SONALI PHARMA LIMITED

Executive Summary

Sonali Pharma Limited exhibits a high risk profile due to a significant decline in net assets and liquidity over the last year, raising concerns about solvency and operational stability. While regulatory compliance is maintained and ownership is straightforward, the financial deterioration and single-person operation warrant careful further investigation before investment consideration.

SONALI PHARMA LIMITED - Analysis Report

Company Number: 13609314

Analysis Date: 2025-07-29 20:41 UTC

1. Risk Rating: HIGH
   Justification: The company shows a marked deterioration in net assets from £4,130 in 2023 to only £137 in 2024, indicating severe erosion of equity. Current assets have decreased while current liabilities increased, substantially reducing net current assets and working capital. This signals potential solvency and liquidity stress in a very small company.

2. Key Concerns:

• Eroding Net Assets: The decline from £4,130 to £137 net assets within one year is a significant red flag for solvency risk.
• Low Working Capital: Net current assets dropped from £5,630 to £1,601, restricting the company’s ability to meet short-term obligations.
• Single Director and Employee: The company relies solely on one director/employee, which may pose operational and governance risks.

3. Positive Indicators:

• Compliance: All statutory filings (accounts, confirmation statements) are up to date with no overdue submissions, indicating regulatory compliance.
• Clear Ownership and Control: Sole control by Mrs. Sonali Cheema with 75-100% shareholding and voting rights reduces complexity in decision-making.
• Micro-Entity Status: Small scale may limit exposure to large liabilities and overheads.

4. Due Diligence Notes:

• Investigate the causes behind the sharp decline in net assets and working capital, including any large liabilities or impairments.
• Review cash flow statements to assess liquidity and operational cash generation capacity.
• Assess any contingent liabilities or related party transactions not visible in the balance sheet.
• Explore business model viability given reliance on a single individual and limited scale.
• Confirm whether the company has any external financing arrangements or guarantees.