ACCOUNTS - Final Accounts preparation

An analysis of turnover by class of business is as follows:

OCTANE PROPERTY FINANCE LIMITED - Company Information

Caseware UK (AP4) 2021.0.152 2021.0.152 2021-12-312021-12-313truetruetrue32021-01-01falseBridging Loan Financetruefalse 10483453 2021-01-01 2021-12-31 10483453 2020-01-01 2020-12-31 10483453 2021-12-31 10483453 2020-12-31 10483453 1 2021-01-01 2021-12-31 10483453 d:Director1 2021-01-01 2021-12-31 10483453 d:Director2 2021-01-01 2021-12-31 10483453 d:Director2 2021-12-31 10483453 d:Director3 2021-01-01 2021-12-31 10483453 d:Director3 2021-12-31 10483453 d:RegisteredOffice 2021-01-01 2021-12-31 10483453 c:CurrentFinancialInstruments 2021-12-31 10483453 c:CurrentFinancialInstruments 2020-12-31 10483453 c:Non-currentFinancialInstruments 2021-12-31 10483453 c:Non-currentFinancialInstruments 2020-12-31 10483453 c:CurrentFinancialInstruments c:WithinOneYear 2021-12-31 10483453 c:CurrentFinancialInstruments c:WithinOneYear 2020-12-31 10483453 c:Non-currentFinancialInstruments c:AfterOneYear 2021-12-31 10483453 c:Non-currentFinancialInstruments c:AfterOneYear 2020-12-31 10483453 c:ReportableOperatingSegment1 2021-01-01 2021-12-31 10483453 c:ReportableOperatingSegment1 2020-01-01 2020-12-31 10483453 c:ReportableOperatingSegment2 2021-01-01 2021-12-31 10483453 c:ReportableOperatingSegment2 2020-01-01 2020-12-31 10483453 c:UKTax 2021-01-01 2021-12-31 10483453 c:UKTax 2020-01-01 2020-12-31 10483453 c:ShareCapital 2021-12-31 10483453 c:ShareCapital 2020-12-31 10483453 c:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 10483453 c:RetainedEarningsAccumulatedLosses 2021-12-31 10483453 c:RetainedEarningsAccumulatedLosses 2020-01-01 2020-12-31 10483453 c:RetainedEarningsAccumulatedLosses 2020-12-31 10483453 c:RetainedEarningsAccumulatedLosses 2020-01-01 10483453 c:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2021-12-31 10483453 c:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2020-12-31 10483453 c:FinancialLiabilitiesFairValueThroughProfitOrLoss c:UnlistedNon-exchangeTraded 2021-12-31 10483453 c:FinancialLiabilitiesFairValueThroughProfitOrLoss c:UnlistedNon-exchangeTraded 2020-12-31 10483453 d:OrdinaryShareClass1 2021-01-01 2021-12-31 10483453 d:OrdinaryShareClass1 2021-12-31 10483453 d:OrdinaryShareClass1 2020-12-31 10483453 d:FRS102 2021-01-01 2021-12-31 10483453 d:Audited 2021-01-01 2021-12-31 10483453 d:FullAccounts 2021-01-01 2021-12-31 10483453 d:PrivateLimitedCompanyLtd 2021-01-01 2021-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 10483453

OCTANE PROPERTY FINANCE LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

OCTANE PROPERTY FINANCE LIMITED

COMPANY INFORMATION

Directors	J A Samuels
	N Van Praag (resigned 15 March 2022)
	R J Maddows (resigned 15 March 2022)


Registered number	10483453


Registered office	Haskell House
	152 West End Lane
	London
	NW6 1SD


Independent auditors	Nyman Libson Paul LLP
	Chartered Accountants & Statutory Auditors
	124 Finchley Road
	London
	NW3 5JS

OCTANE PROPERTY FINANCE LIMITED

CONTENTS

	Page
Strategic report	1
Directors' report	2 - 3
Independent auditors' report	4 - 7
Statement of income and retained earnings	8
Statement of financial position	9
Notes to the financial statements	10 - 18

OCTANE PROPERTY FINANCE LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

The directors present their annual report on the affairs of the company together with the financial statements and auditor's report for the year ended 31 December 2021. This strategic report has been prepared for Octane Property Finance Limited (the "company") and gives greater emphasis to those matters which are significant to the company.

Introduction

Octane Capital Limited is the parent company of the Octane Group. At the balance sheet date there were five wholly owned subsidiaries.

