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12010870ON
ANNUAL AUDITED REPORTFORM X-17A-5
PART III
FACING PAGE
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SEC FILE NUMBER
-7ocInformation Required of Brokers and Dealers Pursuant to Section 17 of the
Securities Exchange Act of 1934 and Rule 17a-5 Thereunder
REPORT FOR THE PERIOD BEGINNING 01 /01 /_.O Ij
MM/DD/YY
AND ENDING /2 /3 /Z.0
MM/DD1YY
REGISTRANT IDENTIFICATION
NAME OF BROKER-DEALER c.eff Tiy lo L_l- OFFICIAL USE ONLY
ADDRESS OF PRINCIPAL PLACE OF BUSINESS Do not use P.O Box No FIRM 1.0 NO
i4M8Z J4INo and Street
-7IeCity State Zip Code
NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORTStf Tylôt
ACCOUNTANT IDENTIFICATION
Area Code Telephone Number
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report
AkcCoejJ.eve LLPName TmnvuaI sjae last os1 middle name
e4o PooL ioo TX 77b.S
FOROFFICIAL USE 01 iL
Potential persons who are to respond to the collection ofInformation contained In this form are not required to respondSEC 1410 06-02 unless the form displays currentlyvalid 0MB control number
Address City
CHECK ONECertified Public Accountant
Public Accountant
Accountant not.residcntinUn.ited States orany of its posser
Zip Code
SECURrrIES ANDEXCHANGE COMMISSION
RECEIVED
FEB 2012
ions
DA.IpLI
Claims for exemption from the requirement that the annual rephrt be coveedhy the opinion of an independent public accountantmust be supported by statement offacts and circumstances relied on as the basis for the exemption See Section 240.1 7a-5e2
OATH OR AFFIRMATION
of _____ IL3l
c.t1- Tci ti Ioiswear or affirm that to the best of
my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
SC.O Tcy lot1 4_4cjas
neither the company nor any partner proprietor principal officer or director has any proprietary interest in any accountclassified solely as that of customer except as follows
20 are true and correct further swear or affirm that
Viotary Public
Threport contains check all applicable boxesE3
Facing Page
Statement of Financial Condition 6uJic.c Se.cIc Statement of Income Loss S.L jflStatement of Changes in Financial Condition CcJi FiocjStatement of Changes in Stockholders Equity or Partners or Sole Proprietors CapitalStatement of Changes in Liabilities Subordinated to Claims of Creditors A1oclg Computation of Net Capital
Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3 uceeIPF1Information Relating to the Possession or Control Requirements Under Rule 15c3-3 ce1t .1-
Reconciliation including appropriate explanation of the Computation ofNet Capital Under Rule 5c3-an4
the
Computation for Determination of the Reserve Requirements Under Exhibit of Rule l5c3_3.cceipReconciliation between the auited and unaudited Statements of Financial Condition with
respect to methods ofconsolidation 4c neeJ.cl AoOrkei ceilAn Oath or Affirmation
Dm copy of the SIPC Supplemental Report dUo Akenber-report describing any material inadequacies found to exist or found to have existed since the date of the previous audit
For conditions of confidential treatment of certain portions of this filing see section 240.1 7a-5e3
SCOTT TAYLOR LTD
Financial Statements and Supplementary
Information Required by SEC Rule 17a-5
December 312011
SCOTT TAYLOR LTD
December 31 2011
TABLE OF CONTENTS
Pages
Independent Auditors Report
Statement of Financial Condition
Statement of Operations
Statement of Changes in Members Equity
Statement of Cash Flows
Notes to Financial Statements 6-8
Supplementary Information
Schedule Net Capital Computation as Required
by Rule 15c3-l of the Securities and Exchange Commission
Independent Auditors Report on Internal Control as Required by Rule
17a-5 of the Securities and Exchaiige commission 10-11
tv1cC0NNELL JONES LLE
INDEPENDENT AUDITORS REPORT
To the Member of
Scott Taylor Ltd
We have audited the accompanying statement of financial condition of Scott Taylor Ltd the
Company as Of December 31 2011 and the related statements of operations changes in
members equity and cash flows for the year then ended that you are filing pursuant to Rule
17a-5 under the Securities Exchange Act of 1934 These financial statements are the
responsibility of the Companys management Our responsibility is to express an opinion on
these financial statenients based On oUr audit
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement
An audit includes examining on test basis evidence supporting the amounts and disclosures
in the financial statements An audit also includes assesing the accounting principles used and
significant estimates made by management as wll as evaluating the overall fihancial
statement presentation We believe that our audit provides reasonable basis for our opinion
In our-opinion the financial statements fecred tabo.e preent fairly in all material respects
the financial condition of Scott Taylor Ltd as of December 31 2011 and the results of its
operations and its cash flows for theyear
then ended in conformity with accounting principles
generally accepted in the United States of America
Our audit was made for the purpose of forming an opinion on the basic financial statements
taken as whole The supplementary information contained in Schedule Net Capital
Calculation required by Rule 7a-5 under the Securities Exchange Act of 1934 is presented
for purposes of additional analysis and is not required part of the financial statements Such
information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to preparethe financial statements The
information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures including comparing and reconciling such
information directly to the underlying accounting and other records used to preparethe
financial statements or to the financial statements themselves and other additional procedures
in accordance with auditing standards generally accepted in the United States of America In
our opinion the information is fairly stated in all material respects in relation to the financial
statements as whole
O4i Post Oak Blvd Suite 1600
EliSiOn TX 77056
Houston TexasPhone 11.068.1600
Iax 713.%ti.I60IFebruary 13 2012
EVES 05CC EN Hi IC EN IS 501
ASSETS
SCOTT TAYLOR LTD
Statement of Financhil Condition
Year Ended December 31 2011
Liabilities and Members Equity
Ellen Taylor
Scott Taylor
Wealth Recovery Inc
Members equity
Total liabilities and members equity
See acconpcthyingnots to financial tatements
9923
9923
Cash
Total assets
4713
4713
497
9923
9923
SCOTT IARLTD
Stemeit of Operations
Year Ended December 312011
Revenue
Commissions
Interest
Expenses
Regulatory fees
Other operating expenses
Total expenses
Net income
155224
40
155264
See accompanying notes to financial statements
2000
55236
57236
98028
SCOTT 1AYLOR LTIP
Statement of Changes in Members Equity
Year Ended December 31 2011
Balance at January 2011 8940
Net income98028
Member draws97045
Balance at December 31 2011 9923
See accompanyingnote to financial statements
SCOTT TALQR LTD
Statement of Cash Flows
Year Ended December31 2011
Cash flows from operating activities
Net income 98028
Cash flows from financing activities
Member draws
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash beginning of year ______________
Cash end of year
97045
97045
983
8940
9923
See accompanying notes to financial statements
SCOTT TLOR LTD
Notes to Financial Statºmeiits
Year Ended December 31 2011
NOTE GENERAL INFORMATION AND SUMMARY OF SIGNIFtCANTACCOUNTING POLICIES
Description of Business
Scott Taylor Ltd the Company Texas limited partnership was formed in
April 2005 It is member of the Financial Industry Regulatory Authority
FINRA As limited broker-dealer the Company operates under the
exemptive provisions of the Securities and Exchange Commissions SEC Rule
15c3-3k2i which provide that it will not maintain any margin accounts will
promptly transmit customer funds and deliver securities received and does not
hold funds or securities for or owe money or securities to customers The
Companys revenues are primarily from commissions earned from various mutual
funds
Basis ofAccounting
The financial statements of the Company have been prepared on the accrual basis
of accounting in accordance with accounting principles generally accepted in the
United States of America
Cash and Cash Equivalehts
The Company considers all short-term highly liquid investments whith are readily
convertible into cash and have maturities as of the date of purchase of three
months or less to be cash equivalents
Income Taxes
The Company is not recognized as taxable entity for federal income tax
purposes thus no federal income tax expense has been recorded in the financial
statements The Company is subject to Texas Franchise Tax and such amount was
immaterial in 2011
Revenue Recognition
