Registered number:
AUDITED
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their strategic report together with the audited financial statements for the year ended 31 December 2021.
The directors report that the Company had an operating profit of £20,720 in 2021. The profit was attributable primarily to an increase in Gross Turnover of £90,745(36.9%) and a decrease in administrative expenses of £15,244(26.1%). Cost of Sales increased from 38.6% to 39.9% related to higher commission payouts related to increase in Turnover. Management is quite satisfied with the overall increase in Turnover of 36.9% as well as the decrease in administrative expenses of 26.1% as a percentage of Sales. Expense controls put in place during the year were effective in contributing the overall profitability.
The Company maintains and updates its policies relating to its own technology and surveillance capabilities, including Written Supervisory Procedures, which are updated throughout the fiscal year, and AML (anti money laundering) policies and procedures compliant with FCA and other regulatory requirements. In addition, the company, its affiliate and their clearing firm maintain multiple insurance policies covering fraud, theft, loss and many other potential liabilities.
The clearing firm is also required under contract to the Company's broker dealer affiliate as well as in accordance with a spectrum of regulatory requirements to maintain up to date technology, supervisory controls, and risk management policies and compliance procedures designed to protect and pre empt the Company from excessive financial risk or exposure. The Company also engages and relies on other third-party providers for additional financial, compliance and regulatory oversight. The Company manages its exposure to liquidity risk by avoiding the use of any capital, loans or hire purchase contracts and by utilising a bank overdraft facility to provide both flexibility and continuity of funding, as and when required. The Company does not trade, make markets or take positions in any securities. The Company has no exposure to interest rate risk as it never takes out any interest bearing loans from financial institutions. Trade debtors primarily represent commission or fees receivable from our affiliate and its clearing house, StoneX (formerly INTL FCStone Inc.). The risks associated with this aspect of operations have been addressed above. Other trade debtors result from the outsourcing of services. These are managed in respect of credit risk and cash flow by strict company policies concerning the credit offered to customers and the regular monitoring of amounts outstanding. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
The directors consider that achieving growth above inflation over the long term in commissions, sales credits and fees receivable from its affiliated broker-dealer in the United States without risking its own capital while maintaining financial stability, business flexibility and a consistent gross margin constitute the primary key financial performance indicator for the Company.
An analysis of these key performance indicators in 2021 shows that Gross Turnover increased by 36.9% driven by an increase of 29.71 in Commissions and Sales Credits and an increase of 65.1%in Corporate Finance Fees. However, the gross margin from Commissions & Sales Credits and Corporate Finance Fees decreased slightly from 61.4% to 60.%, primarily related to the increase in Commission payouts associated with the increase in Turnover. Administrative Costs as a percentage of Sales decreased from 80.1% to 54.0% due to the continued emphasis on cost controls during the year. As such, Operating profit for the year was £20,720 related primarily to the increase in Turnover and reduction in administrative costs.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors consider there are no other key performance indicators.
This report was approved by the board
and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
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 to 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.
The profit for the year, after taxation, amounted to £
20,720
(2020 -
loss
£
45,991
)
.
The directors have recommended that no dividends be paid this year (2020 - £NIL).
The directors who served during the year were:
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company continues to explore strategic initiatives aimed at increasing the depth and scope of its business and addressing changes to the international markets related to the UK’s outlook following BREXIT, changing conditions within the EU and overall global trends, including but not limited to incidences of inflation and other disruptive economic events. It expects to enhance its own offerings by utilizing the service platform and products available to it through its fully disclosed clearing firm, StoneX Group Inc. whose operations are situated in multiple regulatory and financial jurisdictions around the world.