Business review

The company’s principal activity is the origination and administration of short to medium-term bridging finance loans in the property sector. The company looks to differentiate itself from competitors within the market with a productless approach, pricing loans based on the risk of each individual deal and set of circumstances.

Principal risks and uncertainties

The long-term impact of the COVID-19 pandemic on the UK economy will take time to become clear. When combined with the war in Ukraine and increasing fuel prices there is widespread uncertainty within many areas of business, the UK property market is also subject to this. The main risk the group faces is that the property market could fall significantly, which could result in difficulty in recouping the full exposure of loans. The key mitigant to this risk is that the average loan to value of loans advanced are maintained at a conservative level to allow for reasonable buffer should property prices fall. This risk is further mitigated by the fact the loans are short term in nature and closely monitored throughout the term of the loan.
With interest rates and inflation rising there is risk that the country could go into a recession. This creates risk to the group through increased borrowing costs and servicing risk from customers being able to meet their loan repayments. As a productless lender who prices loans based on risk the group will continue to assess pricing and loan to values on a case-by-case basis.

Financial and other key performance indicators

The key performance indicators for the company are turnover, brokers and introducers transacted with and conversion ratios of loan enquiry through to completion. Turnover for the year was £26,569,914 (2020: £29,663,772) and the number of introducers engaged, and the conversion ratios were deemed by directors to be acceptable.

This report was approved by the board on 4 July 2022 and signed on its behalf.

J A Samuels

Director

Page 1

OCTANE PROPERTY FINANCE LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

The directors present their report and the financial statements for the year ended 31 December 2021.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

∙select suitable accounting policies for the company's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to 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.

Directors

The directors who served during the year were:

J A Samuels

N Van Praag (resigned 15 March 2022)

R J Maddows (resigned 15 March 2022)

Results and dividends

The profit for the year, after taxation, amounted to £1,081,135 (2020 - £1,094,938).

Dividends amounting to £700,000 (2020: £840,000) were paid during the year.

Future developments

The company is continually looking to grow the loan book across residential and commercial bridging, refurbishment and buy-to-lets. This is done via enhancements to the lending appetite and loans structuring. This is supported through investigating new financing options and facilities to provide a foundation for growth.

Page 2

OCTANE PROPERTY FINANCE LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

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

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post balance sheet events

Following the Balance Sheet date, share transfers have taken place which changes the ultimate controlling party from PCO Holdco II Sarl to JNS Holdco Limited.

Auditors

The auditors, Nyman Libson Paul LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 4 July 2022 and signed on its behalf.

J A Samuels

Director

Page 3

OCTANE PROPERTY FINANCE LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OCTANE PROPERTY FINANCE LIMITED

Opinion

We have audited the financial statements of Octane Property Finance Limited (the 'company') for the year ended 31 December 2021, which comprise the Statement of income and retained earnings, the Statement of financial position and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Page 4

OCTANE PROPERTY FINANCE LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OCTANE PROPERTY FINANCE LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Page 5

OCTANE PROPERTY FINANCE LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OCTANE PROPERTY FINANCE LIMITED (CONTINUED)

Auditors' 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 Auditors' 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.

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:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

Page 6

OCTANE PROPERTY FINANCE LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OCTANE PROPERTY FINANCE LIMITED (CONTINUED)

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 Auditors' 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.

Richard Paul (Senior statutory auditor)

for and on behalf of

Nyman Libson Paul LLP

Chartered Accountants

Statutory Auditors

124 Finchley Road

London

NW3 5JS

4 July 2022

Page 7

OCTANE PROPERTY FINANCE LIMITED

STATEMENT OF INCOME AND RETAINED EARNINGS

FOR THE YEAR ENDED 31 DECEMBER 2021

	2021	2020
Note	£	£


Turnover	4	26,569,914	29,663,772
Cost of sales		(19,207,331)	(21,022,564)
Gross profit		7,362,583	8,641,208
Administrative expenses		(6,026,698)	(7,287,616)
Operating profit		1,335,885	1,353,592
Interest payable and similar expenses		(1,151)	(1,817)
Profit before tax		1,334,734	1,351,775
Tax on profit	7	(253,599)	(256,837)
Profit after tax		1,081,135	1,094,938



Retained earnings at the beginning of the year		2,390,954	2,136,016
Profit for the year		1,081,135	1,094,938
Dividends declared and paid	8	(700,000)	(840,000)
Retained earnings at the end of the year		2,772,089	2,390,954

There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of income and retained earnings.

