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Registered number: 03870324










LAIDLAW & COMPANY (UK) LTD

AUDITED
ANNUAL REPORT
AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED
31 DECEMBER 2022
 






 



 






 
LAIDLAW & COMPANY (UK) LTD
 

COMPANY INFORMATION


Directors
Mr J Ahern 
Mr M Eitner 




Registered number
03870324



Registered office
Albany House
Claremont Lane

Esher

Surrey

KT10 9FQ




Independent auditors
Wellden Turnbull Limited
Chartered Accountants & Statutory Auditors

Albany House

Claremont Road

Esher

Surrey

KT10 9FQ





 
LAIDLAW & COMPANY (UK) LTD
 

CONTENTS



Page
Strategic Report
 
 
1 - 3
Directors' Report
 
 
4 - 5
Independent Auditors' Report
 
 
6 - 9
Statement of Income and Retained Earnings
 
 
10
Balance Sheet
 
 
11
Notes to the Financial Statements
 
 
12 - 29


 
LAIDLAW & COMPANY (UK) LTD
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The Directors present their strategic report together with the audited financial statements for the year ended 31 December 2022.
Overseas Branches
During the year, the Company provided its services as a securities broker dealer through its primary operating subsidiary in seven locations outside of London:
New York City, New York 
Melville, New York
San Francisco, California
Stamford, Connecticut
Boca Raton, Florida
Naples, Florida
Coral Gables, Florida

Business review
 
The Directors consider that achieving stability and, if possible, above inflation growth in aggregate revenue volume where applicable, will help to generate a sufficient  gross profit margin that will sustain the Company throughout market cycles. Therefore, the Directors consider the percentage growth of overall revenues including commissions and fees and the gross profit margin to be the key performance indicators The Directors also acknowledge that such metrics can experience declines and liquidity delays in less optimal market cycles.
The Directors note that the Company reported an operating loss in 2022 primarily related to the difficult market conditions across all sectors. As the Company has changed its focus on capital markets/banking initiatives, it has taken time for these changes to generate results as they require investment in personnel and internal resources. This process began in late 2022 and has continued into 2024.  Although the Company incurred an operating loss in 2023, it has seen significant movement in 2024 and is operating at a profit as of Q1 2024. 
Operationally, the Company continues to improve efficiencies through prudent expense management, active departmental cooperation, and strategic recruitment and team building in a context of planning and corporate diversification. In so doing, the business should benefit from economies of scale and vertical integration of its areas of practice.  
As in the past, it expects to improve its own offerings by utilizing the service platforms and products available to it, through its fully disclosed clearing firm, StoneX (NASDAQ Global Select Market Symbol – SNEX) as well as platforms and services available to it through its affiliated firms in wealth management, private equity and venture capital. 
StoneX Group Inc. is a global financial services network that connects companies, organizations, traders, and investors to the global market ecosystem through digital platforms. Its segments include Commercial, which offers commercial clients a range of products and services, including risk management and hedging services, execution and clearing of exchange traded and over the counter (OTC) products, voice brokerage, market intelligence and physical trading; Institutional, which provides institutional clients with a complete suite of equity trading services to help them find liquidity with execution, liquidity across a range of fixed income products, as well as prime brokerage in equities and foreign currency pairs and swap transactions; Retail, which includes spot foreign exchange (forex), both financial trading and physical investment in precious metals; and Global Payments which provides foreign exchange and treasury services to banks and commercial businesses, as well as charities. 
 
Page 1

 
LAIDLAW & COMPANY (UK) LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Management believes that the challenges posed by global trends and events require scope, diversity, resilience and flexibility. By working with its affiliates and service providers, and potential business partners, it hopes to expand or, in some case, adjust, its presence in all of its markets and business segments in a prudent and managed fashion to better serve its global clientele
 

