Credit Analysis: AKSM LIMITED

1. Credit Opinion: CONDITIONAL

Reasoning: The company presents a deceptively strong balance sheet with net assets of £112,854 and minimal liabilities, but significant concerns limit confidence. The micro-entity filing status provides virtually no operational visibility—no profit & loss account, no turnover figures, and no cash flow statement. The company reports zero employees despite being classified under SIC code 80100 (Private security activities), an industry typically labour-intensive. Total assets have declined 65% from their 2018 peak of £369,043, suggesting a fundamental shift in business operations rather than growth. The steady net asset position from 2020-2022 (£111,571 unchanged) raises questions about whether the business is genuinely trading or functioning as an asset-holding vehicle. Approval would require full audited accounts, confirmation of trading status, and clarity on revenue generation.

2. Financial Strength

Balance Sheet Health: Moderate, but deteriorating trajectory

Positive indicators: - Net assets have grown materially from £10,510 (2015) to £112,854 (2024) - Liabilities reduced dramatically from £322,713 (2018) to £12,150 (2024) - Current ratio exceptionally strong at approximately 46:1 (£125,447 / £2,718) - Gearing is negligible—long-term debt represents only 10.8% of net assets

Concerning indicators: - Total assets have declined steadily from £369,043 (2018) to £127,722 (2024)—a 65% contraction - Fixed assets reduced to just £2,275, suggesting minimal operational infrastructure - Net asset growth has stalled: only £1,283 increase over four years (2020-2024) - The static net assets of £111,571 across 2020-2022 suggests retained profits were not being added—potentially indicating losses or dividend extraction matching any profits

Asset Composition (2024): - Fixed Assets: £2,275 (1.8% of total assets) - Current Assets: £125,447 (98.2% of total assets)

The overwhelming concentration in current assets without revenue visibility raises questions about whether these are liquid resources supporting a trading business or simply parked funds.

3. Cash Flow Assessment

Liquidity Position: Strong on paper, but operational cash generation unclear

Working Capital Analysis: - Net Current Assets: £122,729 - Current Liabilities: £2,718 (due within one year) - Long-term Liabilities: £12,150 (due after one year)

The company appears to have substantial liquidity headroom. However, without a profit & loss account or cash flow statement, it is impossible to assess: - Operating cash flow generation - Whether current assets include trade debtors that are collectable - The nature of current assets (cash vs. receivables vs. other) - Whether the business generates sufficient revenue to service new debt obligations

Debt Service Capacity: Questionable The micro-entity accounts provide no turnover or profit figures. For a private security company with zero employees, revenue generation is unclear. The company could be: 1. A dormant or semi-dormant entity holding investments 2. A vehicle for property or asset holding 3. A business where the director provides services personally without payroll

Without revenue data, any debt service coverage ratio calculation is impossible.

4. Monitoring Points

Key Conditions for Approval: 1. Submission of full statutory accounts (not micro-entity) or management accounts showing turnover, gross margin, and net profit 2. Director interview to understand business model given zero employees in a security business 3. Bank statements demonstrating regular trading income 4. Confirmation that long-term liabilities (£12,150) are not related party loans that could be called 5. Personal guarantees from Mr Kaisar Zaman (75%+ shareholder) for any facility above £25,000

Recommended Facility Structure (if conditions met): - Maximum exposure: £30,000-£50,000 unsecured - Personal guarantee required - Quarterly review of management accounts - Annual review of filed accounts