Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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INFORMATION
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CONTENTS
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MEMBERS' REPORT INCORPORATING THE ENERGY AND CARBON REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The members present their annual report together with the audited financial statements of XP Investments UK LLP (the "LLP") for the year ended 31 December 2023.
Principal activities
The principal activities of the LLP is to provide order transmission services acting as an inter-dealer broker.
Designated Members
XP Holding UK Ltd was a designated member of the LLP throughout the year.
XP Investimentos S.A resigned as a designated member on 2 November 2023 and XP Inc., was appointed on the same date.
Members' capital and interests
Each member's subscription to the capital of the LLP is determined by their share of the profit and is repayable following retirement from the LLP, as long as an equal capital amount is contributed by a new or existing member.
Details of changes in members' capital in the ended 31 December 2023 are set out in the Reconciliation of members' interests (page 10).
Profits are allocated and divided between members after finalisation of the financial statements.
Energy and carbon report
The LLP has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
Return on assets
For the year ended 31 December 2023, the return on assets for the LLP was a gain of 43% (2022: 65%).
Members' responsibilities statement
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law, (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008), requires the members to prepare financial statements for each financial year. Under that law the members 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, (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 LLP and of the profit or loss of the LLP for that period.
In preparing these financial statements, the members are required to:
∙select suitable accounting policies and then apply them consistently;
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MEMBERS' REPORT INCORPORATING THE ENERGY AND CARBON REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
∙make judgements 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 LLP will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the LLP's transactions and disclose with reasonable accuracy at any time the financial position of the LLP and to enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the LLP and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of information to auditors
Each of the persons who are members at the time when this Members' report is approved has confirmed that:
∙so far as that member is aware, there is no relevant audit information of which the LLP's auditors are unaware, and
∙that member has taken all the steps that ought to have been taken as a member in order to be aware of any relevant audit information and to establish that the LLP's auditors are aware of that information.
This report was approved by the members and signed on their behalf by:
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XP INVESTMENTS UK LLP
We have audited the financial statements of XP Investments UK LLP (the 'LLP') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Reconciliation of members' interests 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 LLP 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 members' 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 LLP'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 members 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 members are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and 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
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XP INVESTMENTS UK LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XP INVESTMENTS UK LLP (CONTINUED)
to report that fact.
We have nothing to report in this regard.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the LLP through discussions with members and other management, and from our commercial knowledge and experience;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the LLP, including the Companies Act 2006, the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" and FCA regulations;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
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XP INVESTMENTS UK LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XP INVESTMENTS UK LLP (CONTINUED)
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the LLP’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙reading the minutes of meetings of those charged with governance;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC, the LLP’s legal advisors and relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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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XP INVESTMENTS UK LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XP INVESTMENTS UK LLP (CONTINUED)
This report is made solely to the LLP's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, as applied by Part 12 of The Limited Liability Partnerships (Accounts and Audit) (Applications of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the LLP'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 LLP and the LLP's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditors
Birchin Court
5th Floor
19-25 Birchin Lane
United Kingdom
EC3V 9DU
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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BALANCE SHEET
AS AT 31 DECEMBER 2023
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BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the members and were signed on their behalf by:
The notes on pages 11 to 19 form part of these financial statements.
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RECONCILIATION OF MEMBERS' INTERESTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
XP Investments UK LLP is a limited liability partnership domiciled and incorporated in England and Wales. The registered office is Birchin Court, 5th Floor, 19-25 Birchin Lane, London, United Kingdom, EC3V 9DU.
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 and the requirements of the Statement of Recommended Practice "Accounting by Limited Liability Partnerships".
The following principal accounting policies have been applied:
The LLP 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 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of XP Inc. as at 31 December 2023 and these financial statements may be obtained from www.xpinc.com.
In preparing these financial statements, the members have considered the cashflow projections which indicate that the LLP will be self-sufficient and no longer require capital injections from its parent company. The members have considered the ability of the LLP to continue for a period of at least 12 months from the date of signing the financial statements. In doing so, they have considered the cash position at 31 December 2023 of £11.3m and the profitability of the LLP of £6.2m which serve to demonstrate the continued success of the business.
Management are required by the Financial Conduct Authority regulations to prepare stress tests and forecasts covering a period until the end of 2026, they have modelled different scenarios and have determined that appropriate capital is in place for the LLP to continue operating for the foreseeable future. For these reasons, the members continue to adopt the going concern basis in preparing the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The LLP acts as an intermediary for trading transactions between clients and liquidity providers in two circumstances. It operates as a risk-less principal in interest rate swaps and as an agent for foreign exchange transactions.
In each case, revenue is recognised as the differences between two offsetting transactions, the buying and selling of derivative instruments. Revenue is recognised in full at the date of the transaction, deviations resulting from the duration of the transaction are not considered to be material. The entity bears no liquidity or settlement risk from engaging in the activity. The LLP also have service agreements with XP Investimentos S.A and XP Investments US LLC., which receives the benefits of services provided by the LLP and requires the allocation among the parties of employees expenses.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The LLP only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans to members.
Functional and presentation currency
Transactions and balances
A division of profits is the mechanism by which the profits of an LLP become a debt due to members. A division may be automatic or discretionary, may relate to some or all of the profits for a financial period and may take place during or after the end of a financial period.
An automatic division of profits is one where the LLP does not have an unconditional right to avoid making a division of an amount of profits based on the members' agreement in force at the time, whereas a discretionary division of profits requires a decision to be made by the LLP, which it has the unconditional right to avoid making.
The LLP divides profits discretionarily. Discretionary divisions of profits are recognised as amounts due to members, although may be used to offset amounts which have been drawn by members, which are recognised as loan assets repayable.
Profits of the LLP which are not yet divided among the members are shown under 'Other amounts' on the Balance sheet, pending a discretionary decision to divide the profits.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the LLP keeping the scheme open or the employee maintaining any contributions required by the scheme). The members have considered the estimates and assumptions that could have a significant risk of causing material adjustment to the carrying amount of assets and liabilities and have considered that there are no significant sources of estimation uncertainty.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Loans and other debts due from members rank equally with debts due to ordinary creditors in the event of a winding up.
Certain employees of the LLP have been granted restricted stock options ("RSU's") in XP Inc., a member of the LLP. The RSU's are granted at the closing value of XP Inc., shares on the grant date and 25% of the RSU's are exercisable one year after the date of the grant, vesting continues monthly thereafter.
An expense equal to the fair value of the RSU's granted is recognised evenly over the vesting period with a corresponding amount being recognised in other reserves.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
XP Holding UK Ltd is considered to be the controlling member by virtue of its voting rights. XP Inc. is the parent company of the smallest group for which consolidated financial statements are prepared of which the LLP is a member.
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