Company Number: 13129836

Analysis Date: 2025-07-20 13:20 UTC

1. Risk Rating: MEDIUM
   Dalgagi Limited shows a solid asset base dominated by investment property valued at £3.01 million and a positive net asset position of £213k as of March 2024. However, the company carries significant long-term liabilities (£3 million), primarily other creditors, which raises concerns about solvency. The current liabilities are relatively low (£32k), and net current assets are positive (£118k), which supports short-term liquidity. The absence of overdue filings and the fact the company is active and not in liquidation are positive but the relatively small share capital (£30) and director loans indicate reliance on related-party financing.

2. Key Concerns:

• High Long-Term Debt: £3 million of creditors due after more than one year against net assets of only £213k implies high leverage, which may strain solvency if asset values decline or cash flows falter.
• Director Loans and Advances: Large amounts owed to directors (circa £4 million combined advances) suggest significant insider financing which could pose risks if directors withdraw support or if conflicts arise.
• Lack of Profit & Loss Disclosure: Accounts are filed with exemption from audit and without an income statement, limiting insight into operational profitability and cash flow generation, hindering assessment of sustainability.

3. Positive Indicators:

• Strong Investment Property Asset: The core asset of investment property is valued consistently at £3.01 million, supporting asset backing for liabilities.
• Positive Net Current Assets: Current assets exceed current liabilities by £118k, suggesting short-term obligations are adequately covered.
• Compliance and Timeliness: All statutory accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance and governance.
• Small Employee Base: Only two employees, which may reduce fixed operational costs and enhance cash flow flexibility.

4. Due Diligence Notes:

• Review the terms and conditions of the £3 million long-term creditors to understand repayment schedule, interest obligations, and security arrangements.
• Obtain detailed profit and loss statements, cash flow statements, and management accounts to ascertain operational performance, profitability, and cash flow sufficiency to service debt.
• Assess the nature and sustainability of director loans and advances, including any repayment terms or covenants.
• Verify valuation methodology and assumptions used for investment property to evaluate risk of impairment or market value declines.
• Investigate related-party transactions and any contingent liabilities disclosed in the full accounts or notes.