Principal risks and uncertainties
 
The responsibility for processing customer activity rests with the Company's clearing firm, StoneX. The clearing and execution agreement provides that StoneX credit losses relating to unsecured margin accounts receivable for the Company's customers are charged back to the Company.
StoneX records customer activity on a settlement date basis, which is generally three business days after the trade date. There is therefore a risk of loss on these transactions in the event of the customer's inability to meet the terms of its contracts, in which case StoneX may have to purchase or sell the underlying financial instruments at the prevailing market prices in order to satisfy its customer related obligations. Any loss incurred by StoneX is charged back to the Company.
The Company, in conjunction with StoneX, controls off balance sheet risk by monitoring the market value and marking securities to market on a daily basis and by requiring adjustments to collateral levels.                                                               jStoneX establishes margin requirements and overall credit limits for such activities and monitors compliance with the applicable limits and industry regulations on a daily basis.
The Company maintain policies relating to their own technology and surveillance capabilities, including written supervisory policies and anti money laundering procedures. In addition, the Company maintains multiple insurance policies covering fraud, theft, loss and other potential liabilities. The Company also relies on other third-party providers for additional financial, compliance and regulatory oversight.
The Company manages its exposure to liquidity risk by using finance leases where appropriate, minimising the use of loans where possible and by utilising a bank overdraft facility to provide both flexibility and continuity of funding, as and when required.
Trade debtors primarily represent commission receivable from our clearing house, StoneX. The risks associated with this 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.

Page 2

 
LAIDLAW & COMPANY (UK) LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Financial key performance indicators
 
The Directors consider that achieving stability and, if possible, above inflation growth in commission volume while maintaining a healthy component of fee revenue will generate a consistent gross profit margin that will sustain the business throughout market cycles. Therefore, the Directors consider the percentage growth of commission and the gross profit margin to be the key performance indicators of the company. The Directors also acknowledge that such metrics can experience declines in less optimal market cycles.
An analysis of these key performance indicators in 2022 shows that gross turnover decreased by 50.9% principally driven by a 41% decrease in Corporate Finance Fee and a decrease of 62.1% in Commission Revenue generated by the US broker dealer, The decrease in Corporate Finance Fees in comparison with 2021, was attributable to the 2021 client reinvestments of profits received from Private Placement distributions.  The decrease in Commission Revenues in comparison with 2021 was primarily attributable to fees earned in for liquidation of investments distributed from prior period private placement investments. The difficult market conditions as well as an overall change in business strategy also contributed to the Commission Revenue Variance. The gross profit margin as a percentage of sales decreased to 21.5% from the prior years' gross profit margin of 21.7% primarily related to the revenue mix and the associated commission payouts. The Directors note that the Company reported an operating loss in 2022 primarily related to market conditions and, the downturn in the IPO, public offering  and Capital Markets activity in the areas in which they focus. Although the Directors were not satisfied in the overall results of the firm, they are comfortable with Management continuing  to execute on its new business initiatives, as well as implementing significant cost cutting measures. The firm began to see the impact of these changes in Q4 2023 and Q1 2024.

Other key performance indicators
 
There are no other key performance indicators.

Directors' statement of compliance with duty to promote the success of the Company
 
The Directors of the Company have acted in accordance with their duties and obligations set out in statute.
The Board makes decisions in good faith for the long-term benefit of its’ stakeholders which include members, employees, business partners, and the community as a whole.


This report was approved by the board and signed on its behalf.



Mr M Eitner
Director

Date: 30 July 2024

Page 3

 
LAIDLAW & COMPANY (UK) LTD
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The Directors present their report and the financial statements for the year ended 31 December 2022.

Directors' responsibilities statement

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; and

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 2006They 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.

Principal activity

The principal activity of the Company in the year under review is that of an auxiliary financial intermediary. The
Company is registered with the Financial Industry Regulatory Authority (FINRA) the largest independent
securities regulator in the U.S.A.

Results and dividends

The loss for the year, after taxation, amounted to $4,243,280 (2021 - loss $1,808,626).

The directors have recommended that no dividends be paid this year (2021 - $Nil).

Directors

The Directors who served during the year were:

Mr J Ahern 
Mr M Eitner 

Page 4

 
LAIDLAW & COMPANY (UK) LTD
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Future developments

Management will continue to focus its resources on expanded distribution capabilities for its products and services, while persisting in its asset gathering capabilities directed toward the products and services of its wealth management, private equity and venture capital affiliates. 
Operationally, it aims to improve efficiencies through prudent expense management, active departmental cooperation and strategic recruitment and team building in a context of planning and corporate diversification.
In so doing, the business should benefit from economies of scale and vertical integration of its areas of practice. Efforts will continue to expand the Company's securities research activities and asset management product offerings, and to continue building its corporate finance, venture capital and private equity practices.
 

Matters covered in the Strategic Report

The principal risks and uncertainties are not shown in the directors report as they are shown in the strategic report in accordance with S414C (11) of the Companies Act 2006.

