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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