London
Tel Aviv
Sydney
Limassol
Cape Town
Singapore
2017
Plus500 Limited
ANNUAL REPORT
AND ACCOUNTS
World's Trading Machine
www.plus500.com
Plus500 Ltd. 2017 Annual Report ABOUT PLUS500
Plus500 Ltd (the “Company”) is a fast-growing online
provider of Contracts for Difference (“CFDs”). Plus500
has developed and operates an online trading platform
for individual customers to trade CFDs internationally
over more than 2,200 different underlying global
financial instruments comprising equities, indices,
commodities, options, exchange-traded funds (“ETFs”),
cryptocurrencies and foreign exchange. The Company
enables individual customers to trade CFDs in more
than 50 countries and in 32 languages. The trading
platform is accessible from multiple operating systems
(Windows, smartphones (iOS, Android and Windows
Phone), tablets (iOS, Android and Surface), Apple Watch
and web browsers).
Plus500 retains operating licences and is regulated in
the United Kingdom, Australia, Cyprus, New Zealand,
Israel, South Africa and Singapore. Customer care is
integral to Plus500: customers cannot be subject to
negative balances and there are no commissions on
trades. Plus500 does not utilise cold calling techniques
and does not offer binary options. A free demo account
is available on an unlimited basis for platform users and
sophisticated risk management tools are provided free
of charge to manage leverage and stop losses to help
customers protect profits and limit capital losses.
Plus500 Ltd. 2017 Annual Report TABLE OF CONTENTS
OVERVIEW
2017 Highlights
Chairman’s Statement
Chief Executive Officer’s Review
Our Strategic Objectives
Technological Edge
Financial Review
Sponsorships
DIRECTORS AND GOVERNANCE
Board of Directors
Corporate Governance
Remuneration Report
Directors’ Report
Significant Risk Factors and Uncertainties
Statement of Directors’ Responsibilities
Corporate Law
FINANCIAL STATEMENTS
Report of the Auditors
Consolidated statements of financial position
Consolidated statements of comprehensive income
Consolidated statements of changes in equity
Consolidated statements of cash flows
Notes to consolidated financial statements
FURTHER INFORMATION
Advisors
08
10
12
16
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20
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32
36
41
44
49
51
52
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62
64
89
Plus500 Limited
2017 ANNUAL REPORT OVERVIEW
6
Plus500 Ltd. 2017 Annual Report 7
Plus500 Ltd. 2017 Annual Report REVENUE
327.9M
EBITDA
151.0M
ACTIVE
CUSTOMERS
155,956
NEW
CUSTOMERS
104,432
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
2017 HIGHLIGHTS
FINANCIAL HIGHLIGHTS
EBITDA1 was $259.2 million (2016: $151.0m)
EBITDA Margin increased 29% to 59.3% (2016: 46.0%)
• Revenue increased 33% to $437.2 million (2016: $327.9m)
•
•
• Net profit was $199.7 million (2016: $117.2m)
•
• Cash generated from operations was $278.7m (2016: $153.3m)
• AUAC2 lower due to efficient and successful marketing strategy
Earnings per share were $1.75 (2016: $1.02)
together with the popularity of our cryptocurrency CFDs offering which
attracted new customers mainly in Q4 2017
• ARPU3 lower due to dilution from significant customer recruitment in
Q4 2017
OPERATIONAL HIGHLIGHTS
• Continued to expand international footprint and diversify revenues
through new licences in South Africa and Singapore
• Another record year of strong customer growth in excess of
expectations, reflecting effective marketing and robust business model:
Active Customers4 increased 103% to 317,175 (2016: 155,956)
•
• New Customers5 increased 136% to 246,946 (2016: 104,432)
• Maintained leadership in technology and product innovation:
• Second largest CFD provider in the UK6
• Highest rated mobile platform among CFD traders in Australia7
•
Leadership in technology and product innovation:
•
a majority of revenues and signups in 2017 (over 75%)
originated from mobile devices, reflecting high speed of
innovation
broad offering enables customers to participate in the volatility
of multiple cryptocurrencies, without owning the underlying
asset
•
• maintained leadership as the highest rated app in its sector by
customers on both Apple’s AppStore and Google’s Play Store
•
Increased international brand awareness having renewed partnerships
as official main sponsors of Club Atlético de Madrid and the Plus500
Brumbies
1 Earnings before Interest, Taxes, Depreciation and Amortization
2 Average New User Acquisition Cost
3 Average Revenue per Active User
4 Customers who made at least one real money trade during the period
5 Customers depositing for the first time ever during the period
6 Investment Trends UK Leverage Trading Report, 2017
7 Investment Trends AU CFD Report, 2017
8
Plus500 Ltd. 2017 Annual Report DIVIDENDS AND SHARE BUYBACK
•
•
•
•
Total dividend payout of $192.1 million, consisted of an interim dividend of $27.2 million, a final dividend of
$92.6 million and a special dividend of $72.3 million
The Company bought back 980,146 Ordinary Shares (or 0.9%) in the capital of the Company for an aggregate
purchase price of $7.5 million pursuant to share buyback programmes executed in 2017
Together the dividends and buyback represent a total pay-out of 100% of the 2017 net profit
Total distributions to shareholders in the five-year period since flotation, including dividends declared in
February 2018, are $530.9 million, more than double the market capitalisation at flotation of $200 million
DIVIDENDS PER SHARE (CENTS)
Interim
Final
Special
TOTAL
DIVIDEND PAYOUT ($M)
Interim
Final & Special
TOTAL
SHARE BUYBACK PROGRAMMES EXECUTED ($M)
2017
2016
$0.2324
$0.3799
$0.2729
$0.8852
$26.7
$75.0
$101.7
$0.2388
$0.8129
$0.6350
$1.6867
$27.2
$164.9
$192.1
$7.5
TOTAL RETURNS TO SHAREHOLDERS ($M)
$199.6
$101.7
9
Plus500 Ltd. 2017 Annual Report
CHAIRMAN’S STATEMENT
INTRODUCTION
In my first year as Chairman I am delighted to see the
Company announced record results, continuing its
exceptional track record of growth. A strong set of 2017
KPIs reflect the benefits of our investment in globalising
Plus500’s brand and our technology driven business
model. Our most important financial measures,
revenue, EBITDA and net profit, all grew significantly
driven by record growth in New and Active Customers.
OUR COMPETITIVE ADVANTAGE
This performance is no accident; it is driven by the
Company's superior technology, which is both a
significant barrier to entry and a competitive advantage.
It enables:
•
•
•
•
a highly rated, user friendly trading platform
delivered on the latest devices
smart marketing technology to acquire higher value
customers more cost effectively
the introduction of new trading instruments more
quickly than our competition
rapid updates to our platform to comply with new
regulations
Vitally, all our technology is delivered by Plus500
developers in-house and is based on proprietary
technology supported solely by the Company’s internal
10
" The Board is confident that Plus500’s
competitive advantages, including its
technology leadership and agile business
model, position it well to adapt rapidly
to regulatory changes and to emerge a
stronger business with an enhanced market
position.
Penny Judd
Chairman
technical expertise. This is more cost effective, more
manageable and ensures we are first to market. This
enables us to maintain our market leading growth.
REGULATION
Our industry remains closely scrutinised by global
regulators. The Company welcomes many of the
regulatory changes introduced in 2017 and being
proposed for 2018, especially in Europe, and has
continued to invest significant resources to ensure
we continue to implement and maintain a compliant
regulatory approach.
Plus500, backed by its financial resources,
technological lead, geographically diversified revenues
and agile business model, expects to be able to adapt
rapidly to any regulatory changes that may be required.
DIVIDENDS AND SHARE BUYBACK
The Board introduced a share buyback programme for
the first time in 2017 in addition to significant dividend
distributions. Our strong financial performance has
once again enabled the Board to propose substantial
payouts to shareholders. The Board will continue to
consider the optimal balance between dividends and
share buybacks as excess funds are generated.
Plus500 Ltd. 2017 Annual Report The Board has concluded that it is in shareholders’
best interests to distribute 100% of 2017 net profits
and therefore has declared a final dividend in respect
of 2017 together with an additional distribution by way
of a special dividend of $192.1 million, which together
with $7.5 million the Company used in 2017 for share
buybacks, equates to 100% of the 2017 net profit.
The 2017 dividends equate to a total payment of
$1.6867 per share compared to $0.8852 last year, an
increase of 91%.
STRATEGY
We aim to strengthen the Company’s position and
restate Plus500's strategic goal of being the number
one global listed CFD provider allowing us to continue
to deliver exceptional shareholder returns. We seek to
build the business by continuing investment in:
•
•
•
•
•
gaining new operating licences in existing and
new target territories, thereby increasing customer
numbers and geographically diversifying our
earnings
further developing our technology thus ensuring
we continue to be first to market and flexible in our
approach
further improving our customer service to deliver an
excellent trading experience to our customers
continuing marketing initiatives to enhance
our brand globally and attract new, high value
customers with good lifetime value
ensuring regulatory compliance and rapid
implementation of all required regulatory changes
OUTLOOK
The Board believes that the Company’s strong financial
position, geographically diversified revenues, advanced
trading platform and flexible, low cost business model,
continue to position it well for the future.
Penny Judd
Chairman
19 March 2018
Plus500 Ltd. 2017 Annual Report
11
CHIEF EXECUTIVE OFFICER’S REVIEW
" We enter 2018 confident we can continue
to develop our business to achieve our
strategic goal of Plus500 being the number
one global listed CFD provider.
Asaf Elimelech
Chief Executive Officer
INTRODUCTION
We have had a very busy and successful year, reporting
record revenues, profits and dividends. This success
is based on our continuing focus on serving our
customers’ trading needs above all else. Our technology
leadership enables us to provide a high-quality user
experience, a comprehensive CFD offering and excellent
customer service. These core characteristics, combined
with our efficient marketing activity, has led to strong
new customer sign ups, reduced churn and increased
customer activity.
Our operating licences in the United Kingdom, Australia,
Cyprus, South Africa, New Zealand, Israel and Singapore
provide strong foundations for the business and we
continue to seek to add more licences to enable our
global expansion and further diversify our revenues.
We anticipate 2018 will be another year of change,
especially once ESMA, the EU financial regulator, has
published its consultation which is expected to result
in changes across Europe. We are committed to
complying with regulation and best practice customer
protection in an ever-evolving regulatory environment
and will continue to make the necessary adjustments to
implement in full, and comply with, regulatory changes
as they are announced.
We believe we are well placed to mitigate any negative
impact of additional regulation given our robust and
agile business model, our lean cost structure and our
technology leadership. We support regulators’ desire
to promote a consistent set of conduct rules across
all European jurisdictions which will ensure a more
sustainable industry and believe we will remain one of
the market leaders.
We remain committed to customer protection. Our
trading platform provides all our customers a protection
mechanism so they cannot be subject to negative
balances. We do not charge commission on trades,
and our revenues and profits, are derived from trading
spreads and overnight charges, and not from customer
losses. We also continue to offer an unlimited demo
account for novice traders and have never offered
customers binary options.
OPERATIONAL REVIEW
The Company’s primary market is offering individual
clients the ability to trade CFDs in global financial
instruments comprising equities, indices, ETFs,
commodities, options, cryptocurrencies and foreign
exchange.
12
Plus500 Ltd. 2017 Annual Report
Customer service is integral to Plus500 and we have
continued to invest in resources to ensure we remain
a market leader. As a result of initiatives such as
introducing 24/7 live chat which is available in ten
languages and has reduced response times, customer
satisfaction has improved markedly. This is reducing
churn and increasing the longevity of customers, and
ultimately their lifetime value.
The increased market volatility as a result of the geo-
political situation in Europe, as well as the changing
global macro environment, has led to particularly
strong trading in CFDs referencing commodities, equity
instruments and cryptocurrencies. The increasing
interest in the price movements and volatility of
the latter resulted in both existing and new traders
participating in these emerging asset classes as they
were able to take part in a volatile market without the
need to purchase the actual underlying cryptocurrency
with its associated risk.
The Company's flexible business structure and in-
house technology capabilities enable it to react rapidly
and efficiently to such market trends and to offer its
customers the opportunity to trade CFDs on emerging
financial instruments, such as cryptocurrencies (the
Company was the first in the market to offer CFDs
on Bitcoin in 2013). This broad offering resulted in an
increase in Active Customers and a stimulus to New
Customer sign ups, especially during Q4 2017.
Overall cryptocurrency CFDs trading represented
less than 15% of total revenues and Plus500 remains
focused on risk management which includes setting
appropriate risk and leverage for all the instruments
traded on its platform; the Company continued to
demonstrate the robustness of its risk and credit
controls by reporting a consistently high level of
profitable daily trading.
The Company had another very successful year
in terms of its marketing activities, in particular
significantly reducing its customer acquisition costs
whilst continuing to acquire a record number of
customers at a lower cost than in the past. In addition,
we achieved our goal of acquiring more valuable
customers – higher value, active traders with good
lifetime value. This was achieved through an efficient
and successful marketing strategy, proprietary
technology leadership (which is another of the
Company’s competitive advantages) and as a result
of the popularity of our cryptocurrency CFDs offering,
which attracted new customers mainly in Q4 2017.
Offline, the sponsorship agreement with Spanish
football club, Atlético Madrid, and with the leading
Australian union rugby team, the Plus500 Brumbies,
is accelerating and delivering brand building benefits
to the business. In 2017, Plus500 extended these
main sponsorship agreements for a further three
seasons, thereby continuing the Company’s strategy of
increasing Plus500’s brand recognition and expanding
the Company’s customer base globally.
This is in line with the Company's strategy of adding
regulatory licences in new territories and further
diversifying its geographical spread of revenues.
During 2017, the Group's Australian subsidiary was
granted an additional licence by the South African
regulator, the Financial Services Board ("FSB") and in
February 2018, Plus500 added another licence to its
portfolio following the grant of a second FSB licence to
its South African subsidiary. In addition, Plus500 was
also granted a capital markets services licence in 2017
by the Singapore regulator, the Monetary Authority of
Singapore, which was subsequently supplemented in
February 2018 by a commodity broker's licence from
International Enterprise Singapore, allowing the offering
of commodity based CFDs in Singapore.
The award of these new licences, alongside the
existing UK, Cyprus, Australian, New Zealand and Israeli
licences, demonstrates the Company’s international
presence, robust trading platform and its continued
focus on best practice regulatory compliance.
For the future, the Company’s strategy is to continue
to seek additional regulatory approvals in jurisdictions
that represent attractive commercial opportunities
and where it can take advantage of its already well
recognised brand.
RISK MANAGEMENT FRAMEWORK
Plus500’s target audience is exclusively individual
customers and the platform is not available to
institutional or corporate traders. Plus500 offers its
customers sophisticated risk management tools to
manage their trading positions, where its customers
cannot be subject to negative balances. As a result,
Plus500 is less vulnerable as it is not dependent upon
13
Plus500 Ltd. 2017 Annual Report a minority of large customers as no single customer
contributed more than 0.4% of total revenue in 2017.
its trading platform and the continued enhancements
being introduced.
During 2017, the Company has improved its 24/7
live chat which is available in ten languages, and its
support has been significantly expanded to facilitate the
increase in New Customers.
We are very pleased that the Company maintained its
lead as the highest rated app in its sector by customers
on both Apple’s AppStore and Google’s Play Store.
All developments are expensed as incurred and we will
continue to work on further developments which are
expected to improve customer sign ups and reduce
churn.
OUTLOOK
We enter 2018 confident we can continue to develop
our business to achieve our strategic goal of Plus500
being the number one global listed CFD provider. We will
continue to invest to maintain our technological lead
through innovation and development and following the
recent grant of licences in South Africa and Singapore,
we will continue to add new licenses across additional
geographies to further diversify our customer base.
We are taking all necessary steps to comply with new
regulatory requirements and believe that our strong
financial position, geographically well diversified
revenue base, advanced trading platform and flexible,
low cost business model, position Plus500 to cope
with any relevant changes and are expected to provide
good shareholder returns despite continuing short term
regulatory uncertainty.
Asaf Elimelech
Chief Executive Officer
19 March 2018
Additionally, the Company’s risk management
framework ensures that risk exposures are strictly
limited resulting in consistent revenue generation with
low volatility. The Company employs a combination
of limits and internal hedging tools to ensure risk is
managed by having a base of a very large number of
small customers; monitoring exposure limits (by client,
instrument and total exposure), with the ability to cap
trades and hedge once limits are reached. Credit risk is
limited by having all customers pre-fund their accounts,
as well as a margin close-out policy, to minimise
unfunded customer losses.
In addition, Plus500 does not offer CFDs in less liquid
instruments, such as small cap stocks, which also
limits its risk exposures.
As a result, Plus500’s market risk framework is highly
effective in ARPU and customers' lifetime value
maximisation, whilst minimising losses. The worst and
best daily revenues in 2017 were a loss of $4.07 million
and profit of $10.48 million respectively. The average
daily revenue in 2017 was $1.17 million.
RESEARCH AND DEVELOPMENT
The Company continues to invest in R&D in order to
maintain its competitive advantage and its ability to
be first to market with new products and platform
enhancements.
As the trading platform has been developed in-house
and is based on proprietary technology that does not
rely on third party software suppliers, we believe this is
a significant competitive advantage and barrier to entry.
This structure contributes to expedited product
development, such as advanced risk management tools
and new financial instruments which were introduced
to our customers during 2017. Further, it provides the
Company with the ability to react quickly to dynamic
market conditions (as evidenced by the Group's
cryptocurrency offerings).
