Company registration number 08229319 (England and Wales)
REGULUS ASSET MANAGEMENT (UK) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
REGULUS ASSET MANAGEMENT (UK) LTD
COMPANY INFORMATION
Directors
Mr Surinder Singh
Kalbinder Kaur Todd
Mr Pawandeep Singh Todd
Company number
08229319
Registered office
Unit 3 Newlands Court
Attwood Road
Burntwood
England
WS7 3GF
Auditor
MUS Accountants Limited
268 BATH ROAD, REGUS
OFFICE 146
SLOUGH
ENGLAND
SL1 4DX
REGULUS ASSET MANAGEMENT (UK) LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
REGULUS ASSET MANAGEMENT (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report for the year ended 31 October 2023.

Review of the business

The business is a supplier to the vehicle rental sector. The company continues to show positive results, much of this is down to developing relationships with both existing and new business partners.

Supply of vehicles remained challenging throughout the financial year , the business has worked closely with OEM’s to maximise opportunities . Despite the challenges, the business continues to perform well and the directors are confident the business will continue to be profitable throughout the difficult trading periods ahead .

 

Principal risks and uncertainties

Whilst every effort is made to grow and develop our business, we face different risks and uncertainties. The risks are primarily with customers and suppliers for non-payment of contracts. These risks are mitigated by careful underwriting processes and regular monitoring of debtors.

The company has no borrowings other than vehicle funding.

Financial risk management and policies

The company directors have a very ‘ hands on ‘ approach to all matters around financial risk management . An outline weekly report is reviewed and a detailed monthly report is produced to ensure the business is monitoring all financial matters .

Interest rate risk

As interest rates have increased over the last 12 months , the business continues to monitor the lease values being charged to customers on a week by week and deal by deal basis . The business also has a high level of unencumbered stock which in turn keeps our costs at a manageable level .

Credit risk

The directors are continually monitoring the credit management of all customers . An annual review using Credit Safe is carried out and regular meetings with customers ensure we have good controls in place .

Liquidity risk

The directors have increased the amount of funding available to the business by adding new asset funding partners . This will provide the business with sufficient working capital to maximise any opportunities

 

Development and performance

The directors aim to continue with the management policies which has resulted in the company's steady growth in recent years. The outlook for 2022-23 is reasonably encouraging with the director being optimistic that current performance can be maintained.

Key performance indicators

The company continues to trade satisfactorily with the pharmacies acquired over the last few years. Turnover for the year ended 31 October 2023 amounted to £15.7m compared to £16.3m in the previous year and the profit before tax for the year is £3.3m compared to previous year profit before tax of £684k.

REGULUS ASSET MANAGEMENT (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

On behalf of the board

Mr Surinder Singh
Director
29 July 2024
REGULUS ASSET MANAGEMENT (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 October 2023.

Principal activities

The principal activity of the company continued to be that of provision of supply of vehicles to independent rental operator.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £78,202. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr Surinder Singh
Kalbinder Kaur Todd
Mr Pawandeep Singh Todd
Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

REGULUS ASSET MANAGEMENT (UK) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
On behalf of the board
Mr Surinder Singh
Director
29 July 2024
REGULUS ASSET MANAGEMENT (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REGULUS ASSET MANAGEMENT (UK) LTD
- 5 -
Opinion

We have audited the financial statements of REGULUS ASSET MANAGEMENT (UK) LTD (the 'company') for the year ended 31 October 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

REGULUS ASSET MANAGEMENT (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REGULUS ASSET MANAGEMENT (UK) LTD (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, was as follows:

 

We also considered potential fraud drivers: including financial or other pressures, opportunity, override of controls and personal or corporate motivations. We considered the programmes and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included testing journals, evaluating the business rationale of significant transactions outside the normal course of business and validating the appropriateness of internal controls and significant accounting estimations based on our fraud risk criteria;

REGULUS ASSET MANAGEMENT (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REGULUS ASSET MANAGEMENT (UK) LTD (CONTINUED)
- 7 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

We obtained understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those related to the financial reporting framework, tax regulations in the jurisdictions in which the company operates.

Based on this understanding we designed our audit procedures to identify non-compliance with laws and regulations. Our procedures involved: making enquiries of management, those responsible for legal and compliance procedures and reviewing other correspondence.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

we draw to your attention that the comparative period financial statements were unaudited as the company was previously below the audit threshold, however, this did not relieve us of the requirement to obtain sufficient appropriate audit evidence that the opening balances do not contain misstatements that materially affect the current period’s financial statements.

