Annual Financial Report

LENDINVEST SECURED INCOME II PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2025

Registered No: 14068186

TABLE OF CONTENTS

 Pages

Officers and Professional Advisors 1

Strategic report  2

Directors' report 8

Directors' responsibilities statement 11

Independent auditor's report to the members of LendInvest Secured Income II PLC 12

Statement of profit and loss 20

Statement of comprehensive income 21

Statement of financial position 22

Statement of changes in equity 23

Statement of cash flows 24

Notes to the financial statements 25-52

OFFICERS AND PROFESSIONAL ADVISORS

DIRECTORS Roderick Lockhart

Ian Thomas

SECRETARY Indigo Corporate Secretary Limited

COMPANY NUMBER 14068186

REGISTERED OFFICE 4-8 Maple Street

London

England W1T 5HD

AUDITORS BDO LLP

55 Baker Street London

W1U 7EU

BANKER HSBC Bank PLC 8 Canada Square London

E14 5HQ

STRATEGIC REPORT

FOR THE YEAR ENDED 31 MARCH 2025

The Directors present their strategic report for LendInvest Secured Income II PLC (the "Company") for the year ended 31 March 2025.

The Directors, in preparing this strategic report, have complied with section 414C of the Companies Act 2006.

The company was incorporated in England and Wales on 26 April 2022 as a public listed company with the registered number of 14068186.

Principal activity

The principal activity of the Company during the financial period was to provide secured property finance to third party borrowers in the United Kingdom. This is now done both directly through underlying loans to third party borrowers, and indirectly where proceeds are used within an intermediary vehicle that feeds others, stretching the reach of the Company.

Performance in the period

The Company was incorporated on 26 April 2022. The Company subsequently issued a prospectus dated 12 July 2022 offering fixed rate secured loan notes to be listed on the London Stock Exchange's Order Book for Retail Bonds (ORB) market and guaranteed by the Company's ultimate parent, LendInvest PLC.

As at 31 March 2025 the Company had £87.9 million of issued bonds by principal value outstanding. The company had a gross loan book of £37.7 million of which a £104,000 fair value adjustment was posted in the period.

The Company has a number of covenants which it is required to comply with as outlined in the prospectus issued on 12 July 2022. Quarterly, the Company is required to report to bondholders, an analysis of its loan portfolio, via the London Stock Exchange's Regulatory News Service and on the LendInvest website. These have all been complied with in the year to 31 March 2025.

The Company's Interest Coverage Ratio, which compares interest earned from borrowers to interest paid to bondholders, indicates that the Company's earnings from loans at the period end date, are expected to cover the cost of interest paid to bondholders 1.23 times.

The Company generated a profit after tax of £397,000 (2024: £985,000 loss) during the year.

Directors

The Directors of the Company who were in office during the period and up to the date of signing of the financial statements, were as follows:

Roderick Lockhart

Ian Thomas

Future outlook

The Company continues to invest in short term loans to property professionals and may issue further notes according to the strategy of the LendInvest Group (the "Group").

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

Principal risks and uncertainties

The Board has the overall responsibility for the establishment and oversight of the Company's risk management framework. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. The Company's activities are reviewed regularly, and potential risks are considered. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the competitiveness and flexibility of the business.

Creating a positive impact on the environment, the communities our borrowers serve, and our talented people is at the heart of our approach. From rewarding borrowers that use environmentally sound practices and contributing to social regeneration, to supporting our employees' career development and seek to do right by all of our stakeholders.

The Company has exposure to the following risks from its use of financial instruments: market, liquidity and credit risk:

Market risk management

There is a risk that the Company will be adversely hit by market rate or price movements. The company has fixed price liabilities which should mitigate any pressure from market risk on that side. The Company's assets are also fixed rate, but loan values will deviate through fair value adjustments should interest rates move. This is substantiated in note 14. We have continued to see high interest rates and inflation which are impacting our financing costs and operations. This pressure has alleviated through FY25 and resilient demand has been evident from a range of investors. The business continues to monitor the level of headline pricing, the size and nature of pipeline commitments and to seek to ensure refinancing transactions and contingencies are developed on a timely basis.