Additionally, the Company is ideally positioned to take
advantage of the increased use of mobile, tablet and
wearables devices for trading given the ease of use of
14
Plus500 Ltd. 2017 Annual Report
15
Plus500 Ltd. 2017 Annual Report OUR STRATEGIC OBJECTIVES
BEING THE NUMBER ONE LISTED
CFD PROVIDER
2017 ACHIEVEMENTS
•
Increased our leading position in CFDs, with
a record industry number of c. 317,000 Active
Customers in 2017
• Record number of c. 247,000 New Customers
(c. 150,600 in Q4 2017)
Increased net profit margins
•
FUTURE GOALS
•
Leverage international presence through marketing
initiatives and continued sponsorship of Atlético
Madrid FC and Plus500 Brumbies
Explore new financial instruments
Further expansion globally with new licences in new
geographic jurisdictions
•
Increasing ARPU and customer lifetime value
• Continue optimisation of marketing channels and
•
•
Number of Active Customers
155,956
317,175
%
3
0
1
+
2016
2017
Number of New Customers
246,946
%
6
3
1
+
104,432
increase the targeted level of ROI
2016
2017
Top CFD providers in UK by number of overall relationships
2014
2015
2016
2017
37%
36%
31%
28%
16%
15%
17%
15%
13%
12%
12%
12%
12%
9%
9%
10%
Plus500
Source: Investment Trends UK Leverage Trading Report, 2017
16
IGCity IndexCMC MarketsPlus500 Ltd. 2017 Annual Report
CONTINUE TO PROVIDE HIGH QUALITY
CUSTOMER SERVICE
INNOVATIVE AND LEADING
TRADING PLATFORM
2017 ACHIEVEMENTS
•
Plus500 continues to lead the industry in mobile
platform client satisfaction and maintains its lead
position as being the highest ranked app in the
sector by customers in both Apple’s AppStore and
Android’s Google Play store
Plus500 has invested resources to develop and
enhance its customer service initiatives, including
by introducing 24/7 live chat which is available in
ten languages and has reduced response times
resulting in an increased customer satisfaction
Significantly reduced customer churn in the
latter part of 2017 due to Q4 recruitment of new
customers
•
•
FUTURE GOALS
• Optimise and support customers through the
development of additional support tools
• Continue to provide excellent client service that will
be available 24/7 and maintain a loyal customer
base
• Continue the reduction of customer churn
EXPAND AND STRENGTHEN OUR
GLOBAL REACH
2017 ACHIEVEMENTS
•
Plus500 obtained new licences in South Africa for
its Australian subsidiary and for its South African
subsidiary, as well as two licences in Singapore
FUTURE GOALS
•
Increase customer base through the addition of
new licenses in new geographies
• Continue to diversify already geographically well
spread revenues
2017 ACHIEVEMENTS
•
Launch of new Plus500 website designed to be
more user-friendly and easy to use, with improved
user interface and user experience
Launching new financial instruments
•
• Maintaining industry leadership in technology
FUTURE GOALS
• Continue to launch new financial instruments
• Maintaining industry leadership in technology
GROWING THE CUSTOMER BASE
2017 ACHIEVEMENTS
•
Plus500 was once again the top industry performer
in New Customer sign ups
The Active Customer base increased to 317,175
•
• Attracted about 247,000 New Customers
FUTURE GOALS
•
Enhance the brand in innovative, cost effective
ways to increase awareness and attract new high
value customers
• Continue the focus on attracting the right kind of
customer: experienced traders with high lifetime
value
CONTINUING TO TRADE PROFITABLY
2017 ACHIEVEMENTS
• Continued to invest in efficient marketing activity
for additional growth and attracted both a high level
of New and Active Customers at a much lower cost
• Another year of being profitable in every month
FUTURE GOALS
• Mitigate the impact of regulatory change on
revenues and profitability
Seek new geographical sources of revenue
•
• Continue to provide good shareholder returns
17
Plus500 Ltd. 2017 Annual Report
TECHNOLOGY EDGE
The growing importance of mobile technology within
the CFD trading industry and the Group's leadership in
this area continued to gather pace in 2017.
Plus500 is an industry leader in mobile client
satisfaction, with over 75% of 2017 revenues and
signups originated from mobile platforms for both
smartphones and tablets reflecting speed of innovation
compared to competitors. The Plus500 mobile app has
consistently maintained its lead as the highest ranked
app in the sector with an average rating of 4.2 out of
5 in both Apple’s AppStore and Android’s Google Play
store.
Number of Signups by Device
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
1
Q
1
1
1
Q
2
1
1
Q
3
1
1
Q
4
2
1
Q
1
2
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2
2
1
Q
3
2
1
Q
4
3
1
Q
1
3
1
Q
2
3
1
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1
Q
4
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1
Q
1
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1
Q
2
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1
Q
3
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1
Q
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1
Q
1
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Q
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1
Q
4
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1
Q
1
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1
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1
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1
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1
Q
1
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1
Q
2
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1
Q
3
7
1
Q
4
Windows
IPad
Web
Android
IPhone
AndroidTablet
WindowsApp
WindowsPhone
AppleWatch
18
Plus500 Ltd. 2017 Annual Report Revenues by Device
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
1
Q
1
1
1
Q
2
1
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3
1
1
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2
1
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4
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4
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4
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1
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1
Q
3
7
1
Q
4
6
1
Q
3
Windows
IPad
Web
Android
IPhone
AndroidTablet
WindowsApp
WindowsPhone
AppleWatch
19
Plus500 Ltd. 2017 Annual Report
FINANCIAL REVIEW
INTRODUCTION
I am delighted to report a strong year with record
results in all financial KPIs. Revenues and EBITDA have
increased by 33% and 72% respectively. EBITDA Margin
increased by 29% thanks to the continued optimisation
of our marketing spend which contributed to a record
low Average User Acquisition Cost.
Total Dividend per Share increased by 91%. Total capital
returns to shareholders amount to 100% of the 2017
net profit, reflecting a 96% increase compared to 2016.
In 2017, as in 2016 and 2015, overall there were no net
revenues from client losses and Plus500 earned the
vast majority (89%) of its revenues from trading spreads
and overnight charges (11%). This reflects the efficiency
and robustness of our risk management systems and
controls as we do not rely on client losses to generate
our revenues.
We continue to maintain a very healthy and efficient
business model. The overall variable costs (“Advertising
and marketing costs” and “Processing costs”)
represented 75% of the Company's total expenses in
2017, reflecting a lean cost structure.
Further to the grant of new regulatory licences in
South Africa and Singapore during the last year, we
20
" We operate a very efficient financial
model – highly automated with low costs,
which enables us to achieve some of the
highest EBITDA margins in the industry.
Elad Even-Chen
Chief Financial Officer
continue to seek to add more licences to enable our
global expansion and further diversify our geographical
revenue split.
The Company continued to maintain a healthy balance
sheet with financial performance ahead of market
expectations.
REVENUE
2017 was a record year of revenues for Plus500.
Revenues totalled $437.2 million (FY 2016: $327.9
million), an increase of 33%. The results benefited
from the scalability of the Company’s business model
with the combination of revenue growth and further
improvements in the operational cost structure
delivering excellent performance.
EBITDA
EBITDA in 2017 was $259.2 million (FY 2016: $151.0
million), an increase of 72%, with EBITDA margins
increasing from 46% in 2016 to 59.3% in 2017. Net
profit for 2017 increased 70% to $199.7 million (FY
2016: $117.2 million). Earnings per share were $1.75
(FY 2016: $1.02).
Plus500 Ltd. 2017 Annual Report SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
SG&A expenses increased by only 1% to $178.7 million
(FY 2016: $177.4 million), despite the 136% increase
in the volume of New Customers with their associated
related processing costs. Revenue-driven costs
comprise mainly of advertising and marketing costs.
PRESENTATION OF CURRENCIES
The consolidated financial statements are presented
in US dollars, which is the Company’s functional and
presentation currency. Foreign currency transactions
and balances in currencies different from the US dollar
are translated into the US dollar using the exchange
rates prevailing on the dates of the transactions or at
the statement of financial position dates.
In 2017, the Company’s net financial expenses
amounted to $5.1 million (FY 2016: financial income,
net $1.5 million), the majority arising from foreign
exchange and translation differences. This represents
an efficient financial performance in light of the
significant foreign exchange volatility which occurred in
2017. A significant proportion of the Company’s cash is
held in US dollars in order to provide a natural hedge to
reduce the impact of currency movements on financial
expenses.
BALANCE SHEET
Plus500’s total assets in FY 2017 were $271.6 million,
an increase of 76% from $154.7 million in FY 2016;
cash balances increased to $241.8 million (FY 2016:
$136.5 million) as a result of the Company's exceptional
dividend distribution (amounting to the payment of
$102.2 million in 2017 compared to $123.3 million in
2016); and equity was $225.9 million (FY 2016: $136.0
million), representing approximately 83.2% of the total
shareholders’ equity and liabilities on the statement of
financial position.
One of the strengths of Plus500’s business model is its
ability to convert net earnings into cash flow.
Deposits are collected in advance from customers and
these deposits and the outcome of the customers’
trading activity is immediately reflected in their
regulated segregated accounts, which are not part
of the cash balances of the Company. Earnings from
these customer trades are recognised in cash on
the Company’s statement of financial position as
customers’ trading activity occurs and amounts are
REVENUE
437.2M
327.9M
EBITDA
259.2M
151.0M
NET PROFIT
199.7M
117.2M
TOTAL DIVIDEND
PER SHARE
1.6867
0.8852
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
21
Plus500 Ltd. 2017 Annual Report In addition to the above, the Board has declared a
special dividend of $0.6350 per share (special dividend
2016: $0.2729 per share) amounting to a payout of
$72.3 million (FY 2016: $31.4 million). The ex-dividend,
record and payment dates of this special dividend will
be as for the final dividend noted above.
The resulting total distribution to shareholders for the
full year will therefore be $1.6867 per share (FY 2016:
$0.8852 per share) amounting to a payout of $192.1
million (FY 2016: $101.7 million). In addition, the
Company used $7.5 million in 2017 for share buybacks.
The dividends together with the share buybacks
amount to 100% of the 2017 net profit.
Total distributions to shareholders, including those
declared in February 2018, in the five-year period since
flotation will be $530.9 million, which exceeds the
market capitalisation at flotation of $200 million.
Elad Even-Chen
Chief Financial Officer
19 March 2018
transferred from or to the Company’s accounts. In
addition, the Company requires relatively low levels of
capital expenditure. The combination of these features
means that a high proportion of net income is rapidly
converted into cash. In 2017 the Company generated
$278.7 million of cash from operations (FY 2016:
$153.3 million) resulting in cash and cash equivalent
balances of $241.8 million at 31 December 2017 (FY
2016: $136.5 million).
In light of this strong cash generation, the Board
will maintain the flexibility to pay special dividends
and undertake share buybacks when the Company
generates surplus cash and the Board feels it
appropriate to make such payments.
Client funds are maintained in segregated accounts
with tier one banks and are subject to annual audit and
certification in line with best practice; these amounted
to $157.6 million (FY 2016: $62.4 million) and this
growth reflected the increased number of customers.
DIVIDENDS AND SHARE BUYBACK
Given the strong financial performance, the Board has
considered the Group’s dividend policy, and in particular
the optimal balance between allocating surplus funds to
the payment of ordinary and special dividends or share
buybacks. The Board will consider whether to undertake
share buybacks in the future and has the power to
implement them at short notice.
The Board has concluded that it is in shareholders’ best
interests to distribute 100% of 2017's net profits ($199.6
million) and therefore it declared a final dividend in
respect of 2017 together with an additional distribution
by way of a special dividend.
As announced in February 2018, the Board was
pleased to declare a final dividend for the year ended
31 December 2017 of $0.8129 per share (final dividend
2016: $0.3799 per share), with an ex-dividend date of
22 February 2018, a record date of 23 February 2018
and a payment date of 23 July 2018. This makes a
total dividend for the year of $1.0517 per share (total
dividend for 2016: $0.6123 per share). This equates
to a total dividend pay-out of $119.8 million or 60% of
net profit for the year, in line with the Company’s stated
policy.
22
Plus500 Ltd. 2017 Annual Report
The table below shows the consolidated audited results of the Company for the two financial years ended
31 December 2017:
2017 ($’000)
2016 ($’000)
Revenue
EBITDA
Profit before Tax
Net Assets
437,238
259,198
253,358
225,927
327,927
150,997
151,982
136,000
The table below shows the consolidated audited cash flows of the Company for the two financial years ended
31 December 2017:
2017($’000)
2016 ($’000)
Net cash provided by operating activities
Net cash provided by (used in) investing activities
211,978
(1,024)
108,907
(2,205)
Net cash used in financing activities
(109,748)
(123,264)
Significant Investment in Marketing
Focus remains online but Plus500 will continue to explore offline opportunities
13*
9
103
9*
6
89
13*
27
77
1
4
56
1
3
32
2013
2014
2015
2016
2017
Online
Affiliates
Offline
Total ($m)
% Direct Online
* Majority is Atlético de Madrid FC sponsorship deal
23
Advertising Spend ($m)3689%6192%10486%12582%11766%Plus500 Ltd. 2017 Annual Report STRONG PRODUCT PLATFORM
MARKET LEADING TECHNOLOGY
Proprietary technology, developed in-house: A key differentiator within the market practice
CFD FINANCIAL INSTRUMENTS
Over 2,200 CFD financial instruments
PLATFORM AND DEVICES
Supporting 32 languages in
more than 50 countrvies
STOCKS
OPTIONS
COMMODITIES
FOREX
CRYPTO
CURRENCIES
ETFS
INDICES
iOS DEVICES
ANDROID DEVICES
WINDOWS PHONE
WEBTRADER
DESKTOP TRADER
WINDOWS 10
24
"Marketing Machine" efficient acquisition of new customersAffiliateProgrammeHedgingand RiskBack OfficePlus500 Ltd. 2017 Annual Report TRADING PLATFORM
All customers are protected
from negative balance
INDIVIDUAL
CUSTOMERS ONLY
25
User Interfaceconsistent experience across all platformsPayment Interfacelocalised payment methodsFraud Managementlow chargeback ratioSystem Architecturerapid product developmentPlus500 Ltd. 2017 Annual Report SPONSORSHIPS
In January 2015 Plus500 announced a business
partnership via a sponsorship agreement with the
Spanish football club, Atlético de Madrid FC, SAD.
In June 2015 the Company announced that it had
become the main sponsor for the 2015/16 and
2016/17 seasons and in January 2017 the partnership
was renewed for 2017/18 season. In November
2017 Plus500 extended the sponsorship agreement
entitling it to advertise and promote itself as the main
sponsor of the club for the 2018/2019, 2019/2020 and
2020/2021 seasons.
Atlético de Madrid FC is one of the most successful
clubs in Europe and is currently ranked second in the
UEFA rankings for club competitions. Atlético de Madrid
FC plays in La Liga, one of the most popular leagues
in the world, which is the top professional association
football division of the Spanish football league system
26
and the club also regularly participates in European
tournaments such as the UEFA Champions League, the
most prestigious club competition in Europe.
Atlético Madrid has won ten La Liga titles. The club has
also won the Copa del Rey on ten occasions along with
other Spanish cup competitions. It is also one of the
most successful clubs in Europe having won the UEFA
Super Cup in 2010 and 2012, and being runner up in the
2013/14 and 2015/16 UEFA Champions League.
This partnership with Atlético Madrid, one of the most
successful clubs in Europe that plays in one of the
most popular leagues in the world, is helping Plus500 to
further its strategy of increasing brand recognition and
expanding its customer base globally.
27
SPONSORSHIPS
In December 2016 Plus500 announced a business
partnership via a sponsorship agreement with the
Australian professional rugby union team, the Brumbies.
In November 2017, Plus500 announced it will continue
to be the Official Sponsor of the Brumbies for the 2018-
2020 seasons.
The Brumbies is an Australian professional rugby union
team based in Canberra that competes in the Super
Rugby competition and is a member of the Australian
Rugby Union.
This sponsorship complements the Company's new
licences in South Africa, which is one of the countries
participating in the Super Rugby competition, and its
existing licences in Australia and New Zealand.
28
Super Rugby is the pre-eminent professional men's
rugby union competition in the Southern Hemisphere
and Japan featuring teams from Australia, South Africa,
New Zealand, Argentina and Japan. The Brumbies are
the current champion of the Australian conference of
Super Rugby and are also one of the most successful
of the Australian teams, having been the Super Rugby
champions in 2001 and 2004.
Together both sponsorships have been highly
successful increasing brand recognition with the
Company’s global customer base and target markets.
29
Plus500 Limited
DIRECTORS AND GOVERNANCE
30
Plus500 Ltd. 2017 Annual Report 31
Plus500 Ltd. 2017 Annual Report BOARD OF DIRECTORS
PENNY JUDD,
CHAIRMAN AND NON-EXECUTIVE
DIRECTOR, 54
Ms. Judd is a non-executive Director, chairman of the
Company and chairman of the Regulatory and Risk
Committee. She is a chartered accountant with over
30 years of experience in Compliance, Regulation,
Corporate Finance and Audit.
Ms. Judd was Managing Director and EMEA Head of
Compliance at Nomura International Plc, a position she
held for three years until June 2016. Prior to this Ms.
Judd worked at UBS Investment Bank for nine years
also as Managing Director, EMEA Head of Compliance.
Ms. Judd began her professional career at KPMG where
she qualified as a chartered accountant. She left KPMG
to join the UK Listing Authority, where she managed the
Equity Markets Division responsible for admission of
companies to the Official List and AIM and regulation
of listed companies. In 2000, Ms. Judd joined the
Corporate Finance team at Cazenove & Co focusing
on bringing companies to the main market as well as
advising on M&A and capital raisings.
