KHK Capital Limited
Annual Report and Financial Statements
For the year ended 31 December 2025
Company Registration No. 10482158 (England and Wales)
KHK Capital Limited
Company Information
Directors
A Kent
S Kent
S Harris
Company number
10482158
Registered office
7 Stratford Place
London
W1C 1AY
Auditor
Moore Kingston Smith LLP
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
KHK Capital Limited
Strategic Report
For the year ended 31 December 2025
Page 1

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

Principal activities

The principal activity of the group continued to be that of providing short term finance to property investors, developers and professionals across the UK, for the purpose of bridging and development. Lending activities are undertaken through the Group’s wholly owned subsidiaries – KHK One Ltd, KHK Two Ltd, KHK Three Ltd and KHK Four Ltd – each of which operates as a dedicated lending vehicle.

KHK Capital Ltd, the parent company, provides centralised management, operational support and governance to the four subsidiary entities. All employees are contracted by the parent company.

The group is funded through a combination of external senior funding lines, director equity notes, private high net worth investor loan notes and a KHK bond fund.

Overview of the Business

The KHK Group operates as a specialist provider of short term, secured bridging finance to property investors, developers, and SMEs across the UK. Lending activities are undertaken through the Group’s subsidiary companies – KHK One Ltd, KHK Two Ltd, KHK Three Ltd and KHK Four Ltd.

Loans are secured against UK residential or commercial property, typically with loan terms ranging from 6 to 24 months. The Group’s operating model is built around speed of execution, robust underwriting, and disciplined risk management, enabling it to support borrowers with time-sensitive funding requirements.

KHK Capital Ltd, the parent company, provides centralised governance, operational support and staffing across the Group.

KHK Capital Limited
Strategic Report (Continued)
For the year ended 31 December 2025
Page 2
Strategy and Business Model

The Group generates revenue through interest income, arrangement fees, exit fees, and extension fees across its lending subsidiaries.

The Group’s strategy is focused on disciplined growth of a well‑secured and diversified loan portfolio, supported by strong governance, prudent risk management, and reliable operational delivery. The business model is executed through selective origination, conservative credit assessment, and active oversight of each loan from drawdown to repayment.

Key elements of the strategy include:

- Selective deployment of capital — Prioritising transactions with clear exit routes, credible counterparties, and security profiles aligned with the company’s risk appetite.

- Disciplined credit management — Applying consistent underwriting standards, independent valuations, and structured due‑diligence processes to maintain portfolio quality.

- Operational reliability — Maintaining efficient internal processes and decision‑making frameworks to support timely completions and strong broker relationships.

- Active portfolio monitoring — Regularly reviewing borrower performance, security positions, and market conditions to identify emerging risks early.

- Funding and liquidity management — Ensuring appropriate headroom within facilities and maintaining a stable funding base to support lending activity.

Medium term objectives are to preserve capital, maintain a balanced and diversified loan book, strengthen operational resilience, and deliver stable, risk adjusted returns for stakeholders.

KHK Capital Limited
Strategic Report (Continued)
For the year ended 31 December 2025
Page 3
Principal Risks and Uncertainties

The Group is exposed to a range of risks typical of short-term property lending. Key risks include:

Credit risk

- Risk of borrower default or delays in executing exit strategies.

- Managed through conservative LTVs, independent valuations, due diligence, and active loan monitoring.

Property market and valuation risk

- Changes in UK property values affecting security coverage and borrower exits.

- Mitigated through prudent initial valuations, diversification, and regular market review.

Liquidity and funding risk

- Reduced access to funding or delays in capital inflows impacting lending capacity.

- Managed through facility headroom, cash flow forecasting, and covenant monitoring.

Operational and process risk

- Errors, delays, or control failures affecting loan execution or oversight.

- Mitigated through documented procedures, segregation of duties, and oversight of third party providers.

Regulatory and compliance risk

- Changes in regulation or non compliance affecting operations or reputation.

- Managed through policies, training, and ongoing monitoring of regulatory developments.

Concentration risk

- Exposure to specific borrowers, asset types, or geographies increasing vulnerability to localised events.

- Mitigated through portfolio limits and diversification.

