Risk Assessment: CHEMIDOSE LIMITED

1. Risk Rating: HIGH

The company presents significant solvency and liquidity concerns based on the available financial data. Net assets have deteriorated from £223,630 (2011) to just £1,111 (2015) — a 99.5% erosion over four years. The company is operating with negative working capital and virtually no cash reserves, creating material doubt about its ability to continue as a going concern.

2. Key Concerns

a) Severe Liquidity Crisis Cash at bank stands at £17 against current liabilities of £226,054. Net current liabilities of £(28,986) indicate the company cannot meet its short-term obligations from current assets. The current ratio is approximately 0.87:1, well below the minimum threshold for operational stability in the construction sector.

b) Catastrophic Equity Erosion Shareholders' funds have collapsed from £223,630 (2011) to £1,111 (2015). The P&L reserve has been almost entirely consumed, falling from a healthy surplus to just £1,091. This trajectory suggests sustained trading losses or significant write-offs that have eliminated the company's financial buffer.

c) Over-Reliance on Debtors Debtors of £133,419 represent 67.8% of current assets. Given the construction industry's exposure to bad debts and payment delays, any impairment would push the company into negative net assets immediately. The quality and collectibility of these receivables is a critical unknown.

3. Positive Indicators

• Filing Compliance: Accounts and confirmation statements are filed and not overdue, indicating basic administrative discipline and no regulatory intervention.
• Tangible Asset Base: Fixed assets of £60,597 (net) provide some underlying value, though realization may be difficult.
• Long Operating History: Incorporated since 2003, suggesting the business has survived prior trading cycles.
• Secured Debt Reduction: Secured debts decreased from £109,365 (2014) to £61,917 (2015), indicating some deleveraging, though overall liabilities remain problematic.

4. Due Diligence Notes

Critical Items Requiring Investigation:

1. Financial Data Gap: The most recent detailed financial data available is for the year ending August 2015. The accounts information indicates a last made-up date of August 2025, but no intervening financial history is provided. This represents a significant data gap of potentially 9+ years. The company's current financial position cannot be reliably assessed without more recent filings.

2. Going Concern Status: The 2015 accounts show a company on the brink of insolvency. It is essential to determine whether subsequent years have seen recovery or further deterioration. Request accounts for 2016-2024 immediately.

3. Debtor Quality: With £133,419 in debtors underpinning the balance sheet, obtain an aged debtor analysis and assess provision adequacy. Determine if related-party balances are included.

4. Creditor Profile: Total creditors of £252,526 require analysis — identify trade creditors, HMRC liabilities, and any director loans. The secured creditors (£61,917) have priority claims on assets.

5. Related Party — Controlmatic Limited: The company owns 50% of Controlmatic Limited, which shows aggregate capital and reserves of just £2. Assess whether this associate has any material liabilities or guarantees that could affect CHEMIDOSE.

6. Director Loans: With Mr. Thompson holding >75% control and serving as both director and secretary, investigate whether director loans exist that could subordinate trade creditors or indicate financial engineering.

7. Trading Performance: The abbreviated accounts provide no profit & loss detail. Obtain full accounts to understand revenue trends, gross margins, and the source of the equity erosion (trading losses vs. asset write-downs).

8. CCJ and Litigation Check: Given the strained financial position, search for County Court Judgments, winding-up petitions, or payment defaults.