Plus500 Ltd. 2019 Annual Report ABOUT PLUS500
Plus500 Ltd. (the "Company" and together with its
subsidiaries, the "Group") is a leading online provider
of Contracts for Difference (“CFDs”). Plus500 has
developed and operates a leading online trading
platform for individual customers to trade CFDs
internationally with reference to more than 2,800
different underlying global financial instruments,
comprising equities, indices, commodities, options,
exchange-traded funds (“ETFs”), cryptocurrencies and
foreign exchange. Customers of Plus500 can trade
CFDs in more than 50 countries and in 32 languages.
The trading platform is accessible from multiple
operating systems (Windows, iOS, Android and Surface)
and web browsers.
Plus500 shares have a premium listing on the Main
Market of the London Stock Exchange (symbol: PLUS)
and are a constituent of the FTSE 250 index.
Plus500 retains operating licences and is regulated in
the United Kingdom, Australia, Cyprus, New Zealand,
Israel, South Africa, Singapore and the Seychelles.
Customer care is and has always been integral to
Plus500, as such, customers cannot be subject to
negative balances. 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 leveraged exposure, and stop losses to help
customers protect profits, while limiting capital losses.
Plus500 does not utilise cold calling techniques and
does not offer binary options.
Plus500 Ltd. 2019 Annual Report
Plus500 Ltd. 2019 Annual Report TABLE OF CONTENTS
STRATEGIC REPORT
2019 Highlights
Chairman's Statement
Chief Executive Officer's Statement
Our Strategy
Our Business Model
Key Stakeholder Relationships
Key Performance Indicators
Our Technology
Our Markets
Financial Review
Risk Management Framework
Going Concern and Viability Statement
Corporate Social Responsibility Report
Sponsorships
GOVERNANCE
Chairman's Introduction to Governance
Board of Directors
UK Corporate Governance Code Compliance Statement
Governance Report
Shareholder Engagement
Report of the Nomination Committee
Report of the Audit Committee
Report of the Regulatory & Risk Committee
Report of the Remuneration Committee
Directors' Remuneration Report
Directors' Report
Corporate Law
Directors' Responsibility Statement
FINANCIAL STATEMENTS
Independent Report of the Auditors
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
FURTHER INFORMATION
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Plus500 Limited
STRATEGIC REPORT
Plus500 Ltd. 2019 Annual Report Plus500 Ltd. 2019 Annual Report 2019 HIGHLIGHTS
FINANCIAL HIGHLIGHTS
2019 was a year of two distinct halves with strong improvement in H2 2019:
REVENUE
• Robust performance across all key metrics in H2 2019 compared to H1 2019,
which was impacted by extremely low volatility in Q1 2019. Strong H2 2019
was mainly driven by increased trading opportunities identified by customers,
reflecting more volatile market conditions during the rest of the year.
• H2 2019 revenues up 40% vs. H1 2019, to $206.5 million (H1 2019:
$148.0 million) (FY 2019: $354.5 million, FY 2018: $720.4 million);
• H2 2019 EBITDA up 93% vs. H1 2019, to $126.7 million (H1 2019:
$65.6 million) (FY 2019: $192.3 million, FY 2018: $506.0 million);
• H2 2019 Net Profit up 94% vs. H1 2019, to $100.1 million (H1 2019:
$51.6 million) (FY 2019: $151.7 million, FY 2018: $379.0 million).
• 2019 marked the first full year of trading under the new regulatory regime
introduced by European regulators, with customer trading patterns
adjusting through the year.
OPERATIONAL HIGHLIGHTS
• Average of approximately 3 million customer trades per month in 2019;
• Average deposit per Active Customer increased 19% year on year at $5,116
(FY 2018: $4,284), reflecting our customers’ continued and strong trust in
our trading platform;
• Continued investment in technology and innovation to further enhance the
Group’s customer proposition through the introduction of new features,
trading instruments and trading tools, support channels and an improved
customer interface.