Macroeconomic and interest rate risk

- Economic conditions or rate movements affecting borrower behaviour and refinancing markets.

- Managed through monitoring of macro indicators and adjusting underwriting assumptions where appropriate.

KHK Capital Limited
Strategic Report (Continued)
For the year ended 31 December 2025
Page 4
Financial Review

The Group delivered a stable financial performance during the year, supported by continued demand for short-term property lending and disciplined management of the consolidated loan book. The results reflect controlled operating costs and predictable funding expenses.

Revenue Performance

- Group turnover for the year was £15.1m (2024: £12.5m), driven primarily by interest income from the loan book and arrangement fees on new originations. Revenue growth was supported by an increase in average loan book size across the Group.

- Interest income remained the Group’s principal revenue stream, with pricing remaining broadly consistent with prior-year.

Gross Profit

- Gross profit for the year was £13.9m (2024: £11.7m). The improvement from prior year reflects the expansion of the loan book, with stable credit performance and impairments recognised during the year being minimal.

Administrative expenses

- Administrative expenses totalled £2.3m (2024: £1.5m). Although a notable increase the costs remained relatively proportionate to the scale of operations.

Finance costs

- Finance costs increased in line with utilisation of senior and junior funding lines and intercompany funding arrangements. Facility pricing and availability remained relatively stable throughout the year with no adverse changes to terms.

Loan Book and Credit Performance

- The consolidated loan book increased to £116m (2024: £92m), supported by new originations and drawdowns on existing loans. Redemptions continued to occur broadly in line with expectations.

Profit Before Tax

- Profit before tax remained relatively stable at £2.3m (2024: £2.3m). Higher gross profit was offset by increased administrative and finance costs, resulting in a consistent year on year profit before tax.

Balance Sheet Position

- The Group’s balance sheet remains well-capitalised, with positive retained earnings, a diversified loan book and stable funding arrangements. Net assets at year end were £3.8m (2024: £3.7m).

Overall Assessment

- The Directors consider the Group’s financial position to be sound and supportive of it’s strategic objectives for the forthcoming year.

KHK Capital Limited
Strategic Report (Continued)
For the year ended 31 December 2025
Page 5
Non-Financial Performance Indicators

The board monitors a range of non-financial indicators that reflect the operational effectiveness, credit discipline, and service quality of the Group. These measures provide early insight into portfolio performance, borrower behaviour, and the strength of internal processes.

- Average loan‑to‑value across the portfolio — used to assess underwriting quality and the overall risk profile of the loan book relative to market conditions.

- Arrears and default activity — monitored to identify emerging credit stress, the effectiveness of recovery strategies, and the performance of specific borrower segments or product types.

- Operational turnaround times, including the average duration from initial application to drawdown — an indicator of process efficiency, borrower experience, and the effectiveness of third‑party partners such as valuers and solicitors.

- Repeat engagement from borrowers and brokers — a measure of relationship strength, service quality, and the company’s reputation within the specialist lending market.

- Staff retention, development, and training — reflecting the stability and capability of the team, particularly in underwriting, portfolio management, and compliance‑critical roles.

- Compliance monitoring and audit outcomes — covering internal reviews, external audits, and regulatory checks, providing assurance over adherence to policies, lending standards, and statutory obligations.

These indicators collectively support the board’s assessment of the Group’s long‑term sustainability, operational resilience, and alignment with its risk appetite.

Outlook

The Group benefits from a diversified structure, with lending activity undertaken across 4 subsidiaries and centralised operational support provided by the parent company. Going into 2026 the Group is supported by:

- A range of funding partners, providing stable liquidity for ongoing lending activity.

- Junior funding from KHK Capital Ltd, with approximately £41m of funds available for deployment across the subsidiaries.

- Consolidated retained earnings standing at £3.8m;

- A strong origination pipeline generated by the Group’s underwriting and business development teams, typically producing £10-£15m per month in eligible and creditworthy loans.

The Group expects the KHK One loan book to remain broadly stable, reflecting it’s maturity, established funding structure and consistent origination profile. However, other funding lines from both existing partners and new providers currently under review – are expected to support steady, organic growth in the total consolidated loan book over the medium term.