Ms. Judd is currently a non-executive director of TruFin
plc and Alpha Financial Markets Consulting plc.
CHARLES FAIRBAIRN,
SENIOR NON-EXECUTIVE DIRECTOR AND
EXTERNAL DIRECTOR, 56
Charles Fairbairn is a non-executive Director, the
senior independent director and chairman of the Audit
Committee. Mr. Fairbairn has held similar positions
for a number of AIM companies over the past 18
years including Research Now Ltd, the online research
company of which he was a founder investor, StatPro
Group plc, a provider of analytics for asset managers,
and Brightview plc, an internet service provider.
Mr. Fairbairn graduated from Durham University with a
BA (Hons) in Economics in 1983 and then qualified as
a Chartered Accountant with Deloitte Haskins & Sells in
London in 1986. Having spent seven years at Deloitte
Haskins & Sells, he joined Pearson Plc in 1990 as group
accountant, group chief accountant and latterly finance
director of Pearson New Entertainment, a start- up
division. Over the following 19 years, since leaving
Pearson New Entertainment in 1998, he has held a
number of positions as finance director, executive and
non-executive director of a portfolio of companies,
helping to develop and scale growth companies from
start-ups into global companies. Mr. Fairbairn is an
active investor in growth companies and reviews new
business and turnaround opportunities, exposing him
to a multitude of sectors and business models. He also
holds an Investment Management Certificate.
32
Plus500 Ltd. 2017 Annual Report
STEVE BALDWIN,
NON-EXECUTIVE DIRECTOR, 49
Steve Baldwin is a non-executive Director. Mr. Baldwin
has an extensive corporate finance background and
most recently held the position of Head of European
Equity Capital Markets and Corporate Broking at
Macquarie Capital until February 2015 when he decided
to pursue a non-executive career. Prior to this Mr.
Baldwin was a Director at JPMorgan Cazenove for ten
years and was a Vice President of Corporate Finance
at UBS from 1995 to 1998. He qualified as a Chartered
Accountant at Coopers & Lybrand. Mr. Baldwin was
appointed to the Board in June 2017.
Mr. Baldwin is currently a non-executive director of
Elegant Hotels Group plc and TruFin plc.
DANIEL KING,
NON-EXECUTIVE DIRECTOR AND EXTERNAL
DIRECTOR, 52
Daniel King is a non-executive Director and chairman
of the Remuneration Committee and Nomination
Committee. Mr. King has over 19 years’ experience in
e-commerce technologies, data and analytics, digital
and online media and has extensive knowledge in
developing and scaling high-growth companies.
Mr. King is currently the President & COO for Profitero,
a SaaS provider of online insights and e-commerce
intelligence for retailers and brands. Previously Mr.
King worked for UK Trade & Investment as Head
of High Growth & Emerging Markets, working with
companies and individual investors looking to set up
their businesses or investment in the UK. Mr King was
previously managing partner of Blue Leaf Capital, a
private boutique venture capital and advisory services
company based in London. Prior to this Mr. King
held Managing Director roles with Compete, a WPP
company; MySupermarket.co.uk; and Experian Hitwise,
overseeing the company's EMEA operations and was a
key member of staff that led to the eventual acquisition
of Hitwise by Experian in June 2007.
Mr. King is also a non-executive Director of several
public and private companies and advises companies
on their business model, growth strategies, and
international expansion plans.
33
Plus500 Ltd. 2017 Annual Report GAL HABER,
MANAGING DIRECTOR & DIRECTOR, 43
Gal Haber has nearly 19 years’ experience in software
programming and business development. As one of the
founders of Plus500, he currently holds the position of
Managing Director of the Company, having previously
held the position of Chief Executive Officer. He led the
design of the user-friendly trading platform, which
represents one of the key competitive advantages for
the business.
ASAF ELIMELECH,
CHIEF EXECUTIVE OFFICER & DIRECTOR, 37
Asaf Elimelech is the Chief Executive Officer of
the Company. He previously served as the CEO of
Plus500AU Pty Ltd. and has worked for the Plus500
Group since 2012. In his previous role as the Company’s
Chief Subsidiaries Officer, he was responsible for
managing the Company’s subsidiaries, working with the
senior management team to ensure that the Group, via
its subsidiaries, was meeting its strategic goals.
Prior to founding Plus500, Mr. Haber served as Chief
Operating Officer of InterLogic Ltd, a ‘skilled games’
programme provider for the internet, digital television
and mobile devices, which he co-founded in 2004.
Previously, Mr. Haber worked for Top Image Systems
Ltd, the enterprise content management specialist.
Mr. Haber holds a B.Sc. in Computer Science from the
Technion, Israel.
Prior to joining Plus500, Mr. Elimelech was a supervisor
at PwC Israel from 2008 to 2012, specialising in biotech
and commercial audit, as well as providing tax services
to clients. As part of his role he managed several audit
teams and was responsible for the preparation of
financial reports for private and international public
companies. Mr. Elimelech holds a B.A. in Accounting
and Economics from Haifa University and is a certified
accountant in Israel.
34
Plus500 Ltd. 2017 Annual Report ELAD EVEN-CHEN,
CHIEF FINANCIAL OFFICER, VP BUSINESS
DEVELOPMENT & DIRECTOR, 32
Elad Even-Chen is the Group Chief Financial Officer, VP
Business Development and Head of IR. Mr. Even- Chen’s
responsibilities cover a broad range of finance, business
and strategic functions including managing the Group
finance departments, the global legal and corporate
aspects alongside Plus500’s strategic business
development projects and their financial angles. Mr.
Even-Chen joined the Group in 2011.
Mr. Even-Chen is a certified accountant in Israel and,
prior to joining Plus500, he was a senior associate
at KPMG, specialising in commerce and real estate
audit. Mr. Even-Chen holds a B.A. in Accounting and
Economics from Tel-Aviv University, a LL.B Degree from
the College of Management and an MBA (specialising in
Financial Management) from Tel-Aviv University.
35
Plus500 Ltd. 2017 Annual Report CORPORATE GOVERNANCE
BOARD OF DIRECTORS
The Board is responsible to shareholders for effective
direction and control of the Company which is aimed to
provide a long-term success for the Company. In order
to lead the development of the strategy of the Company
and the progress of financial performance, the Board
is provided with timely and comprehensive information
that enables the Board to review and monitor the
performance of the Company and to ensure it is in line
with the Company’s objectives in order to achieve its
strategic goals.
This report describes the framework for corporate
governance and internal control that the directors
have established to enable them to carry out this
responsibility.
As an AIM listed company, the Company is not required
to comply with the provisions of the UK Corporate
Governance Code (the “Code”) and this is not a
statement of compliance as required by the Code.
However, the directors recognise the importance of
sound corporate governance and, accordingly, comply
with the Code, to the extent they believe appropriate for
a company of its nature and size.
The Board also follow, as far as practicable, the
recommendations in the Corporate Governance Code
for Small and Mid-size Quoted Companies published by
the QCA in May 2013 (the “QCA Guidelines”), which have
become a widely recognised benchmark for corporate
governance of small and mid-size quoted companies,
particularly AIM companies. As an Israeli company, the
Company also complies with the corporate governance
provisions of Israel’s Companies Law, 5759-1999 (the
“Companies Law”).
BOARD COMPOSITION
On 19 March 2018 the Board is comprised of three
executive directors, Gal Haber, Asaf Elimelech and Elad
Even-Chen, and four non-executive directors, Penny
Judd (Chairman of the Board), Charles Fairbairn (Senior
Non-Executive Director), Daniel King and Steve Baldwin.
The balance between executive and non-executive
directors do not allow any group to dominate the
Board’s decision making.
36
In accordance with the Companies Law, the Board must
always have at least two external directors who meet
certain statutory requirements of independence (the
“External Directors”). The Company’s External Directors
are currently Charles Fairbairn and Daniel King. The
term of office of an External Director is three years,
which can be extended for two additional three-year
terms. Under the Companies Law, External Directors are
elected by shareholders by a special majority and may
be removed from office only in limited cases.
Any committee of the Board must include at least
one External Director and the Audit Committee and
Remuneration Committee must each include all
of the External Directors (including one External
Director serving as the chair of the Audit Committee
and Remuneration Committee), and a majority of
the members of each of the Audit Committee and
Remuneration Committee must comply with the
director independence requirements prescribed by the
Companies Law.
Collectively, the non-executive directors bring a valuable
range of expertise in assisting the Company to achieve
its strategic aims. The effectiveness of the Board
benefits from the following skills and experience which
is currently on the Board: financial services, finance
and accounting, governance and regulatory, research
and development, technology and CFD and financial
instrument expertise.
OPERATION OF THE BOARD
The Company Secretary, Dana Comber, is responsible
for ensuring that the Company complies with the
statutory and regulatory requirements and maintains
high standards of corporate governance. She supports
and works closely with the Chairman of the Board, the
Chief Executive Officer and the Board committee chairs
in setting agendas for meetings of the Board and its
committees and supports the transfer of timely and
accurate information flow from and to the Board and
the management of the Company. Ms. Comber is a
certified lawyer in Israel.
Plus500 Ltd. 2017 Annual Report
The Board holds its meetings in accordance with its
scheduled calendar. Since the beginning of 2017 the
Board met on 12 occasions. Each Board meeting
is preceded by a clear agenda and any relevant
information is provided to directors in advance of the
meeting. In addition, the Board convene occasionally
for additional updates and conversations on ad-hoc
emerging matters that arise in between the scheduled
Board meetings.
An agreed procedure exists for directors in the
furtherance of their duties to take independent
professional advice. Newly appointed directors are
to be made aware of their responsibilities through
the Company Secretary. The Company provides to
the directors training sessions via internal meetings,
presentations and conversations which are being
conducted by Company advisors, management and
other relevant persons during the year in order to enable
greater awareness and understanding of the Company’s
business and the environment in which it operates.
The Company has established properly constituted
Audit, Remuneration, Nomination, Regulatory and Risk
and Disclosure Committees of the Board with formally
delegated duties and responsibilities.
BOARD EVALUATION
The performance of the Board, the Board committees
and the individual Board members is self-assessed on
an evaluation of Board performance survey conducted
on an annual basis via questionnaire and Board
discussion. Following a Board review of the results
arising from the questionnaire, appropriate actions
are taken in order to address the areas which could be
improved upon to increase Board effectiveness.
CONFLICTS OF INTEREST
The Company has procedures for the disclosure and
review of any conflicts, or potential conflicts, of interest
in compliance with the Companies Law, which the
directors may have.
Under the Companies Law, any transaction of the
Company with a director or any transaction of the
Company in which a director has a personal interest
requires the Board's approval. The transaction must not
be approved if it is not in the Company’s best interest.
If the transaction is an extraordinary transaction (i.e.
a transaction that is not in the ordinary course of
business, that is not on market terms or that is likely
to have a material impact on a company’s profitability,
assets or liabilities), then Audit Committee approval is
required in addition to Board approval.
If the transaction concerns exculpation, indemnification,
insurance or compensation of a director, then the
approvals of the Remuneration Committee, the Board
and the shareholders by way of ordinary resolution are
required (in that order).
A director who has a personal interest in a matter
that is considered at a meeting of the Board, the
Audit Committee or the Remuneration Committee
may not attend that meeting or vote on that matter,
unless a majority of the Board, the Audit Committee
or the Remuneration Committee, as applicable, has
a personal interest in the matter. If a majority of the
Board, the Audit Committee or the Remuneration
Committee, as applicable, has a personal interest in
the transaction, the shareholders’ approval, by way of
ordinary resolution, is also required. The authorisation
of a conflict matter, and the terms of authorisation, may
be reviewed at any time by the Board.
The Board considers that these procedures are
operating effectively. There have been no matters
arising requiring assessment by the Board as a
potential conflict during the year.
RELATIONSHIP WITH SHAREHOLDERS
The Company encourages the participation of both
institutional and private investors. The Chief Executive
Officer, Asaf Elimelech, and Chief Financial Officer, Elad
Even-Chen, meet regularly with institutional investors,
usually in regard to the issuance of half and full year
results. Communication with private individuals is
maintained through the Annual General Meeting and the
Company’s annual and interim reports. The chairmen
of the Company’s Audit, Remuneration, Nomination and
Regulatory and Risk Committees are made available
to answer questions at the Company’s Annual General
Meetings. In addition, further details on the strategy
and performance of the Company can be found at its
website (www.plus500.com), which includes copies of
the Company’s press releases.
Regular updates are provided to the Board on meetings
with shareholders and analysts, and broker’s opinions.
Non-executive directors are available to meet major
37
Plus500 Ltd. 2017 Annual Report
shareholders, if required. Investors are encouraged to
contact the Company’s Investor Relations
at ir@Plus500.com.
INTERNAL CONTROLS
The Board maintains full control and direction over
appropriate strategic, financial, organisational and
compliance issues. The Company’s organisation
structure has clearly defined lines of authority,
responsibility and accountability, which is reviewed
regularly. The annual budget and forecasts are reviewed
by the Board prior to approval being given. This includes
the identification and assessment of the business risks
inherent in the Company and the online financial trading
industry as a whole along with associated financial and
regulatory risks.
The Board has overall responsibility for the Company’s
systems of internal control and for monitoring their
effectiveness. Although no system of internal control
can provide absolute assurance against material
misstatement or loss, the Company’s systems are
designed to provide the directors with reasonable
assurance that issues are identified on a timely basis
and dealt with appropriately. The Company’s key
internal financial control procedures include:
•
•
•
•
•
•
•
a review by the Board of actual results compared
with budget and forecasts;
reviews by the Board of year end forecasts;
the establishment of procedures for acquisitions,
capital expenditure and expenditure incurred in the
ordinary course of business;
the appraisal and approval of proposed acquisitions
by the Board;
the detailed budgeting and monitoring of costs
incurred on the development of new products;
the reporting to, and review by, the Board of
changes in legislation, regulatory requirements and
practices within the sector and accounting and
regulatory and legal developments pertinent to the
Company;
the appointing of experienced and suitably qualified
staff to take responsibility for key business
functions to ensure maintenance of high standards
of performance.
In accordance with Companies Law, the Board must
appoint an internal auditor nominated following the
recommendation of the Audit Committee. The primary
role of the internal auditor is to examine whether a
company’s actions comply with the law and proper
business procedure. The internal auditor may be an
employee of the Company but may not be an interested
party or office holder, or a relative of any interested
party or office holder and may not be a member of
the Company’s independent accounting firm or its
representative. The Company’s internal auditor is
Brightman Almagor Zohar & Co. (Deloitte Israel) a
member firm of Deloitte Touche Tohmatsu Limited.
AUDIT AND AUDITOR INDEPENDENCE
An additional responsibility of the Audit Committee is to
keep under review the scope and cost effectiveness of
the external audit. This includes recommending to the
Board the appointment of the external auditors and for
reviewing the scope of the audit, approving the audit fee
and, on an annual basis, the committee being satisfied
that the auditors are independent.
The external auditors are engaged to express an
opinion on the financial statements. They discuss with
management the reporting of operational results and
the financial condition of the Company, to the extent
necessary to express their audit opinion.
Kesselman & Kesselman, a member firm of
PricewaterhouseCoopers International Limited, are
retained to perform audit and audit-related work on the
Company and its subsidiaries. The Audit Committee
monitors the nature and extent of non- audit work
undertaken by the auditors. It is satisfied that there
are adequate controls in place to ensure auditor
independence and objectivity. The matter is kept under
review and is a standing item on the agenda for the
Audit Committee. Periodically, the Audit Committee
monitors the cost of non-audit work undertaken by
the auditors. The Audit Committee considers that it
is in a position to take action if at any time it believes
that there is a risk of the auditors’ independence being
undermined through the award of this work.
AUDIT COMMITTEE
Responsibilities
The Audit Committee has responsibility for ensuring
that the financial performance of the Company is
properly reported on and reviewed, and its role includes
monitoring the integrity of the financial statements
38
Plus500 Ltd. 2017 Annual Report of the Company (including annual and interim accounts
and results announcements), reviewing internal control
and risk management systems, reviewing any changes
to accounting policies, reviewing and monitoring
the extent of the non-audit services undertaken by
external auditors and advising on the appointment of
external auditors. In addition, under the Companies
Law, the Audit Committee is required to monitor the
effectiveness of the internal control environment of the
Company, including consulting with the internal auditor,
Brightman Almagor Zohar & Co. (Deloitte Israel), and
the independent accountants, to review, classify and
approve related party transactions and extraordinary
transactions, to review taxation and transfer pricing, to
review the internal auditor’s audit plan and to establish
and monitor whistle-blower procedures.
Composition
The UK Corporate Governance Code recommends
that an audit committee should comprise at least
three members who are independent non-executive
directors, and that at least one member should have
recent and relevant financial experience. The Audit
Committee comprises Charles Fairbairn, Steve Baldwin
and Daniel King, and is chaired by Charles Fairbairn. The
committee operates under written terms of reference
and meets at least twice a year with the Company’s
external auditors, and with the executive directors
present by invitation only. The committee meets with
the external auditors without the executive directors
present as it considers appropriate.
Main activities
The committee met on six occasions since the
beginning of 2017. Among others, the committee
reviewed the financial performance and financial
statements of the Company, reviewed an assessment
of the control environment, via internal audit reports,
and progress on implementing both internal and
external audit recommendations, monitored and
reviewed the internal audit function’s effectiveness in
the overall context of the Group’s internal controls and
risk management systems.
NOMINATION COMMITTEE
Responsibilities
The Nomination Committee has responsibility for
reviewing the structure, size and composition (including
the skills, knowledge and experience) of the Board, and
giving full consideration to succession planning. It also
has responsibility for recommending new appointments
to the Board.
