Company Number: 14573901

Analysis Date: 2025-07-29 19:00 UTC

1. Risk Rating: HIGH
   Justification: Luxorama Retails Ltd exhibits significant solvency concerns with net liabilities of £43,853 and net current liabilities of £67,537 as of the latest accounts date (31 January 2024). The company’s current liabilities far exceed its current assets, indicating liquidity stress. Being a very recently incorporated entity (2023), the financial history is limited, but the negative net asset position and working capital deficit are material red flags for financial stability.

2. Key Concerns:

• Solvency Risk: Negative net assets and net current assets imply the company’s liabilities exceed its assets, raising doubts about its ability to meet obligations without additional funding or restructuring.
• Liquidity Concerns: Cash balance is very low (£936), and with current liabilities at £93,473, the company faces immediate cash flow pressures that could impact operational continuity.
• Operational Stability: With only one employee (the director) and minimal fixed asset base (£26,016), the company may be undercapitalized for its retail activities, particularly in a sector with inventory requirements (£25,000 stock), posing risks to sustainable operations.

3. Positive Indicators:

• No Overdue Filings: The company is compliant with filing deadlines for both accounts and confirmation statements, reducing regulatory risk.
• Director Control & Stability: The sole director, Mr. Kadeer Hassan Shah, who also holds majority ownership (75-100%), indicates clear leadership and decision-making authority.
• Small Company Exemption: Use of total exemption full accounts and small company regime suggests simplified reporting and potentially lower administrative costs.

4. Due Diligence Notes:

• Investigate the source of funding and any planned capital injections to address the negative shareholders’ funds and working capital deficit.
• Review cash flow projections and supplier payment terms to assess liquidity management and risk of default.
• Confirm the nature of liabilities included in current creditors (£93,473), specifically whether any are trade payables, tax obligations, or short-term borrowings.
• Assess the sustainability of the business model given the limited staffing and asset base relative to the scale of liabilities.
• Verify absence of any director disqualifications or governance issues beyond the data provided.