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

Principal risks and uncertainties (continued)

Liquidity risk management

There is a risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's position. The Company's liquidity position is monitored and reviewed on an ongoing basis by the Directors and the Assets and Liabilities Committee. The Company's strategy is to grow the portfolio and then periodically securitise the assets.

The tables below analyse the Company's contractual undiscounted cash flows of its financial assets and liabilities:

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

Principal risks and uncertainties (continued)

Credit risk management

Credit risk is the risk that the Company's loans and advances are subject to borrower default. It arises principally from the Company's loans and advances to customers, receivables from related parties and cash and cash equivalents held at bank.

Credit risk management lies at the core of the business and the Company has continued to develop its strong credit risk management framework which includes:

• A clearly defined credit risk policy.

• The continued recruitment of specialist skills in credit underwriting.

• A Credit Committee which meets monthly.

• An Impairment and Modelling Committee - specifically formed for the governance of IFRS 9 - which meets quarterly.

In addition to managing the credit risk associated with borrowers, the Company manages other risks including:

Climate risk management

The Company gives consideration to climate risk also and as part of the Group.

The Company considers climate risk as part of the wider LendInvest Group approach. Emerging EPC legislation may require properties to hold a minimum EPC rating of C by 2025 in order to qualify for a mortgage or remain suitable for rental. We therefore monitor this risk closely, as energy-inefficient properties could become harder to refinance, increasing default risk at term. Our lending activity is closely tied to energy performance: by funding upgrades and retrofits, our products help borrowers meet evolving Minimum Energy Efficiency Standards ("MEES") and contribute to the transition to a lower-carbon housing stock.

Capital management

The Company considers its capital to comprise of its equity share capital plus retained earnings. The Company's objectives when maintaining capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns to shareholders. The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

Director's responsibilities under the Companies Act 2006

Under section 172 of the Companies Act 2006, a Director of a UK Company must act in the way they consider would be most likely to promote the long-term success of the Company while having regard to the interests of stakeholders and the broader impacts of our decisions. This section sets out how we have discharged those duties during the financial year ended 31 March.

We identify key stakeholder groups based on their direct influence on our ability to deliver our strategy and operate sustainably.

Employees - Why they matter: Our success depends on attracting, retaining and empowering skilled people who believe in our mission to simplify and modernise property finance. How we considered their interests: The Board maintained oversight of culture and engagement through feedback forums, leadership visibility, and regular updates on workforce sentiment. Strategic decisions - including our headcount realignment to support operational efficiency - were made with care and transparency, with support mechanisms in place throughout. We continued investing in employee experience, learning and development, and recognition frameworks to support long-term engagement.

Customers and brokers - Why they matter: Our customers - including landlords, developers and brokers - rely on our speed, technology and reliability to seize opportunities and scale portfolios. How we considered their interests: Customer and broker feedback directly informed enhancements to our digital mortgage portal and product offering. The launch of our residential mortgage products followed identified demand for flexibility and speed, and the Board oversaw performance metrics to ensure these needs continued to be met. As market conditions evolved, we prioritised responsiveness, including rate reductions and faster decisioning to maintain customer confidence and trust.

Investors and capital partners - Why they matter: We rely on continued confidence from institutional and retail investors to grow our lending platform and deliver shareholder value. How we considered their interests: The Board engaged regularly with shareholders and funding partners throughout the year, supporting a number of strategic milestones including our largest securitisation to date and the formation of new capital partnerships. These decisions were guided by our commitment to improving returns, reducing capital intensity and enhancing transparency across all aspects of reporting and investor communications.

Regulators - Why they matter: Regulatory compliance is fundamental to our licence to operate and reputation as a responsible financial services provider. How we considered their interests: Our governance framework remained robust, with Board-level oversight of risk, compliance, and FCA engagement. The launch of our expanded residential offering was supported by close dialogue with regulators to ensure adherence to lending standards and consumer protections.

