Company Number: SC682162

Analysis Date: 2025-07-29 20:18 UTC

1. Risk Rating: LOW
   The company demonstrates positive net assets and net current assets throughout the last few years, with no overdue filing obligations. Cash levels, while reduced in the latest year, remain adequate relative to current liabilities. There is no indication of insolvency or governance issues.

2. Key Concerns:

• Declining cash reserves: Cash decreased significantly from £46,070 in 2023 to £21,365 in 2024, which may signal potential liquidity tightening or increased investment outflows.
• Concentrated ownership: Two directors hold between 75-100% of shares combined, potentially increasing governance risks due to lack of wider shareholder oversight.
• Limited employee base: With only 2 employees reported, operational capacity and scalability appear limited, which may affect sustainability if key personnel are lost.

3. Positive Indicators:

• Positive net current assets (£30,265 in 2024) and net assets (£65,992 in 2024) indicate sound balance sheet strength.
• Up-to-date statutory filings with no overdue accounts or confirmation statements reflect good regulatory compliance.
• Tangible fixed assets increased significantly in 2024 (£35,727 from £2,744), suggesting investment in operational capacity or equipment.
• Consistent recognition of turnover and contract completion policies in line with accounting standards.

4. Due Diligence Notes:

• Investigate cause and sustainability of cash reserve decline and whether it reflects working capital cycling, investment, or cash flow issues.
• Review underlying contract pipeline and revenue trends given limited employee count and industry classification in “Other engineering activities.”
• Assess related party transactions or governance arrangements due to concentrated shareholdings and directorship by controlling shareholders.
• Confirm tax liabilities and deferred tax positions as noted, especially given changes in creditors related to taxation and social security.
• Validate valuation and usage of tangible fixed assets additions, particularly recent large motor vehicle purchases/net disposals.