Composition
The UK Corporate Governance Code recommends that
a majority of members of the nomination committee
should be independent non-executive directors. The
Nomination Committee in 2017 comprised Daniel
King, Gal Haber and Charles Fairbairn and is chaired by
Daniel King.
Main activities
The committee met on five occasions since the
beginning of 2017 in relation to the appointment
of Steve Baldwin as a non-executive director, the
appointment of Penny Judd as Chairman of the
Board, the re-election of Penny Judd, Gal Haber, Asaf
Elimelech and Elad Even-Chen as directors, for review
of the Company’s succession plan, organisational
structure and senior leadership and for review of Board
composition. In accordance with the Companies Law,
the term of office of Charles Fairbairn and Daniel King,
the Company’s External Directors, continues until July
2019, and therefore they are not standing for re-election
at the 2018 Annual General Meeting.
REGULATORY AND RISK COMMITTEE
Responsibilities
The Regulatory and Risk Committee has responsibility
for providing oversight with respect to current and
potential future risk exposures of the Company and for
overseeing and monitoring the Company’s compliance
with laws, regulations and orders as required. Its
activity includes reviewing relationships with regulatory
authorities such as FCA, ASIC, CySEC, FSB, FMA, ISA,
MAS, IE Singapore and other regulatory authorities,
as appropriate, in jurisdictions where the Company
has a significant presence; reviewing risk assessment
programme and internal controls and risk management.
Composition
The Regulatory and Risk Committee comprises Charles
Fairbairn, Penny Judd, Asaf Elimelech and Elad Even-
Chen, and is chaired by Penny Judd.
Main activities
The committee met on four occasions since the
beginning of 2017 to review the Group’s relationships
with regularity authorities, to review licence applications
submitted during the period, and to review risk
39
Plus500 Ltd. 2017 Annual Report
During these meetings the committee determined
and agreed with the Board about the Company’s
remuneration philosophy and the principles of its
remuneration policy, ensuring that these are in line with
the business strategy, objectives, values and long-term
interests of the Company and comply with all regulatory
requirements.
In addition, in 2017 the committee, together with an
external dedicated consultant, continued to review
the Company’s remuneration practices in relation to
the Board’s risk appetite statements ensuring that
remuneration does not encourage excessive risk-
taking, and approved and recommended changes to
the remuneration of the executive and non-executive
directors.This is determined within the Company's risk
management and internal control framework and takes
account of the Company’s values and the long- term
interests of shareholders, fund investors and other
stakeholders.
Further, the committee reviewed and recommended
to amend the Company’s Remuneration Policy for
Directors and Executives, which was amended and
approved by the Company's shareholders at the
Extraordinary Shareholders Meeting held in January
2018.
assessment programmes and internal controls and risk
management.
DISCLOSURE COMMITTEE
Responsibilities
The Disclosure Committee is responsible for assisting
the Board in fulfilling its responsibilities in respect of the
requirement to make timely and accurate disclosure of
all information that is required to be disclosed to meet
legal and regulatory obligations, including compliance
with MAR.
Composition
The Disclosure Committee comprises Charles Fairbairn,
Asaf Elimelech and Elad Even-Chen and is chaired by
Elad Even-Chen.
Main activities
The committee met on six occasions since the
beginning of 2017 to discuss the content of the
announcements proposed to be released to the Stock
Exchange and approve their content where relevant. .
REMUNERATION COMMITTEE
Responsibilities
The Remuneration Committee has responsibility for
determining, within the agreed terms of reference, the
Company’s policy on the remuneration packages of the
Company’s Chief Executive Officer, the Chairman of
the Board, the executive and non-executive directors,
the Company Secretary and other senior executives, as
detailed in the Remuneration Report on pages 41 to 42
of the Annual Report..
Composition
The UK Corporate Governance Code recommends that
a remuneration committee should comprise at least
three members who are independent non- executive
directors. The Remuneration Committee comprises
Daniel King, Charles Fairbairn and Steve Baldwin and
is chaired by Daniel King and operates under written
terms of reference.
Main activities
The Remuneration Report on page 41 contains a
detailed description of the Company’s remuneration
policy. The committee met on six occasions since the
beginning of 2017.
40
Plus500 Ltd. 2017 Annual Report
REMUNERATION REPORT
and retain Directors of the calibre necessary to maintain
the Company’s position. It aims to provide sufficient
levels of remuneration to do this, but to avoid paying
more than is necessary. The remuneration will also
reflect the Director’s responsibilities.
REMUNERATION COMMITTEE
The remuneration of the Directors in the following table
represents the entire remuneration paid to the Directors
in 2016 and 2017 (the fees paid to executive Directors
during 2016 and 2017 represent the full amount
accrued to them).
DIRECTORS’ REMUNERATION
The Board recognises that Directors’ remuneration
is of legitimate interest to the shareholders. The
Company operates within a competitive environment,
performance depends on the individual contributions
of the Directors and employees and it believes
in rewarding vision and innovation. As an Israeli
company, listed on the AIM market of the London
Stock Exchange, Plus500 is not required to comply
with the requirements of Schedule 8 to the Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008; however, it has included the
Remuneration Report to disclose key aspects of the
Directors’ remuneration.
POLICY ON DIRECTORS’ REMUNERATION
The policy of the Board is to provide executive
remuneration packages designed to attract, motivate
The remuneration of the Directors in 2017 (including directors who resigned from
the Board during 2017) was as follows:
1
2
3
4
5
6
7
8
Alastair Gordoni
Penny Juddii
Charles Fairbairn
Daniel King
Steve Baldwiniii
Gal Haber
Asaf Elimelechiv
Elad Even-Chenv
2017 Fees ($)
2016 Fees ($)
45,042
96,758
85,497
70,071
40,874
347,252
2,772,376
2,503,810
92,813
36,934
72,747
69,016
-
377, 545
524,319
770,113
i. Mr. Gordon resigned from the Board in June 2017
ii. Ms. Judd joined the Board in June 2016, and was appointed as Chairman of the Board in June 2017
iii. Mr. Baldwin joined the Board in June 2017
iv. Mr. Elimelech joined the Board in February 2016
v. Mr. Even-Chen joined the Board in June 2016
41
Plus500 Ltd. 2017 Annual Report The Remuneration Committee is formally required
to meet not less than twice a year and at such other
times as necessary. The Remuneration Committee has
responsibility for determining, within the agreed terms
of reference, the Company’s policy on the remuneration
packages of the Company’s Chief Executive Officer, the
Chairman of the Board, the executive and non-executive
Directors, the Company Secretary and other senior
executives. The Remuneration Committee also has
responsibility for:
•
•
recommending to the Board and the Company's
shareholders a compensation policy for directors
and executives and monitoring its implementation,
which, in accordance with Israeli law, requires
the approval of the Board and the Company’s
shareholders following the approval and
recommendation of the Remuneration Committee
approving and recommending to the Board and
the Company’s shareholders, the total individual
remuneration package of the Chairman of the
Board, each executive and non-executive director
and the Chief Executive Officer (including bonuses,
incentive payments and share options or other
share awards, which, in accordance with Israeli
law, requires the approval of the Board and the
Company’s shareholders following the approval and
recommendation of the Remuneration Committee
•
approving and recommending to the Board the total
individual remuneration package of the Company
Secretary and all other senior executives (including
bonuses, incentive payments and share options
or other share awards), in each case within the
terms of the Company’s policy and in consultation
with the Chairman of the Board and/or the Chief
Executive Officer. No Director or manager may
be involved in any discussions as to their own
remuneration
The Remuneration Committee comprises Daniel King,
Charles Fairbairn and Steve Baldwin and is chaired
by Daniel King and operates under written terms of
reference.
The remuneration of the Company’s five most highly compensated executives in 2017
(including two of its executive directors) was as follows:
2017 Fees ($)
2,772,376
2,503,810
1,201,937
694,501
651,772
1
2
3
4
5
Asaf Elimelech
Elad Even-Chen
David Zruia
Omer Elazari
Sean Murphy
42
Plus500 Ltd. 2017 Annual Report 43
Plus500 Ltd. 2017 Annual Report DIRECTORS’ REPORT
ACTIVITIES
Plus500 has developed and operates an online trading
platform for individual customers to trade CFDs
internationally over more than 2,200 different underlying
global financial instruments comprising equities,
indices, commodities, options, exchange-traded funds
(“ETFs”), cryptocurrencies and foreign exchange.
The Company enables individual customers to trade
CFDs in more than 50 countries and in 32 languages.
The trading platform is accessible from multiple
operating systems (Windows, smartphones (iOS,
Android and Windows Phone), tablets (iOS, Android and
Surface), Apple Watch and web browsers).
The Company currently conducts operations in the
European Economic Area ("EEA"), Gibraltar, Australia,
South Africa, New Zealand, Israel, the Middle East and
elsewhere. The Company has six subsidiaries which
have been granted licences by regulators.
FCA - In June 2010, the Company’s UK subsidiary,
Plus500UK, received authorisation from the Financial
Conduct Authority ("FCA") which regulates its
operations in the United Kingdom.
ASIC - In October 2012, the Company’s Australian
subsidiary, Plus500AU, received the Australian
Securities and Investments Commission ("ASIC")
licence which enables it to conduct a financial services
business in Australia.
CySEC - In October 2014, the Company’s subsidiary in
Cyprus, Plus500CY, received the Cyprus Securities and
Exchange Commission ("CySEC") licence which enables
it to conduct financial services in Cyprus. Plus500CY
also operates in other EEA countries and Gibraltar
through a regulatory passporting mechanism.
FMA - In October 2016, Plus500AU received
authorisation from the Financial Markets Authority
("FMA"), the New Zealand government agency
responsible for financial regulation to operate an online
trading platform for individual customers to trade CFDs
in New Zealand.
44
ISA - In October 2016, the Company’s subsidiary in
Israel, Plus500IL, received from the Israel Securities
Authority ("ISA") a licence to operate an online trading
platform for individual customers in Israel to trade
CFDs.
FSB - In February 2017, the Financial Services Board
("FSB"), the South African authority that oversees the
non-banking financial services industry, has granted
Plus500AU a licence to operate an online trading
platform for individual customers to trade CFDs in
South Africa. In February 2018, the FSB has granted an
additional licence to the Company's subsidiary in South
Africa, Plus500SA.
MAS and IE Singapore - In December 2017, the
Monetary Authority of Singapore ("MAS") granted a
capital markets services license to Plus500SG, which
was subsequently supplemented in February 2018
by a commodity broker's licence from International
Enterprise Singapore ("IE Singapore"), allowing the
offering of commodity based CFDs in Singapore.
BUSINESS REVIEW
For the operating and business review of the Company
during the year please refer to the Chief Executive
Officer’s Review on pages 12 to 14 included within the
Annual Report. For future developments please refer
to the outlook section of the Chief Executive Officer’s
review on page 14.
FINANCIAL
The Company generates its revenues principally
from the dealing spreads on the trading platform.
Additionally, the Company generates revenues
from overnight charges on certain positions held by
customers overnight. In 2017, as in 2016 and 2015, the
Company did not generate net revenues or losses from
market P&L. The Company does not charge customers
any commission on trades.
For financial review of the business during the year
please refer to the Chief Financial Officer’s Review on
pages 20 to 23 included within the Annual Report.
Plus500 Ltd. 2017 Annual Report KEY PERFORMANCE INDICATORS (KPIS)
KPIs, which are set at Group level, as defined below,
have been devised to allow the Board and sharehold-
ers to monitor the “Group” as a whole, as well as the
operating businesses within the Group. The Company
has financial KPIs that it monitors on a regular basis at
Board level and where relevant at divisional manage-
ment meetings as follows:
• Number of Active Customers:
317,175 (2016: 155,956)
• Number of New Customers:
246,946 (2016: 104,432)
• Average Revenue Per User (ARPU):
$1,379 (2016: $2,103)
• Average User Acquisition Cost (AUAC):
$474 (2016: $1,195)
DIVIDEND AND BUYBACK POLICY
The Board has considered the Group’s dividend policy
of 60% payout ratio with payment of special dividends
and flexibility to share buyback as appropriate, and
in particular the optimal balance between allocating
surplus funds to the payment of ordinary and special
dividends or share buybacks. The Board will consider to
undertake buybacks in the future and has the power to
implement them at short notice.
The Board has concluded that it is in shareholders’ best
interests to distribute 100% of 2017 net profits ($199.6
million) and therefore declared a final dividend in
respect of 2017 together with an additional distribution
by way of a special dividend.
The Board has declared in February 2018 a final
dividend out of the Company’s net profits for the year
ended 31 December 2017 of $0.8129 per share (final
dividend 2016: $0.3799 per share), with an ex-dividend
date of 22 February 2018, a record date of 23 February
2018 and a payment date of 23 July 2018. This makes
a total dividend for the year of $1.0517 per share (total
dividend for 2016: $0.6123 per share). This equates
to a total dividend pay-out of $119.8 million or 60% of
net profit for the year, in line with the Company’s stated
policy.
In addition to the above, the Board has declared a
special dividend of $0.6350 per share (special dividend
2016: $0.2729 per share) amounting to a payout of
$72.3 million (FY 2016: $31.4 million). The ex-dividend,
record and payment dates of this special dividend will
be as for the final dividend noted above.
The resulting total distribution to shareholders for the
full year will therefore be $1.6867 per share (FY 2016:
$0.8852 per share) amounting to a payout of $192.1
million (FY 2016: $101.7 million).
Total distributions to shareholders including those
declared in February 2018 in the five-year period since
flotation on July 2013 will be $530.9 million, which
exceeds the market capitalisation at flotation of $200
million.
RESEARCH AND DEVELOPMENT
The Company’s trading platform, which acts as a key
differentiator and competitive advantage relative to its
peers, has been specifically developed to be as intuitive
and user friendly as possible providing customers
with real-time prices, continuous monitoring of open
positions and trading activity, execution facilities and
a multitude of order types. In April 2017 the Company
launched a new website designed to be more user-
friendly and easy to use, with improved user interface
and user experience, in order to create more enhanced
customer service and increase satisfaction whilst
creating greater web-site traffic and trading activity.
Customers are able to trade and access all of their
account information online through a variety of different
channels, which results in increased traffic to the
trading platform.
As a result of Plus500’s self-developed proprietary
technology, the Company does not pay external
licence fees for its core trading platform technology.
This allows the Company to operate without limiting
the amount of time that a customer can use a demo
account or placing high thresholds on the minimum
amount with which a customer can open a real-money
trade. The trading platform also provides, free of charge,
real-time price and data analysis features to customers
and sophisticated risk management tools, which
provides the Company with a significant competitive
advantage.
The development of the trading platform continues
to evolve in order to meet the growing demands of
Plus500's Active Customer base. Plus500 is constantly
updating and introducing new financial instruments.
As a result of initiatives such as introducing 24/7 live
45
Plus500 Ltd. 2017 Annual Report
chat (in ten different languages), which has reduced
response times, customer satisfaction has improved
markedly. Plus500 has placed an increased level of
focus and investment on customer satisfaction and
customer service in order to retain customers whilst
providing an additional strong differentiator in New
Customer acquisition and retention. Some of the
benefits are already being reflected by the satisfaction
rate of the Group's customers which has increased
significantly.
All developments are expensed as incurred and all IP in
the platform belongs to the Company.
THE COMPANY'S SUPPLIER POLICY
Company creditors relate mainly to costs associated
with marketing, financial information and payment
processing services. Due to the nature of these
creditors, the Company does not have a specific
supplier payment policy. Average creditors days for the
year ended 31 December 2017 were 30 days (2016: 30
days).
EMPLOYEES
Plus500 is committed to the creation of a work
environment in which fairness, trust and individual
responsibility are valued. The Company believes
that talented and dedicated employees are our most
valuable asset and that everyone should be given an
equal opportunity to succeed.
The Company is committed to equal opportunity in
employment and to creating, managing and valuing
diversity in its workforce.
The Company has an equal opportunities policy with
respect to hiring, promotion, compensation, training and
assignment of responsibilities, termination, or any other
aspect of the employment relationship on age, gender
orientation, marital status, physical or mental disability.
ENVIRONMENT
Plus500 is continuously striving to increase
sustainability efforts and has developed a thorough
company-wide action plan targeted at conservation of
46
Plus500 Ltd. 2017 Annual Report resources. Its efforts include energy-saving technology
integration, responsible product design, resource
conservation, recycling with responsible end of life
electronics management and green information
technology practices.
SOCIAL
Plus500 is committed to operating responsibly in
all aspects of its business, including enriching the
communities where it operates and creating an
inclusive, safe and healthy workplace. Plus500 knows
that mobile technology is a great way to bring people
together and build communities and that is why at the
core of its Corporate and Social Responsibility (“CSR”)
efforts it uses the same expertise, technology and
partnerships it uses in working with its customers.
Plus500 believes that CSR is both its responsibility and
an essential part of good management. As Plus500
grows its business it remains committed to integrating
CSR initiatives into its business, not only to enrich and
contribute to the lives of the communities in which it
works and lives, but also to create tangible value for its
employees, customers and shareholders.
CAPITAL MANAGEMENT
The Company’s objectives when managing capital
are to safeguard the Company’s ability to continue
as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost
of capital. There were no changes to the Company’s
approach to capital management during the year.
SHARE CAPITAL
At the close of business on 19 March 2018, the
Company had 113,908,231 ordinary shares in issue, and
additional 980,146 ordinary shares are held in treasury
by the Company. The Company does not currently have
any share schemes.
47
Plus500 Ltd. 2017 Annual Report future. Accordingly, the financial statements have been
prepared on a going concern basis.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held in the second
quarter of 2018. The exact date of the meeting and
details of all resolutions to be proposed at the Annual
General Meeting will be included in the Notice of Annual
General Meeting to be circulated by the Company in due
course.