Suppliers and delivery partners - Why they matter: Our third-party providers support key operational functions, from legal services to platform infrastructure. How we considered their interests: We engaged with our partners through structured reviews and clear commercial terms. As part of our continued digital investment, we strengthened several relationships to ensure delivery reliability and platform scalability, aligned with our capital-light strategy and customer expectations.

Communities and the environment Why they matter: We recognise the impact of our activities on the communities we lend into and our responsibility to support environmental sustainability in the built environment. How we considered their interests: We continued to promote energy-efficient property financing across our product suite and maintained our carbon neutrality status for operational emissions. Board discussions included ESG progress updates and supported initiatives that contribute to the long-term resilience and sustainability of the housing sector.

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

The Company uses key performance indicators to track progress against its plans. The performance of the main indicators in this reporting period were:

For further details of the loan and ECL provision movements, please see note 8.

There are no events after the reporting period that require disclosure.

Approved by the Board on 30 July 2025 and signed on its behalf by:

Roderick Lockhart

Director

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 MARCH 2025

The Directors present their report and the audited financial statements of the Company for the year ended 31 March 2025.

See strategic report on page 2. Principal risks and uncertainties See strategic report on pages 3 to 5. Going concern

At a Group level, the Directors believe the Group is well capitalised and efficiently funded, with sufficient levels of liquidity. The Directors have reviewed the Group's capital and liquidity plans, which have been stress tested under a range of severe but plausible scenarios. The forecast indicates that under stressed scenarios the Group continues to operate with sufficient levels of liquidity and capital for at least the next 12 months. A comprehensive review of all covenants attached to the listed bonds has been conducted to ensure ongoing compliance with both under expected circumstances and potential stressed scenarios. Based on the above, the Directors believe the Group has sufficient resources to continue its activities for a period of at least 12 months from the date of approval of the financial statements. Through reliance on its ultimate parent, the Directors have concluded that it is appropriate to adopt the going concern basis in preparing these financial statements for the Company.

The statutory profit after tax for the year ended 31 March 2025 amounted to £397,000. The Company paid no dividends during the period and the Directors do not recommend a final dividend.

See strategic report on pages 6 to 7.

See strategic report on pages 3 to 5.

DIRECTORS' REPORT - (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

Political donations

No political donations were made during the period.

There are no events after the reporting period that require disclosure.

The Directors of the Company who were in office during the period and up to the date of signing of the financial statements, were as follows:

Roderick Lockhart

Ian Thomas

DIRECTORS' REPORT - (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2025

The Company has arranged qualifying third-party indemnity insurance for all its Directors.

Each of the persons who is a Director at the date of approval of this report confirms that:

• so far as the Directors are aware, there is no relevant audit information of which the Company's auditor is unaware; and

• each Director has taken all the steps he/she 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.

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

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of BDO LLP as auditors of the Company is to be proposed at the forthcoming Annual General Meeting.

Approved by the Board on 30 July 2025 and signed on its behalf by:

Roderick LockhartDirector

Directors' responsibilities statement

The Directors are responsible for preparing 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 act the Directors have elected to prepare the financial statements in accordance with UK adopted International Accounting Standards. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRS, 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 Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Company's affairs as at 31 March 2025 and of its profit for the year then ended;

• the Company financial statements have been properly prepared in accordance with UK adopted international accounting standards; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of LendInvest Secured Income II PLC (the 'Company') for the year ended 31 March 2025 which comprise Statement of profit and loss, the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity, the Statement of cash flow and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

Following the recommendation of the audit committee, we were appointed by the Directors in March 2023 to audit the financial statements for the period ending 31 March 2023 and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments is 3 years, covering the years ended 31 March 2023 to the year ended 31 March 2025 . We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company.

