cash balances relating to discretionary funds operated by the peer to peer platform of its subsidiary, Assetz SME Capital Limited.

When calculating the provision, management utilises historical loan behaviours and its own experiences to determine the provisions which may be required to be accounted for at a given time. These provisions relate to the potential coverage of some or all of the capital losses on peer to peer loans on a discretionary basis, should capital losses arise from a defaulted loan post any recovery work carried out.

The group reviews and adjusts the balances of provisions appropriate for the level of risk and the timing of that risk - the credit for this financial year being released to the profit and loss is £32,539 (2024: £1,040,413) but does not change the cash balances held by the group.

At the reporting date, the provision for liabilities totalled £3,664,213 (2024: £3,723,564).

Financial risk management

The Board has overall responsibility for the establishment and oversight of the group's risk management framework.

The risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to.

The group's activities are reviewed regularly and potential risks are considered.

Risk factors

The group has exposure to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

Principal financial instruments

The principal financial instruments used by the group from which financial instrument risk arises, are as follows:

- Loan due from and payable to related undertakings

- Trade and other receivables

- Cash and cash equivalents

- Trade and other payables

- Categorization of financial assets and financial liabilities

Credit risk

Credit risk is the risk of financial loss to the group if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the group's receivables from customers and cash and cash equivalents held at banks.

The group's maximum exposure to credit risk by class of financial asset is as follows:

Trade receivables of £1,396,908 (2024: £1,684,097) represent invoiced amount in respect of servicing fees due from borrowers. The risk of financial loss is deemed minimal because all funding are secured.

Ongoing credit evaluation is performed on the financial condition of other receivables.

Individual risk limits for banks and financial institutions are set by external rating agencies. The credit risk on cash and cash equivalents is managed under the group's treasury policy that stipulates the limits and quantities that the group must remain within. No credit or counter party limits were exceeded during the year.

Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's position.

The group's liquidity position is monitored and reviewed on an ongoing basis by the directors.

Capital management

The group's objective when managing capital is to safeguard its ability to continue as a going concern and to meet the FCA regulatory capital requirements. Financial performance is regularly reviewed by various committees in the business, focusing on the amount of regulatory and working capital needed. This is especially important as the business continues to expand. The process includes the monitoring of FCA returns as well as the annual budget and forecast process from which cashflow and capital assessments and projections are made.

Fees arose entirely from within the United Kingdom.

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

Their aggregate remuneration comprised:

The directors of the company are also considered to be the key management personnel of the Group.

The charge for the year can be reconciled to the loss per the income statement as follows:

The entire net book value of motor vehicles is in respect of assets held under hire purchase contracts.

The net book value of computer equipment includes £nil (2024: £18,543) in respect of assets held under hire purchase contracts.

Details of the company's subsidiaries at 31 March 2025 are as follows:

The registered office and principal place of business of all of the above mentioned companies is Assetz House, Manchester Green, 335 Styal Road, Manchester, M22 5LW.

The financial year end of all of the subsidiaries is 31st March 2025.

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

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

Third party loans are secured by fixed charges.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

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

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

Ordinary shares L3, L4 and L5 are split out as per the following:

700,000 ordinary L3 shares with a nominal value of 0.001p each per share.

300,000 ordinary L4 shares with a nominal value of 0.001p each per share.

300,000 ordinary L5 shares with a nominal value of 0.001p each per share.

On 24th June 2024 the following shares were allotted:

The company issued 400,000 ordinary G1 shares with a nominal value of 0.001p each per share.

The company issued 324,000 ordinary I1 shares with a nominal value of 0.001p each per share.

On 27th August 2024 the following shares were allotted:

The company issued 200,000 ordinary L2 shares with a nominal value of 0.001p each per share.

The company issued 200,000 ordinary L3 shares with a nominal value of 0.001p each per share.

On 8th September 2024 the following shares were allotted:

The company issued a further 500,000 ordinary L3 shares with a nominal value of 0.001p each per share.

The company issued a further 300,000 ordinary L4 shares with a nominal value of 0.001p each per share.

The company issued a further 300,000 ordinary L5 shares with a nominal value of 0.001p each per share.

On 18th October 2024 the following shares were allotted:

The company issued a further 216,000 ordinary G1 shares with a nominal value of 0.001p each per share.

The company issued 162,000 ordinary G2 shares with a nominal value of 0.001p each per share.

The company issued a further 108,000 ordinary I1 shares with a nominal value of 0.001p each per share.

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

Assetz Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is Assetz House, Manchester Green, 335 Styal Road, Manchester, England, M22 5LW. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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 company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.

The directors have at the time of approving the financial statements, 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.

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

Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Details of the company's principal operating subsidiaries are included in note 12.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows: