ALI & KANUNGO LTD

Executive Summary

Ali & Kanungo Ltd exhibits high financial risk primarily due to negative net assets and significant long-term borrowing that outweighs its asset base. While the company maintains good filing compliance and shows asset growth aligned with its real estate activities, its minimal liquidity and heavy leverage raise concerns about solvency and cash flow sustainability. Further due diligence on debt obligations, asset valuations, and operational performance is recommended to clarify risk exposure.

ALI & KANUNGO LTD - Analysis Report

Company Number: 14169800

Analysis Date: 2025-07-29 19:41 UTC

1. Risk Rating: HIGH
   The company shows significant solvency and liquidity risks due to negative net assets and substantial long-term liabilities exceeding total assets.

2. Key Concerns:

• Negative Net Assets: Net liabilities of £12,533 as of 31 March 2024 indicate the company’s liabilities exceed its assets, a sign of financial distress.
• High Long-Term Debt: Creditors falling due after more than one year increased markedly from £184,290 in 2023 to £574,742 in 2024, primarily bank loans and director loans, suggesting heavy leverage and potential repayment burden.
• Minimal Liquidity: Cash reserves are very low (£3,709), and current assets are minimal relative to current liabilities (£574,742 long-term creditors but current liabilities figure not separately disclosed here, though implied to be significant), indicating potential cash flow challenges.

3. Positive Indicators:

• Asset Growth: Tangible fixed assets increased substantially from £169,950 to £558,850, reflecting investment in property assets aligned with its real estate SIC codes.
• No Filing Delinquencies: Accounts and confirmation statements are up to date with no overdue filings, suggesting good regulatory compliance.
• Experienced Directors: The directors include individuals with professional backgrounds (doctors) and established control, which may support governance stability.

4. Due Diligence Notes:

• Examine Debt Terms: Detailed review of bank loan covenants, repayment schedules, and director loan conditions is critical to assess refinancing or default risk.
• Cash Flow Analysis: Obtain management accounts or cash flow forecasts to evaluate ability to meet short-term obligations given low cash and negative working capital.
• Asset Valuation: Verify the valuation and marketability of fixed assets (land and buildings) to understand realisable value in distress scenarios.
• Profitability and Revenue Streams: Limited financial data on income or profitability is available; further investigation into operational performance and revenue generation is needed to assess sustainability.
• Related Party Transactions: Scrutinize director loans and any related party dealings for conflicts of interest or unusual terms.