•
Increased focus on our core markets and continued expansion of global
presence:
• Successfully retained leading industry positions in core markets as
the largest CFD provider in the UK4, Germany5 and Spain6 and as the
top rated mobile platform among CFD traders in Australia7;
• Following the year end, a new securities dealer licence was issued by
the Financial Services Authority in the Seychelles, further
complementing the Group's seven existing regulatory licences
internationally and reflects the Group's robust regulatory regime.
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354.5M
720.4M
EBITDA1
192.3M
506.0M
ACTIVE
CUSTOMERS 2
199,720
304,616
NEW
CUSTOMERS3
91,388
134,237
Plus500 Ltd. 2019 Annual Report SHAREHOLDER RETURNS
Plus500 continues to deliver significant shareholder returns:
100% of 2019 net profit to be distributed to shareholders – equivalent to a total of $151.7 million.
•
Interim dividend of $30.9 million distributed in November 2019;
• Final dividend of $40.8 million (FY 2018: $70.2 million), or $0.3767 per share (FY 2018: $0.6191 per share);
• $80 million in share buyback programmes, including a $50 million share buyback programme announced in
August 2019 executed in full and a new share buyback programme to purchase $30 million of the Company's
shares declared in February 2020.
1 Earnings before Interest, Taxes, Depreciation and Amortisation
2 Active Customers – Customers who made at least one real money trade during the period
3 New Customers – Customers depositing for the first time during the period
4 By total number of relationships with UK CFD traders. Investment Trends 2019 UK Leverage Trading Report
5 By total number of client relationships. Investment Trends 2019 Germany Leverage Trading Report
6 By total number of client relationships. Investment Trends 2019 Spain Leverage Trading Report
7 By own client rating. Investment Trends 2018 Australia Leveraged Trading Report
* For illustrative purposes
4
Plus500 Ltd. 2019 Annual Report CHAIRMAN’S STATEMENT
" Looking to 2020 we are confident
of the prospects for the Group as
we focus on further strengthening
our customer offering and market
positions. "
Penny Judd
Chairman
INTRODUCTION
2019 marked the first full year under the new regulatory
regime in Europe and I am pleased with the operational
progress we made during the year. This included:
• a robust performance with strong improvement in H2
2019, finishing the year in good financial shape
• continued delivery of significant shareholder returns
• retained leading industry positions in core markets
and continued expansion of global presence
• enhanced customer proposition through ongoing
investment in technology and innovation
OUR COMPETITIVE ADVANTAGE
We believe that the Company's technology
capabilities, which continue to be developed internally,
are a key differentiator to its competitors. Our
proprietary technology provides the ability to react
and implement changes to both our trading platform
and marketing activities rapidly, resulting in a highly
attractive and dynamic customer offering.
We continued to invest in our technology, operational
and regulatory framework during the year, enhancing
our ability to cater to each of our customers in the
relevant platform, language, market and regulatory
environment. This investment is expected to provide
long term benefits to customer acquisition and activity
whilst enhancing efficiency and financial returns.
REGULATION
During the year, and as anticipated, the majority of
EU-member states adopted national product
intervention measures relating to CFDs, reflecting
the ESMA product intervention measures which
came into force in August 2018.
In August 2019, the Australian Securities and Investments
Commission (ASIC), released a consultation paper which
sets out its proposals to exercise its power to make
certain market-wide product intervention orders and
impose certain restrictions on the sale and marketing
of CFDs to retail customers. This is anticipated to take
place during 2020 and is expected to result in a similar
impact on the industry in Australia as ESMA’s intervention
measures had in Europe during 2018-2019.
As evidenced in the period following the implementation
of ESMA’s regulations, the Board believes that the Group’s
high levels of investment in regulatory compliance,
alongside its flexible business model and advanced
technological capabilities, will enable it to adjust rapidly
and efficiently to any future changes.
5
Plus500 Ltd. 2019 Annual Report The UK left the European Union on 31 January
2020 and is now in a transitional period until 31
December 2020. Between now and the end of the
year, EU law will continue to apply with no
change. Plus500 remains well prepared for
various scenarios for the UK’s exit from the EU,
supported by the Group’s separate EU licence in
Cyprus which enables it to operate in EU
regulated jurisdictions, in line with applicable
regulatory requirements. Plus500 will continue to
assess any future developments relating to the
UK’s exit from the EU.
