Company Number: 14070715

Analysis Date: 2025-07-29 16:15 UTC

Financial Health Assessment: SHAVIRAM CLEMENT LIMITED

---

1. Financial Health Score: D

Explanation:
The company shows significant liquidity stress with negative net current assets and net liabilities overall. While its core asset, investment property, remains substantial, the heavy burden of creditors and long-term loans outweighs asset values, indicating financial strain. The going concern assumption depends heavily on external support, raising caution for independent sustainability.

---

2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Investment Property (Fixed Assets)	3,443,743	Strong core asset base in real estate, reflecting company's primary business activity.
Current Assets	44,480	Very low liquid assets; includes only £8,926 in cash and £35,554 in debtors.
Current Liabilities	413,461	Short-term debts substantially higher than current assets, signaling liquidity risk.
Net Current Assets (Working Capital)	-368,981	Negative working capital; "symptom of distress" indicating potential cash flow challenges.
Creditors Due After One Year	3,161,709	Large long-term liabilities, including a £2 million secured loan against the property.
Net Assets (Equity)	-86,947	Negative equity; liabilities exceed assets, indicating financial imbalance and erosion of capital.
Shareholders' Funds	-87,047	Reflects cumulative losses or financing structure leading to negative net worth.
Cash Reserves	8,926	Insufficient cash buffer for operational agility or unexpected expenses.

---

3. Diagnosis

Liquidity and Cash Flow Symptoms:
The company exhibits "symptoms of liquidity distress" demonstrated by its negative working capital (-£368,981). With current liabilities nearly 9 times the cash on hand, the firm may struggle to meet short-term obligations without external support or asset liquidation.

Capital Structure and Solvency:
Net liabilities of £86,947 and negative shareholders’ funds suggest the company is technically insolvent on a balance sheet basis. Although the company owns significant investment property valued at over £3.4 million, this is heavily encumbered by secured and unsecured debts, including a £2 million loan secured on the property.

Going Concern Considerations:
The directors’ note states reliance on support from a Group Finance Company to continue operations, implying that without this support, the company’s financial health could deteriorate further. This reliance is akin to a patient needing ongoing medication—without it, the prognosis worsens.

Operational Activity:
The company does not employ staff and generates revenue mainly from rental income on investment property. The lack of turnover figures and profit/loss details limits the assessment of operational profitability, but accumulated losses reflected in reserves point to ongoing challenges.

---

4. Recommendations

1. Improve Liquidity Reserves:

   • Increase cash holdings through additional equity injections or refinancing to reduce liquidity risk.
   • Consider restructuring short-term debts to longer maturities to ease immediate cash flow pressures.

2. Debt Management and Restructuring:

   • Negotiate with creditors to reduce the burden of current and long-term liabilities.
   • Explore options for refinancing secured loans at better terms or partial debt forgiveness.

3. Asset Utilisation and Monetisation:

   • Review the investment property portfolio for opportunities to unlock value (e.g., partial sale, redevelopment).
   • Enhance rental income streams to improve operational cash flow.

4. Financial Monitoring and Reporting:

   • Implement tighter financial controls and regular cash flow forecasting to detect early warning signs.
   • Prepare detailed profit and loss accounts to better understand operational performance.

5. Contingency Planning:

   • Develop a robust business continuity plan considering the heavy reliance on group financial support.
   • Assess alternative funding sources or strategic partnerships to strengthen capital base.

---