Disclosure of information to auditors



Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

Due to identifying certain non-compliant events , the Company was subject to the following fines: State of Connecticut $200,000 imposed in January 2023, FINRA - $200,0000 imposed in February 2023, and the SEC imposed a fine of $822,000 in November 2023. The subsidiary has taken steps to correct their systems to ensure future compliance.  The Company is not subject to any current regulatory investigations. 

Auditors

Under section 487(2) of the Companies Act 2006Wellden 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.
 





Mr M Eitner
Director

Date: 30 July 2024

Page 5

 
LAIDLAW & COMPANY (UK) LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LAIDLAW & COMPANY (UK) LTD
 

Opinion


We have audited the financial statements of Laidlaw & Company (UK) Ltd (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 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.


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 Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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.


Page 6

 
LAIDLAW & COMPANY (UK) LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LAIDLAW & COMPANY (UK) LTD (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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.


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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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.


Page 7

 
LAIDLAW & COMPANY (UK) LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LAIDLAW & COMPANY (UK) LTD (CONTINUED)


Auditors' 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 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. We have identified the greatest risk of a material impact on the financial statements from irregularities, including fraud, to relate to the timing and recognition of revenue and the override of controls by management. We have obtained an understanding of the legal and regulatory frameworks that the Company operates within including both those that directly have an impact on the financial statements and more widely those for which non-compliance could have a significant impact on the Company’s operations and reputation. The Companies Act 2006, employee legislation, health and safety legislation. FCA regulations, FINRA regulations and data protection are those we have identified in this regard. Auditing standards limit the required procedures as to non-compliance with laws and regulations to enquiries of those charged with governance and review of any applicable correspondence. 
The extent to which our procedures are capable of detecting irregularities, including fraud are detailed below:
 
Enquiry of management and those charged with governance as to actual and potential litigation and claims;
 
Enquiry of staff in compliance functions to identify any instances of non-compliance with laws and regulations;
 
Agreeing revenue recognised in the period to supporting audit evidence and assessing the accuracy of revenue recognised based on revenue recognition criteria;
 
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.


Page 8

 
LAIDLAW & COMPANY (UK) LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LAIDLAW & COMPANY (UK) LTD (CONTINUED)


Use of our report
 

This report is made solely to the Company's members in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.





Robin John FCA CTA (Senior Statutory Auditor)
  
for and on behalf of
Wellden Turnbull Limited
 
Chartered Accountants
Statutory Auditors
  
Albany House
Claremont Road
Esher
Surrey
KT10 9FQ

30 July 2024
Page 9

 
LAIDLAW & COMPANY (UK) LTD
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
                                                                                                                   Note
$
$

  

Turnover
 4 
14,200,880
28,679,659

Cost of sales
  
(11,147,377)
(22,443,692)

GROSS PROFIT
  
3,053,503
6,235,967

Administrative expenses
  
(7,936,705)
(9,360,941)

Other operating income
 5 
2,315,482
2,126,459

Other operating charges
  
(341,374)
(311,044)

Exceptional other operating charges
 13 
(822,885)
(400,000)

Loss from changes in fair value of investments
  
(544,726)
(197,535)

OPERATING LOSS
 6 
(4,276,705)
(1,907,094)

Income from fixed assets investments
 10 
1,122
1,009

Interest payable and expenses
 11 
(40,916)
(27,047)

LOSS BEFORE TAX
  
(4,316,499)
(1,933,132)

Tax on loss
 12 
73,219
124,506

LOSS AFTER TAX
  
(4,243,280)
(1,808,626)

  

  

Retained earnings at the beginning of the year
  
(3,217,896)
(1,409,270)

Loss for the year
  
(4,243,280)
(1,808,626)

RETAINED EARNINGS AT THE END OF THE YEAR
  
(7,461,176)
(3,217,896)

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of income and retained earnings.

The notes on pages 12 to 29 form part of these financial statements.

