SUNCROSS LIMITED - Risk Assessment Report

1. Risk Rating: LOW

Justification: SUNCROSS LIMITED presents a financially stable profile with substantial net assets (£215,333), a strong cash position (£90,164), and minimal liabilities (£4,831). The company has been operational for 27+ years with consistent positive equity and no filing defaults. The recent director resignations and property revaluation decrease warrant monitoring but do not, in isolation, elevate the overall risk profile given the company's robust balance sheet.

2. Key Concerns

Concern 1: Property Revaluation Decrease

The tangible fixed assets (predominantly land and buildings) were revalued downward by £20,000 in 2024, reducing from £150,000 to £130,000. This represents a 13.3% decline in the company's primary asset value and has directly reduced the revaluation reserve from £42,750 to £22,750. For a residents' property management company, this may reflect deteriorating property market conditions or a correction of prior overvaluation. The impact on overall shareholders' funds is significant – declining from a peak of £238,756 (2021) to £215,333 (2024), a cumulative reduction of approximately 10%.

Concern 2: Multiple Director Resignations

Three directors resigned on 7 January 2026: John Trevor Abdy, John William Rossiter, and Malcolm Irving Kendall. Notably, the 2024 accounts were signed by M I Kendall (one of the resigning directors) on 7 August 2025. The simultaneous departure of multiple board members, including the signatory to the most recent accounts, raises questions about governance continuity. While this may reflect normal turnover in a residents' management company context, the clustering of resignations warrants attention.

Concern 3: PSC Register Inconsistency

The Persons with Significant Control register lists 10 individuals, including two persons (Mr Joseph Gerand Blakiston and Miss Teresa Agnes Thorne) who do not appear on the current or resigned directors list. Additionally, three resigned directors remain on the PSC register. While PSC status relates to ownership/control rather than directorship, the register may require updating to reflect current control positions, particularly following the January 2026 resignations.

3. Positive Indicators

• Strong Liquidity Position: Cash at bank of £90,164 significantly exceeds current liabilities of £4,831, providing a current ratio well in excess of 18:1. The company has no borrowings and minimal creditor exposure.

• Consistent Positive Net Assets: The company has maintained positive shareholders' funds throughout the entire 10-year reporting period, growing from £202,011 (2015) to £215,333 (2024). This demonstrates long-term financial stability.

• Regulatory Compliance: Accounts are filed on time (latest made up to 31 December 2024, next due 30 September 2026, not overdue). Confirmation statement is current. The company has maintained consistent filing history with no recorded defaults.

• Minimal Liabilities: Total creditors of only £4,831 (comprising £1 trade creditor, £1,325 taxation/social security, and £3,505 other creditors) present negligible solvency risk.

• Established Track Record: Incorporated in 1997, the company has demonstrated 27+ years of operational continuity, which is particularly notable for a residents' property management entity.

4. Due Diligence Notes

Items Requiring Further Investigation:

1. Income Statement Review: As a small company filing under Section 444 of the Companies Act 2006, the Income Statement has not been delivered to the Registrar. The modest increase in retained earnings (from £95,435 to £101,083, a £5,648 increase) suggests limited profitability. Understanding the revenue model and service charge arrangements would be essential for assessing operational sustainability.

2. Property Valuation Basis: The £20,000 downward revaluation requires clarification. Request the valuation report or basis for the revaluation to understand whether this reflects market conditions, a change in valuation methodology, or identification of prior overstatement. Assess whether further impairments are anticipated.

3. Director Resignation Circumstances: Investigate the reasons behind the simultaneous resignation of three directors in January 2026. Determine whether this reflects governance disputes, leaseholder changes (common in RMCs), or other factors. Confirm that board composition post-resignations meets statutory requirements.

4. PSC Register Accuracy: Verify whether the PSC register has been updated following the January 2026 director resignations. Clarify the status of Mr Joseph Gerand Blakiston and Miss Teresa Agnes Thorne, who appear as PSCs but not as directors.

5. Service Charge and Leasehold Obligations: Given the SIC code (98000 – Residents property management), understand the company's contractual obligations to leaseholders, service charge arrangements, and any contingent liabilities not reflected in the balance sheet. RMCs often have implicit obligations that may not appear in statutory accounts.

6. Other Creditors Composition: The £3,505 in "other creditors" should be identified. While immaterial in absolute terms, understanding the nature of these payables provides insight into operational commitments.

7. Related Party Transactions: The accounts note is silent on related party disclosures. Given the multiple PSCs and director changes, confirm whether any related party transactions exist that could present conflicts of interest.