In addition, in response to the changes that resulted from Brexit, the Company and the Company’s parent have engaged counsel and other advisors to assist the group in determining a strategy designed to allow the Company and its affiliates to best service its customers that reside not only in the UK but also in certain EU countries. As reported in prior filings, StoneX Group Inc. (NASDAQ Global Selected Market – SNEX) is a financial services company. The company provides financial products, and advisory and execution service. StoneX operates through five segments: Commercial Hedging, Global Payments, Securities, Physical Commodities and Clearing and Execution Services (CES). The Commercial Hedging segment services its commercial clients through its team of risk management consultants. The Global Payments segment provides solutions to banks and commercial businesses, as well as charities, non-government and government organisations. The Securities segment provides solutions that facilitate cross border trading. The Physical Commodities segment consists of its physical precious metals trading and physical agriculture and energy commodity business. The CES segment seeks to provide clearing and execution of exchange traded futures and options for the institutional and trader market segments. Management is hopeful that the greater scope and diversity will assist the Company in establishing an expanded presence in the United Kingdom and will potentially help us to better serve domestic and European clientele of its affiliate.
Matters relating to financial risk management objectives and policies and a review of business has been included in the strategic report.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Although the global pandemic, which began to escalate in the first Quarter of 2020, continued to have an impact on the overall business environment in both the US and the UK, the Company was able to continue its operations throughout 2021 and 2022 with minimum impact. Other global trends, including inflation and post-Covid slowdowns, combined with the ongoing potential for disruptive geopolitical events, are also factors in the Company’s performance, strategy and outlook.
Although it is difficult to determine the overall financial impact these issues will have on the future business results and the directors are aware that, as of the date of this report, the Company’s 2022 fiscal results are not showing a profit for the year-to-date period, the loss is not significant as the company expects, the directors are nonetheless were satisfied that the company’s lesser than optimal performance is in line with industry trends and will not impair its ability to meet al of its statutory requirements in 2022 and future periods.
Under section 487(2) of the Companies Act 2006, Wellden Turnbull Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
We have audited the financial statements of Laidlaw & Company International Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of Income and Retained Earnings, the Balance Sheet
and the related notes, including a summary of 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONTINUED)
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 Auditors' 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:
Audit procedures performed by the engagement team included:
∙
Enquiry of management and those charged with governance as to actual and potential litigation and claims;
∙
Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations;
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Agreeing revenue recognised in the period to supporting audit evidence and assessing the accuracy of revenue recognised based on revenue recognition criteria;
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Reviewing financial statement disclosures and verification to supporting documentation to assess compliance with applicable laws and regulations;
∙
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONTINUED)
This report is made solely to the Company's members
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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Albany House
Claremont Lane
Surrey
KT10 9FQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2021
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BALANCE SHEET
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 12 to 19 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Laidlaw & Company International Limited is a private company, limited by shares, incorporated in England and Wales, registered number 06059026. The registered office is Albany House, Claremont Lane, Esher, Surrey KT10 9FQ.
The principal place of business is 521 5th Ave, 12h Floor, New York, NY 10175.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
These financial statements are presented in sterling, however the functional currency used by the company is US dollars. The financial statements are rounded to the nearest £.
The following principal accounting policies have been applied:
The accounts have been prepared in accordance with the provisions applicable to FRS 102. There were no material departures from the standard.
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Laidlaw Holdings Limited as at 31 December 2021 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Commission and clearing charges are recognised on a trade date basis as security transactions occur. Advisory fees earned from providing merger-acquisition and financial restructuring advice are recognised when received. Investment banking and placement fees are recognised on the closing date of the transaction. Underwriting fees are recognised at the time the underwriting is complete. Recharged expenses are recognised when the expenses have been incurred.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Functional and presentation currency
Transactions and balances
There are no significant judgements when applying accounting policies. Key sources of estimation: The Company utilises a Group staff resource. The Company considers that cost of this resource represents 50% of commission revenue.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
9.
Taxation (continued)
In March 2021, the Chancellor announced an increase in the corporation tax rate from 19% to 25% with effect from 1 April 2023.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Other reserves
Profit and loss account
The Company's immediate parent undertaking is Laidlaw Holdings Limited. The consolidated financial statements of Laidlaw Holdings Limited may be obtained from Companies House or from its registered office Albany House, Claremont Lane, Esher, Surrey, KT10 9FQ.
There is no ultimate controlling party.
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