KAY9 SECURITY SOLUTIONS LIMITED

1. Risk Rating: LOW Justification: The company demonstrates a strongly improving financial trajectory with robust solvency, having transitioned from negative net assets in 2015 to a solid positive position of £208,675 as of October 2024. Liquidity has significantly improved, with net current assets moving from a deficit to a £63,918 surplus in the latest reporting period. Filing compliance is current, and there are no immediate indicators of financial distress.

2. Key Concerns: * Key Person Dependency & Concentration of Control: The company is entirely reliant on a single director and employee, Xxxxxx Xxxxxxxxname shown to subscribers, who also holds over 75% of the shares and voting rights. This creates significant operational risk in the event of incapacity or resignation, and concentration of power raises standard governance concerns for minority stakeholders, if any. * Financial Reporting Opacity: As a micro-entity filing under FRS 105, the company provides minimal financial disclosure. The director has elected not to file a Profit and Loss account, making it impossible to assess revenue stability, profit margins, or overheads. Furthermore, there is no description of the principal activity within the filed accounts. * Sudden Balance Sheet Shifts: The latest accounts show a substantial year-on-year increase in both current assets (from £49,430 to £164,853) and current creditors (from £50,440 to £100,935). Without a P&L or detailed notes, the drivers of this simultaneous inflation of short-term assets and liabilities are unclear and could indicate a reliance on short-term debt to fund operations or an influx of unpaid creditors.

3. Positive Indicators: * Strong Solvency and Equity Growth: Net assets have grown consistently over the last nine years, from a deficit of £3,355 in 2015 to £208,675 in 2024. The most recent year alone saw an increase of nearly £97,000 in shareholder funds, suggesting strong retained profitability. * Improved Working Capital Position: The company reversed a slightly negative working capital position (£1,010 deficit in 2023) to a positive net current asset position of £63,918 in 2024, significantly reducing short-term liquidity risk. * Regulatory Compliance: The company is actively compliant with Companies House filing requirements. Both the annual accounts and confirmation statements are up to date, with the latest accounts signed and authorized in a timely manner (June 2025 for the October 2024 year-end).

4. Due Diligence Notes: * Composition of Current Assets: Investigate the nature of the £164,853 in current assets. Determine how much is cash at bank versus trade debtors. A high debtor figure could indicate collection issues or delayed client payments. * Nature of Current Liabilities: Clarify what constitutes the £100,935 owed within one year. Assess how much relates to trade creditors, HMRC liabilities, or director loans, as this will dictate the urgency of the repayment obligations. * Fixed Assets: The company holds £163,841 in fixed assets, which is substantial for a single-employee security firm. Establish whether these are property assets, vehicles, or equipment, and verify if they are encumbered by the long-term creditors (£19,084 due after more than one year). * Director Background: Conduct standard background checks on Xxxxxx Xxxxxxxxname shown to subscribers to ensure no disqualification orders or adverse history at other directorships, given the absolute control he exercises over the entity.

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