Following the year end, in January 2020, a new
licence was granted to the Group by the Financial
Services Authority in the Seychelles, further
complementing the Group’s seven existing licences
across the globe.
SHAREHOLDER RETURNS
The Company's core shareholder returns policy is
to return at least 60% of net profits to shareholders,
through a combination of dividends and share
buybacks, with at least 50% of this distribution being
made by way of dividends. This policy applies to net
profits on a half-yearly basis.
The Board declared a final dividend of $40.8 million
for the year ended 31 December 2019 representing
$0.3767 per share (final dividend 2018: $0.6191 per
share). This makes a total dividend for the year of
$0.6501 per share (total dividend for 2018: $1.9977
per share).
The Board determined at the time of the Group's
half year results in August 2019 that enhanced
shareholder value could be delivered from buying
back the Company's shares and, as a consequence,
a material share buyback programme to purchase
up to $50 million of the Company's shares was
announced. In 2019 the Company purchased 4,259,066
Ordinary Shares in accordance with this programme,
amounting to a total of $41.2 million, at an average
share price of £7.66. Following the year end, the share
buyback programme continued to its completion, and
an additional 749,854 Ordinary Shares have been
purchased, amounting to a total of $8.8 million, at an
average share price of £9.06.
A new share buyback programme was commenced
in February 2020 to buy back up to $30 million of the
Company’s shares.
STRATEGY
We remain confident in the prospects of the business
going forward. Future success and value creation will
be based on delivery on a number of fronts including
multiple additional growth opportunities:
6
Plus500 Ltd. 2019 Annual Report We are encouraged by the momentum the Group built
in the second half of 2019, which continued into 2020
as the Group experienced a significant increase in
levels of customer trading activity following heightened
volumes of trading across global financial markets. As
a result, trading during the first quarter to date has been
trending substantially ahead of the last quarter of 2019.
While it is too early to say what impact this will have on
the outcome for 2020 as a whole, we are confident on
our outlook for the year ahead.
Overall, we remain optimistic about the potential to
deliver growth in existing and new markets, as well as
continue providing strong shareholder returns.
Penny Judd
Chairman
6 April 2020
• expansion into new geographic regions and
acceleration within current regions through
additional regulatory licences;
• product extension enabled by further development
of the current technology platform, enhancing
customer acquisition rates and improving
retention levels;
• value-adding targeted acquisitions, made possible
by the imposition of increasingly strenuous
regulatory standards, which enhance the position of
the compliant industry leaders.
OUTLOOK
We believe that customer trading patterns have now
adjusted and stabilised following the regulatory
changes introduced in Europe last year.
In addition, we believe that, as seen during recent
periods of regulatory change, the Group’s flexible
business model, optimised cost base and technological
advantage will enable it to adjust rapidly to any future
regulation, including the impact of any changes
expected to be introduced in Australia during 2020.
The safety and wellbeing of our employees remains
the Company’s utmost priority. In accordance with
our business continuity plans and in light of local
regulation following the outbreak of COVID-19, our staff
globally are now operating remotely. Benefitting from
our operations being entirely online, there has been no
operational impact from the COVID-19 pandemic to
date. The business has been functioning successfully
maintaining the same high quality of service while
handling significantly increased workloads in respect
of customer enquiries and market activity; this
demonstrates the robustness of the Group’s platform,
systems and infrastructure and the quality of its
technology and people.
The Board will continue to ensure the welfare of our
staff whilst monitoring the impact of COVID-19, taking
necessary actions as appropriate.
Like other operators in the sector, Plus500’s financial
performance in 2020 will be dependent, among other
things, on financial market conditions providing
sufficient trading opportunities for customers.
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Plus500 Ltd. 2019 Annual Report 8
Plus500 Ltd. 2019 Annual Report CHIEF EXECUTIVE OFFICER’S STATEMENT
" Plus500 considers its human capital to be
its most valuable asset and a key element
in the ongoing optimisation of the Group’s
platform and ability to recruit and retain
higher value customers. "
Asaf Elimelech
Chief Executive Officer
INTRODUCTION
OPERATIONAL REVIEW
We finished 2019 in good financial and operational
shape following a period of change for the industry,
which has provided a more certain regulatory outlook
for Plus500 and the industry as a whole.