Revenue is recognized at the time payment is received from the mutual fund
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities the disclosure of contingent assets and liabilities and the reported
amounts of revenue and expenses at the date of the financial statements Actual
results could differ from those estimates
SOTTFAYLOR LTD
Notes to Financial Statements
Year Ended December31 2011
NOTE RELATED PARTY TRANSACTIONS
Under an agreement with Wealth Recovery owned by the principal owners of
The Company Scott Taylor Ltd leases its offices and pays for use of all
equipment at that location For 2011 the allocated expenses were $6000 for rent
and .$4OqO.for equipment
NOTE NETr CAPITAL REQUIREMENTS
In cdrdÆnØe ith Rile 15c3-1 of the SEC the Companys aggregate
indebtedness as defined shall not exceed 15 times its net capital The Company
mut also maintain minimum net capital subject to the requirements of fully
disclosed broker-dealer As of Deceniber 31 2011 the Companys net capital as
defined of $9923 exceeded the required minimum by $4923 and the Company
had no aggregate indebtedness
NOTE SUBORDINATED LIABILITIES
There were no luibilities subordinated to claims of general creditors at any time
during the yea ended becember 31 2011 Therefore the statement of changes in
liabilities subordinated to claims of general creditos specified by rule 7a-5d2has not been presented for the year ended Decnbcr 31 2011
NOTE 1FORMAJIONRELATING TO THE
OSSSION OR CONTROL REQUIREMENTS FOR BROKER-DEALERS
computation for determination of reserve requirements and information relating
to possession or control of securities as specified by rule 15c3-3 and rule 17a-
5d3 were both omittedand are notrequiredas the Company operates pursuanttqprovisions of SEC Ri.4 15c3..3lc2i The Company does not
hqicl customer funds orsecurities.
NOTE MEMBERS EQUITY
During 2011 members made capital draws from the Company in the amount of
$97045
SUPPLEMENTARY INFORMATIONPURSUANT TO RULE 15c3-1 OF THE
SECURITIES EXCHANGE ACT OF 1934
SCHEDULE
NET CAPITAL COMPUTATIONAS REQUIRED BY RULE 15c3-1 OF THE
SECURITIES AND EXCHANGE COMMISSION FORSCOTT TAYLOR LTD
December 31 2011
COMPUTATION OF BASIC NET CAPITAL REQUIREMENTNet capital requirement the greater of
1/15 of Aggregate Indebtedness
Minimum Dollar Requirement
Net capital
Excess Net Capital
Aggregate Indebtedness
Ratio of aggregate indebtedness to net capital
Ratio of subordinated indebtedness to debt/equity total
The reconciliation of the computation of net capital under rule 15c3-1 to the computation of net capital as flied by
the Company on form X-1 7A-5 on January 2012 is not required as no djfference exist
See accompanying independent auditors report
9923
COMPUTATION OF NET CAPITAL
Total assets
Less total liabilities
Net worth
Deductions from and/or charges to net worth
Total non-allowable assets
Other deductions or charges
Total deductions from net worth
Net capital before haircuts on securities positions
Haircuts on securities
Certificates of deposit and commercial paper
U.S and Canadian government obligations
State and municipal government obligations
Corporate obligations
Stock and warrants
Options
Arbitrage
Other securities
Undue concentration
Net capital
9923
9923
9923
5000 5000
9923
4923
-%N/A
INDEPENDENT AUDITORS REPORTON INTERNAL CONTROL
AS REQUIRED BY RULE 17a-5 OFTHE SECURITIES AND EXCHANGE COMMISSION
ACTOF 1934
McCoNNELL JONES LLP
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROLAS REQUIRED BY RULE 17a-5 OF THE SECURITIES
AND EXCHANGE COMMISSION ACT OF 1934
To the Member of
Scott Taylor Ltd
In planning and performing our audit of the financial statements and supplemental schedules of
Scott Taylor Ltd the Company as of and for the year ended December 31 2011 in
accordance with auditing standards generally accepted in the United States of America we
considered the Companys internal control over financial reporting internal control as
basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control Accordingly we do not express an opinion on the effectiveness
of the Companys internal control
Also as required by rule 7a-5g1 of the Securities and Exchange Commission SEC we
have made study of the practices and pröeedure followed by the Company including
consideration of control activities for safeguarding securities This study included tests of such
practiceind procedures thatwe consfdØred relevant the objectives stated in rule 17a-5g in
