BALDEV PROJ2 LTD

Executive Summary

Baldev Proj2 Ltd is a private building development company with improving short-term liquidity but negative net assets due to accumulated losses and increased long-term borrowing. While there are risks related to leverage and solvency, the directors' ongoing financial support and positive working capital provide some operational stability. Further due diligence on debt terms and project viability is recommended to fully assess financial sustainability.

BALDEV PROJ2 LTD - Analysis Report

Company Number: SC680395

Analysis Date: 2025-07-29 20:35 UTC

1. Risk Rating: MEDIUM
   The company shows improving net current assets and a positive working capital position as of the latest accounts, but it remains with negative net assets and shareholders' funds. The presence of significant long-term bank loans and accumulated losses indicate moderate solvency and liquidity concerns.

2. Key Concerns:

• Negative shareholders' funds (£3,752 deficit) suggest the company has accumulated losses and is technically insolvent on a net asset basis.
• Significant long-term bank loans (£303,040) introduced in the latest period increase leverage and fixed obligations that must be serviced.
• Low cash balance relative to current liabilities, despite recent improvement, could pressure short-term liquidity if project cash inflows fluctuate.

3. Positive Indicators:

• Net current assets improved substantially from negative (£1,607) to positive (£299,289), indicating better short-term liquidity management.
• Stock levels have increased alongside current assets, consistent with active development projects in the construction sector.
• Directors have signaled ongoing financial support to the company, supporting going concern assumptions.

4. Due Diligence Notes:

• Investigate the nature and terms of the £303,040 bank loan, including repayment schedule and covenants, to assess refinancing and default risks.
• Review the company’s project pipeline, contract status, and revenue recognition policies to evaluate operational sustainability and cash flow projections.
• Examine the directors’ financial support arrangements and ability to continue funding the company during uncertain periods.
• Verify absence of overdue filings or regulatory compliance issues (none evident here).
• Confirm the status and financial health of the controlling shareholder Balmoral Developments (Scotland) Ltd, given its 75-100% ownership.