Company Number: 13788366

Analysis Date: 2025-07-29 16:52 UTC

1. Risk Rating: MEDIUM
   RHS Films Ltd presents a moderate risk profile primarily because its financial position, while technically solvent with net current assets of £1, is extremely tight. The company relies heavily on debtors for liquidity, and current liabilities nearly equal current assets, leaving minimal working capital buffer.

2. Key Concerns:

• Liquidity Risk: The company holds only £5,002 in cash against current liabilities of £732,785, relying almost entirely on debtors (£727,784) for liquidity. This exposes the company to cash flow timing risks if debtor payments are delayed.
• Operational Sustainability: The company reported a loss before tax of £195,561, which was fully offset by a film tax credit, indicating underlying operational losses. There is no staff employed, suggesting the company may be project-based and reliant on external resources or parent company support.
• Dependence on Parent Group: Significant amounts owed to group undertakings (£406,188) indicate reliance on intra-group financing or trade credit. This dependency may pose risk if group support diminishes or financial conditions within the group worsen.

3. Positive Indicators:

• No Overdue Filings or Compliance Issues: Accounts and confirmation statement filings are up to date, demonstrating good regulatory compliance.
• Unqualified Audit Opinion: The financial statements were audited with an unqualified opinion, adding credibility to the reported figures.
• Backing by Parent Company: The ultimate parent, Altitude Film Entertainment Ltd, holds 75-100% control and supports the company’s going concern status, which reduces standalone risk.

4. Due Diligence Notes:

• Investigate the collectability and aging profile of trade and other debtors to assess liquidity risk more precisely.
• Review the nature and terms of intra-group balances to understand the risk of repayment or conversion into equity.
• Assess the company’s business model and pipeline of projects to determine future revenue sustainability and reliance on parent group support.
• Confirm no contingent liabilities or off-balance sheet risks exist, particularly connected to film production activities.