Page 10

 
LAIDLAW & COMPANY (UK) LTD
REGISTERED NUMBER: 03870324

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
                                                                        Note
$
$

FIXED ASSETS
  

Tangible fixed assets
 14 
95,341
181,736

Investments
 15 
73,944
79,909

  
169,285
261,645

CURRENT ASSETS
  

Debtors: amounts falling due after one year
 16 
29,792
505,210

Debtors: amounts falling due within one year
 16 
3,248,359
2,055,132

Current asset investments
 17 
171,496
704,461

Cash at bank and in hand
 18 
1,458,458
2,925,552

  
4,908,105
6,190,355

Creditors: amounts falling due within one year
 19 
(3,585,458)
(2,185,236)

NET CURRENT ASSETS
  
 
 
1,322,647
 
 
4,005,119

TOTAL ASSETS LESS CURRENT LIABILITIES
  
1,491,932
4,266,764

Creditors: amounts falling due after more than one year
 20 
(1,899,931)
(2,346,483)

  

NET (LIABILITIES)/ASSETS
  
(407,999)
1,920,281


CAPITAL AND RESERVES
  

Called up share capital 
 24 
2,150,000
2,150,000

Share premium account
 25 
999,455
999,455

Capital contribution reserve
 25 
3,903,722
1,988,722

Profit and loss account
 25 
(7,461,176)
(3,217,896)

SHAREHOLDERS' DEFICT/FUNDS
  
(407,999)
1,920,281


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


Mr M Eitner
Director

Date: 30 July 2024

The notes on pages 12 to 29 form part of these financial statements.

Page 11

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Laidlaw & Company (UK) Limited is a private company, limited by shares, and incorporated in England and Wales, registered number 03870324. The registered office is Albany House, Claremont Road, Esher, Surrey KT10 9FQ. 
The principal place of business is 521 5th Avenue, 12th floor, New York, NY 10175.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 US dollars which is the functional currency of the Company and rounded to the nearest $.

The following principal accounting policies have been applied:

  
2.2

Compliance with accounting standards

The accounts have been prepared in accordance with the provisions of FRS102. There have been no material deviations from the standard.

 
2.3

Financial Reporting Standard 102 - reduced disclosure exemptions

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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
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 2022 and these financial statements may be obtained from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

Page 12

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

Revenue

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover includes commissions and fees, investment banking fees, placement fees, advisory fees
and underwriting net of syndicate expenses, arising from security offerings in which the company
acts as an underwriter or agent. The following criteria must also be met before turnover is recognised:
 
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 over the period the service is provided.
 
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.
 
Management charges to Group companies are recognised in the same period the cost to recharge is accrued for.

 
2.5

Going concern

The financial statements have been prepared on a going concern basis as the Directors believe that the Company will continue to meet its liabilities as they fall due for a period of at least 12 months from the date of approval of the financial statements. In assessing the appropriateness of the going concern basis of preparation,the Directors have taken into account the key risks of the business as well as availability of cash resources. The firm has also prepared a detailed analysis of actual activity as of 30 June 2024, including proft & loss projections and cash projections through 30 August 2025 and has determined that it will have the necessary cash flows to meets its third party obligations. In the event that the results in 2024-2025 do not meet the Company's obligations, the Company has  access to adequate third party capital to meet its needs. 

 
2.6

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is USD.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income and retained earnings.

Page 13

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.7

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the statement of income and retained earnings on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.8

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the statement of income and retained earnings so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.9

Finance costs

Finance costs are charged to the statement of income and retained earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.10

Taxation

Tax is recognised in the statement of income and retained earnings except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.11

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Page 14

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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:

Leasehold improvements
-
5
years
Fixtures and fittings
-
5
years
Office equipment
-
5
years

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 the statement of income and retained earnings.

 
2.13

Valuation of investments

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Income and Retained Earnings for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the statement of income and retained earnings for the period.

 
2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.15

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Page 15

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.16

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.17

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the statement of income and retained earnings.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in
Page 16

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.17
Financial instruments (continued)

the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

Page 17

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, the Directors have had to make judgements, estimates and assumptions that effect the application of policies and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historic experiences and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities. Actual results may differ from these estimates. The judgements, estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:
Legal fee provisions
At the year end where there are legal cases ongoing, the Company takes specialist advice to assess the
expected outcome and settlement. Based upon the information the Company complies with the regulations on contingent assets and liabilities.

          Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, whereappropriate. The actual lives of the assets and residual values are assessed annually and may varydepending on a number of factors. In re-assessing asset lives, factors such as technological innovation,product life cycles and maintenance programmes are taken into account. Residual value assessmentsconsider issues such as future market conditions, the remaining life of the asset and projected disposalvalues


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
$
$

Commissions and sales credits
4,717,492
12,471,641

Corporate finance fees
8,816,734
14,937,178

Trading gains and (losses)
(15,841)
437,832

Broker loan commissions
642,168
830,920

Other income
40,328
2,088

14,200,881
28,679,659


The turnover is derived from geographical markets outside the UK.