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. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:

· reviewing minutes of meetings of those charged with governance and correspondence with regulators, such as the Financial Conduct Authority, for any factors which could be of higher risk in relation to going concern;

· challenging the appropriateness of the Directors' assumptions and judgements made in the base forecast and stress-tested forecast. In doing so we agreed key assumptions such as forecast growth to historic actuals and relevant data and considered the historical accuracy of the Directors' forecasts by comparing them to actual results;

· enquiring with the Directors to determine whether there were any breaches of borrowing covenants within the period or subsequent to period end and the ability to manage any potential breaches;

· performing a review of compliance with borrowing covenants which comprised obtaining and reviewing covenant compliance statements to verify that no covenant breaches have occurred which may trigger penalties or repayment of borrowings ahead of the maturity dates;

· obtaining and assessing the Directors plans in respect of funding lines which are approaching maturity within the next 12 months by considering the Group's past experience of extending the maturity of facilities, their discussions with new providers of funding and experience of portfolio sales;

· inspecting the latest post period end management accounts and reviewed minutes of the meeting to determine if there were any significant matters which could affect the going concern of the Company.

· reviewing the going concern disclosure in note 1 to the financial statements to assess that it gives a complete and accurate description of the Directors' assessment of going concern.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC (CONTINUED)

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.

Overview

An overview of the scope of our audit

Our Company audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC (CONTINUED)

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Reporting threshold 

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £55,000 (2024: £54,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. 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.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC (CONTINUED)

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. 

Responsibilities of Directors

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

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

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.

Extent to which the audit was 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:

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC (CONTINUED)

Non-compliance with laws and regulations

Based on:

· Our understanding of the Company and the industry in which it operates;

· Discussion with management and those charged with governance; and

· Obtaining and understanding of the Company's policies and procedures regarding compliance with laws and regulations.

we considered the significant laws and regulations to be:

· Companies Act 2006;

· UK tax legislation

· UK-adopted International Accounting Standards

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the Financial Conduct Authority rules and the General Data Protection Regulation (GDPR).

Our procedures in respect of the above included:

· obtaining an understanding of the control environment in monitoring compliance with laws and regulations;

· reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations discussed above;

· enquiring of management and those charged with governance about their own identification and assessment of the risks of irregularities, including fraud;

· reviewing of legal expenditure accounts to understand the nature of expenditure incurred; and

reviewing of minutes of meetings of those charged with governance and correspondence with the Financial Conduct Authority.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

· enquiry with management and those charged with governance including the Audit Committee regarding any known or suspected instances of fraud;

· obtaining an understanding of the Company's policies and procedures relating to:

o  Detecting and responding to the risks of fraud; and

o  Internal controls established to mitigate risks related to fraud.

· review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

· discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

· performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and

· considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls and in relation to accounting estimates within expected credit loss and Fair value of loss.

Our procedures in respect of the above included:

· testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;

· Involvement of forensic specialists in the audit to review our risk assessment on fraud risks identified;

· involvement of internal credit, econometric experts and internal valuation experts in the areas of high estimation by management such as ECL and Loans and Advances Valuation which is covered in KAM under 'Determination of ECL and Valuation Techniques of Loans and Advances;

· evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

· Assessing significant estimates made by management for bias which is covered in the KAM under ' 'Determination of ECL' and 'Valuation techniques of loans and advances'.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME II PLC (CONTINUED)

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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 are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: 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's members as a body, for our audit work, for this report, or for the opinions we have formed.

Stefan Beyers (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

30 July 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

All amounts relate entirely to continuing activities and to owners of the Company.

The notes on pages 25 to 52 form an integral part of these financial statements.

The notes on pages 25 to 52 form an integral part of these financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 30 July 2025, they were signed on its behalf by:

Roderick Lockhart Director

1 Other comprehensive income consists of fair value adjustments on loans and advances through OCI £3k (2024 £183k) less deferred tax charge £1k (2024 £46k).

The notes on pages 25 to 52 form an integral part of these financial statements.

Interest received was £10.3million (2024: £6.2million) and interest paid was £8.1million (2024: £4.9million).

1Cash and cash equivalents wholly consists of cash held within bank accounts which is immediately accessible.

The notes on pages 25 to 52 form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies General information

LendInvest Secured Income II PLC is a public company limited by share capital which was incorporated on 26 April 2022 in England and Wales and is domiciled in the United Kingdom under the Companies Act 2006. The address of its registered office is given on page 1.

The principal activity of the Company was to provide secured lending to third party borrowers in the United Kingdom.