In 2019, Plus500 acquired a total of 91,388 New
Customers. The number of Active Customers was
199,720 for the full year.
We were particularly pleased with the strong
improvement in financial performance in the second
half of 2019 and believe that customer trading patterns
have now adjusted following the regulatory changes
introduced in Europe last year. We continue to monitor
and prepare for any potential product intervention
measures that are expected to take place in Australia
during 2020.
I am also encouraged by the trading momentum we
have shown through the year end, reflecting continued
optimisation of our marketing spend, enhancements to
our customer service, improvements in our proprietary
technology platform and additional cost optimisation.
We are further pleased in our ability to provide
significant value to our shareholders with the delivery of
strong returns representing 100% of our 2019 net profit.
There was a slight increase of 0.3% in Active Customers
in H2 2019 vs H1 2019, reflecting an improvement in
the H2 2019 churn rate of 31% (H1 2019: 34%), which
the Group attributes to recent initiatives adopted to
enhance the overall customer experience.
Average User Acquisition Cost (AUAC) increased on
2018 levels as the Group invested in marketing to
acquire new higher value customers. AUAC saw a 6%
reduction in H2 2019 when compared to the first half
of 2019, while Average Revenue Per User (ARPU) levels
increased by 39% over the same period. The average
lifetime value of New Customers is expected to remain
at an attractive level, justifying the level of investment
allocated to our efficient marketing algorithms. Plus500
expects AUAC to rise steadily over time, as the profile of
customers shifts to higher value customers including
those who qualify and elect for a professional status.
Average deposit per Active Customer grew by 19%
on a year on year basis to $5,116 (FY 2018: $4,284).
We believe this reflects customers' strong trust and
increased appetite to trade on the Plus500 platform.
Following a period of regulatory changes in the industry,
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Plus500 Ltd. 2019 Annual Report
greater levels of stability have ensued, bringing greater
confidence to customers to continue trading.
During 2019 we continued to focus on the acquisition
and retention of highly skilled employees; Plus500
considers its human capital to be its most valuable
asset and a key element in the ongoing optimisation of
the Group's platform and ability to acquire and retain
higher value customers, while continuing to maintain an
effective and lean cost structure.
RISK MANAGEMENT FRAMEWORK
Plus500's target audience is exclusively individual
customers; the trading platform is not available to
institutional or corporate traders. As a result, Plus500
has a low customer concentration and therefore does
not rely on trading activity from a small number of
very large customers - the largest customer in 2019
contributed less than 1% of total Group revenue.
Additionally, the Company's risk management
framework ensures that risk exposures are strictly
limited. The Company employs a combination of
real-time monitoring technology, predefined limits and
internal offsetting techniques across its hundreds of
thousands of customers to ensure risk is effectively
managed.
Plus500 monitors trading levels and exposure limits (for
example by customer, instrument and asset class) and
credit risk is limited by ensuring all customer accounts
are pre-funded. The Group also offers a margin
close-out policy to all of its customers on a cross
border basis.
Although Customer Trading Performance8 fluctuates
over the short term and can fluctuate from year to year,
the Company considers performance over a longer
timeframe, which has tended to be broadly neutral. As
per Plus500's business model, revenues are mainly
driven by the volume of trades executed on its trading
platforms and the associated trading spreads and
overnight charges. Over the past six years, Customer
Income9 accounted for approximately 99% of revenues.
TECHNOLOGY AND INNOVATION
We believe that the Group’s technology capabilities,
which continue to be developed internally, are a key
differentiator and represent a significant competitive
advantage. Plus500’s ability to react and implement
changes rapidly enables the Company to adapt to both
the Group’s needs, as well as to customers’ demands,
helping to create a highly attractive and dynamic
customer offering.