EVENTS AFTER THE REPORTING PERIOD
For significant events after the reporting period please
refer to Note 16 of the financial statements.
DIRECTORS’ STATEMENT AS TO DISCLOSURE
OF INFORMATION TO AUDITORS
Having made enquiries of fellow Directors and of the
Company’s auditors, each Director confirms that to the
best of each Director’s knowledge and belief, there is no
information relevant to the preparation of the auditors’
report of which the Company’s auditors are unaware.
The Directors of the Company have taken all the steps
that they might reasonably be expected to have taken
as directors in order to make themselves aware of
any information needed by the Company’s auditor in
connection with preparing their report and to establish
that the auditors are aware of that information.
AUDITORS
There is no limitation of liability in the terms of
appointment of Kesselman & Kesselman, a member
firm of PricewaterhouseCoopers International Limited,
the External Auditors. The Company’s Auditors for the
next year will be appointed in the 2018 Annual General
Meeting which will be held in the second quarter of
2018.
Approved by the Board and signed on its behalf by
Elad Even-Chen,
Chief Financial Officer
19 March 2018
SUBSTANTIAL SHAREHOLDINGS
As of 9 March 2018, based on information reported to
the Company by shareholders, the Company had the
following shareholders with direct or indirect interest of
3% or more of the issued and outstanding share capital
of the Company:
Significant
Shareholders
% of Ownership
of Shares
1
2
3
4
5
6
7
8
Brighttech Investments
JPMorgan Chase & Co
Sparta24 Ltd
9.99%
7.79%
7.45%
Odey Asset Management
6.29%
Morgan Stanley
5.82%
Old Mutual
4.36%
Investec Group
3.94%
Deutsche Bank
3.11%
PRINCIPAL RISKS AND UNCERTAINTIES
Management and control of risks within the Company
is embedded within day to day operating procedures.
The Company has developed a comprehensive
risk mitigation plan to ensure minimum exposure
and secure solutions. These procedures comprise
a range of measures including corporate policies,
operating rules, systematic reporting, external audits,
self-assessment and continuous monitoring by the
Regulatory & Risk Committee, the Board and the
executive management team.
The Company operates globally in varied markets and
the principal risks and uncertainties have been reviewed
by the Board together with agreed mitigating actions.
The most significant risks and uncertainties and
mitigation actions are outlined in Note 3 on pages 71
to 75 and on pages 49 to 50 included within the Annual
Report.
GOING CONCERN
The Directors, after considering the risks and
uncertainties referenced in the previous section and
after reviewing the Company’s operating budgets,
investment plans and financing arrangements, consider
that the Company has sufficient resources at their
disposal to continue their operations for the foreseeable
48
Plus500 Ltd. 2017 Annual Report
SIGNIFICANT RISK FACTORS AND UNCERTAINTIES
RISKS RELATING TO THE LEGAL AND
REGULATORY FRAMEWORK APPLICABLE
TO THE INDUSTRY IN WHICH THE GROUP
OPERATES
•
The vast majority of the Group’s revenue depends
upon the maintenance of licences from regulators.
• Non-compliance with the regulatory framework
of jurisdictions in which the Group’s offering
is available could adversely affect the Group’s
profitability and may result in the suspension,
revocation or amendment of its licences and/or
other enforcement action.
Increased regulatory scrutiny of the industry in
which the Group operates could adversely affect
the Group’s revenue, business and profitability.
• Changes to the EU regulatory framework and
•
•
current and proposed EU regulations and directives
could restrict the Group’s business, and the
implementation of necessary changes to comply
with them could place a significant demand on the
Group’s resources.
The Group is required to conduct “appropriateness
tests” on customers, and there can be no guarantee
that the Group’s assessments or tests of a
customer’s appropriateness for its product will be
adequate in all or any particular jurisdictions or will
not be subject to regulatory scrutiny or challenge.
• Operating online in different jurisdictions exposes
the Group to a number of risks which may have a
significant adverse effect on the Group’s business
and operations.
The Group may not adequately discharge its
obligations under anti-money laundering, anti-
bribery and corruption and financial sanctions laws
and regulations.
•
• Customer complaints may affect the Group’s
business and operations.
The Group may be held liable for the activities of its
affiliates under the “500Affiliates” programme.
Laws, regulations or rules in the jurisdictions
where the Group operates, or where its offering
is available, could result in customer agreements
being deemed unenforceable as against the
customer.
The Group must comply with data protection
•
•
•
•
•
•
•
and privacy laws and may be targeted by cyber
criminals.
Financial promotions regimes and other regulations
may impact on the Group’s ability to advertise.
The Group is subject to rules regulating how it
holds client money and the inability of the Group to
address future changes to any applicable customer
money regulations could have a material adverse
effect on the Group’s business, prospects, financial
condition and results of operations.
The Group is dependent on banks, credit card
companies, payment processors and financial
institutions for payment processing and cash
holding.
The introduction of a European Financial
Transaction Tax could adversely affect the Group’s
profitability.
• Changes in tax law could adversely affect the
Group’s profitability.
RISKS RELATING TO THE GROUP’S TRADING
ACTIVITIES
•
•
If the Group fails to attract New Customers its
growth may be impaired.
The Group faces risks associated with the
implementation of its business strategy.
The Group faces significant competition.
•
• Reduction in trading volume and market activity
and low market volatility could harm the Group’s
profitability.
Political and economic events within the EEA may
harm the Group’s operations.
•
• Any significant decline in the market for CFDs could
significantly harm the Group’s business.
•
• Any significant decline in the cryptocurrency market
could significantly harm the Group’s business.
The Group’s customer, geographical and product
sector focus could leave the Group exposed to
certain concentration risks.
The Group may suffer losses if its reputation is
harmed.
The Group depends on its senior management
team, and if it is unable to retain its current
personnel and hire qualified additional personnel,
its ability to implement its growth strategy and
•
•
49
Plus500 Ltd. 2017 Annual Report •
•
The Group could be negatively affected by a
significant macroeconomic or unexpected market
event.
The Group’s insurance coverage may be inadequate
to cover its losses in respect of claims made
against the Group.
RISKS RELATING TO THE GROUP’S DOMICILE
AND OPERATIONS IN ISRAEL
•
•
•
•
Security, political and economic instability in the
Middle East and Israel in particular may harm the
Group’s business.
It may be difficult to enforce an English judgment
against the Company or its officers and directors, to
assert English securities claims in Israel or serve
process on certain of the Company’s officers and
directors.
The rights and responsibilities of the Company’s
shareholders are governed by Israeli law and
differ in some respects from the rights and
responsibilities of shareholders under English law.
The Takeover Code does not apply except to the
extent certain share control limits analogous to the
equivalent provisions of the Takeover Code have
been incorporated into the Articles.
•
•
compete in its industry could be harmed.
Financial risk limitation policies, procedures and
practices may not be effective and may leave the
Group exposed to certain risks.
Losses due to fraud and other misconduct by
customers could have a material adverse effect on
the Group’s business.
• A reduction in the availability of credit and debit
cards and alternative payment systems for
customers of the Group’s operations and/or
complaints to credit and debit card providers and
alternative payment system processors could
damage the Group’s business.
The Group is exposed to litigation risk.
•
RISKS RELATING TO THE GROUP’S TRADING
SYSTEMS
•
Systems failures or delays could materially harm
the Group’s business.
•
• Network security breaches could result in the Group
losing customers and being held criminally or civilly
liable.
In order to compete effectively, the Group must
keep up with rapid technological changes and
changes in its customers’ requirements and
preferences.
The Group is partially dependent on third parties,
including infrastructure suppliers, data providers
and data sources, and online marketing service
providers.
The terms on which the Group has contracted with
certain customers, affiliates and suppliers may not
be standard.
•
•
• Any inability of the Group to protect or continue the
current use of its proprietary intellectual property
could adversely affect its business.
RISKS RELATING TO THE GROUP’S
FINANCIAL CONDITION
• A referendum held in the UK on 23 June 2016
resulted in a vote in favour of the UK leaving the EU
which could have a significant impact on the Group,
the value of the Company’s investments and the
value of the Ordinary Shares.
The Group’s financial results may be adversely
affected by currency fluctuations.
•
50
Plus500 Ltd. 2017 Annual Report STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.
The Companies 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 International Financial
Reporting Standards (“IFRS”). 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 the profit or loss of the
Company for that period.
In preparing these financial statements, the Directors
are required to:
•
•
•
Present fairly the financial position, financial
performance and cash flows of the Company
Select suitable accounting policies in accordance
with IAS 8- Accounting policies, changes in
Accounting Estimates and Errors and then apply
them consistently
Present information, including accounting
policies, in a manner that provide relevant, reliable,
consistent and understandable information
• Make judgments and accounting estimates that are
reasonable
•
•
•
State whether applicable IFRS have been followed,
subject to any material departures disclosed and
explained in the financial statements;
Provide additional disclosures when compliance
with the specific requirements in IFRS is insufficient
to enable users to understand the impact of
transactions, other events and conditions on
the Company’s financial position and financial
performance
Prepare the financial statements on the going
concern basis unless it is inappropriate to presume
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 applicable law. They
are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps
in the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for preparing the
Directors’ Report, and the Directors’ Remuneration
Report.
51
Plus500 Ltd. 2017 Annual Report
CORPORATE LAW
MANDATORY BIDS, SQUEEZE OUT AND SELL OUT RULES RELATING TO THE
COMPANY'S ORDINARY SHARES
As the Company is incorporated in Israel, it is subject to
Israeli law and the City Code on Takeovers and Mergers
will not apply to the Company, except to the extent the
Company incorporated in its Articles of Association
provisions analogous to Rules 4, 5, 6 and 8 of the
Takeover Code, as described below.
MERGERS
The Companies Law permits merger transactions,
provided that each party to the transaction obtains
the approval of its board of directors and shareholders
(excluding certain merger transactions which do not
require the approval of the shareholders, as set forth in
the Companies Law).
Pursuant to the Company’s Articles of Association, the
shareholders of the Company are required to approve
the merger by the affirmative vote of a majority of
the outstanding Ordinary Shares of the Company. In
addition, for purposes of the shareholder vote of each
party, the merger will not be deemed approved if a
majority of the shares not held by the other party, or
by any person who holds 25 per cent. or more of the
shares or the right to appoint 25 per cent. or more of
the directors of the other party, has voted against the
merger.
The Companies Law requires the parties to a proposed
merger to file a merger proposal with the Israeli
Registrar of Companies, specifying certain terms of
the transaction. Each merging company’s board of
directors and shareholders must approve the merger.
Shares in one of the merging companies held by the
other merging company or certain of its affiliates are
disenfranchised for purposes of voting on the merger.
A merging company must inform its creditors of the
proposed merger. Any creditor of a party to the merger
may seek a court order blocking the merger, if there is a
reasonable concern that the surviving company will not
be able to satisfy all of the obligations of the parties to
the merger. Moreover, a merger may not be completed
until at least 50 days have passed from the time that
the merger proposal was filed with the Israeli Registrar
of Companies and at least 30 days have passed from
the approval of the shareholders of each of the merging
companies.
In addition, the provisions of the Companies Law that
deal with ‘‘arrangements’’ between a company and
its shareholders may be used to effect squeeze- out
transactions in which the target company becomes
a wholly-owned subsidiary of the acquirer. These
provisions generally require that the merger be
approved by a majority of the participating shareholders
holding at least 75 per cent. of the shares voted on
the matter, as well as 75 per cent. of each class of
creditors. In addition to shareholder approval, court
approval of the transaction is required.
Under the Companies Law, in the event the Company
enters into a merger or an “arrangement” under the
Companies Law (as described above), the provisions
of the Companies Law and the Articles of Association
provisions analogous to Rules 4,5,6 and 8 of the
Takeover Code (as described below) do not apply.
COMPANIES LAW -
SPECIAL TENDER OFFER
The Companies Law provides that an acquisition of
shares of a public Israeli company must be made by
means of a special tender offer if, as a result of the
acquisition, the purchaser could become a holder of 25
per cent. or more of the voting rights in the Company.
This rule does not apply if there is already another
holder of at least 25 per cent. of the voting rights in the
Company.
Similarly, the Companies Law provides that an
acquisition of shares in a public company must be
made by means of a tender offer if, as a result of the
acquisition, the purchaser could become a holder
of more than 45 per cent. of the voting rights in the
company, if there is no other shareholder of the
52
Plus500 Ltd. 2017 Annual Report of the company’s shares or a particular class of
shares; then, the Companies Law provides that the
purchaser automatically acquires ownership of
the remaining shares. However, if the purchaser is
unable to purchase more than 95 per cent. or 98
per cent., as applicable, of the company’s shares or
class of shares, the purchaser may not own more
than 90 per cent. of the shares or class of shares of
the target company.
ARTICLES OF ASSOCIATION – TAKEOVER
PROVISIONS
In addition to the tender offer rules applied by the
Companies Law (as described above), offers are also
subject to the takeover provisions incorporated in the
Company's Articles of Association, which provisions
are generally analogous to Rules 4, 5, 6 and 8 of the
Takeover Code.
company who holds more than 45 per cent. of the
voting rights in the company.
A special tender offer must be extended to all
shareholders of a company but the offeror is not
required to purchase shares representing more than 5
per cent. of the voting power attached to the company’s
outstanding shares, regardless of how many shares are
tendered by shareholders. A special tender offer may be
consummated only if (i) at least 5 per cent. of the voting
power attached to the company’s outstanding shares
will be acquired by the offeror and the number of shares
tendered in the offer exceeds the number of shares
whose holders objected to the offer.
If a special tender offer is accepted, then the purchaser
or any person or entity controlling it or under common
control with the purchaser or such controlling person
or entity may not make a subsequent tender offer for
the purchase of shares of the target company and may
not enter into a merger with the target company for a
period of one year from the date of the offer, unless the
purchaser or such person or entity undertook to effect
such an offer or merger in the initial special tender offer.
Shares that are acquired in violation of this requirement
to make a tender offer will be deemed Dormant Shares
(as defined in the Companies Law) and will have no
rights whatsoever for so long as they are held by the
acquirer.
ISRAEL COMPANIES LAW -
FULL TENDER OFFER
Under the Companies Law, a person may not purchase
shares of a public company if, following the purchase,
the purchaser would hold more than 90 per cent. of
the company’s shares or of any class of shares, unless
the purchaser makes a tender offer to purchase all of
the target company’s shares or all the shares of the
particular class, as applicable. If, as a result of the
tender offer, either:
•
•
the purchaser acquires more than 95 per cent.
of the company’s shares or a particular class of
shares and a majority of the shareholders that did
not have a Personal Interest accepted the offer;
or the appointing of experienced and suitably
qualified staff to take responsibility for key business
functions to ensure maintenance of high standards
of performance.
the purchaser acquires more than 98 per cent.
53
Plus500 Ltd. 2017 Annual Report Plus500 Limited
FINANCIAL STATEMENTS
54
Plus500 Ltd. 2017 Annual Report 2017 FINANCIAL
STATEMENTS CONTENTS
REPORT OF THE AUDITORS
Report of the Auditors
CONSOLIDATED FINANCIAL STATEMENTS IN USD:
Consolidated statements of financial position
Consolidated statements of comprehensive income
Consolidated statements of changes in equity
Consolidated statements of cash flows
Notes to consolidated financial statements
57
58
60
61
62
64
55
56
Plus500 Ltd. 2017 Annual Report REPORT OF THE AUDITORS
In our opinion the consolidated financial statements
referred to above present fairly, in all material
respects, the financial position of the Company and its
subsidiaries as of 31 December 2017 and 2016, and
the statements of comprehensive income, changes in
equity and cash flows for each of the two years in the
period ended 31 December 2017, in accordance with
International Financial Reporting Standards (IFRS).
Kesselman & Kesselman
Certified Public Accountants (lsr.)
A member firm of PricewaterhouseCoopers
International Limited
Tel Aviv, Israel
19 March 2018
TO THE SHAREHOLDERS OF PLUS500 LTD.
We have audited the accompanying consolidated
statements of financial position of Plus500 Ltd.
(hereafter – the Company) as of 31 December 2017
and 2016, and the related consolidated statements
of comprehensive income, statements of changes in
equity and statements of cash flows for each of the
two years in the period ended 31 December 2017.
These financial statements are the responsibility of the
Company's Board of Directors and management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing
standards generally accepted in Israel, including
those prescribed by the Israeli Auditors (Mode of
Performance) Regulations, 1973. 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 a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
made by the Company's Board of Directors and
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel, P.O Box 50005
Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax: +972 -3- 7954556, www.pwc.com/il
57
Plus500 Ltd. 2017 Annual Report CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
Note
2017
2016
As of 31 December
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term bank deposit
Restricted deposits
Accounts receivable
Income tax receivable
NON-CURRENT ASSETS:
Long term restricted deposit
Property, plant and equipment, net
Intangible assets, net
Deferred income taxes
10a
241,854
136,481
8
10b
7
8
4
5
7
228
422
7,696
17,190
37
356
9,690
4,147
267,390
150,711
289
3,367
84
490
4,230
102
3,429
113
353
3,997
TOTAL ASSETS
271,620
154,708
The accompanying notes are an integral part of the financial statements.