 

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

REGULUS ASSET MANAGEMENT (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REGULUS ASSET MANAGEMENT (UK) LTD (CONTINUED)
- 8 -
Mr Muhammad Salar Arain FCCA
Senior Statutory Auditor
For and on behalf of MUS Accountants Limited
29 July 2024
Chartered Certified Accountants
Statutory Auditor
268 BATH ROAD, REGUS
OFFICE 146
SLOUGH
ENGLAND
SL1 4DX
REGULUS ASSET MANAGEMENT (UK) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
15,490,027
16,314,488
Cost of sales
(10,278,629)
(12,803,853)
Gross profit
5,211,398
3,510,635
Administrative expenses
(1,661,115)
(2,724,483)
Other operating income
116,582
109,965
Operating profit
4
3,666,865
896,117
Interest receivable and similar income
7
62,185
9,814
Interest payable and similar expenses
8
(422,116)
(221,068)
Profit before taxation
3,306,934
684,863
Tax on profit
9
(737,004)
(194,628)
Profit for the financial year
2,569,930
490,235

The profit and loss account has been prepared on the basis that all operations are continuing operations.

REGULUS ASSET MANAGEMENT (UK) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
2023
2022
£
£
Profit for the year
2,569,930
490,235
Other comprehensive income
-
-
Total comprehensive income for the year
2,569,930
490,235
REGULUS ASSET MANAGEMENT (UK) LTD
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 11 -
2023
2022
unaudited
Notes
£
£
£
£
Fixed assets
Tangible assets
11
20,055,950
6,578,824
Investments
12
24,420
24,420
20,080,370
6,603,244
Current assets
Stocks
14
468,161
996,133
Debtors
15
2,005,188
1,676,590
Cash at bank and in hand
2,233,622
1,558,344
4,706,971
4,231,067
Creditors: amounts falling due within one year
16
(17,460,413)
(6,474,545)
Net current liabilities
(12,753,442)
(2,243,478)
Total assets less current liabilities
7,326,928
4,359,766
Provisions for liabilities
Deferred tax liability
18
779,151
303,717
(779,151)
(303,717)
Net assets
6,547,777
4,056,049
Capital and reserves
Called up share capital
20
100,000
100,000
Profit and loss reserves
6,447,777
3,956,049
Total equity
6,547,777
4,056,049

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
Mr Surinder  Singh
Director
Company registration number 08229319 (England and Wales)
REGULUS ASSET MANAGEMENT (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2021
100,000
3,513,900
3,613,900
Year ended 31 October 2022:
Profit and total comprehensive income
-
490,235
490,235
Dividends
10
-
(48,086)
(48,086)
Balance at 31 October 2022
100,000
3,956,049
4,056,049
Year ended 31 October 2023:
Profit and total comprehensive income
-
2,569,930
2,569,930
Dividends
10
-
(78,202)
(78,202)
Balance at 31 October 2023
100,000
6,447,777
6,547,777
REGULUS ASSET MANAGEMENT (UK) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
8,773,859
1,527,776
Interest paid
(422,116)
(221,068)
Income taxes paid
(146,488)
-
0
Net cash inflow from operating activities
8,205,255
1,306,708
Investing activities
Purchase of tangible fixed assets
(26,364,156)
(15,120,629)
Proceeds from disposal of tangible fixed assets
11,752,026
22,485,746
Purchase of investments
-
0
(11,820)
Interest received
62,185
9,814
Net cash (used in)/generated from investing activities
(14,549,945)
7,363,111
Financing activities
Repayment of bank loans
-
0
(444,444)
Payment of finance leases obligations
7,098,170
(7,561,251)
Dividends paid
(78,202)
(48,086)
Net cash generated from/(used in) financing activities
7,019,968
(8,053,781)
Net increase in cash and cash equivalents
675,278
616,038
Cash and cash equivalents at beginning of year
1,558,344
942,306
Cash and cash equivalents at end of year
2,233,622
1,558,344
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 14 -
1
Accounting policies
Company information

REGULUS ASSET MANAGEMENT (UK) LTD is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3 Newlands Court, Attwood Road, Burntwood, England, WS7 3GF.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers
25% on cost
Rental fleet
Written down to directors' estimate or agreed residual value (if known) over the holding period
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 18 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Residual values

Fixed asset residual values in relation to motor vehicles are based on either an agreed contracted buy back value or the directors' best estimate for risk vehicles based their knowledge and on the current prevailing market. All other fixed assets are deemed to have a residual value of £nil as they are used in the course of business.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Supply of vehicles to independent rental operators
15,490,027
16,314,488
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
15,490,027
16,314,488
2023
2022
£
£
Other revenue
Interest income
62,185
9,814
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
-
0
Depreciation of owned tangible fixed assets
1,114,584
1,725,575
Depreciation of tangible fixed assets held under finance leases
877,635
619,466
Profit on disposal of tangible fixed assets
(857,215)
(225,005)
Operating lease charges
35,798
7,479
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
6
4
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
5
Employees
(Continued)
- 20 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
108,309
84,125
Social security costs
2,734
2,107
Pension costs
198,909
359,704
309,952
445,936
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
28,000
27,333
Company pension contributions to defined contribution schemes
198,000
358,000
226,000
385,333
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
62,185
9,814
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
62,185
9,814
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
4,645
Other finance costs:
Interest on finance leases and hire purchase contracts
422,116
216,423
422,116
221,068
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
261,570
194,628
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
475,434
-
0
Total tax charge
737,004
194,628