Throughout 2019, the Group continued its investment
in its operational and regulatory framework, as well as
10
Plus500 Ltd. 2019 Annual Report
its technology, in order to enhance its offering across
the broad range of platforms, languages, markets
and regulatory environments in which it operates. The
ongoing investment and development of these areas
will create long term benefits to activity and customer
acquisition whilst improving customer experience.
The Group continues to place a strong focus on
innovation and technology throughout the entire
customer journey – from marketing and customer
acquisition process to trading experience, support
channels, risk management and back office systems.
Back office processes (such as depositing funds)
are also completed using the Group’s proprietary
technology, which provides smart routing optimisation
between various local payment processing companies.
The Company also introduced additional alternative
payment methods to increase variety and streamline
the deposit process. This enables the Group to operate
an efficient and lean cost base, while improving the
service it can offer to its customers.
The Group’s trading platform benefits from its intuitive
and user-friendly design, which is accessible from
multiple operating systems and provides customers
with access to more than 2,800 financial instruments.
The upgrades introduced to Plus500’s trading platform
in 2019 have contributed to an increased appeal to
higher value customers; these included:
• an analysis package to its WebTrader, iOS and
Android platforms, including volume indicators,
drawing tools and an extensive range of technical
indicators;
acknowledged as the UK’s no. 1 in satisfaction for
online chat customer service in 201910. Integration
with WhatsApp was successfully introduced during
the first half of 2019 and is already contributing to an
overall improved customer service experience, which
is available in main languages 24/7. Plus500 was the
first major CFD provider to successfully incorporate
WhatsApp to its platform as part of its customer
support offering.
The Group’s mobile and tablet offering continues to be
very popular with customers, representing over 80% of
total revenues in 2019 (FY 2018: 77%), with 75% of all
customer trades being completed on a mobile device
(FY 2018: 73%). Plus500 remains the industry leader in
mobile as it retains its position as the highest rated app
in its sector in both the AppStore and Google’s
Play Store.
GROUP POSITIONING AND CORE VALUES
Plus500 retains an entrepreneurial approach, adapting
rapidly to changing market conditions and customer
requirements, resulting in a market-leading offering
delivered through cutting-edge proprietary technology.
The Company continues to recruit and develop the best
people and to focus on being operationally efficient
whilst maintaining regulatory compliance.
Our core values include putting our customers and
stakeholders at the centre, leading the industry
while standing out and providing an innovative, self-
developed, high quality product, as well as providing our
employees a dynamic and evolving work environment in
which they can grow and develop.
• upgraded WebApp platform interfaces for further
PLUS500’S GROWTH STRATEGY
user customisation, including traders’ ability to alter
the appearance of the platform by selecting a light or
dark background, with dark mode quickly becoming
very popular;
We remain confident in the prospects of the business
going forward. Future success and value creation will
be based on delivery on a number of fronts:
• more than 100 new financial instruments, some of
which were unique to Plus500’s trading platform,
were also added in 2019, as the Group responded
rapidly to either news flow or customer demand.
The Company continually seeks to upgrade and
enhance its customer service channels, evolving from
email to market-leading live chat, for which it was
• The Company has outgrown the competition
organically over the past decade in many
jurisdictions and is confident this will continue,
enabled by superior customer targeting, leading
marketing techniques and disciplined customer
onboarding processes;
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Plus500 Ltd. 2019 Annual Report
• Profitability has been enhanced by concentration on
cost efficiency. Plus500 will continue to emphasise
cost control, remaining lean and investing only where
it is confident in delivering superior returns;
• The Company is considering multiple additional
growth opportunities through:
1. expansion into new geographic regions and
acceleration within current regions through
additional regulatory licences;
2. product extension enabled by further development
of the current technology platform, enhancing
customer acquisition rates and improving retention
levels;
3. value-adding targeted acquisitions, made possible
by the imposition of increasingly strenuous
regulatory standards, which enhance the position
of the compliant industry leaders;
• Delivering best-in-class customer service is key to
success. Plus500 will emphasise enhancements to
its current trading platform to build on its reputation
for excellent customer service and to provide trading
functionality which will appeal to and satisfy the
more sophisticated traders;
• Capital discipline will remain a central tenet of
Plus500’s strategy. The Company will seek to
maximise returns for all its stakeholders by either
utilising capital which is surplus to operational
requirements to deliver superior growth, or returning
it to its shareholders.