The Group is exempt from the Streamlined Energy and Carbon Reporting (SECR) requirements for the year ended 31 December 2025, as its total energy consumption for the period did not exceed 40MWh. Accordingly, the Group is not required to disclose energy consumption, greenhouse gas emissions or related matters in the Strategic Report.

KHK Capital Limited
Strategic Report (Continued)
For the year ended 31 December 2025
Page 6

On behalf of the board

A Kent
Director
30 April 2026
KHK Capital Limited
Directors' Report
For the year ended 31 December 2025
Page 7

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

Dividends

Ordinary dividends were paid amounting to £1,620,000. The directors do not recommend payment of a further dividend.

Directors

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

A Kent
S Kent
S Harris
Auditor

Moore Kingston Smith LLP were re-appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

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

United Kingdom 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 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 group and parent company, and of the profit or loss of the group 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 U nited K ingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic report

The true group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

KHK Capital Limited
Directors' Report (Continued)
For the year ended 31 December 2025
Page 8
Statement of disclosure to auditor

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 auditor of the company 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 auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to groups and companies entitled to the exemptions of the medium-sized companies regime.

On behalf of the board
A Kent
Director
30 April 2026
KHK Capital Limited
Independent Auditor's Report
To the Members of KHK Capital Limited
Page 9
Opinion

We have audited the financial statements of KHK Capital Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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.

KHK Capital Limited
Independent Auditor's Report (Continued)
To the Members of KHK Capital Limited
Page 10

Opinions on other matters prescribed by the Companies Act 2006

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

- T he information given in the strategic report and the directors' r eport 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

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.

Responsibilities of directors

As explained more fully in the directors' r esponsibilities s tatement, 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 group's and 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 group or parent company or to cease operations, or have no realistic alternative but to do so.

KHK Capital Limited
Independent Auditor's Report (Continued)
To the Members of KHK Capital Limited
Page 11
Auditor's responsibilities for the audit of the financial statements

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 group's or the parent 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 group or the parent 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.

- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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.

KHK Capital Limited
Independent Auditor's Report (Continued)
To the Members of KHK Capital Limited
Page 12

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 noncompliance 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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

KHK Capital Limited
Independent Auditor's Report (Continued)
To the Members of KHK Capital Limited
Page 13
Ian Matthews (Senior Statutory Auditor)
30 April 2026
for and on behalf of Moore Kingston Smith LLP
Chartered Accountants
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
KHK Capital Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2025
Page 14
2025
2024
Notes
£
£
Turnover
3
14,919,865
12,563,950
Cost of sales
(1,212,517)
(916,686)
Gross profit
13,707,348
11,647,264
Administrative expenses
(2,174,072)
(1,529,455)
Operating profit
11,533,276
10,117,809
Interest payable and similar expenses
6
(9,226,329)
(7,796,441)
Profit before taxation
2,306,947
2,321,368
Tax on profit
7
(585,661)
(593,880)
Profit for the financial year
1,721,286
1,727,488
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
KHK Capital Limited
Group Balance Sheet
As at 31 December 2025
Page 15
2025
2024
Notes
£
£
£
£
Current assets
Debtors
11
117,397,109
90,982,236
Cash at bank and in hand
3,531,282
5,146,727
120,928,391
96,128,963
Creditors: amounts falling due within one year
12
(43,864,303)
(35,160,419)
Net current assets
77,064,088
60,968,544
Creditors: amounts falling due after more than one year
13
(73,269,925)
(57,275,667)
Net assets
3,794,163
3,692,877
Capital and reserves
Called up share capital
16
12
12
Profit and loss reserves
3,794,151
3,692,865
Total equity
3,794,163
3,692,877

The notes on pages 20 to 30 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 30 April 2026 and are signed on its behalf by:
30 April 2026
A Kent
Director
Company Registration No. 10482158
KHK Capital Limited
Company Balance Sheet
As at 31 December 2025
Page 16
2025
2024
Notes
£
£
£
£
Fixed assets
Investments
9
4
4
Current assets
Debtors falling due after more than one year
11
41,261,077
23,718,535
Debtors falling due within one year
11
136,231
4,334,116
Cash at bank and in hand
1,023,193
1,695,644
42,420,501
29,748,295
Creditors: amounts falling due within one year
12
(42,156,390)
(28,906,923)
Net current assets
264,111
841,372
Total assets less current liabilities
264,115
841,376
Creditors: amounts falling due after more than one year
13
(34,735)
(25,668)
Net assets
229,380
815,708
Capital and reserves
Called up share capital
16
12
12
Profit and loss reserves
229,368
815,696
Total equity
229,380
815,708

The notes on pages 20 to 30 form part of these financial statements.

