Financial Health Assessment: KEYSTONE PORTFOLIO LIMITED

1. Financial Health Score: F

Explanation: This patient is in critical condition. The company has been balance-sheet insolvent for its entire documented history, with accumulated losses exceeding £342,000 against share capital of just £1. It has no employees, no visible revenue stream, and survives solely on life support from its director's loan. Like a patient kept alive only by a ventilator, this company exists only because the director chooses not to pull the plug.

2. Key Vital Signs

*The current ratio appears healthy only because current liabilities are negligible (£1,200 in accruals). This is akin to a patient with low short-term medication needs but a terminal underlying condition.

3. Diagnosis

Chronic Balance Sheet Insolvency with Director Dependency Syndrome

The financial data reveals a company that has been technically insolvent since at least 2016, with a progressively worsening condition. The core pathology breaks down as follows:

Symptom 1: Massive and Persistent Accumulated Losses

The profit and loss reserve stands at negative £342,550 – representing over a decade of accumulated trading losses or expenses with no offsetting revenue. This is the financial equivalent of a patient who has been losing blood for years without receiving a transfusion that sticks. The slight improvement from (£369,134) to (£342,550) represents approximately £26,584 of reduction in net liabilities, but this is attributable to the director writing down their loan rather than trading performance.

Symptom 2: Director Loan Dependency

The most significant feature of this balance sheet is the £350,203 owed to director David Maynard Worrow – representing over 99% of total liabilities. This is a related party creditor that has been outstanding for many years. The company's survival is entirely at the mercy of this single individual. If the director were to demand repayment, the company would face immediate compulsory liquidation. This is like a patient whose heart is controlled by a single switch – the director's forbearance.

Symptom 3: Absence of Trading Activity

• Zero employees throughout all periods
• Minimal debtors (£79 – a VAT reclaim)
• No visible revenue stream in the filleted accounts
• Minimal operating costs (only £1,200 in accruals, likely accounting fees)
• SIC Code 66290 (insurance/pension auxiliary activities) but no evidence of active trading

The company appears to be a dormant shell with nominal operating activity, kept alive for purposes not visible from the accounts alone.

Symptom 4: Asset Emaciation

Total assets have collapsed from £134,960 in 2019 to just £5,127 in 2025. The remaining fixed assets (£3,727 net book value) consist of depreciating items – plant & machinery, fixtures, and computer equipment. Motor vehicles are fully depreciated. The company has shed virtually all its asset mass.

Symptom 5: Volatile Historical Trajectory

The financial history shows significant swings: - 2016: Net liabilities of (£71,648) – relatively modest - 2017: Worsened to (£194,966) – significant increase in director loan - 2018: Catastrophic deterioration to (£346,474) – director loan jumped to £451,504 - 2019: Apparent recovery to (£192,714) – likely asset revaluation or loan write-off - 2020-2024: Steady deterioration back to (£369,133) - 2025: Slight improvement to (£342,549)

This volatility suggests the director has periodically restructured or written off portions of the loan, but the underlying condition remains terminal without genuine trading recovery.

4. Recommendations

Immediate Actions (Critical Care)

1. Assess Going Concern Viability: The director must honestly evaluate whether this company serves any ongoing purpose. If it is not trading and has no realistic prospect of generating revenue, the humane decision may be to dissolve it rather than continue accruing costs.

2. Director Loan Resolution: The £350,203 director loan is the elephant in the room. Options include: - Formal write-off: The director could formally forgive part or all of the loan, which would crystallize a personal capital loss but clean up the balance sheet - Conversion to equity: Converting the loan to share capital would eliminate the insolvency, though this creates its own tax implications - Maintain status quo: Only viable if the director is comfortable with the risk and the company serves a legitimate purpose

3. Review SIC Code Accuracy: The company is classified under insurance/pension auxiliary activities (66290), yet there is no evidence of such operations. Ensure the registered activity reflects reality to avoid regulatory scrutiny.

Medium-Term Actions (Rehabilitation)

4. Determine Strategic Purpose: If the company is to continue, clarify its role. Is it: - A property holding vehicle? (No property is visible on the balance sheet currently) - An insurance/pension intermediary? (No revenue evidence) - A dormant entity being maintained for future use?

5. Cost Minimization: The company currently has minimal costs (£1,200 accruals). Continue to minimize overhead – this is one of the few things being done well.

6. Filing Compliance: Accounts are up to date, which is positive. Maintain this to avoid Companies House penalties that would worsen the financial position.

If Closure Is Chosen

7. Voluntary Strike-Off: If the company has no ongoing purpose, consider a voluntary strike-off under Section 1000 of the Companies Act 2006. This is the simplest and cheapest route, provided: - The company has not traded in the last 3 months - No agreements with creditors are in place - The director is willing to write off the outstanding loan

8. Tax Implications of Loan Write-Off: Before any dissolution, seek advice on the tax treatment of the director loan write-off, as this may have personal tax consequences for Mr Worrow.

Prognosis

Poor. Without fundamental change, this company will continue to exist in a state of suspended animation – technically alive but functionally dormant, accumulating minor costs each year while remaining deeply insolvent. The slight improvement in net liabilities this year (£26,584) is encouraging but represents loan restructuring rather than operational recovery. The company's fate is entirely in the director's hands.