Page 18

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Other operating income

2022
2021
$
$

Other operating income
433,225
402,376

Net rents receivable
-
29,854

Chargeback contributions
145,764
236,393

Insurance claims receivable
379,623
60,205

Management charges
1,356,870
1,397,631

2,315,482
2,126,459



6.


Operating loss

The operating loss is stated after charging:

2022
2021
$
$

Depreciation of tangible fixed assets
128,857
329,440

Other operating lease rentals
1,262,674
2,040,773

Page 19

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2022
2021
$
$

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
41,627
50,000

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.


8.


Employees

Staff costs, including Directors' remuneration, were as follows:


2022
2021
$
$

Wages and salaries
11,648,410
22,506,906

Social security costs
441,911
705,937

12,090,321
23,212,843


The average monthly number of employees, including the Directors, during the year was as follows:


        2022
        2021
            No.
            No.







Directors
2
2



Brokers and administrative staff
49
56

51
58


9.


Directors' remuneration

2022
2021
$
$

Directors' emoluments
1,134,394
3,814,978


The highest paid Director received remuneration of $569,725 (2021 - $2,189,354).

Page 20

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Income from investments

2022
2021
$
$





Dividends received
1,122
1,009



11.


Interest payable and similar expenses

2022
2021
$
$


Other loan interest payable
40,916
20,154

Finance leases and hire purchase contracts
-
6,893

40,916
27,047


12.


Taxation


2022
2021
$
$

Corporation tax


Adjustments in respect of previous periods
-
(87,816)

Foreign tax


Foreign tax on income for the year
(73,219)
1,107

Deferred tax


Origination and reversal of timing differences
-
(37,797)


Taxation on loss on ordinary activities
(73,219)
(124,506)
Page 21

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
$
$


Loss on ordinary activities before tax
(4,316,498)
(1,933,131)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(820,135)
(367,295)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
218,244
123,426

Depreciation in excess of capital allowances
13,994
-

Fair value movement in investments
103,498
37,531

Dividend income
(214)
(192)

Super deductions for tax allowances
(2,420)
(1,510)

Foreign tax relief as an expense
-
(213)

Unrelieved tax losses carried forward
487,033
145,582

Other foreign taxes paid/(received)
(73,219)
1,107

Other differences leading to an increase (decrease) in the tax charge
-
(62,942)

Total tax charge for the year
(73,219)
(124,506)

Page 22

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
12.Taxation (continued)


Factors that may affect future tax charges

The Company has tax losses to reduce future taxable profits In October 2022, the government announced changes to the corporation tax rate from 1 April 2023, increasing the main rate of corporation tax from 19% to 25%


13.


Exceptional items

2022
2021
$
$


Penalty
822,885
400,000

The Financial Industry Regulatory Authority (FINRA) conducted a compliance audit of a subsidiary company's accounting records and supervisory systems. Due to identifying certain non-compliant events occurring, FINRA imposed a fine of $200,000 in February 2023. This was provided for in the 2021 accounts. The Company has taken steps to correct their systems to ensure future compliance.
The State of Connecticut’s Regulatory Authority (FINRA) conducted a compliance audit of a subsidiary company's accounting records and supervisory systems. Due to identifying certain non-compliant events occurring, FINRA imposed a fine of $200,000 in January 2023. This was provided for in the 2021 accounts, The Company has taken steps to correct their systems to ensure future compliance.
The Securities Exchange Commission (SEC) conducted an investigation of a subsidiary's activities beginning in 2018. The end result was a fine to the subsidiary on the amount of $822,885. This was provided for in the 2022 accounts, the Company has taken steps to correct their systems to ensure future compliance.

Page 23

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Tangible fixed assets





Short-term leasehold property
Furniture, fixtures and fittings
Office equipment
Total

$
$
$
$



Cost or valuation


At 1 January 2022
281,486
376,914
259,506
917,906


Additions
-
-
42,462
42,462



At 31 December 2022

281,486
376,914
301,968
960,368



Depreciation


At 1 January 2022
196,909
349,451
189,810
736,170


Charge for the year on owned assets
55,664
21,984
51,209
128,857



At 31 December 2022

252,573
371,435
241,019
865,027



Net book value



At 31 December 2022
28,913
5,479
60,949
95,341



At 31 December 2021
84,577
27,463
69,696
181,736

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2022
2021
$
$



Furniture, fittings and equipment
-
15,203


15.