OUTLOOK
The Company benefitted from its highly flexible
business model in 2019, which, alongside our
high levels of investment in regulatory compliance
and advanced technological capabilities, enabled
us to adjust rapidly and efficiently following the
implementation of ESMA’s regulation during the
year. We believe that customer trading patterns have
now adjusted and stabilised following the regulatory
changes introduced in Europe last year and continue
to monitor and prepare for any potential product
intervention measures that are expected to take place in
Australia during 2020.
The momentum built during the second half is
testament to the continued optimisation of marketing
spend during the year, as well as enhancements to
customer service and improvements in the Group’s
proprietary technology platform.
As a result of the ongoing period of heightened volumes
of trading across global financial markets during Q1
2020, the Company has continued to see a significantly
increased level of customer trading activity, alongside
strong momentum across all financial and operational
KPIs. Revenue from Customer Income has been very
strong due to the heightened levels of market volatility.
We have also experienced gains from Customer Trading
Performance, although this is expected to be neutral
over time.
Given the uncertainty regarding the duration of the
current levels of volatility and the unquantified potential
impact from regulatory changes in Australia, it remains
difficult to predict the outcome for the full year at this
stage.
Nonetheless, our performance in the financial year to
date means we enter 2020 with confidence, reflecting
further strengthening of our customer offering and
market positions, especially in regulated markets where
legislation is transparent and brand recognition is
already significant. We remain committed to ongoing
improvement in the customer trading experience in
order to increase retention rates and appeal to more
sophisticated and higher value traders; success here
is expected to provide incremental revenues in due
course.
Asaf Elimelech
Cheif Executive Officer
6 April 2020
8 Customer Trading Performance – Gains/losses on customers’ trading positions
9 Customer Income – Revenue from customer spreads and overnight charges
10 Investment Trends 2019 UK Leverage Trading Report
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Plus500 Ltd. 2019 Annual Report
OUR STRATEGY
By focusing on our core strategic pillars we seek to achieve our goal of being the leading global listed CFD provider
Strategic Objectives
2019 Performance
KPIs
Priorities
Maintain leadership
in innovation
•
Introduced new features and redesigns to the trading platform to enhance
the customer experience through all parts of the customer journey
• Developed innovative financial instruments, some of which were unique to
Plus500's trading platform
•
Immediate release of new instruments in accordance
• Continue to maintain our market leading position
with market trends and customer demand
in launching new instruments
• Number 1 ranking among CFD providers for mobile app
• Constantly seek to develop the performance
in both the AppStore and Google's Play Store, and in
and user experience of our trading platform,
• The Group’s technological edge enabled it to comply quickly and efficiently
number of downloads
enhancing customer experience and reducing
with recent regulatory changes
• Over 80% of revenues from mobile devices (2018: 77%)
churn
Grow our customer base
in established markets and
extend market leadership
• Maintained its leading position in core markets and international brand
•
recognition
Integration with WhatsApp contributing to an overall improved customer
service experience, which is available in main languages 24/7
Strengthen and expand our
geographical reach into
new regions
• The Group constantly works on expanding into new geographical regions by
acquiring new regulatory licences
• 91,388 New Customers (2018: 134,237)
• 199,720 Active Customers (2018: 304,616)
• ARPU: $1,775 (2018: $2,365)
• AUAC: $1,046 (2018: $934)
• Number 1 CFD provider in the UK, Germany and Spain11
• Reduced response times in customer support channels
•
Increase in customer satisfaction and retention
• Following the year end, in January 2020, a new licence
was granted to the Group by the Financial Services
Authority in the Seychelles, further complementing the
Group's seven existing licences across the globe and
reducing specific location regulatory risk
• Continue to invest in marketing scale and
abilities to ensure that it remains a key
differentiator and attracts new valuable
customers, while optimising our return on
investment and improving retention rates
• Continue to increase brand awareness in
