Company registration number 13437270 (England and Wales)
WEBULL SECURITIES (UK) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
WEBULL SECURITIES (UK) LTD
COMPANY INFORMATION
Directors
B W James
N L Saunders
A Wang
H C Wang
Company number
13437270
Registered office
Summit House
170 Finchley Road
London
England
NW3 6BP
Auditor
Azets Audit Services
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
WEBULL SECURITIES (UK) LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 22
WEBULL SECURITIES (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Principal activities
Webull Securities (UK) Ltd (the “Company”) has been authorised to carry out investment business by the Financial Conduct Authority since October 2022. It commenced business at the beginning of July 2023, offering stockbroking platform, execution and clearing broking services in equities to retail clients. The Company’s platform offers equity investments in the US and Asian markets.
Review of the business
Strategy
The Company’s growth strategy is to grow the value of assets held by its clients, and increase transactional volume by broadening the product set available through its platform.
Business performance
The Company has made a loss before taxation of £3,710,413 (2022: £988,862) for the year ended 31 December 2023. The increase is mainly attributable to marketing and trading expenses the business having launched in July 2023.
During the year, there was a capital injection of £5,000,000 from the parent company, Webull Holdings (Singapore) Pte Ltd.
Principal risks and uncertainties
Operational risk
In order to minimise the impact of operational risks, the Company ensured all internal procedures are clearly documented, especially those covering client money, payments and compliance.
Credit risk
The Company’s credit risk is mainly attributable to its trade receivables. This is mitigated through annual due diligence performed on its key partners.
Liquidity risk
The Company has an internal process to monitor its liquidity and ensure projected funding requirements are met. The Company maintains a highly liquid balance sheet where its assets are mainly consist of cash at bank.
Capital adequacy is monitored daily. Please refer to note 18 for further details.
Regulatory capital requirements have been met throughout the financial year ended 31 December 2023.
WEBULL SECURITIES (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
N L Saunders
Director
23 April 2024
WEBULL SECURITIES (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
B W James
N L Saunders
A Wang
H C Wang
S T Phelps
(Resigned 6 June 2023)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
N L Saunders
Director
23 April 2024
WEBULL SECURITIES (UK) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 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.
WEBULL SECURITIES (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WEBULL SECURITIES (UK) LTD
- 5 -
Opinion
We have audited the financial statements of Webull Securities (UK) Ltd (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
WEBULL SECURITIES (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WEBULL SECURITIES (UK) LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
WEBULL SECURITIES (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF WEBULL SECURITIES (UK) LTD
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and 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 and reviewing accounting estimates for indicators of potential bias.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Robin Haslam
Senior Statutory Auditor
For and on behalf of Azets Audit Services
24 April 2024
Chartered Accountants
Statutory Auditor
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
WEBULL SECURITIES (UK) LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
25,684
-
Administrative expenses
(3,757,915)
(988,862)
Operating loss
4
(3,732,231)
(988,862)
Interest receivable and similar income
7
21,818
Loss before taxation
(3,710,413)
(988,862)
Tax on loss
8
Loss for the financial year
(3,710,413)
(988,862)
The income statement has been prepared on the basis that all operations are continuing operations.
WEBULL SECURITIES (UK) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Loss for the year
(3,710,413)
(988,862)
Other comprehensive income
-
-
Total comprehensive income for the year
(3,710,413)
(988,862)
WEBULL SECURITIES (UK) LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
8,376
5,638
Current assets
Debtors
10
383,965
62,326
Cash at bank and in hand
6,840,322
4,888,494
7,224,287
4,950,820
Creditors: amounts falling due within one year
11
(1,346,861)
(625,147)
Net current assets
5,877,426
4,325,673
Net assets
5,885,802
4,331,311
Capital and reserves
Called up share capital
14
10,000,001
5,000,001
Other reserves
710,605
445,702
Profit and loss reserves
(4,824,804)
(1,114,392)
Total equity
5,885,802
4,331,311
The financial statements were approved by the board of directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
N L Saunders
Director
Company Registration No. 13437270
WEBULL SECURITIES (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1
-
(125,530)
(125,529)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(988,861)
(988,861)
Issue of share capital
14
5,000,000
-
-
5,000,000
Credit to equity for equity settled share-based payments
13
-
445,701
445,701
Balance at 31 December 2022
5,000,001
445,701
(1,114,391)
4,331,311
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(3,710,413)
(3,710,413)
Issue of share capital
14
5,000,000
-
-
5,000,000
Credit to equity for equity settled share-based payments
13
-
264,904
Balance at 31 December 2023
10,000,001
710,605
(4,824,804)
5,885,802
WEBULL SECURITIES (UK) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
19
(3,063,903)
(105,537)
Investing activities
Purchase of tangible fixed assets
(6,087)
(5,969)
Interest received
21,818
Net cash generated from/(used in) investing activities
15,731
(5,969)
Financing activities
Proceeds from issue of shares
14
5,000,000
5,000,000
Net cash generated from financing activities
5,000,000
5,000,000
Net increase in cash and cash equivalents
1,951,828
4,888,494
Cash and cash equivalents at beginning of year
4,888,494
Cash and cash equivalents at end of year
6,840,322
4,888,494
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Webull Securities (UK) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Summit House, 170 Finchley Road, London, England, NW3 6BP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The financial statements have been prepared on the going concern basis which the directors believe to be appropriate for the following reason. The company is dependent for its continued operational existence on support provided by Webull Holdings (Singapore) Pte. Ltd, its parent company, which has provided the company with an undertaking that it will, for at least 12 months from the date of approval of these financial statements, continue to make available such funds as are needed by the company, and in particular will not seek repayment of the amounts currently made available, This should enable the company to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment, As with any company placing reliance on other entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although at the date of approval of these financial statements, they have no reason to believe that it will not do so.true
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
Straight line over 3 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position 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.
