SAMANI CONTRACTORS LTD

Executive Summary

Samani Contractors Ltd demonstrates significant financial distress with ongoing negative net assets and working capital deficits, raising considerable solvency and liquidity risks. While regulatory compliance is maintained and tangible assets exist, the reliance on director loans and absence of employees suggest operational and funding vulnerabilities. Further investigation into liquidity management and business viability is essential before considering investment.

SAMANI CONTRACTORS LTD - Analysis Report

Company Number: 13633956

Analysis Date: 2025-07-20 14:27 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns with persistent negative net assets and net current liabilities, indicating an inability to meet short-term and potentially long-term obligations.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company reported net liabilities of £9,373 and shareholders’ deficit of £9,473 as of the latest accounts, worsening from prior years, which signals erosion of capital and solvency risk.
• Negative Working Capital: Net current liabilities stand at £16,716, with cash balances insufficient to cover short-term debts, highlighting liquidity risk and potential cash flow difficulties.
• Loans from Directors: A significant portion of current liabilities (£20,409) is owed to directors, suggesting reliance on related party financing which may not be sustainable or available on commercial terms.

3. Positive Indicators:

• No Overdue Filings: The company has maintained compliance with filing deadlines for both accounts and confirmation statements, indicating good regulatory discipline.
• Tangible Fixed Assets: The company holds tangible assets valued at £7,343 net of depreciation which provides some asset backing, albeit modest.
• Active Status with No Insolvency Proceedings: The company remains active and is not in liquidation or administration, showing it has not yet reached formal distress.

4. Due Diligence Notes:

• Verify the terms and repayment schedule of director loans to assess potential insolvency risk if these become due or are withdrawn.
• Investigate cash flow projections and business plans to determine how the company intends to address ongoing working capital deficits and the negative equity position.
• Review the nature of the company’s operations and revenue streams since no employees were reported and SIC code 96090 is broad; understanding operational sustainability is critical.
• Confirm whether there are any contingent liabilities or off-balance sheet obligations not disclosed that could exacerbate financial stress.
• Evaluate the director’s track record and any related party transactions for governance concerns, given the reliance on director loans.