measurable, innovative, cost-effective ways to
attract new and valuable customers
• Further invest in customer support measures to
increase overall customer satisfaction
• Extend our global footprint and to continue
to diversify revenues through addition of new
operating licences
11 By total number of client relationships, Investment Trends 2019 UK Leverage Trading Report; Investment Trends 2019 Germany Leverage
Trading Report; Investment Trends 2019 Spain Leverage Report
13
Plus500 Ltd. 2019 Annual Report Strategic Objectives
2019 Performance
KPIs
Priorities
Maintain leadership
in innovation
•
Introduced new features and redesigns to the trading platform to enhance
the customer experience through all parts of the customer journey
• Developed innovative financial instruments, some of which were unique to
• The Group’s technological edge enabled it to comply quickly and efficiently
Plus500's trading platform
with recent regulatory changes
•
Immediate release of new instruments in accordance
with market trends and customer demand
• Continue to maintain our market leading position
in launching new instruments
• Number 1 ranking among CFD providers for mobile app
in both the AppStore and Google's Play Store, and in
number of downloads
• Over 80% of revenues from mobile devices (2018: 77%)
• Constantly seek to develop the performance
and user experience of our trading platform,
enhancing customer experience and reducing
churn
Grow our customer base
in established markets and
extend market leadership
recognition
•
Integration with WhatsApp contributing to an overall improved customer
service experience, which is available in main languages 24/7
• Maintained its leading position in core markets and international brand
Strengthen and expand our
geographical reach into
new regions
• The Group constantly works on expanding into new geographical regions by
acquiring new regulatory licences
• 91,388 New Customers (2018: 134,237)
• 199,720 Active Customers (2018: 304,616)
• ARPU: $1,775 (2018: $2,365)
• AUAC: $1,046 (2018: $934)
• Number 1 CFD provider in the UK, Germany and Spain11
• Reduced response times in customer support channels
•
Increase in customer satisfaction and retention
• Following the year end, in January 2020, a new licence
was granted to the Group by the Financial Services
Authority in the Seychelles, further complementing the
Group's seven existing licences across the globe and
reducing specific location regulatory risk
• Continue to invest in marketing scale and
abilities to ensure that it remains a key
differentiator and attracts new valuable
customers, while optimising our return on
investment and improving retention rates
• Continue to increase brand awareness in
measurable, innovative, cost-effective ways to
attract new and valuable customers
• Further invest in customer support measures to
increase overall customer satisfaction
• Extend our global footprint and to continue
to diversify revenues through addition of new
operating licences
14
Plus500 Ltd. 2019 Annual Report OUR BUSINESS MODEL
Our robust, agile, lean and scalable business
model generates operating leverage to create
value for our stakeholders
HOW WE CREATE VALUE
Financial Capital
Public Sector
Human Capital
The Company maintains a
healthy debt-free balance
sheet and a lean cost
structure
Governmental and
regulatory activity affect
the environment within
which Plus500 operates
Read more on page 29
Human capital is a key element
in the ongoing optimisation of
the Group's platform and ability
to recruit and retain higher value
customers
SHAREHOLDERS AND
INVESTORS
The Company is tasked with
delivering its shareholders
with the best return on their
investment
REGULATORS
EMPLOYEES
Regulators play a central
role in shaping our industry
and maintaining and building
constructive relationships here
is key across both current and
potential jurisdictions
The success of Plus500 is based
on its values and the abilities of
its people
Recruiting talented people
Experienced management,
skilled employees with a deep
understanding of the business
Read more on page 41
15
Plus500 Ltd. 2019 Annual Report WHAT WE DO
Plus500 operates a leading online trading platform for individual customers to trade CFDs internationally. Our
internally developed platform provided 199,720 Active Customers with the ability to trade CFDs in over 2,800
underlying financial instruments in 2019
Technology
Partnerships
Goods and Services
Plus500 operates its intuitive
and user-friendly trading platform
which is based on its proprietary
technology
The Company relies
on its partnerships as a
significant contributor to
its brand awareness and
growth
The Company utilises a range of
services to support its business
operations
CUSTOMERS
SPONSORSHIPS
SUPPLIERS