As permitted by section 408 of the Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £1,033,672 (2024 - £774,776 profit).

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

The financial statements were approved by the board of directors and authorised for issue on 30 April 2026 and are signed on its behalf by:
30 April 2026
A Kent
Director
Company Registration No. 10482158
KHK Capital Limited
Group Statement of Changes in Equity
For the year ended 31 December 2025
Page 17
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2024
12
2,325,377
2,325,389
Year ended 31 December 2024:
Profit and total comprehensive income
-
1,727,488
1,727,488
Dividends
8
-
(360,000)
(360,000)
Balance at 31 December 2024
12
3,692,865
3,692,877
Year ended 31 December 2025:
Profit and total comprehensive income
-
1,721,286
1,721,286
Dividends
8
-
(1,620,000)
(1,620,000)
Balance at 31 December 2025
12
3,794,151
3,794,163
KHK Capital Limited
Company Statement of Changes in Equity
For the year ended 31 December 2025
Page 18
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2024
12
400,920
400,932
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
774,776
774,776
Dividends
8
-
(360,000)
(360,000)
Balance at 31 December 2024
12
815,696
815,708
Year ended 31 December 2025:
Profit and total comprehensive income
-
1,033,672
1,033,672
Dividends
8
-
(1,620,000)
(1,620,000)
Balance at 31 December 2025
12
229,368
229,380
KHK Capital Limited
Group Statement of Cash Flows
For the year ended 31 December 2025
Page 19
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
9,891,374
12,586,238
Interest paid
(9,226,329)
(7,796,441)
Income taxes paid
(654,748)
(712,544)
Net cash inflow from operating activities
10,297
4,077,253
Financing activities
Repayment of bank loans
(5,742)
(5,115)
Dividends paid to equity shareholders
(1,620,000)
(360,000)
Net cash used in financing activities
(1,625,742)
(365,115)
Net (decrease)/increase in cash and cash equivalents
(1,615,445)
3,712,138
Cash and cash equivalents at beginning of year
5,146,727
1,434,589
Cash and cash equivalents at end of year
3,531,282
5,146,727
KHK Capital Limited
Notes to the Group Financial Statements
For the year ended 31 December 2025
Page 20
1
Accounting policies
Company information

KHK Capital Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales limited by shares. The registered office is 7 Stratford Place, London, W1C 1AY.

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

1.1
Basis of preparation

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 a mounts 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.

1.2
Business combinations

In the parent company financial statements, t he 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. I nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company KHK 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 December 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 g roup.

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.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
1
Accounting policies
(Continued)
Page 21
1.4
Going concern

The directors have a reasonable expectation that the group and parent company have adequate resources to continue in operational existence for at least one year from the date of approval of these financial statements. This is supported by the directors' assessment of the group's ability to settle its liabilities as they fall due. Due to the nature of the group’s activities, the directors are confident that the current economic climate has not impacted the going concern status of the group. The group also has revolving credit facilities with multiple third party lenders acting as a security agents which is used to finance the loans in issue. In assessing the ability of the group to continue as a going concern the director's have also considered the level of security held against each loan in issue. The group has deemed the level of security held sufficient to cover the loans.

As a result the directors believe that the group will be able to continue in business and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of the financial statements.

1.5
Revenue

Turnover represents arrangement fees, redemption fees on loan finance and interest receivable. Arrangement fees are recognised once loans are accepted by the borrowers and redemption fees are recognised when loans are redeemed.

Interest receivable represents interest on loan finance and is recognised using the effective interest method.

