TECHNIT LTD

Executive Summary

TECHNIT LTD demonstrates a stable financial footing with positive net assets and strong liquidity for a micro-entity. Its compliance record is sound, and the business appears operationally viable albeit small in scale. Key risks relate to governance concentration and limited operational capacity, which should be examined further through detailed financial and operational due diligence.

TECHNIT LTD - Analysis Report

Company Number: 13800544

Analysis Date: 2025-07-29 15:58 UTC

1. Risk Rating: LOW

Justification: TECHNIT LTD shows a solid net asset position with positive net current assets and shareholders' funds increasing from £125,569 in 2022 to £182,159 in 2023. The company has no overdue filings and remains active, indicating good compliance and operational status. The micro-entity status aligns with a small scale operation, reducing complexity and risk exposure.

2. Key Concerns:

• Limited scale: With only 1 employee in 2023 and micro-entity classification, the company is highly dependent on key personnel and limited operational capacity, which could affect sustainability if the director or main operator is unavailable.
• Concentration of control: Mr. Umer Farooq holds 75-100% ownership and voting rights, with full control over board appointments. This concentration could pose governance risks from a minority investor or creditor perspective.
• Declining current assets: Current assets decreased from £324,529 in 2022 to £289,825 in 2023, alongside a significant reduction in current liabilities from £201,986 to £110,147, indicating changes in working capital structure that warrant further review for cash flow consistency.

3. Positive Indicators:

• Strong liquidity position: Net current assets increased from £122,543 to £179,678 year-on-year, suggesting the company has sufficient short-term assets to cover its liabilities.
• Timely and compliant filings: No overdue accounts or confirmation statements, indicating good regulatory compliance.
• Increasing net assets: The growth in shareholders' funds and net assets reflects retained earnings or capital input, strengthening the balance sheet.

4. Due Diligence Notes:

• Review detailed cash flow statements and profit and loss accounts (not provided) to understand the drivers behind current assets and liabilities changes and confirm sustainable cash flow generation.
• Assess customer concentration and revenue diversification to evaluate operational risk given the small size and employee count.
• Confirm whether any related-party transactions or financial dependencies exist given the sole director and shareholder structure.
• Investigate any contingent liabilities or off-balance sheet commitments not visible in the micro-entity accounts.
• Verify the absence of director disqualifications or regulatory actions beyond public records.