DERWEN ROAD (CWM MAWR) LTD

Executive Summary

Derwen Road (Cwm Mawr) Ltd shows significant solvency and liquidity risks highlighted by its negative net asset position and net current liabilities, compounded by heavy reliance on related party funding. While the company maintains good compliance with filing requirements and stable directorship, its financial position raises concerns regarding operational sustainability and ability to meet short-term obligations without further capital support. Further detailed investigation into related party debts and operational cash flows is advisable to fully understand risk exposure.

DERWEN ROAD (CWM MAWR) LTD - Analysis Report

Company Number: 13058802

Analysis Date: 2025-07-20 11:14 UTC

1. Risk Rating: HIGH
   The company exhibits a persistent negative net asset position and net current liabilities, indicating solvency concerns. The scale of current liabilities relative to assets has worsened over the last two years, suggesting increasing financial stress.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Deficit: The company’s net assets have deteriorated from -£1,012 in 2023 to -£2,528 in 2024, showing accumulated losses and potential insolvency risks.
• Net Current Liabilities: Current liabilities (£112,866) exceed current assets (£110,338) as of March 2024, indicating potential liquidity issues and a risk of inability to meet short-term obligations.
• Significant Related Party Creditors: Over £110k is owed to group undertakings, which may indicate reliance on related party funding rather than sustainable external financing or operational cash flow.

3. Positive Indicators:

• Compliance and Filing: The company is up to date with both accounts and confirmation statement filings, demonstrating regulatory compliance and good governance in administrative matters.
• No Audit Requirement: As a small company, it is exempt from audit, which reduces compliance burden and costs.
• Stable Director Structure: Directors have been consistent since incorporation with no disqualifications noted, which supports continuity in management.

4. Due Diligence Notes:

• Investigate the nature and terms of amounts owed to group undertakings to assess the sustainability of related party financing and any contingent liabilities.
• Review cash flow statements and operational performance to understand the underlying causes of recurring net current liabilities and negative equity.
• Evaluate future project pipeline and contracts given the SIC code (development of building projects) to determine operational sustainability and prospects for improving financial health.
• Confirm absence of director disqualifications or adverse governance issues beyond publicly available records.
• Assess whether there are any contingent liabilities or off-balance sheet exposures not reflected in current filings.