The notes on pages 10 to 18 form part of these financial statements.

Page 8

OCTANE PROPERTY FINANCE LIMITED

REGISTERED NUMBER: 10483453

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

		2021		2020
Note		£		£


Current assets
Debtors: amounts falling due after more than one year	9	34,416,712		100,068,905
Debtors: amounts falling due within one year	9	188,830,032		200,415,689
Cash at bank and in hand	10	665,297		266,836
		223,912,041		300,751,430
Creditors: amounts falling due within one year	11	(187,133,528)		(199,023,688)
Net current assets			36,778,513		101,727,742
Total assets less current liabilities			36,778,513		101,727,742
Creditors: amounts falling due after more than one year	12		(34,006,423)		(99,336,787)

Net assets			2,772,090		2,390,955

Capital and reserves
Called up share capital	14	1	1
Profit and loss account		2,772,089	2,390,954
		2,772,090	2,390,955

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 July 2022.

J A Samuels

Director

The notes on pages 10 to 18 form part of these financial statements.

Page 9

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

1.	General information

Octane Property Finance Limited is a private company limited by shares and incorporated in England. The address of its registered office Haskell House, 152 West End Lane, London, England, NW6 1SD.
The company's principal activity is to offer short-term bridging finance to customers purchasing residential or commercial property.

2.Accounting policies

2.1

Basis of preparation of financial statements

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

The company's functional and presentational currency is GBP, rounded to the nearest £1.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

∙the requirements of Section 7 Statement of Cash Flows;

∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);

∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Octane Capital Limited as at 31 December 2021 and these financial statements may be obtained from https://beta.companieshouse .gov.uk/.

2.3

Going concern

The company meets its day to day working capital requirements through the utilisation of its own funds, banking and loan facilities and a loan from its ultimate controlling party.
Existing funding facilities, forecasts and projections indicate that the company has adequate resources to continue with some level of activity from a minimal to full levels. Although the continuing effects of the global coronavirus outbreak from January 2020 can be modelled, it is very difficult to determine the assumptions that will prove to be most appropriate and therefore there is an element of doubt existing that cannot be quantified.
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements, but with the proviso that some uncertainly exists over the company’s future.

Page 10

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.4

Revenue recognition

Revenue consists of interest on loans issued and other set-up fees. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts and rebates, using the effective interest method which allocates interest and direct and incremental fees over the the expected useful lives of the loans.

2.5

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred. Costs are charged over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.

2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.7

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

2.8

Debtors

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

2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

2.10

Creditors

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

2.11

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from other third parties and loans to or from related parties.

Page 11

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.11

Financial instruments (continued)

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

Customer loans
Included within trade debtors are loans to customers that have been sold to a third party during the year but fail the derecognition criteria of FRS 102 section 11.33.
As the company substantially retains the risks and rewards of ownership of these loans they continue to recognise these transferred assets in their entirety and recognise a financial liability for the consideration received or deferred.
De-recognition
The company will derecognise these financial assets when:
(a) the contractual rights to the cash flows from the financial asset expire or are settled; or
(b) the entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or
(c) the entity, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity shall:
(i) derecognise the asset; and
(ii) recognise separately any rights and obligations retained or created in the transfer.
The carrying amount of the transferred asset shall be allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations shall be measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised in accordance with this paragraph shall be recognised in profit or loss in the period of the transfer.

2.12

Dividends

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

Page 12

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date and the amount reported for revenue and expenditure during the period. However, the nature of estimations means that actual outcomes could differ from those estimates.
The following are the company's key sources of estimation uncertainty:
Impairment of debtors
Trade debtors are recorded in the accounts at cost. Some debtors may not pay part or all of the balance due, and thus the debtor balance in the financial statements will need to be amortised to reflect the lower of cost and market value. The company records a provision for bad debts to estimate the total impact of non-payments, considering factors such as the value of the outstanding amount in excess of the security, the recoverable amount ascertained by an independent valuer, the credit rating of customers, the ageing profile of debtors and historical experience.
Accruals
The company makes an estimate of interest, commissions and other costs that relate to the current financial reporting period but have not yet been invoiced.

Interest receivable	20,540,081	23,650,356
Fees income	6,029,833	6,013,416
	26,569,914	29,663,772

All turnover arose within the United Kingdom.

5.	Auditors' remuneration
		2021	2020
		£	£

Fees payable to the company's auditor for the audit of the company's annual financial statements

10,000

19,500

The company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent company.