58
Plus500 Ltd. 2017 Annual Report
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
Note
2017
2016
(CONTINUED)
As of 31 December
Liabilities and Shareholders’ Equity
CURRENT LIABILITIES:
Trade payables – due to clients
Other accounts payable and accruals:
Service suppliers
Other
Income tax payable
Share-based compensation
EQUITY:
Ordinary shares
Share premium
Treasury shares
Retained earnings
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
10c
10d
7
9
6
4,482
1,588
22,614
12,108
2,318
4,171
45,693
317
22,220
(7,536)
5,827
7,083
1,912
2,298
18,708
317
22,220
-
210,926
113,463
225,927
136,000
271,620
154,708
Asaf Elimelech
Chief Executive Officer
Elad Even-Chen
Group Chief Financial Officer
Penny Judd
Non-Executive Director and
Chairman
Date of approval of the annual financial information by the Company’s Board of Directors:
19 March 2018
The accompanying notes are an integral part of the financial statements.
59
Plus500 Ltd. 2017 Annual Report
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
U.S. dollars in thousands
TRADING INCOME
YEAR ENDED 31 DECEMBER
NOTE
2017
2016
437,238
327,927
SELLING, GENERAL & ADMINISTRATIVE EXPENSES:
Selling and marketing
Administrative and general
11a
11b
156,001
157,277
22,733
20,132
INCOME FROM OPERATIONS
258,504
150,518
Financial income
Financial expenses
FINANCING INCOME (EXPENSES) – NET
3,242
8,388
(5,146)
3,624
2,160
1,464
INCOME BEFORE TAXES ON INCOME
253,358
151,982
TAXES ON INCOME
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME
7
53,683
34,740
199,675
117,242
-
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
199,675
117,242
U.S. dollars
EARNINGS PER SHARE (BASIC AND DILUTED)
15
1.75
1.02
The accompanying notes are an integral part of the financial statements.
60
Plus500 Ltd. 2017 Annual Report
CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
U.S. dollars in thousands
ORDINARY
SHARES
SHARE
PREMIUM
TREASURY
SHARES
RETAINED
EARNINGS
TOTAL
BALANCE AT 1 JANUARY 2016
317
22,220
Profit and comprehensive income for the year
TRANSACTION WITH SHAREHOLDERS-
Dividend
-
-
-
-
BALANCE AT 31 DECEMBER 2016
317
22,220
Profit and comprehensive income for the year
TRANSACTION WITH SHAREHOLDERS-
Dividend
Acquisition of treasury shares
-
-
-
-
-
-
-
-
-
-
-
-
95,117
117,654
117,242
117,242
(98,896)
(98,896)
113,463
136,000
199,675
199,675
(102,212)
(102,212)
(7,536)
-
(7,536)
BALANCE AT 31 DECEMBER 2017
317
22,220
(7,536)
210,926
225,927
The accompanying notes are an integral part of the financial statements.
61
Plus500 Ltd. 2017 Annual Report
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations (see Appendix A)
Income tax paid – net
Interest (paid) received, net
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of deposits
Purchase of restricted deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES-
Dividend paid to equity holders of the Company
Acquisition of treasury shares
Net cash used in financing activities
YEAR ENDED 31 DECEMBER
2017
2016
278,683
153,294
(66,514)
(44,548)
(191)
161
211,978
108,907
(218)
(203)
(593)
(10)
-
(253)
(1,905)
(47)
(1,024)
(2,205)
(102,212)
(123,264)
(7,536)
-
(109,748)
(123,264)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ACTIVITIES-
101,206
(16,562)
Balance of cash and cash equivalents at beginning of year
136,481
156,497
Gains (Losses) from exchange differences on cash and cash equivalents
4,167
(3,454)
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR
241,854
136,481
The accompanying notes are an integral part of the financial statements.
62
Plus500 Ltd. 2017 Annual Report CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
U.S. dollars in thousands
APPENDICES CONSOLIDATED STATEMENT
OF CASH FLOWS
APPENDIX A:
CASH GENERATED FROM OPERATIONS -
YEAR ENDED 31 DECEMBER
2017
2016
Net income for the period
199,675
117,242
ADJUSTMENTS REQUIRED TO REFLECT THE CASH FLOWS
FROM OPERATING ACTIVITIES:
Depreciation and amortization
Taxes on income
Interest and foreign exchange (gains) losses on operating activities
OPERATING CHANGES IN WORKING CAPITAL:
Decrease in accounts receivable
Increase in trade payables-due to clients
Increase (decrease) in other accounts payable:
Service suppliers
Other
Liability for share-based compensation
Settlement of share-based compensation
CASH FLOWS FROM OPERATING ACTIVITIES
The accompanying notes are an integral part of the financial statements.
694
53,683
(3,942)
50,435
1,994
2,894
16,787
2,326
5,472
(900)
479
34,740
2,942
38,161
71
69
(7,564)
3,603
2,544
(832)
28,573
(2,109)
278,683
153,294
63
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Plus500BOS EOOD (hereafter - “BOS subsidiary",
"Plus500BOS“) is a subsidiary of the Company located
in Sofia, Bulgaria. The subsidiary provides operational
services to the Company.
Plus500SG Pte Ltd (hereafter - "SG Subsidiary",
"Plus500SG") is a subsidiary of the Company located in
Singapore.
In December 2017, Plus500SG obtained regulatory
authorisation from the Monetary Authority of Singapore
("MAS") ") and International Enterprise Singapore
("IE Singapore") to provide certain financial services in
Singapore. The SG subsidiary was granted a Commodity
Broker's License in February 2018.
Plus500SA (hereafter - “SA subsidiary”, “Plus500SA”) is a
new subsidiary of the Company located in South Africa.
The SA subsidiary obtained regulatory authorisation from
the Financial Services Board of South Africa in January
2018 to provide certain financial services in South Africa.
The Group is engaged in one operating segment - CFD
trading.
The address of the Company's principal offices is
Building 25, MATAM, Haifa 31905, Israel.
NOTE 1 - GENERAL INFORMATION
Information on activities of plus500 Ltd and its
subsidiaries (hereafter- the Group):
Plus500 Ltd. (hereafter - the Company) was established
in 2008 in Israel as a private limited company with the
name Investsoft Ltd. On 18 June 2012 the Company
changed its name to Plus500 Ltd. The Company
has developed a trading platform for private clients,
enabling trading on contracts for differences (hereafter
- CFD) on shares, indices, commodities, ETFs, options,
cryptocurrencies and foreign exchange.
On 24 July 2013, the Company's shares were listed for
trading on the AIM market of the London Stock Exchange
in the Company's initial public offering ("IPO").
The company established the following subsidiaries:
Plus500UK Limited (hereafter - "UK subsidiary",
"Plus500UK") is a subsidiary of the Company located in
London in the UK, and is regulated by Financial Conduct
Authority ("FCA") to offer CFDs.
Plus500AU Pty Ltd (hereafter - "AU subsidiary",
"Plus500AU") is a subsidiary of the Company with its
main office located in Sydney, Australia. Plus500AU has
an Australian Securities and Investments Commission
("ASIC") license, a New Zealand Financial Market
Authority (“FMA”) license and regulatory authorisation
from the Financial Services Board of South Africa ("FSB")
to provide certain financial services.
Plus500CY Ltd (hereafter - "CY subsidiary", "Plus500CY")
is a subsidiary of the Company located in Cyprus.
Plus500CY has a Cyprus Securities and Exchange
Commission ("CYSEC") license.
Plus500IL Ltd (hereafter - "IL subsidiary", "Plus500IL")
is a subsidiary of the Company located in Israel with its
main offices in Tel Aviv. The IL subsidiary is subject to
regulation by the Israeli Securities Authority (“ISA”).
64
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. Basis of Preparation
The Group's financial information as of 31 December
2017 and 2016 and for each of the two years for the
period ended on 31 December 2017 are in compliance
with International Financial Reporting Standards that
consist of standards and interpretations issued by the
International Accounting Standard Board (hereafter –
IFRS).
The significant accounting policies described below
have been applied consistently in relation to all the
reporting periods, unless otherwise stated.
The financial information has been prepared under the
historical cost convention, subject to adjustments in
respect of revaluation of financial assets at fair value
through profit or loss presented at fair value.
b. Principles of consolidation:
The Company controls the subsidiaries since it is
exposed to, or has rights to, variable returns from its
involvement with the entities and has the ability to affect
those returns through its power over them.
1. The consolidated financial statements include the
accounts of the Company and its subsidiaries.
2.
Intercompany balances and transactions between
the Group's entities have been eliminated.
3. Accounting policies of the subsidiaries have been
changed where necessary to ensure consistency
with the policies adopted by the Group.
c. Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the
operating segments.
As stated in note 1 above, the Group operates in one
operating segment: CFD trading.
d. Foreign currency translation:
1. Functional and Presentation Currency
Items included in the financial information of each
of the Group’s entities are measured using the
currency of the primary economic environment
in which that entity operates (the "functional
currency"). The consolidated financial statements
are presented in U.S. dollars ("USD"), which is the
Group's functional and presentation currency.
2. Transactions and balances
Foreign currency transactions in currencies
different from the functional currency (hereafter –
"foreign currency") are translated into the functional
currency using the exchange rates prevailing at
the dates of the transactions or valuation where
items are re-measured.Gains and losses arising
from changes in exchange rates are presented in
the statement of comprehensive income among
"financial income (expenses)".
e. Property, plant and equipment
The cost of a property, plant and equipment item is
recognized as an assets only if: (a) it is probable that
the future economic benefits associated with the item
will flow to the Group and (b) the cost of the item can
be measured reliably.
Property, plant and equipment are stated at historical
cost less accumulated depreciation. Historical cost
includes expenditure that is directly attributable to the
acquisition of the items and only when the two criteria
mentioned above for recognition as assets are met.
Depreciation is calculated using the straight-line
method to allocate the cost of property, plant and
equipment less their residual values over their
estimated useful lives, as follows:
65
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED):
Percentage of
annual depreciation
Computers and office
equipment
Leasehold improvements
6-33
10
Leasehold improvements are amortized by the straight-
line method over the terms of the lease (ten years)
which is shorter than the asset's useful life.
The asset’s residual values, the depreciation method
and useful lives are reviewed, and adjusted if
appropriate, at least once a year.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
f. Intangible Assets - computer software
Acquired computer software licenses are capitalized
on the basis of the costs incurred to acquire and bring
to use the specific software licenses. These costs are
amortized over their estimated useful lives (3-5 years)
using the straight line method.
Costs associated with maintaining computer software
programs are recognized as an expense as incurred.
g. Financial instruments:
1. Classification
The Group classifies its financial assets in the
following categories: at fair value through profit or
loss and loans and receivables. The classification
depends on the purpose for which the financial assets
were acquired. Group management determines
the classification of its financial assets at initial
recognition.
a. Financial instruments at fair value through profit
or loss
This category includes financial assets and
financial liabilities held for trading. A financial
instrument is classified in this category if acquired
principally for the purpose of selling in the short
term, or if designated by management in this
category. Derivatives are also categorized as held
for trading unless they are designated as hedges.
Assets in this category are classified as current
assets if expected to be settled within 12 months;
otherwise, they are classified as non-current.
The Group's financial instruments at fair value
through profit or loss comprise 'Financial
derivative open positions' offset from, or
presented with, 'Customer deposits, net' within
'Trade payables - due to clients' (see note 2j) in the
consolidated statements of financial position.
b. Loans and receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments
that are not quoted in an active market. They are
included in current assets, except for maturities
greater than 12 months after the statement of
financial position date. These are classified as
non-current assets.
The Group's loans and receivables comprise 'Cash
and cash equivalents', 'Short-term bank deposit',
'Restricted deposits', 'Accounts receivable' and
'Long-term restricted deposit' in the consolidated
statements of financial position.
2. Recognition and measurement
Investments are initially recognized at fair value
plus transaction costs for all financial assets not
measured at fair value through profit or loss. Financial
assets measured at fair value through profit or loss,
are initially recognized at fair value and transaction
costs are expensed in profit or loss. Financial assets
are derecognized when the rights to receive cash
flows from the investments have expired or have
66
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
been transferred and the Group has transferred
substantially all risks and rewards of ownership.
Financial assets at fair value through profit or loss are
subsequently carried at fair value. Receivables are
measured in subsequent periods at amortized cost
using the effective interest method.
Gains or losses arising from changes in the fair value
of the 'financial instruments at fair value through profit
or loss' category are presented in the consolidated
statements of comprehensive income within 'Trading
income' in the period in which they arise.
A financial instrument is derecognized when the
contract that gives rise to it is settled, sold, cancelled
or expires.
comprise individual client funds held in segregated
client money accounts.
Segregated client money accounts hold statutory
trust status restricting the Group’s ability to control the
monies and accordingly such amounts are not reflected
as Company's assets in the consolidated statements of
financial position.
i. Other accounts payable
Other accounts payable are obligations to pay for
services that have been acquired in the ordinary course
of business from suppliers. Other accounts payable are
classified as current liabilities if payment is due within
one year or less. If not, they are presented as non-
current liabilities.
3. Offsetting financial instruments
Financial assets and liabilities are offset and the net
amount reported in the consolidated statements of
financial position when there is a legally enforceable
right to offset the recognized amounts and there is
an intention to settle on a net basis, or realize the
asset and settle the liability simultaneously.
Other accounts payable are recognized initially at fair
value and subsequently measured at amortized cost
using the effective interest method.
j. Trade payables – due to clients
As part of its business, the Group receives from its
customer's deposits to secure their trading positions,
held in segregated client money accounts.
The legally enforceable right must not be contingent
on future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of the Company
or the counterparty.
h. Cash and cash equivalents
Cash and cash equivalents include cash in hand, short-
term bank deposits and other highly liquid short-term
investments, the original maturity of which does not
exceed three months.
All of the subsidiaries, except the BG Subsidiary, hold
money on behalf of clients in accordance with the
client money rules of the FCA, ASIC, CYSEC, FMA, ISA,
FSB, and MAS, respectively. Such monies are classified
as ‘segregated client funds’ in accordance with the
regulatory requirements. Segregated client funds
Assets or liabilities resulting from profits or losses on
open positions are carried at fair value. Amounts due
from or to clients are netted against, or presented with,
the deposit with the same counterparty where a legally-
enforceable netting agreement is in place and where it
is anticipated that assets and liabilities will be netted on
settlement.
Trade payables - due to clients represent balances with
clients where the combination of customer's deposits
and the valuation of financial derivative open positions
result in an amount payable by the Group.
Trade payables - due to clients are classified as current
liabilities as the demand is due within one year or less.
k. Share-based compensation
The Group operates a cash- settled share-based
67
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
compensation plan, under which it receives services from
employees as consideration for rights. The fair value
of the employee services received in exchange for the
grant of the rights are recognized as an expense in the
consolidated statements of comprehensive income. At
the end of each reporting period, the Group evaluates the
rights based on their fair value and the change in the fair
value is recognized in the consolidated statements of
comprehensive income.
positions are carried at fair value and gains and losses
arising on this valuation are recognized as trading
income, as well as gains and losses realized on positions
that have closed.
Trading income is reported gross of commissions
to agents as the Group is acting as a principal and is
exposed to the significant risks and rewards associated
with its trading transactions with its customers.
l. Employee benefits and Pension Obligations
The Group operates various pension schemes. The
schemes are generally funded through payments to
insurance companies or trustee-administered pension
funds.
n. Dividends
Dividend distribution is recognized as a liability in the
Group's statement of financial position on the date on
which the dividends are approved by the Group’s Board of
Directors.
The Group has defined contribution plans. A defined
contribution plan is a pension plan under which the
Group pays fixed contributions into a separate entity. The
Group has no legal or constructive obligations to pay
further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to
employee service in the current and prior periods.
The Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory
basis. The Group has no further payment obligations
once the contributions have been paid. The contributions
are recognized as employee benefit expense
commensurate with receipt from employees of the
service in respect of which they are entitled for the
contributions.
m. Trading income
Trading income is recognized when it is probable that
economic benefits associated with the transaction
will flow to the Group and the income can be reliably
measured.
o. Current income tax
Tax is recognized in profit or loss, except to the extent
that it relates to items recognized directly in equity. In
this case, the tax is also recognized directly in equity,
respectively.
The current income tax charge is calculated on the basis
of the tax laws enacted at the statement of financial
position date in countries where the Company and the
subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
p. Deferred income tax
Deferred income tax is recognized, using the liability
method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
Trading income represents gains (including commission)
and losses arising on client trading activity, primarily in
contracts for difference on shares, indexes, commodities,
cryptocurrencies and foreign exchange. Open client
Deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by
68
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
the balance sheet date and are expected to apply when
the related deferred income tax asset is realized or the
deferred income tax liability is settled.
entities are not required to provide comparative
information for preceding periods. The Group adopted
the amendment prospectively.
The Group recognizes deferred taxes on temporary
differences arising on investments in subsidiaries,
except where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable
that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax is recognized in profit or loss, except
to the extent that it relates to items recognized directly
in equity. In this case, the deferred income tax is also
recognized directly in equity, respectively.
Deferred income tax assets are recognized only to the
extent that it is probable that future taxable profit will be
available against which the temporary differences can be
utilized.
q. Leases
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from
the lessor) are charged to profit or loss on a straight-line
basis over the period of the lease.
r. New International Financial Reporting Standards,
Amendments to Standards and New interpretations:
1. New and amended standards adopted by the Group
for the first time for the financial year beginning on or
after 1 January 2017:
a. IAS 7 Disclosure Initiative - Amendments to IAS 7
The amendments require entities to provide disclosures
about changes in their liabilities arising from financing
activities, including both changes arising from cash
flows and non-cash changes (such as foreign exchange
gains or losses). On initial application of the amendment,
b. IFRIC Interpretation 23 Uncertainty over Income
Tax Treatments
IFRIC 23 clarifies application of the recognition and
measurement requirements in IAS 12 Income Taxes
when there is uncertainty over income tax treatments.