1.6
Fixed asset investments

Equity in vest ments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

I n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

1.7
Cash and cash equivalents

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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company only has financial instruments classified as basic and measured at amortised cost. The company has no financial instruments that are classified as 'other' or financial instruments measured at fair value.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
1
Accounting policies
(Continued)
Page 22
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.9
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.10
Employee benefits

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

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

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 23
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Loan recoverability

Loan recoverability is a critical estimate in our financial reporting process. This estimate involves assessing the likelihood that outstanding loans will be repaid in full, considering various factors such as the borrower's financial condition, property valuations, and current economic conditions. The recoverability of loans directly impacts the valuation of our loan portfolio and the recognition of potential impairments.

3
Turnover
2025
2024
£
£
Turnover analysed by class of business
Interest Receivable
13,788,692
11,536,405
Fees Receivable
1,131,173
1,027,545
14,919,865
12,563,950

The Group operates solely in the United Kingdom and accordingly, all turnover for the current and prior year is attributable to customers located in the UK.

4
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
33,600
15,385
KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 24
5
Employees

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

Group
Company
2025
2024
2025
2024
Number
Number
Number
Number
11
8
11
8

Their aggregate remuneration comprised:

Group
Company
2025
2024
2025
2024
£
£
£
£
Wages and salaries
792,608
573,559
792,608
573,559
Social security costs
86,925
70,408
86,925
70,408
Pension costs
11,314
7,407
11,314
7,407
890,847
651,374
890,847
651,374
6
Interest payable and similar expenses
2025
2024
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
9,217,628
7,795,345
Other interest on financial liabilities
467
1,096
9,218,095
7,796,441
Other finance costs:
Other interest
8,234
-
Total finance costs
9,226,329
7,796,441
7
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
585,661
593,880
KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
7
Taxation
(Continued)
Page 25

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

2025
2024
£
£
Profit before taxation
2,306,947
2,321,368
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
576,737
580,342
Tax effect of expenses that are not deductible in determining taxable profit
8,924
8,577
Unutilised tax losses carried forward
-
0
4,961
Taxation charge
585,661
593,880
8
Dividends
2025
2024
Recognised as distributions to equity holders:
£
£
Final paid
1,620,000
360,000
9
Fixed asset investments
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Investments in subsidiaries
10
-
0
-
0
4
4
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2025 and 31 December 2025
4
Carrying amount
At 31 December 2025
4
At 31 December 2024
4
KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 26
10
Subsidiaries

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

Name of undertaking
Registered office
Class of shares held
% Held
Direct
KHK One Limited
United Kingdom
Ordinary
100.00
KHK Two Limited
United Kingdom
Ordinary
100.00
KHK Three Limited
United Kingdom
Ordinary
100.00
KHK Four Limited
United Kingdom
Ordinary
100.00

KHKL Two, KHK Three and KHK Four were exempt from audit for the year ended 31 December 2025 under section 479A of the Companies Act 2006, as these entities are included in the consolidated financial statements of the Company.

The Company has given a statutory guarantee in respect of the liabilities of these subsidiary undertakings in accordance with section 479C of the Companies Act 2006, and the conditions for audit exemption were satisfied.

11
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Amounts owed by group undertakings
-
0
-
0
-
0
4,232,205
Other debtors
113,927,113
76,522,602
111,137
101,911
Prepayments and accrued income
490,676
1,077,789
25,094
-
0
114,417,789
77,600,391
136,231
4,334,116
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
0
-
0
41,261,077
23,718,535
Other debtors
2,534,134
13,381,845
-
0
-
0
Prepayments and accrued income
445,186
-
0
-
0
-
0
2,979,320
13,381,845
41,261,077
23,718,535
Total debtors
117,397,109
90,982,236
41,397,308
28,052,651

Included within the Group's other debtor balance is an impairment against loans advanced to third party borrowers amounting to £2,100,000 (2024 - £800,000) as the Directors are of the opinion that, at the present time, this represents the recoverable value.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 27
12
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans
14
6,210
6,210
6,210
6,210
Trade creditors
-
0
870
-
0
-
0
Corporation tax payable
294,504
363,591
8,216
10,976
Other taxation and social security
81,820
69,541
81,820
69,541
Other creditors
43,266,496
34,528,382
41,999,369
28,805,715
Accruals and deferred income
215,273
191,825
60,775
14,481
43,864,303
35,160,419
42,156,390
28,906,923

The Group's other creditors balance includes a balance of £1,106,000 (2024: £5,006,000) relating to amounts owed by KHK Two to Charles Street Commercial Investments Limited.