The Company is a 100% subsidiary of LendInvest Loan Holdings Limited (which is in turn a 100% subsidiary of LendInvest PLC) and its results are included in the consolidated financial statements of the Group.

Basis of accounting

The financial statements have been prepared in accordance with the Companies Act 2006 and the UK-adopted International accounting standards.

The financial statements have been prepared on a historical cost basis, except as required in the valuation of certain financial instruments which are carried at fair value. The preparation of financial statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 1. The financial statements have been prepared on a going concern basis, see note 1 for further details.

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates ("functional currency"). The Company maintains its books and records in pound sterling ("£") and its financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

New standards not yet effective

The IASB has issued a number of amendments to reporting standards which the Company has determined as being applicable to its financial reporting. These amendments are effective in future accounting periods and the Company has not opted for any early adoption. The following amendments are effective for the period beginning on or after 1 April 2025 and are not expected to have a material impact on the Company:

• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS7);

• Contracts referencing nature-dependent Electricity (Amendments to IFRS9 and IFRS7);

• IFRS 18 Presentation and Disclosure in Financial Statements; and

• IFRS 19 Subsidiaries without Public Accountability: Disclosures.

• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);

• Non-Current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements);

• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures) and

• Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies - (continued)

Revenue recognition

Revenue represents interest and other income from borrowers and for the provision of finance. Revenue recognised on loans held by related and third parties is recognised as follows:

Recognised under IFRS 9

· Interest income calculated using the effective interest rate Interest on loans and advances made by the group is recognised in the Consolidated statement of profit and loss using the effective interest rate method. Under the effective interest rate method fees earned from borrowers and transaction costs incurred which are integral to the creation of a loan such as arrangement, valuation and broker fees are amortised over the expected life of the loan.

· Fee income relates to intermediary fees charged between Lendinvest Limited and the Company.

Revenue comprises the fair value of the consideration received or receivable in the ordinary course of the Company's activities.

All revenue recorded in the financial statements is generated in the UK and sourced from transactions relating to property loans. Fees on these transactions are calculated based on the above revenue recognition policy.

Interest expense and similar charges

This represents interest expenses on interest bearing liabilities which are accounted for under IFRS 9 on an effective interest rate (EIR) basis, inclusive of directly attributable incremental transaction costs and fees including structuring fees, uncommitted fees, and set up costs (legal fees).

Administrative expenses

Expenses are recognised in the statement of profit and loss in the period in which they are incurred (on an accruals basis).

Cash and cash equivalents

Cash and cash equivalents comprise of cash balances and balances with a maturity of three months or less from the acquisition date which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

As per IFRS 9, the Group classifies its financial instruments with reference to both the Group's business model for managing the assets and the contractual cash flow characteristics of the instrument.

Financial assets

(i) At amortised cost

These are assets for which the business model is to hold the asset and collect the contractual cash flows. The cash flows are solely payments of principal and interest and are on specified dates.

The Company measures drawn loans and advances held under this business model, cash and cash equivalents and trade and other receivables at amortised cost.

On initial recognition the asset is held at its fair value minus any transaction costs. Subsequent measurement is calculated on the effective interest rate method and is subject to impairment where the recoverable value falls below the carrying value. This assessment is performed quarterly.

(ii) At fair value through other comprehensive income

These are assets for which the business model is to collect the contractual cash flows and to sell the assets. The contractual cash flows are solely payments of principal and interest and are on specified dates.

The Company measures drawn loans and advances held under this business model at fair value through other comprehensive income.

These assets are initially recognised at fair value, plus any attributable costs. Subsequent changes in fair value are recognised in equity, except for impairment losses which are recognised in the Consolidated statement of profit and loss.

For further information on the measurement of impairment losses, please see note 8.

Upon derecognition, any accumulated movements in fair value previously recognised in equity (fair value reserve) are reclassified to profit or loss in the consolidated statement of profit and loss.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies - (continued)

Financial Instruments - (continued)

(iii) At fair value through profit or loss

These are assets for which the business model is neither to hold nor to hold or sell, or where contractual cash flows are not solely payments of principal and interest. The Company designates loan commitments as financial liabilities at fair value through profit or loss. The assets that result on origination of the loans are initially recognised at fair value, adjusting for the recorded fair value to date. 