Page 13

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Employees

The average monthly number of employees, including the directors, during the year was as follows:

	2021	2020
	No.	No.

Directors	3	3

Corporation tax
Current tax on profits for the year	253,599	256,837

Profit on ordinary activities before tax

1,334,734

1,351,775

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)	253,599	256,837
Effects of:
Total tax charge for the year	253,599	256,837

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 14

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

8.	Dividends
		2021	2020
		£	£

	Dividends paid on equity capital	700,000	840,000
		700,000	840,000

9.	Debtors
		2021	2020
		£	£

Due after more than one year
Trade debtors	33,328,240	97,615,833
Prepayments and accrued income	1,088,472	2,453,072
	34,416,712	100,068,905

					2021	2020
					£	£

Due within one year
Trade debtors	180,426,767	191,568,187
Amounts owed by group undertakings	921,858	977,494
Other debtors	26,917	-
Prepayments and accrued income	7,454,490	7,870,008
	188,830,032	200,415,689

10.	Cash and cash equivalents
		2021	2020
		£	£

	Cash at bank and in hand	665,297	266,836

Page 15

OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

11.	Creditors: Amounts falling due within one year
		2021	2020
		£	£

Amounts owed to group undertakings	177,589,119	189,045,272
Corporation tax	127,750	123,837
Other creditors	339,621	379,416
Accruals and deferred income	9,077,038	9,475,163
	187,133,528	199,023,688

12.	Creditors: Amounts falling due after more than one year
		2021	2020
		£	£

Amounts owed to group undertakings	32,723,264	95,131,941
Accruals and deferred income	1,283,159	4,204,846
	34,006,423	99,336,787

Secured loans
Included in amounts owed to groups within one year and after more than one year are loans of £209,142,745 (2020: £282,650,561) due to ultimate parent company PCO HoldCo II Sarl and fellow subsidiary Octane Property Finance 2 Limited. These loans are interest bearing at a variable rate linked to the performance of the borrower loans and are short and medium term in duration up to a maximum of three years. The loans are secured by fixed and floating charge over the assets of the company and by a legal charge against the properties.

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OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

13.	Financial instruments
		2021	2020
		£	£

	Financial assets
	Financial assets measured at amortised cost	214,703,782	290,161,594

	Financial liabilities
	Financial liabilities measured at amortised cost	(210,652,004)	(284,556,629)

Financial assets measured at amortised cost comprise of trade debtors, amounts owed by group undertakings and other debtors.

Financial liabilities measured at amortised cost comprise of trade creditors, amounts owed to group undertakings and other creditors.
During the year the company transferred assets to another party in transactions that did not qualify for derecognition under Financial Reporting Standard 102 Section 11 as follows:
Included within trade debtors are customer loans of £163,444,640 (2020: £201,650,458) that were transferred to Octane Property Finance 2 Limited during the year.
The customer loans consist of mortgage loans with related securities that are generally from 12 to 36 months in duration.
Under the terms of the asset transfer, the company substantially retains all the risks and rewards of ownership, including but not limited to:
• all legal title to mortgage loans;
• all sums of principal, interest and any other sum payable or to become payable;
• all arrears of interest and other sums payable;
• the right to demand, sue for, recover, receive and give receipts for all such sums; and
• the benefit of all security for such principal monies and interest and other sums payable.
Included within amounts due to group undertakings are deemed loans of £158,445,442 (2020: £196,580,166) due to Octane Property Finance 2 Limited, in respect of customer loans transferred to them during the year.

14.	Share capital
		2021	2020
		£	£

Allotted, called up and fully paid

1 (2020 - 1) Ordinary "A" shares share of £1.00	1	1

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OCTANE PROPERTY FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

15.	Related party transactions
	The company is a wholly owned subsidiary within a group for which consolidated financial statements are publicly available and accordingly has taken advantage of the exemptions provided by "Financial Reporting Standard 102" not to disclose transactions with the other group entities including its parent and fellow subsidiary undertakings.

16.	Post balance sheet events

Following the Balance Sheet date, share transfers have taken place which changes the ultimate controlling party from PCO Holdco II Sarl to JNS Holdco Limited.

17.	Controlling party

The immediate parent company is Octane Capital Limited, whose registered office is located at Haskell House, 152 West End Lane, London, England, NW6 1SD.
The ultimate controlling party is the ultimate parent company PCO HoldCo II Sarl, incorporated in Luxembourg.

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