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.12
Leases
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Commission received
8,179
-
Foreign exchange conversions
17,505
-
25,684
-
2023
2022
£
£
Other revenue
Interest income
21,818
-
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(6,962)
5,402
Fees payable to the company's auditor for the audit of the company's financial statements
20,000
9,135
Depreciation of owned tangible fixed assets
3,349
332
Share-based payments
264,904
445,701
Operating lease charges
103,371
17,160
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
5
5
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
774,490
808,201
Social security costs
135,586
39,871
Pension costs
13,041
6,107
923,117
854,179
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
270,069
362,500
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 2).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 1 (2022 - 1).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
21,818
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
21,818
8
Taxation
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(3,710,413)
(988,862)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(871,947)
(187,884)
Unutilised tax losses carried forward
871,947
187,884
Taxation charge for the year
-
-
9
Tangible fixed assets
Computers
£
Cost
At 1 January 2023
5,970
Additions
6,087
At 31 December 2023
12,057
Depreciation and impairment
At 1 January 2023
332
Depreciation charged in the year
3,349
At 31 December 2023
3,681
Carrying amount
At 31 December 2023
8,376
At 31 December 2022
5,638
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
313,091
32,212
Prepayments and accrued income
70,874
30,114
383,965
62,326
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Creditors: amounts falling due within one year
2023
2022
£
£
Amounts owed to group undertakings
199,999
199,999
Taxation and social security
9,601
16,756
Other creditors
996,221
339,180
Accruals and deferred income
141,040
69,212
1,346,861
625,147
12
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
13,041
6,107
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
13
Share-based payment transactions
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £264,904 (2022 - £445,701) which related to equity settled share based payment transactions.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Share of £1 each
10,000,001
5,000,001
10,000,001
5,000,001
Reconciliation of movements during the year:
Number
At 1 January 2023
5,000,001
Issue of fully paid shares
5,000,000
At 31 December 2023
10,000,001
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
34,320
16
Related party transactions
Included in other debtors at the year end is £42,048 (2022: £15,032) owed by Webull Securities (Europe) Ltd and £172,328 (2022: £NIL) owed by Webull Securities (Australia) Pty. Ltd, connected companies which are members of the group of companies and is are related parties of the company by virtue of common control.
Included in other creditors at the year end is £199,999 (2022: £199,999) owed to the parent company Webull Holdings (UK) Limited and £7,310 (2022: £NIL) owed to Webull Technologies Pte. Ltd.
At the year end the company owes £157 (2022: £326,660) to Webull Holdings (Singapore) Pte. Ltd. Webull Holdings (Singapore) Pte Ltd is a subsidiary company of Webull Corporation.
17
Ultimate controlling party
The ultimate parent company is Webull Corporation, a company incorporated in Cayman Islands. Its registered office is Sertus Chambers, Governors Square, Suite No 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands.
The company was, at the end of the year, part of a large group incorporated outside of the EEA and in accordance with Section 401 of the Companies Act 2006, is not required to produce, and has not published, consolidated accounts. The group consolidated accounts can be obtained from Webull Corporation.
18
Regulatory capital
Regulatory capital is determined in accordance with minimum capital requirements of the Financial Conduct Authority in the United Kingdom.
The company’s objectives when managing capital are to:
Comply with the capital requirements set by the regulators;
Safeguard the company’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for its other stakeholders; and
Maintain a strong capital base to support the future strategy and development of the business.
Capital adequacy and the use of regulatory capital are monitored by the company’s management, applying the prudential requirements of the Financial Conduct Authority’s MIFIDPRU rules.
WEBULL SECURITIES (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Cash absorbed by operations
2023
2022
£
£
Loss for the year after tax
(3,710,413)
(988,862)
Adjustments for:
Investment income
(21,818)
Depreciation and impairment of tangible fixed assets
3,349
332
Equity settled share based payment expense
264,904
445,701
Movements in working capital:
Increase in debtors
(321,639)
(62,325)
Increase in creditors
721,714
499,617
Cash absorbed by operations
(3,063,903)
(105,537)
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