Financial liabilities

(iii) At amortised cost

All financial liabilities are measured at amortised cost, unless IFRS 9 specifically determines they should be valued at fair value through profit or loss. The Group holds trade and other payables and interest-bearing liabilities at amortised cost. On initial recognition the liability is held at its fair value plus any transaction costs. Subsequent measurement is based on the effective interest rate method.

(iv) At fair value through profit or loss

Financial liabilities are measured at fair value through profit or loss when they meet the definition of held for trading, or when they are designated as such to eliminate or significantly reduce an accounting mismatch that would otherwise arise.

Forbearance

The Company maintains a forbearance policy for the servicing and management of customers who are in financial difficulty and require some form of concession to be granted, even if this concession entails a loss for the Group. A concession may be either of the following:

· A modification of the previous terms and conditions of an agreement, which the borrower is considered unable to comply with due to its financial difficulties, to allow for sufficient debt service ability, that would not have been granted had the borrower not been in financial difficulties; or

· A modification of the previous terms and conditions of an agreement, which the borrower is considered unable to comply with due to its financial difficulties, to allow for sufficient debt service ability, that would not have been granted had the borrower not been in financial difficulties; or

Forbearance in relation to an exposure can be temporary or permanent depending on the circumstances, progress on financial rehabilitation and the detail of the concession(s) agreed. The Company excludes short-term repayment plans that are up to three months in duration from its definition of forborne loans.

Modification of financial assets and financial liabilities

When a financial asset or financial liability is modified, a quantitative and qualitative evaluation is performed to assess whether or not the new terms are substantially different to the original terms. For financial assets, the Company considers the specific circumstances including:

· If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;

· Whether any substantial new terms are introduced that substantially affects the risk profile of the loan;

· Significant extension of the loan term when the borrower is not in financial difficulty;

· Significant change in the interest rate; and

· Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

The Company specifically, but not exclusively, considers the outcome of the '10% test'. This involves a comparison of the cash flows before and after the modification, discounted at the original EIR (Effective interest rate), whereby a difference of more than 10% indicates the modification is substantial.

If the terms and cash flows of the modified financial instrument are deemed to be substantially different, the derecognition criteria are met and the original financial instrument is derecognised and a 'new' financial instrument is recognised at fair value. The difference between the carrying amount of the derecognised financial instrument and the new financial instrument with modified terms is recognised in the statement of profit and loss.

If the terms and cash flows of the modified financial instrument are not deemed to be substantially different, the financial instrument is not derecognised and the Company recalculates the 'new' gross carrying amount of the financial instrument based on the revised cash flows of the modified financial instrument discounted at the original EIR and recognises any associated gain or loss in the statement of profit and loss. Any costs and fees incurred are recognised as an adjustment to the carrying amount of the financial instrument and are amortised over the remaining term of the modified financial instrument by recalculating the EIR on the financial instrument.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies - (continued)

Financial Instruments - (continued)

Derecognition of financial assets and liabilities

Financial instruments are only derecognised when the contractual rights/obligations to receive/deliver cash flows from them have expired or when the Company has transferred substantially all risks and rewards of ownership.

Interest income and expense

Interest income and expense on all financial instruments is recognised in interest receivable or payable in the statement of profit and loss. Interest income, any fees considered an integral part of effective interest rate of the loan and interest expense are calculated using the effective interest rate method for financial assets and liabilities held at amortised cost and at FVOCI.

The effective interest rate method is a method of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability.

Specifically, for loans and advances, the effect of this policy is to spread arrangement, broker and valuation fees, and costs directly attributable and incremental to setting up the loan, over the expected life of the contractual period.

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 period end date.

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

Going concern

The Group's business activities, along with the factors likely to affect its future development and financial position, are detailed in the Strategic Report. The Directors have assessed the Group's funding position and confirm that no committed funding lines mature within 12 months from the date of approval of these financial statements.