The Interpretation addresses the accounting for income
taxes when tax treatments involve uncertainty that
affects the application of IAS 12. The Interpretation does
not apply to taxes or levies outside the scope of IAS 12,
nor does it specifically include requirements relating
to interest and penalties associated with uncertain
tax treatments. An entity has to determine whether to
consider each uncertain tax treatment separately or
together with one or more other uncertain tax treatments.
The approach that better predicts the resolution of the
uncertainty should be followed. The Interpretation is
effective for annual reporting periods beginning on or
after 1 January 2019. Early adoption is permitted. The
Group is currently evaluating the impact of adoption
IFRIC 23 on its Financial Statements.
c. IFRS 2 Classification and Measurement of Share
based Payment Transactions - Amendment to IFRS 2
Amendments to IFRS 2 Share-based Payment in relation
to the classification and measurement of share-based
payment transactions. The amendments address three
main areas:
• The effects of vesting conditions and non-vesting
conditions on the measurement of a cash-settled share-
based payment transaction
• The classification of a share-based payment transaction
with net settlement features for withholding tax
obligations
• The accounting where a modification to the terms
and conditions of a share-based payment transaction
changes its classification from cash-settled to equity
settled.
69
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The amendment is effective for annual periods beginning
on or after 1 January 2018. The Group estimates
that there will be no material impact on its financial
statements.
2. New and amended standards not yet adopted by
the Group for reporting periods starting 1 January
2017:
a. IFRS 9 – "Financial Instruments"
(hereafter – IFRS 9).
IFRS 9, ‘Financial instruments’, addresses the
classification, measurement and recognition of
financial assets and financial liabilities. The complete
version of IFRS 9 was issued in July 2014. It replaces
the guidance of IAS 39 that relate to the classification
and measurement of financial instruments. IFRS
9 retains but simplifies the mixed measurement
model and establishes three primary measurement
categories for financial assets: amortized cost, fair
value through other comprehensive income and
fair value through P&L. The basis of classification
depends on the entity's business model and the
contractual cash flow characteristics of the financial
assets. Investments in equity instruments are
required to be measured at fair value through profit
or loss with the irrevocable option at inception to
present changes in fair value in OCI not recycling.
There is now a new expected credit losses model
that replaces the incurred loss impairment model
used in IAS 39. For financial liabilities there were
no changes to classification and measurement
except for the recognition of changes in own credit
risk in other comprehensive income, for liabilities
designated at fair value through profit or loss. IFRS
9 relaxes the requirements for hedge effectiveness
by replacing the bright line hedge effectiveness
tests. It requires an economic relationship between
the hedged item and hedging instrument and for the
‘hedged ratio’ to be the same as the one management
actually uses for risk management purposes.
Contemporaneous documentation is still required
but is different to that currently prepared under IAS
39. The standard is effective for accounting periods
70
beginning on or after 1 January 2018. The Group will
apply the new rules retrospectively from 1 January
2018 with the practical expedients permitted under
the standard. Comparatives will not be restated.
The Group estimates that there will be no material
impact in the application of IFRS 9 on its financial
statements.
b. IFRS 15- "Revenue from Contracts with Customers"
(hereafter- IFRS 15).
Upon first-time adoption, IFRS 15 will replace existing
IFRS guidance on revenue recognition.
The core principle of IFRS 15 is that an entity
recognizes revenue to depict the transfer of promised
goods or services to customers in an amount that
reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services.
IFRS 15 introduces a single model for revenue
recognition, in which an entity recognizes revenue in
accordance with that core principle by applying the
following five steps:
1. Identify the contract(s) with a customer.
2. Identify the performance obligations in the
contract.
3. Determine the transaction price.
4. Allocate the transaction price to the separate
performance obligations in the contract.
5. Recognize revenue as each performance
obligation is satisfied.
IFRS 15 provides guidance about various issues
related to the application of that model, including:
recognition of revenue from variable consideration
set in the contract, adjustment of transaction for
the effects of the time value of money and costs to
obtain or fulfill a contract.
The standard extends the disclosure requirements
regarding revenue and requires, among other things,
that entities disclose qualitative and quantitative
information about significant judgments made by
management in determining the amount and timing
of the revenue.
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On 22 July 2015, the IASB released a decision on
deferral of the effective date of the standard by one
year, and the standard will be applied retrospectively
for annual periods beginning on 1 January 2018, with
transitional provisions. Early adoption is permitted.
The Group has explored the expected impact of IFRS
15 on its financial statements and concluded that the
effect is not material.
c. IFRS 16 – "Leases" (hereafter – IFRS 16)
In January 2016, the IASB issued IFRS 16 - Leases
which sets out the principles for the recognition,
measurement, presentation and disclosure of
leases for both parties to a contract and replaces
the previous leases standard, IAS 17 - Leases. IFRS
16 eliminates the classification of leases for the
lessee as either operating leases or finance leases
as required by IAS 17 and instead introduces a
single lessee accounting model whereby a lessee
is required to recognize assets and liabilities for all
leases with a term that is greater than 12 months,
unless the underlying asset is of low value, and to
recognize depreciation of leases assets separately
from interest on lease liabilities in the income
statement. IFRS 16 is effective from January 1, 2019
with early adoption allowed only if IFRS 15 - Revenue
from Contracts with Customers is also applied.
The Group estimates that there will be no material
impact in the application of IFRS 16 on its financial
statements.
(CONTINUED)
NOTE 3 - FINANCIAL RISK MANAGEMENT
The Group specializes in the field of Contracts for
Differences (‘‘CFD’’) for individual clients only, primarily
on commodities, indices, stocks, options, ETFs,
cryptocurrencies and foreign exchange.
The Group activities expose it to a variety of financial
risks: market risk (including currency risk and price
risk), credit risk and liquidity risk. The Group's overall
risk management programme focuses on the
unpredictability of financial markets and seeks to
minimize potential adverse effects on the Group's
financial performance.
a. Market risk
The management of the Group deems this risk as the
highest risk the Group incurs.
Market risk is the risk that changes in market prices will
affect the Group's income or the value of its holdings
of financial instruments. This risk can be divided into
market price risk and foreign currency risk, as described
below.
The Group's market risk is managed on a Group-wide
basis and exposure to market risk at any point in time
depends primarily on short term market conditions and
the levels of client activity. The Group utilizes market
position limits for operational efficiency and does not
take proprietary positions based on an expectation
of market movements. As a result, not all net client
exposures are hedged and the Group may have a
substantial net position in any of the financial market in
which it offers products.
The Group's market risk policy incorporates a
methodology for setting market position limits,
consistent with the Group risk appetite, for each
financial instrument in which the Group clients can
trade, as well as certain markets which the CEO
considers to be correlated. These limits are determined
based on the Group clients’ trading levels, volatilities
and the market liquidity of the underlying financial
product or asset class and represent the maximum
long and short client exposure that the Group will hold
without hedging the net client exposure.
71
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - FINANCIAL RISK MANAGEMENT (CONTINUED):
The Group's real-time market position monitoring
system is intended to allow it to continually monitor
its market exposure against these limits. If exposures
exceed these limits, the Group either hedges, or new
client positions are rejected under the Group's policy.
It is the approach of the Group to observe during
the year the 'natural' hedge arising from the Group's
global clients in order to reduce the Group's net market
exposure.
Under the Group's policy, if it is not cost effective to
hedge market positions, the Group will review the
appropriate action.
The Group's exposure to market risk at any point in time
depends primarily on short-term market conditions and
client activities during the trading day. The exposure at
each statement of financial position date may therefore
not be representative of the market risk exposure
faced by the Group over the year. The Group's exposure
to market risk is determined by the exposure limits
described above which change from time to time.
1. Market price risk
This is the risk that the fair value of a financial
instrument fluctuates as a result of changes
in market prices other than due to the effect of
transactional foreign currency exposures or interest
rate risks.
The Group has market price risk as a result of its
trading activities CFDs on foreign exchange, stocks,
indices, commodities, cryptocurrencies and ETFs,
part of which is naturally hedged as part of the
overall market risk management. The exposure is
monitored on a Group-wide basis.
Exposure limits are set by the risk manager for each
product, and also for groups of products where it is
considered that their price movements are likely to
be positively correlated.
Daily profit on closed positions:
U.S. dollars in thousands
2017
2016
Highest profit
Highest loss
Average
10,475
7,917
(4,067)
(2,610)
1,172
864
During the years 2017 and 2016, as to the closed
positions, there were 313 and 312 profitable trading
days, respectively.
The Group is of the opinion that its exposure to
market risk is managed among others by capping
the exposure of each instrument through risk
limitation protocols.
2. Foreign currency risk
Transactional foreign currency exposures represent
financial assets or liabilities denominated in
currencies other than the functional currency of the
Group. Transaction exposures arise in the normal
course of business.
Foreign currency risk is managed on a Group-wide
basis, while the Group exposure to foreign currency
risk is not considered by the Board of Directors to
be significant. The Group monitors transactional
foreign currency risks including currency statement
of financial position exposures, equity, commodity,
interest and other positions denominated in foreign
currencies and trades on foreign currencies.
At 31 December 2017, if the U.S. dollar had
strengthened by 1% against Euro with all other
variables unchanged the exposure in respect of
balance denominated in Euro on income after
taxes is $ 332 thousand (2016: $ 64 thousand);
if the U.S dollar had strengthened by 1% against
Australian Dollar with all other variables unchanged
the exposure in respect of balance denominated
in Australian Dollar on income after taxes is $ 273
thousand (2016: $ 54 thousand).
72
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - FINANCIAL RISK MANAGEMENT (CONTINUED):
The exposure in respect to balances denominated
in other currencies is immaterial.
b. Credit risk
The Group operates a real-time mark-to-market trading
platform with customers' profits and losses being
credited and debited automatically to their accounts.
Under the Group's policy, costumers cannot owe the
Group's funds when losing more than they have in their
accounts.
Client credit risk principally arises when a customer's
total funds deposited (margin and free equity) are
insufficient to cover any trading losses incurred. In
particular, costumer credit risk can arise where there
are significant, sudden movements in the market (i.e.
due to high general market volatility or specific volatility
relating to an individual financial instrument in which a
customer has an open position).
The Group's offering is margin-traded. If the market
moves adversely by more than the customer's
maintenance margin, the Group is exposed to customer
credit risk.
The principal types of customer credit risk exposures
are managed by monitoring all customer positions
on a real time basis. If customers funds are below
the required margin level, customers positions are
liquidated (margin call).
The carrying amount of the Group's financial assets
best represents their maximum exposure to credit risk.
The Group has no material financial assets that are past
due or impaired as at the reporting dates.
As of 31 December 2017 and 2016 counterparties
holding about 90% and 96%, respectively, of the Group's
cash and cash equivalents, credit cards, client funds
and deposits and the credit ratings as of 31 December
2017 are as follows:
Financial institution
Rating*
Barclays Bank Plc
Bank Leumi
Credit Suisse AG
Commonwealth Bank of Australia
Westpac Banking Corporation
UBS
BGL BNP- Paribas
National Australia Bank
Banco Santander SA
ANZ Banking Group Ltd
Bank of Cyprus Public Company Ltd
Societe Generale SA
A
A-
A
AA-
AA-
A+
A
AA-
A-
AA-
B
A
* The Financial institutions were rated by the same
third party
The remaining counterparties, for the year ended 31
December 2017 and 2016 hold about 10%, and 4%,
respectively, of Group's cash and cash equivalents.
Those amounts are held in a few banks worldwide and
the balance in each of those banks does not exceed 3%
of total cash and cash equivalents.
The Group’s largest credit exposure to any single bank
as of 31 December 2017 was $ 98,445 thousands
or 25% of the exposure to all banks (2016: $ 54,301
thousands or 27%).
c. Concentration risk
Concentration risk is defined as all risk exposures
with a loss potential which is large enough to threaten
the solvency or the financial position of the Group. In
respect of financial risk, such exposures may be caused
by credit risk, market risk, liquidity risk or a combination
or interaction of those risks (see note 13).
c. Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting obligations arising from its financial
73
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - FINANCIAL RISK MANAGEMENT (CONTINUED):
liabilities that are settled by delivering cash or other
financial assets.
Liquidity risk is managed centrally and on a Group-wide
basis. The Group's approach to managing liquidity is to
ensure it will have sufficient liquidity to meet its financial
liabilities when due, under both normal circumstances
and stressed conditions.
The Group's approach is to ensure that there will be no
material liquidity mismatches with regard to liquidity
maturity profiles due to the very short-term nature of
its financial assets and liabilities. Liquidity risk can,
however, arise as a result of the Group's adopting what
it considers to be best industry practice in placing
some individual client funds in segregated client money
accounts. A result of this policy is that short-term
liquidity ‘gaps’ can potentially arise in periods of very
high client activity or significant increases in global
financial market levels.
The contractual maturity of the financial liabilities is up
to two months.
d. Capital Management:
1. The UK Subsidiary is regulated by the FCA. The UK
Subsidiary manages its capital resources on the
basis of regulatory capital requirements (hereafter
- Pillar 1) and its own assessment of capital
required to support all material risks throughout the
business (hereafter - Pillar 2). The UK Subsidiary
manages its regulatory capital through an Internal
Capital Adequacy Assessment Process (known as
the ICAAP) in accordance with guidelines and rules
implemented by the FCA.
Both Pillar 1 and Pillar 2 assessments are
compared with total available regulatory capital on
a daily basis and monitored by the management of
the Group. As of 31 December 2017 and 2016, the
UK Subsidiary had £24,326 thousands and £16,436
thousands, respectively, of regulatory capital
resources, which is in excess of both its regulatory
capital requirement (Pillar 1) and the internally
measured capital requirement (Pillar 2).
2. The CY Subsidiary is regulated by CySEC. The CY
Subsidiary manages its capital resources on the
basis of regulatory capital requirements (hereafter
- Pillar 1) and its own assessment of capital
required to support all material risks throughout the
business (hereafter - Pillar 2). The CY Subsidiary
manages its regulatory capital through an Internal
Capital Adequacy Assessment Process (known as
the ICAAP) in accordance with guidelines and rules
implemented by the CySEC.
The CY Subsidiary monitors on a frequent basis
its Pillar 1 capital requirements and ensures that
its capital position remains always above the
minimum regulatory thresholds. As of 31 December
2017 and 2016, the regulatory capital of the CY
Subsidiary was €52,831 thousands and €18,046
thousands, respectively, which is in excess of both
its regulatory capital requirement (Pillar 1) and the
internally measured capital requirement
(Pillar 2). As of 31 December 2017 and 2016, Pillar
1 Capital Adequacy ratio was 17.2% and 17.3%
respectively.
Moreover, the Group is evaluating its overall risk
profile and capital position through its internal
capital adequacy assessment process, which is
performed at least on an annual basis.
3. The AU Subsidiary is regulated by ASIC. The AU
Subsidiary manages its capital resources on the
basis of regulatory capital requirements and its
own assessment of capital required to support
all material risks. The AU Subsidiary manages
its capital through its Net Tangible Assets
(NTA) assessment in accordance with rules and
guidelines implemented by ASIC.
As at 31 December 2017 and 2016, the AU
Subsidiary held Net Tangible Assets of $13,814
thousands and $8,983 thousands, respectively, of
regulatory capital, which is in excess of its NTA
requirements.
74
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - FINANCIAL RISK MANAGEMENT (CONTINUED):
Specific valuation techniques used to value financial
instruments are based on quoted market prices at the
statement of financial position date and an additional
predetermined amount.
4. The SG Subsidiary is regulated by MAS. The SG
Subsidiary manages its capital resources on the
basis of regulatory capital requirements and its
own assessment of capital required to support
all material risks. The SG Subsidiary manages its
capital in accordance with rules and guidelines
implemented by MAS.
As at 31 December 2017, the SG Subsidiary held
regulated capital of SGD 1,600 thousands of
regulatory capital, which is in excess of its MAS
requirements.
5. The IL Subsidiary is regulated by ISA.
The IL Subsidiary manages its capital resources
on the basis of regulatory capital requirements and
its own assessment of capital required to support
all material risks. The IL Subsidiary manages its
capital in accordance with rules and guidelines
implemented by ISA.
As at 31 December 2017 and 2016, the IL
Subsidiary held regulated capital of $3,838
thousands and $3,202 thousands, respectively,
of regulatory capital, which is in excess of its ISA
requirements.
f. Fair value estimation
Financial derivative open positions (offset from, or
presented with, deposits from clients within 'Trade
payable - due from clients') (see also note 10c) are
measured at fair value through profit or loss using
valuation techniques. The said valuation techniques
are based on inputs other than quoted prices in active
market that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is,
derived from prices) (level 2).
These valuation techniques maximize the use of
observable market data where it is available and rely as
little as possible on entity specific estimates. Since all
significant inputs required for the fair value estimations
of the said instruments are observable, the said
instruments are included in level 2.
75
Plus500 Ltd. 2017 Annual Report
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Plus500 Ltd. 2017 Annual Report
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Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 6 - SHARE CAPITAL
Composed of ordinary shares of NIS 0.01 par value, as follows:
Authorized
Issued and fully paid
Less treasury shares*
Outstanding shares
NUMBER OF SHARES 31 DECEMBER
2017
2016
300,000,000
300,000,000
114,888,377
114,888,377
980,146
-
113,908,231
114,888,377
* In June 2017, the Board approved a programme to buy back up to US$10 million of the Company’s Ordinary
Shares. The buyback programme ran from 2 June 2017 to 31 August 2017 and was funded from the Company’s
net cash balances. In August 2017, the Board approved a second programme to buy back up to US$27.21 million
of Ordinary Shares. The second buyback programme expired on 1 February 2018 and was also funded from the
Company’s net cash balances. The Company bought back 980,146 Ordinary Shares (or 0.9%) in the capital of the
Company for an aggregate purchase price of $7.5 million pursuant to these buyback programmes. Shares were
bought back at an average price of £5.98.