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
3,306,934
684,863
Expected tax charge based on the standard rate of corporation tax in the UK of 22.50% (2022: 19.00%)
744,060
130,124
Tax effect of expenses that are not deductible in determining taxable profit
3,054
504
Gains not taxable
(192,873)
-
0
Unutilised tax losses carried forward
-
0
(72,443)
Effect of change in corporation tax rate
205
-
0
Permanent capital allowances in excess of depreciation
(741,125)
(314,501)
Other permanent differences
-
0
5,387
Depreciation added back
448,249
445,557
Deferred tax movement
475,434
-
0
Taxation charge for the year
737,004
194,628
10
Dividends
2023
2022
£
£
Interim paid
78,202
48,086
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
11
Tangible fixed assets
Computers
Rental fleet
Total
£
£
£
Cost
At 1 November 2022
26,777
9,522,032
9,548,809
Additions
7,421
26,600,782
26,608,203
Disposals
-
0
(11,692,486)
(11,692,486)
Revaluation
-
0
(244,047)
(244,047)
At 31 October 2023
34,198
24,186,281
24,220,479
Depreciation and impairment
At 1 November 2022
21,003
2,948,982
2,969,985
Depreciation charged in the year
6,694
1,985,525
1,992,219
Eliminated in respect of disposals
-
0
(797,675)
(797,675)
At 31 October 2023
27,697
4,136,832
4,164,529
Carrying amount
At 31 October 2023
6,501
20,049,449
20,055,950
At 31 October 2022
5,774
6,573,050
6,578,824

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Rental fleet
13,352,953
5,470,427
12
Fixed asset investments
2023
2022
£
£
Unlisted investments
24,420
24,420
13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
24,420
24,420
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
468,161
996,133
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,717,501
1,629,500
Other debtors
287,687
47,090
2,005,188
1,676,590
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
11,505,675
4,407,505
Trade creditors
1,523,079
693,977
Corporation tax
261,573
146,491
Other taxation and social security
2,952
1,147
Other creditors
3,459,853
718,925
Accruals and deferred income
707,281
506,500
17,460,413
6,474,545
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
11,505,675
4,407,505

Finance lease payments represent rentals payable by the company for certain items of motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is approximately 1 year. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
779,151
303,717
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
18
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 November 2022
303,717
Charge to profit or loss
475,434
Liability at 31 October 2023
779,151

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
198,909
359,704

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
12,000
12,000
Lessor

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
2,619,060
2,121,507
Between two and five years
107,604
315,405
2,726,664
2,436,912
REGULUS ASSET MANAGEMENT (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
21
Operating lease commitments
(Continued)
- 25 -

Vehicles are supplied under a Master Lease Agreement which are set out the terms and conditions of use and the financial obligations of the lessee.

22
Related party transactions

During the year the company paid management charges of £13,680 to its directors.

 

During the year the company charged management fee to Easy Lease (UK) Limited of £30,000 (2022: £nil). At the year end, creditors include an amount of £3,250,000 (2022: £400,000). This is interest free loan and repayable on demand.

 

During the year rent of £36,000 was payable to Regulus Property Ltd. At the year end, creditors include an amount of £24,000 payable to Regulus Property Ltd.

23
Controlling party

The ultimate controlling party is deemed to be Surinder Singh by virtue of his shareholding.

24
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,569,930
490,235
Adjustments for:
Taxation charged
737,004
194,628
Finance costs
422,116
221,068
Investment income
(62,185)
(9,814)
Gain on disposal of tangible fixed assets
(857,215)
(225,005)
Depreciation and impairment of tangible fixed assets
1,992,219
2,345,041
Movements in working capital:
Decrease/(increase) in stocks
527,972
(817,233)
Increase in debtors
(328,598)
(605,988)
Increase/(decrease) in creditors
3,772,616
(65,156)
Cash generated from operations
8,773,859
1,527,776
25
Analysis of changes in net debt
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
1,558,344
675,278
2,233,622
Obligations under finance leases
(4,407,505)
(7,098,170)
(11,505,675)
(2,849,161)
(6,422,892)
(9,272,053)
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