Risk Analysis: CMD ELECTRICAL LIMITED (NI607588)

1. Risk Rating: HIGH

Justification: While the historical financial position shows considerable strength, the company's dissolved status represents a fundamental and irreversible risk event. A dissolved entity cannot trade, enforce contracts, or hold assets in the normal course. Any assessment of solvency, liquidity, or operational stability is effectively moot for a company that has ceased to exist as a legal person. The dissolution overrides what would otherwise be a low-risk financial profile.

2. Key Concerns

Concern 1: Dissolved Company Status

The company is recorded as dissolved. This is the paramount concern. Upon dissolution, all assets vest bona vacantia in the Crown (or the relevant devolved authority in Northern Ireland). The company cannot legally continue to operate, enter into contracts, or recover debts. Any purported business activity post-dissolution would be void or ultra vires. The dissolution date of 14 August 2026 appears anomalous (future-dated) and warrants verification—this may indicate a data recording error or a pending voluntary strike-off that has been suspended or challenged.

Concern 2: Zero Employees (2023)

The average number of persons employed dropped from 2 in FY2022 to Nil in FY2023. For a company classified under SIC code 43210 (Electrical installation), which is inherently labour-intensive, the absence of any employees strongly suggests the company had ceased active trading operations even prior to dissolution. The business appears to have transitioned into a passive asset-holding vehicle.

Concern 3: Concentration and Realisability of Assets

The balance sheet is heavily concentrated in: - Debtors: £494,909 (33% of total assets) — with no employees, the nature and recoverability of these balances is questionable - Investments: £120,000 carrying value, with cumulative impairment of £24,920 and fair value adjustments — suggesting volatility and potential further downside risk - Freehold property: £120,600, recently revalued upward by £38,716 — revaluation introduces subjectivity and may not reflect realisable value in a dissolution scenario

3. Positive Indicators

Strong Net Asset Position

Net assets of £1,473,432 as at 31 March 2023 represent a robust balance sheet. The company was clearly solvent at the last reporting date, with net assets consistently exceeding £1.4 million over the five-year history available.

Minimal Liabilities

Total liabilities of just £13,781 are negligible relative to total assets of £1.5 million. The current ratio (current assets of £1,227,883 versus current liabilities of £13,781) is approximately 89:1, indicating no liquidity stress whatsoever at the reporting date.

Substantial Cash Reserves

Cash at bank of £732,974 provides a significant liquid buffer. Cash levels have been consistently strong throughout the reported period (ranging from £587,175 to £966,327), suggesting the company was not cash-constrained.

Consistent Shareholder Equity Growth

Shareholders' funds grew from £942,190 in 2017 to £1,473,432 in 2023, demonstrating sustained value accumulation over the period.

4. Due Diligence Notes

Dissolution Verification (Critical)

• Confirm the exact dissolution date and whether this was a voluntary strike-off by directors or compulsory dissolution by the Registrar
• Establish whether any restoration application has been made or is contemplated
• Determine whether assets were distributed to shareholders prior to dissolution or whether they have vested bona vacantia
• Check the Belfast Gazette for any notices relating to the dissolution

Debtors Analysis

• Investigate the composition of the £494,909 debtor balance — with zero employees, are these trade debtors, inter-company balances, or director loans?
• Assess recoverability: are these debts still enforceable given the company's dissolved status?
• Examine whether any debts have been assigned or factored

Related Party Transactions

• The PSC (Mr Charles McDaid) owns more than 75% of shares — investigate whether the debtor balance includes related-party amounts
• Determine whether the investment portfolio (£120,000) relates to connected entities
• Review whether the freehold property at Balliniska Road, Londonderry is occupied by a related business

Property Revaluation

• The freehold property was revalued by James O'Doherty & Co on 15 March 2023, resulting in a £38,716 uplift — obtain and review the valuation report
• Assess whether the revaluation basis (multiple of rental income) is appropriate given the property's use and the company's dormant operational status

Provisions

• Provisions increased from £10,068 to £16,702 — understand the nature of these provisions and whether they relate to contingent liabilities that may affect former directors personally post-dissolution

Director Conduct

• Verify whether either director (Marie Therese McDaid or Charles Kieran McDaid) has any disqualification orders or pending insolvency-related proceedings
• Check whether the directors have been involved in other dissolved or insolvent companies

Investment Portfolio

• The investments carry £24,920 cumulative impairment and £19,135 fair value adjustment — identify the underlying assets and assess whether further impairment is likely
• Determine whether these are listed securities, unquoted investments, or loans to related parties