Charles Street Commercial Investments Limited hold an all-monies debenture over the company. The creditor is secured by a fixed charge over any sub-mortgage or charge held by the company in respect of co-lent projects. The debenture provides security for all amounts owed now or in the future to Charles Street Commercial Investments Limited.

13
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans and overdrafts
14
19,925
25,667
19,925
25,668
Amounts owed to group undertakings
-
0
-
0
14,810
-
0
Other creditors
73,250,000
57,250,000
-
0
-
0
73,269,925
57,275,667
34,735
25,668

Other creditors due after one year relates exclusively to KHK One Limited's senior revolving credit facility with Shawbrook Bank Limited and Hampshire Trust Bank PLC. The facility matures in February 2029.

The facility is secured by TMF Trustee Limited, whom hold a fixed and floating charge over all assets of the company, both present and future.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 28
14
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank loans
26,135
31,877
26,135
31,878
Payable within one year
6,210
6,210
6,210
6,210
Payable after one year
19,925
25,667
19,925
25,668
15
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
11,314
7,407

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

16
Share capital
Group and company
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
1,200
1,200
12
12
17
Related party transactions

During the year, companies under common control of the directors advanced funds to the company to assist with short‑term cash flow requirements. Advances of £1 5 0,000, £100,000 and £60,000 were made respectively. All advances were interest‑free, unsecured and were repaid in full on the following day. No amounts were outstanding at the reporting date.

During the year, a subsidiary of the company incurred an arrangement fee expense of £200,000 payable to a company under common control of the directors. The transaction was not benchmarked against external market terms. No amounts were outstanding at the reporting date.

18
Directors' transactions

During the year, the Company advanced a loan of £35,000 to a director of the Company. The loan was repaid in full within the same month that it was advanced. No interest was charged on the loan and there was no amount outstanding at the year end.

During the year, KHK One Limited advanced £150,000 to a director. The amount was fully repaid during the year and no balance remained outstanding at the year end. No interest was charged on this advance.

KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 29
19
Controlling party

Control of the Company, and therefore Group, is exercised by the directors through their common directorships in the corporate shareholders of the Company. While legal ownership of the Company rests with the corporate shareholder entities, the director have the power to direct the relevant activities of the Company and are therefore considered to the be ultimate controlling parties.

20
Cash generated from group operations
2025
2024
£
£
Profit after taxation
1,721,286
1,727,488
Adjustments for:
Taxation charged
585,661
593,880
Finance costs
9,226,329
7,796,441
Movements in working capital:
Increase in debtors
(26,414,873)
(20,279,407)
Increase in creditors
24,772,971
22,747,836
Cash generated from operations
9,891,374
12,586,238
21
Cash generated from operations - company
2025
2024
£
£
Profit after taxation
1,033,672
774,776
Adjustments for:
Finance costs
3,428,937
2,191,060
Investment income
(4,314,594)
(2,850,613)
Movements in working capital:
Increase in debtors
(13,344,657)
(8,584,451)
Increase in creditors
13,267,037
9,872,030
Cash generated from operations
70,395
1,402,802
KHK Capital Limited
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2025
Page 30
22
Analysis of changes in net debt - group
1 January 2025
Cash flows
31 December 2025
£
£
£
Cash at bank and in hand
5,146,727
(1,615,445)
3,531,282
Borrowings excluding overdrafts
(31,877)
5,742
(26,135)
Third party lenders
(90,615,632)
(23,769,720)
(114,385,352)
(85,500,782)
(25,379,423)
(110,880,205)
23
Analysis of changes in net debt - company
1 January 2025
Cash flows
31 December 2025
£
£
£
Cash at bank and in hand
1,695,644
(672,451)
1,023,193
Borrowings excluding overdrafts
(31,878)
5,743
(26,135)
Third party lenders
(28,359,632)
(11,669,720)
(40,029,352)
(26,695,866)
(12,336,428)
(39,032,294)
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