Directors have a reasonable expectation that the Group will have adequate resources to continue to operate for a period of at least 12 months from the signing of these accounts including severe yet plausible downside scenarios that Group will have sufficient funds to meets its liabilities as they fall due for that period. Therefore, it is on this basis that the Directors have continued to prepare the accounts on a going concern basis. More information on the Directors' assessment of going concern is set out in the Directors' report.

Critical accounting estimates and judgements

The preparation of these financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise judgement in applying the accounting policies.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies - (continued)

Critical judgements in applying the Company's accounting policies

Significant increase in credit risk

The determination of how significant an increase in lifetime PD should be to trigger a move between credit risk stages for impairment requires significant judgement. Management have adopted a test-based approach to derive objective thresholds such that credit deterioration is recognised at the appropriate point. Similarly significant judgement is also applied when assessing the risk of a default occurring following the modification of a financial asset that does not result in derecognition.

Fair value measurement

Judgements were applied to determine the unobservable inputs to the fair value models used to calculate the fair values of loans and advances. These include the discount rate, prepayment rates, PDs, LGDs (Loss given default), recovery costs and cure probabilities driven from the ECL models.

Estimates and assumptions

Fair value measurement

A number of assets and liabilities included in the Company's financial statements require disclosure of fair value such as loans and advances and interest bearing liabilities. The fair value measurement of the Company's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are ('the fair value hierarchy'):

Level 1: Quoted prices in active markets for identical assets;

Level 2: Observable direct or indirect inputs other than Level 1 inputs;

Level 3: Unobservable inputs (i.e., not derived from market data and require a level of estimates and judgements within the model).

For further discussion around the key estimates and sensitivity, please refer to note 14.

Expected Credit Loss Calculation

The accounting estimates with the most significant impact on the calculation of impairment loss provisions under IFRS 9 are macroeconomic variables, in particular UK house price inflation and unemployment, and the probability weightings of the macroeconomic scenarios used. The Group has used three macroeconomic scenarios, which are considered to represent a range of possible outcomes over a normal economic cycle, in determining impairment loss provisions:

The baseline scenario reflects the most profitable economic outlook, the downside scenarios account for plausible stress conditions and an upside scenario representing the impact of modest improvements to assumptions used in the baseline scenario.

For the period ended 31 March 2025 management have applied 40%/40%/20% to the central, downside and upside scenarios respectively.

Changes to macroeconomic assumptions, as expectations change over time, are expected to lead to volatility in impairment loss provisions and may lead to pro-cyclicality in the recognition of impairment provisions.

Sensitivity Analysis

Sensitivity analysis on the ECL models has been completed. Due to the high number of loans which are individually assessed, the model demonstrates very low levels of sensitivity, as can be seen from the two changes below:

• An 10% increase in the forced sale discount. This would increase the ECL by £0.7m (2024 £0.2m).

• A 100% downside was applied to all the models. This would increase the ECL by £2.8m (2024 £0.3m).

• A 100% upside was applied to all the models. This would decrease the ECL by £1.0m (2024 £0.6m).

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

1 Accounting policies - (continued)

Critical judgements and accounting estimates - (continued)

Write-offs

Loans and advances are written off (either partially or in full) when there is no reasonable prospect of recovery. This is generally the case when the primary security has been realised and the Company is unable to reach an agreement with the borrower for immediate or short-term repayment of the amounts subject to the write-off. Write-offs constitute a derecognition event as detailed under Financial Instruments in note 1. Financial assets that are written off can still be subject to enforcement activities in order to recover amounts due. Amounts subsequently recovered on assets previously written off are recognised in impairment losses on financial assets in the statement of profit and loss.

Funding

All borrowings are initially recorded at fair value plus any transaction costs. Borrowings are subsequently measured using the effective interest rate method. The interest is calculated using effective interest rate method and recognised to the income statement over the period of the relevant borrowing.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Intermediary fees

Intermediary fees are charged by the ultimate parent, LendInvest PLC. This charge relates to the service provided by the group, in terms of management oversight, use of intellectual property and an allocation of costs incurred by the group, among various subsidiaries. This fee is based on a discretionary basis after due consideration on tax and regulatory requirements. This includes consideration made to pre-tax positions on the profit and loss of the entity and minimum cash balances to be maintained as a result of regulatory requirements.