Fixed asset investments





Unlisted investments

$



Cost or valuation


At 1 January 2022
79,909


Additions
5,001


Revaluations
(10,966)



At 31 December 2022
73,944




Page 24

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Debtors

2022
2021
$
$

Due after more than one year

Other debtors
29,792
505,210


2022
2021
$
$

Due within one year

Trade debtors
168,579
331,421

Amounts owed by group undertakings
1,292,715
717,651

Other debtors
877,476
474,577

Prepayments and accrued income
909,589
531,483

3,248,359
2,055,132



17.


Current asset investments

2022
2021
$
$

Listed investments
171,496
704,461



18.


Cash and cash equivalents

2022
2021
$
$

Cash at bank and in hand
1,458,458
2,925,552


Page 25

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

19.


Creditors: Amounts falling due within one year

2022
2021
$
$

Trade creditors
542,416
412,297

Amounts owed to group undertakings
-
29,939

Corporation tax
-
6,114

Obligations under finance lease and hire purchase contracts
-
20,411

Other creditors
280,898
271,346

Accruals and deferred income
2,762,144
1,445,129

3,585,458
2,185,236


.


20.


Creditors: Amounts falling due after more than one year

2022
2021
$
$

Other creditors
467,848
748,746

Accruals and deferred income
1,432,083
1,597,737

1,899,931
2,346,483



21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2022
2021
$
$


Within one year
-
20,411

-
20,411

Page 26

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

22.


Financial instruments

2022
2021
$
$

Financial assets


Financial assets measured at fair value through the statement of income and retained earnings
1,703,898
3,709,922




Financial assets measured at fair value through the Statement of Income and Retained Earnings, comprise fixed and current asset investments and bank balances.


23.


Deferred taxation


2021


$






At beginning of year
37,797


Charged to profit or loss
37,797



At end of year
-


24.


Share capital

2022
2021
$
$
Allotted, called up and fully paid



1,160,651 (2021 - 1,160,651) Ordinary shares of $1.464695 each
1,700,000
1,700,000
228,181 (2021 - 228,181) Preference shares of $1.972118 each
450,000
450,000

2,150,000

2,150,000

The preference shares rank before the ordinary shares in capital distributions. When there are profits available for distribution and resolved to be distributed the preference shares will receive a 10% cumulative dividend prior to dividends paid on the ordinary shares.

Page 27

 
LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

25.


Reserves

Share premium account

The share premium account comprises the amounts paid above and beyond the par value of the shares
in issue.

Other reserves

The capital contribution reserve comprise an injection of capital by the parent company.

Profit and loss account

Profit and loss account comprises retained earnings to date.


26.


Contingent liabilities

The Company has been named as a defendant in a number of actions relating to its activities as a broker-dealer including civil actions and arbitration. From time to time, the Company is also involved in proceedings and investigations by self-regulatory organisations. Although the ultimate outcome of these matters involving the Company cannot be predicted with certainty, in the opinion of the directors the Company has meritorious defences to all such actions and intends to defend each of these actions vigorously. It is therefore the opinion of the directors that the ultimate resolution of such actions will have no material adverse effect on the Company's financial condition.


27.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
$
$


Not later than 1 year
258,867
1,755,946

Later than 1 year and not later than 5 years
259,474
6,695,819

Later than 5 years
-
5,122,492

518,341
13,574,257

In the year the lease on the New York office was reassigned to the parent company.


28.


Transactions with directors

During the year, loans of $20,000 (2021 - $225,000) were made to a director. The loans were repayable on demand and interest free, $20,000 was repaid during the year .
During the year, loans of $400,357 (2021 - $785,575) were made to a director. The loans were repayable on demand and interest free, $70,363 was repaid during the year leaving a balance of $329,994 payable at the year end.

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LAIDLAW & COMPANY (UK) LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

29.


Related party transactions

The Company is exempt under the terms of Financial Reporting Standard 102 (FRS102) paragraph 33.1A, from disclosing related party transactions with other group companies, on the grounds the Company is wholly owned within the Group and the Company is included in consolidated financial statements prepared by the Group.


30.


Post balance sheet events

In May 23 the Company received from the US government $1,236,398. The funds represented the value of a COVID loan support the US government had previously rejected. The Company sought legal advice and on appeal the claim was settled for the aforementioned amount.
For details on regulatory fines occuring since the year end, refer to Note 13 of the accounts.


31.


Parent company

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 Road, Esher, Surrey, KT10 9FQ.
There is no ultimate controlling party.


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