KAPOOR PROPERTY LTD

Executive Summary

Kapoor Property Ltd demonstrates significant liquidity and solvency risks, evidenced by persistent negative net current assets and minimal equity relative to substantial liabilities. While statutory filings are up to date and the company holds tangible fixed assets, the financial structure suggests cash flow challenges and weak capitalization. Further due diligence on debt terms, cash flows, and asset valuations is essential to assess the company’s operational sustainability and risk exposure.

KAPOOR PROPERTY LTD - Analysis Report

Company Number: 13516325

Analysis Date: 2025-07-20 12:02 UTC

1. Risk Rating: HIGH

Justification: Kapoor Property Ltd exhibits significant liquidity risk with persistent negative net current assets across multiple years and a very low net asset base relative to its liabilities. The company’s financial structure shows a heavy reliance on long-term creditors, and working capital deficits suggest potential cash flow constraints impacting its ability to meet short-term obligations.

2. Key Concerns:

• Negative Net Current Assets: For the 2022, 2023, and 2024 financial years, net current assets have been substantially negative (approximately -£92k to -£103k), indicating that current liabilities exceed current assets by a wide margin. This raises concerns about liquidity and the company’s capacity to cover short-term debts without resorting to additional borrowing or asset sales.

• High Long-term Creditors: The company records long-term liabilities of £213,715 consistently over the last three years, which is very close to the total asset base. The inability to reduce this liability may indicate ongoing debt servicing pressure.

• Minimal Net Assets and Equity: Net assets and shareholders’ funds are very low (£3,256 in 2024) relative to total assets and liabilities, suggesting thin equity buffers. This weak capitalization limits the company’s financial resilience to adverse operating or market conditions.

3. Positive Indicators:

• Stable Fixed Asset Base: Fixed assets have increased slightly from £308,711 in 2022 to £320,860 in 2024, implying some investment or appreciation in tangible assets, which may serve as collateral or provide operational capacity.

• No Overdue Filings: The company is current with both accounts and confirmation statement filings, indicating compliance with statutory reporting requirements and governance discipline.

• Single Director and PSC Alignment: The director, Mr. Awtar Singh Kapoor, holds full control and ownership (75-100%) of shares and voting rights, which can enable swift decision-making and consistent strategic direction.

4. Due Diligence Notes:

• Examine Debt Terms: Investigate the nature and terms of the long-term creditors (£213,715), including interest rates, repayment schedules, covenants, and lender identity. Assess whether these liabilities are sustainable or could trigger default risks.

• Cash Flow Analysis: Review detailed cash flow statements or bank statements to confirm liquidity status and operational cash generation, as negative net current assets signal potential cash flow constraints.

• Asset Valuation and Marketability: Confirm valuations and liquidity of fixed assets (£320k+), including property holdings, to ascertain whether these can be leveraged or sold to improve financial health.

• Profitability and Revenue Trends: The extracted data lacks profit and loss details. Obtaining these would clarify revenue generation and operational sustainability, especially given the absence of P&L filing.

• Potential Related Party Transactions: Given the single director/shareholder structure, verify whether any financial arrangements with related parties exist that could impact financial stability.

• Director Conduct and Creditworthiness: While no disqualifications are noted, a background check on the director’s credit and litigation history would be prudent.

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