The amounts of dividends for the years 2017 and 2016 declared and distributed by the Company's Board of
Directors are as follows:
Amount of dividend in thousands of $
72,196
26,700
75,000
27,212
Date of declaration
16 February 2016
2 September 2016
5 February 2017
4 August 2017
78
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - TAXES ON INCOME:
a. Corporate taxation in Israel
Under the "Tax Burden Distribution Law", corporate tax
rate is 25% as from 2012.
On 5 August 2013, the Law for Change of National
Priorities, 2013 (hereinafter - the Law) was published
in Reshumot (the Israeli government official gazette),
enacting, raising the corporate tax rate beginning in
2014 and thereafter to 26.5% (instead of 25%).
On 5 January 2016, the Law for the Amendment to the
Income Tax Ordinance (No. 216), 2016 was published
in the official gazette. The said law stipulated the
reduction of the rate of corporate tax from 26.5% to 25%
commencing tax year 2016.
In December 2016, the Economic Efficiency Law
(Legislative Amendments for Implementing the
Economic Policy for the 2017 and 2018 Budget Year),
2016 was published, introducing a gradual reduction
in corporate tax rate from 25% to 23%. However, the
law also included a temporary provision setting the
corporate tax rate in 2017 at 24%. As a result, the
corporate tax rate is 24% in 2017 and will be 23% in
2018 and thereafter.
b. Corporate taxation in subsidiaries
The UK Subsidiary is assessed for the tax under the tax
laws in the UK. The principal tax rate applicable to the
UK Subsidiary in the UK for the years 2017 and 2016 is
19% and 20% respectively.
The CY Subsidiary is assessed for direct and indirect
tax under tax laws in Cyprus. The corporation tax rate
applicable to the CY Subsidiary in Cyprus is 12.5%.
The AU Subsidiary is assessed for the tax under the tax
laws in the AU. The principal tax rate applicable to the
AU Subsidiary in the AU is 30%.
Other subsidiaries in the Group do not have significant
taxable income and the overall effect of the income
of those subsidiaries on the Group's tax expenses is
immaterial.
c. Deferred tax asset
The Deferred tax assets in 2017 and 2016 in total
amount of $490 thousands and $353 thousands,
respectively, is presented among "non-current assets".
The Deferred tax assets in 2017 and 2016 were
computed at tax rate of 23% and 24%, respectively.
The Deferred tax assets which will be settled in 2018
are in total amount of $490 thousands.
The deferred tax assets in the financial statements
are mainly caused by payroll expenses of share-based
compensation plan (see note 9).
79
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - TAXES ON INCOME (CONTINUED):
d. Taxes on income included in the income statements for the reported periods:
U.S. dollars in thousands
Current taxes:
Current
taxes
in
respect of current year's profits
Deferred taxes:
Recognition of deferred taxes asset (see c above)
Changes in tax rates applicable to deferred tax assets
Taxes on income expenses
YEAR ENDED 31 DECEMBER
2017
2016
53,804
34,920
53,804
34,920
(121)
(196)
-
16
53,683
34,740
e. Reconciliation of the theoretical tax expense
Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates
applicable to companies in Israel (note 7a above) and the actual tax expense:
U.S. dollars in thousands
YEAR ENDED 31 DECEMBER
2017
2016
Income before taxes on income, as reported in the income statements
253,358
151,982
Theoretical tax expense in respect of this year’s income - at 24% (2016: 25%)
60,806
37,996
Decrease in taxes resulting from different tax rates applicable to foreign subsidiaries
(3,143)
(2,504)
Decrease in taxes in respect of currency differences and expenses not
deductible for tax purposes
(3,980)
(768)
Increase in taxes resulting from changes in tax rates applicable to deferred tax assets
-
16
Taxes on income for the reported period
53,683
34,740
f. Effect of adoption of IFRS in Israel on tax liability
As mentioned in note 2a, the Group prepares its
financial statements in accordance with IFRS.
IFRS standards differ from accounting principles
generally accepted in Israel and accordingly, the
preparation of financial statements in accordance
with IFRS may reflect a financial position, results of
operations and cash flows that are materially different
from those presented in financial statements presented
in accordance with accounting principles generally
accepted in Israel. The Company is filing to the Israeli
tax authorities, its Israeli tax returns, in accordance to
Israeli GAAP.
80
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - TAXES ON INCOME (CONTINUED):
NOTE 8 – RESTRICTED DEPOSITS
In April 2014 the Company has entered into a lease
agreement with a third party for its headquarters facility in
Haifa. In June 2015 and in November 2015 the Company
signed two additions to the lease contract from April 2014
for leasing an additional area (see note 14).
The short term restricted deposit serves as a security for a
bank guarantee provided in favor of the said third party in
the amount of US $ 308 thousands (NIS 1,069 thousands)
until 01 July 2018. In addition, the IL Subsidiary has
restricted deposits in amounts of US $114 thousands until
01 November 2018.
In addition, the BG Subsidiary has restricted deposits in
amounts of US $88 thousands, the SG Subsidiary has
restricted deposits in amounts of US $123 thousands and
the AU Subsidiary has restricted deposits in amounts of
US $78 thousands.
During 2014, the Government of Israel published a
law memorandum in connection with the amendment
to the Income Tax Ordinance (hereafter – the law
memorandum) resulting from application of IFRS in the
financial statements. Generally, the law memorandum
adopts IFRS. However, it suggests several amendments
to the Income Tax Ordinance that will serve to clarify
and determine the manner of computing taxable
income for tax purposes in cases where the manner
of computation is unclear and IFRS is incompatible
with the principles of the tax method applied in Israel.
At the same time, the law memorandum generally
adopts IFRS. The legislation process involving the law
memorandum has not been completed, and is not likely
to be completed in the near future.
As the legislation process relating to the law
memorandum has not been completed, management
believes that the temporary provision for 2007 to 2013
may be extended to cover 2014-2017 as well. Due to the
application of temporary provision on the 2007-2013
tax years, as above, and the possibility for extension
to 2014-2017, management expects at this stage that
the new legislation will not apply to tax years preceding
2018.
Considering that the temporary provision applies to
the 2007-2013 tax years and Company's assessment
on the likelihood for extension to cover 2014-2017, as
above, the Company computed its taxable income for
2009-2017 based on the Israeli accounting standards
that existed prior to adopting IFRS in Israel.
g. A final tax assessments has been received by the
Company for the year ended 31 December 2013.
The UK Subsidiary, AU Subsidiary, CY Subsidiary,
BOS subsidiary, SG subsidiary and IL Subsidiary have
only been subject to self-assessments since their
incorporation.
81
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 9 – SHARE-BASED COMPENSATION
The Group grants "Share Appreciation Rights" to
selected employees upon approval of the Board of
Directors and management (hereafter - the grant).
As of 31 December 2017 and 2016 the Group
recognized a liability at fair value of $4,171 thousands
and $2,298 thousands, respectively.
During 2014, the Group granted 1,382 rights to 14
employees on three different occasions.
On 1 January 2015, the Group granted 894 rights
to 20 employees. The Group granted another 3,122
rights to 26 employees on 3 January 2016, 41 rights
to 1 employee on 17 April 2016 and 3,722 rights to 45
employees on 30 December 2016. On 31 December
2017, the Group granted 3,321 rights to 72 employees.
The rights will be settled in cash two years after the
date of grant.
In the year 2017, the Group recognized expenses
within 'Selling and marketing expenses' and within
'Administrative and general expenses', with respect of
the grant, in amount of $2,775 thousands and $2,697
thousands, respectively.
In the year 2016, the Group recognized expenses
within 'Selling and marketing expenses' and within
'Administrative and general expenses', with respect of
the grant, in amount of $1,415 thousands and $1,129
thousands, respectively.
The rights represent the total amount of grant divided
by the average closing price of the ordinary shares of
the Company on the AIM over the course of the 60
trading days immediately preceding the dates of grant
(hereafter - the share price on
grant date).
In January 2017, 18 employees exercised 815 rights for
cash in total amount of $858 thousands. The exercise
price per granted right is approximately $1,053, and 1
employee exercise 52 rights for cash in total amount of
$42 thousands. The exercise price per granted right is
approximately $808.
As of the end of each period, the fair value of the rights
is calculated by the number of rights, as calculated on
grant date, multiplied by the average closing price of the
ordinary shares of the Company on the AIM over the
course of the 60 trading days immediately preceding
the end of each period (or the payout date) divided by
the share price on grant date.
In January 2016, 10 employees exercised 1,072 rights
for cash in total amount of $755 thousands. The
exercise price per granted right is approximately $704.
In July 2016, 1 employee exercised 33 rights for cash in
total amount of $35 thousands. The exercise price per
granted right is approximately $1,061.
The fair value of the rights was estimated using the
Restricted Stock Unites option pricing model.
During 2017 and 2016, 504 and 304, respectively rights
were forfeited.
The following table specifies the dates of grants and the grant rights as of each date:
GRANT DATE
SETTLEMENT DATE
SHARE PRICE ON GRANT DATE (GBP)
GRANTED RIGHTS
14 January 2014
14 January 2016
16 July 2014
16 July 2016
19 December 2014
19 December 2016
1 January 2015
1 January 2017
3 January 2016
3 January 2018
17 April 2016
17 April 2018
30 December 2016
30 December 2018
31 December 2017
31 December 2019
82
260.19
524.30
499.80
522.94
388.81
563.25
541.21
943.23
1,149
33
200
894
3,122
41
3,722
3,321
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 10 - SUPPLEMENTARY STATEMENT OF FINANCIAL POSITION INFORMATION:
a. Cash and cash equivalents
Cash and cash equivalents by currency of denomination
U.S. dollars in thousands
USD
EURO
GBP
AUD
NIS
Other
Gross cash and cash equivalents
Less: segregated client funds
Own cash and cash equivalents
b. Accounts receivable
U.S. dollars in thousands
Prepaid expenses
Other
31 DECEMBER
2017
2016
208,684
120,253
91,781
33,624
38,163
9,390
17,777
43,338
10,995
11,050
6,683
6,530
399,419
198,849
(157,565)
(62,368)
241,854
136,481
31 DECEMBER
2017
2016
6,434
1,262
7,696
6,235
3,455
9,690
As of 31 December 2017 and 2016, the total amount of prepaid expensesincludes mainly expenses related to Company's
sponsorship agreement with Atletico Madrid Football Club (see note 14b).
All the financial assets included among current assets are for relatively short-periods; therefore, their fair values approximate or
are identical to their carrying amounts.
83
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 10 - SUPPLEMENTARY STATEMENT OF FINANCIAL POSITION INFORMATION
(CONTINUED):
c. Trade payables – due to clients:
U.S. dollars in thousands
Customers deposits, net*
Segregated client funds
31 DECEMBER
2017
2016
162,047
63,956
(157,565)
(62,368)
4,482
1,588
*Customers deposits, net are comprised of the following:
Customers deposits
188,401
83,580
Less- financial derivative open positions:
Gross amount of assets
Gross amount of liabilities
(45,694)
(25,902)
19,340
6,278
162,047
63,956
As of 31 December 2017 and 2016, the total amount of 'Trade payables - due to clients' includes bonuses to the
clients from all of the subsidiaries.
d. Other accounts payable and accruals:
1. Service suppliers
Accounts payable and accruals for suppliers are comprised mainly of amounts due to advertising
service suppliers.
2. Other
U.S. dollars in thousands
Payroll and related expenses
Accrued expenses
Other
31 DECEMBER
2017
2016
7,970
3,967
171
12,108
3,010
4,054
19
7,083
The financial liabilities included among other accounts payable, accruals and deposits from clients are for relatively
short periods; therefore, their fair values approximate or are identical to their carrying amounts.
84
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 11 - SUPPLEMENTARY STATEMENT OF COMPREHENSIVE INCOME INFORMATION:
U.S. dollars in thousands
a. Selling and marketing expenses:
Payroll and related expenses
Share-based compensation
Commission to agents
Advertising
Commissions to processing companies
Server and data feeds commissions
Third party customer support
Sundry
b. Administrative and general expenses:
Payroll and related expenses
Professional fees and regulatory fees
Share-based compensation
Office expenses
Traveling expenses
Public company expenses
Nonrefundable VAT
Sundry
YEAR ENDED 31 DECEMBER
2017
2016
12,855
2,775
27,039
9,784
1,415
8,773
90,087
116,075
16,909
14,323
5,751
67
518
4,451
1,859
597
156,001
157,277
9,971
2,953
2,697
4,179
650
829
725
729
6,831
5,486
1,129
2,754
553
997
1,872
510
22,733
20,132
85
Plus500 Ltd. 2017 Annual Report NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 12 - RELATED PARTIES
NOTE 13 – ENTERPRISE WIDE DISCLOSURES
"A related party" - As this term is being defined in IAS 24 -
"Related Party Disclosure" (hereafter – IAS 24R).
Key management personnel of the Company include five
founding shareholders: one of those shareholders is a
Director.
These shareholders provide services to the Company
directly or through companies they control.
As of 31 December 2017 and 2016, the balance of the
Company's liability in respect of these services amounts
is $180 thousands and $163 thousands respectively; the
said liability is recorded among 'Accrued expenses' (see
note 10d(2)).
In 2017 and 2016, the Company paid service fees to
related parties at the total amount of $2,095 thousands
and $1,888 thousands, respectively. A total of $1,748
thousands and $1,510 thousands were recognized
as payroll and related expenses under the 'Selling and
marketing expenses' item for the years 2017 and 2016,
respectively. The remaining balance of $ 347 thousands
and $378 thousands was recognized as payroll and
related expenses under the 'Administrative and general
expenses' item in 2017 and 2016, respectively.
In 2017 and 2016, the Company paid directors fees at the
total amount of $679 thousands and $645 thousands,
respectively under the 'Administrative and general
expenses'.
The Company is domiciled in Israel. Trading income
and non-current assets from Israeli customers are not
material.
The Trading income attributed to geographical areas
according to the location of the customer is as follows:
Year ended 31 December
U.S. dollars in thousands
2017
2016
United Kingdom
68,634
61,378
Europe
Other
265,605
200,653
102,999
65,896
437,238
327,927
NOTE 14 - COMMITMENTS
a. On 28 April 2014 the Company signed a lease contract
(hereafter –the contract) with a third party for the
lease of 1,360 square meter offices in Haifa, Israel.
According to the contract, the lease is for 60 months
and the Company has an option to shorten the lease
period to 36 months with a payment of NIS 337
thousands plus VAT.
On 30 June 2015 and on 11 November 2015 the
Company signed two additional lease contracts to the
contract (hereafter – the additional contract), for the
lease of additional 730 square meters and 804 square
meters, respectively. According to the additional
contract terms, the additional lease is for the same
period as the contract.
The rental payments are linked to the Israeli CPI.The
expected rental payments for the next years are as
follows:
U.S. dollars in thousands
2018
2019
Total
846
282
1,128
86
Plus500 Ltd. 2017 Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 14 - COMMITMENTS (CONTINUED):
b. The Company and Club Atlético de Madrid,
S.A.D. (hereafter - Atlético Madrid) entered into a
sponsorship agreement on 3 October 2017 under
which the Company is entitled to advertise and
promote itself as the main sponsor of Atlético Madrid
for the 2018/19, 2019/20 and 2020/21 seasons.
c. The Company and Brumbies Rugby, the Australian
professional rugby union team (hereafter - the
Brumbies) entered into a sponsorship agreement on
1 October 2017 under which the Company is entitled
to advertise and promote itself as the official sponsor
of the Brumbies for three seasons between 1 January,
2018 to 31 December, 2020.
NOTE 15 - EARNINGS PER SHARE
Earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue
during the year.
U.S. dollars
YEAR ENDED 31 DECEMBER
2017
2016
Profit attributable to equity holders of the Company
199,675,000
117,242,000
Weighted average number of ordinary shares in issue*
114,420,058
114,888,377
* After weighting the effect of the buyback program. Please see note 6.
NOTE 16 - SUBSEQUENT EVENTS:
a. On 14 February 2018 the Company declared a
final dividend in an amount of $92,592 thousand
($0.8129 per share). The dividend is due to be paid
to the shareholders on 23 July 2018.
b. On 14 February 2018 the Company declared a
special dividend in an amount of $72,333 thousand
($0.635 per share). The dividend is due to be paid to
the shareholders on 23 July 2018.
87
Plus500 Ltd. 2017 Annual Report Plus500 Limited
FURTHER INFORMATION
88
Plus500 Ltd. 2017 Annual Report ADVISORS
Nominated Advisor and Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY, UK
Joint Broker
Berenberg
Joh. Berenberg, Gossler & Co. KG
60 Threadneedle Street
London EC2R 8HP, UK
Independent Auditors
Kesselman & Kesselman, a member firm of
PricewaterhouseCoopers International Limited
Trade Tower
25 Hamered Street
Tel Aviv 6812508, Israel
Financial PR
MHP Communications
6 Agar Street
London WC2N 4HN, UK
Legal Advisor (Israel)
Naschitz, Brandes, Amir & Co.
5 Tuval Street
Tel Aviv 6789717, Israel
Legal Advisor (United Kingdom)
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London EC4R 9HA, UK
Depositary
Link Market Services Trustees Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU, UK
Registrar
Link Market Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
89
Plus500 Ltd. 2017 Annual Report Plus500 Limited
ANNUAL REPORT AND ACCOUNTS 2017
www.plus500.com
Published in March 2018
Perivan Financial Print