making the periodic computations of aggtØgate indebtedness or aggregate debits and net
capital under rule 7a-3a 11 and for determining compliance with the exemptive provisions
of rule 15c3-3 Because the Company does not carry securities accounts for customers or
perform custodial functions relating to customer securities we did not review the practices and
procedures followed by the Company in any of the following
Making quarterly securities examinations counts verifications and comparisons and
recordation of differences required by rule 7a- 13
Complying with the requirements for prompt payment for securities under Section of
Federal Reserve Regulation of the Board of Governors of the Federal Reserve
System
The management of the Company is responsible for establishing and maintaining internal
control and the practices and procedures referred to in the preceding paragraph In fulfilling
this responsibility estimates and judgments by management are required to assess the expected
benefits and related costs of controls and of the practices and procedures referred to in the
preceding paragraph and to assess whether those practices and procedures can be expected to
achieve the SECs above-mentioned objectives Two of the objectives of internal control and
the practices and procedures are to provide management with reasonable but not absolute
assurance that assets for which the Company has responsibility are safeguarded against loss
from unauthorized use or disposition and that transactions are executed in accordance with
managements authorization and recorded properly to permit the preparation of financial
statements in conformity with generally accepted accounting principles Rule 7a-5g lists
additional objectives of the practices and procedures listed in the preceding paragraph
04 st dk Bid Suite 600
lOUSlOfl IX 77056
Phone 71 196016X
Fdx 713.9611.160
WWW MI IN Hi EN IS LI
Because of inherent limitations in internal control or the practices and procedures referred to
above error or fraud may occur and not be detected Also projection of any evaluation of them
to future periods is subject to the risk that they may become inadequate because Of changes in
conditions or that the effectiveness of their desigfi and operation may deteriorate
deficiency in internal control exists when the design or operation of control does not allow
management or employees in the normal course of performing their assigned functions to
prevent or detect and correct misstatements on timely basis significant deficiency is
deficiency or combination of deficiencies in internal control that is less severe than
material weakness yet important enough to merit attention by those charged with governance
material weakness is deficiency or combination of deficiencies in internal control such
that there is reasonable possibility that material misstatement of the companys financial
statements will not be prevented or detected and corrected on timely basis
Our consideration of internal control was for the limited purpose described in the first and
second paragraphs and would not necessarily identi1 all deficiencies in internal control that
might be material weaknesses We did not identify any deficiencies in internal control and
control activities for safeguarding securities that we consider to be material weaknesses as
defined above
We understand that practices and procedures that accomplish the objectives referred to in the
second paragraph of this report.ar considered by the SEC to be adequate its purposes in
accordance with the Securities Ehange Act of 1934 and related regulations and that practices
and procedures that do not accomplish such objectives in all material respects indicate
material inadequacy for such purposes Based on this understanding and on our study we
believe that the Companys practices and procedures were adequate at DcØmber 31 2011 to
meet the SECs objectives
This report is intended solely ortlie information and use ofthç management the SECFinancial Industry Regulatory Authority and other regulatOry agencies that rely on rule
7a-5g under the Securities Exchange Act of 1934 in their regulation of registered brokers
and dealers and is not intended to be and should not be used by anyàne other than these
specified parties
Houston Texas
February 13 2012
11
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