ENVIRONMENTAL ENERGY CONTROLS EOT LIMITED

Executive Summary

Environmental Energy Controls EOT Limited exhibits ongoing financial weakness with negative net assets and heavy reliance on director and related party loans, undermining its creditworthiness. The company lacks sufficient liquidity and operational cash flow evidence to support debt servicing, resulting in a credit decline recommendation. Close monitoring of related party funding levels and any operational improvements is essential for future credit consideration.

ENVIRONMENTAL ENERGY CONTROLS EOT LIMITED - Analysis Report

Company Number: SC714374

Analysis Date: 2025-07-29 20:19 UTC

1. Credit Opinion: DECLINE
   Environmental Energy Controls EOT Limited shows persistent net liabilities and a negative net asset position over multiple reporting periods. Its current liabilities significantly exceed any liquid or fixed assets available, indicating a weak capital structure and poor solvency. The company is limited by guarantee with no share capital, which reduces equity buffer. Related party loans and director advances form a large part of current liabilities, suggesting reliance on informal financing rather than robust cash generation or external funding. Without evidence of positive cash flow or profitability, the ability to service debt or repay creditors is highly questionable.

2. Financial Strength:
   The balance sheet reveals fixed assets of approximately £5.3 million, but these are offset by current liabilities exceeding £5.3 million, resulting in negative net current assets and net liabilities of around £2,818 at the latest year-end. The company’s shareholders’ funds remain negative and have deteriorated slightly year-on-year. The bulk of liabilities comprises loans from directors (£3.6 million) and related entities (£1.7 million), indicating a capital structure dependent on related party funding rather than operational cash flows or external financing. Absence of share capital and persistent losses reflected in the negative retained reserves severely weaken financial resilience.

3. Cash Flow Assessment:
   No employees are reported, and no information is provided on operating cash flows or profitability. The negative net current assets suggest working capital deficits, indicating potential liquidity pressure. The company relies heavily on director advances and related party loans, which are interest bearing or interest-free but repayable on demand, posing refinancing and liquidity risk. Lack of operating cash inflow details and negative net assets imply limited internal cash generation capacity to meet short-term obligations.

4. Monitoring Points:

• Track any improvements in net current asset position and reduction in related party and director liabilities.
• Monitor operating cash flows or any profits generated by subsidiaries, as the parent company’s investment depends on group performance.
• Review any changes in capital structure, including additional guarantees or external funding arrangements.
• Keep watch on director conduct and repayment terms of advances to assess risk of calls on the guarantee or default.
• Evaluate any upcoming filings for updated financials to detect trends in solvency or liquidity.