Changes in the presentation of the Statement of Financial Position

During the year ended 31 March 2025 the company amended the statement of financial position for additional clarity in the numbers being presented. The table below illustrates the effect of the reclassification in the comparative before restatement:

This reclassification has no impact on the net assets of the Company.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

2 Financial risk management

The Board has the overall responsibility for the establishment and oversight of the Company's risk management framework. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. The Company's activities are reviewed regularly, and potential risks are considered. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the business's competitiveness and flexibility.

The Company has exposure to the following risks from its use of financial instruments: credit risk, liquidity risk, market risk:

Credit risk management

Credit risk is the risk that the Company's loans and advances are subject to borrower default. It arises principally from the Company's loans and advances to customers, receivables from related parties and cash and cash equivalents held at banks. The Company's maximum exposure to credit risk by class of financial asset is as follows:

Credit risk management lies at the core of the business and the Company has continued to develop its strong credit risk management framework which includes:

• a clearly defined credit risk policy;

• the continued recruitment of specialist skills in credit underwriting;

• a Credit Committee which meets monthly; and

• an Impairment & Modelling Committee - specifically formed for the governance of IFRS 9 - which meets quarterly.

The Company manages its exposure to credit losses by assessing borrowers' affordability of loan repayments, risk profile, and stability during the underwriting process. Impairments are monitored and provided for under IFRS 9. The credit policy is designed to ensure that the credit process is efficient for the applicant while providing the Group with the necessary details to make an informed credit decision.

The fair value of cash and cash equivalents at 31 March 2025 and 31 March 2024 approximates the carrying value. Credit risk relating to cash and cash equivalents is mitigated as cash and cash equivalents are held with reputable institutions. These institutions have a Moody's credit rating of Prime-1 (superior ability to repay short-term debt obligations).

The risk of movements in the price of the underlying collateral secured by the Company against loans to borrowers is actively managed by the Company. Security over loan collateral is registered with the Land Registry, and only properties within England, Wales and Scotland are suitable for security. Loans are capped at 85% of the open market value of the property against which security is held, and minimum loan period interest is retained on completion for some short-term loans.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

2 Financial risk management - (continued)

Liquidity risk management

There is a risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's position. The Company's liquidity position is monitored and reviewed on an ongoing basis by the directors and management.

The table below analyses the Company's contractual undiscounted cash flows of its financial assets and liabilities:

All gross nominal inflows and outflows on financial assets and financial liabilities are due within 5 years at the reporting date.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

3 Segmental analysis

The Company's lending operations are carried out solely in the UK, and effective from 1 April 2023, were carried out solely from the Company's LendInvest Mortgages and Capital Divisions, reflective of the product offerings. The results and net assets of the Group are derived from the provision of property related loans only. The following describes the operations of the two reportable segments for the year ended 31 March 2025:

LendInvest Mortgages

LendInvest Mortgages provides mortgages to both professional BTL landlords and homeowners as well as a range of short term mortgages.

LendInvest Capital

The LendInvest Capital division provides larger, more structured finance primarily to property developers and larger Bridging

loans and houses the Fund and Self-Select Platform.

Please see below for a segmental analysis of the profit and loss and statement of financial position balances:

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

3 Segmental analysis (continued)

4 Interest expense and similar charges

5 Auditor's remuneration

Fees payable to the Company's auditors for audit services of £34,600 in the current year are borne by LendInvest PLC and disclosed in note 10 of the consolidated financial statements of the Group.

6 Staff costs

Key management personnel compensation

Key management personnel, whom are only the Directors, are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.

The Company employed no employees for the year ended 31 March 2025. The Directors' emoluments are paid by LendInvest PLC. The highest paid Director had emoluments of £469k for the year ended 31 March 2025.

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

7 Taxation

The tax on profit before tax for the period is the same as the standard rate of corporation tax in the UK of 25%. The differences are reconciled below:

NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025

8 Loans and advances

Fair value adjustment to gross loans and advances due to classification as FVOCI, based on the Company's business model for managing these financial assets.