The Company has a customer-
centric approach and provides its
customers with unlimited access
to a demo account, providing the
time and flexibility to learn about
CFD trading
The trading platform offers
real-time prices and data analysis
features
Plus500 has sponsorship
agreements with Club Atlético
de Madrid FC in Spain and
with the Plus500 Brumbies in
Australia, which contributes to
its continued growth in brand
recognition
Advertising and marketing are major
areas of investment for our business
Strong international brand
Over $600 million has been invested
through marketing channels in the
trusted Plus500 brand in the last six years
In addition, Plus500 receives services
from payment processing partners,
which allows the Group to provide its
services to its customers
16
Plus500 Ltd. 2019 Annual Report HOW WE MAXIMISE VALUE
Clear strategy
Simple and coherent strategy based on constantly evolving
our trading platform, enhancing our brand through excellent
customer service and growing our customer base in new and
established markets
Read more on page 13
HOW WE SHARE VALUE
SHAREHOLDERS
AND INVESTORS
Attractive returns through capital
growth, ordinary and special
dividends and share buybacks
Total returns in dividends and share
buybacks since admission to AIM in
2013 amount to $919 million*
REGULATORS
EMPLOYEES
The Company
contributes to round
table discussions
within the industry
and holds regular
dialogue with global
regulators
Providing rewarding careers,
with opportunities for training,
development and progression
Departmental training sessions
are offered globally to continually
hone skills and achieve best
practice
Read more on page 31
Read more on page 41
* $823 million in cash dividends and $96 million in share buyback programmes, including the $30 million share buyback programme
commenced in February 2020
17
Plus500 Ltd. 2019 Annual Report Comprehensive risk management
Proprietary risk management that
incorporates real-time functionality
risk management systems and trading
threshold triggers to reduce risk
Read more on page 33
Sound governance
The Plus500 Board is comprised of experienced
individuals with extensive knowledge of finance, regulation
and compliance, technology and capital market disciplines
Our Board operates according to the best practices of the
main market and, as a premium listed company, we have
upgraded our internal policies and procedures to be as
compliant as possible, in order to provide our stakeholders
with a framework for long term success
Read more on page 58
CUSTOMERS
SPONSORSHIPS
SUPPLIERS
The cooperation of the
Company with its
partners provides all
parties with stronger
brand recognition
Read more on page 45
Ongoing growth of
the business ensures
continued support of the
Group’s marketing and
operations suppliers
Customers enjoy a highly rated, robust and
scalable, user-friendly trading platform with a
leading position in the mobile space
Intuitive navigation and consistency minimises the
learning curve between devices and improves user
experience
Customer centric approach – negative balance
protection and maintenance margin automatic
close-out are offered to all customers in all
geographies at no cost
Unlimited demo account enables potential
customers of Plus500 to become familiar with the
product and its characteristics prior to conducting
any real-money trading
Leadership in innovation
24/7 customer service in multiple languages
18
Plus500 Ltd. 2019 Annual Report OUR COMPETITIVE ADVANTAGE
Sophisticated, proprietary software
Smart marketing technology
Flexible, scalable business structure
Intuitive in-house platform allowing
flexibility, integrated features and
rapid innovation
Proprietary, highly effective
system to identify opportunities
and acquire customers efficiently
Read more on page 25
Ability to adjust to the changing
environment as a result of our lean
cost structure and proprietary
technology
The Company does not pay any
royalties or license fees to third
parties for the use of the trading
platform by its customers and can
therefore maintain high margins and
profitability levels
12
13
14
12 By total number of client relationships, Investment Trends 2019 UK Leverage Trading Report
13 By total number of client relationships, Investment Trends 2019 Germany Leverage Trading Report
14 Investment Trends 2019 Spain Leverage Trading Report
19
Plus500 Ltd. 2019 Annual Report
WHERE WE OPERATE
Countries
Languages
Offices
Our trading platform is available in more than 50
countries in 32 languages
Operations are conducted from our eight offices
worldwide. Plus500 retains operating licences and is
regulated in the UK, Australia, Cyprus, New Zealand,
Israel, South Africa, Singapore and the Seychelles
Plus500 Ltd.
Publicly traded on the:
LONDON STOCK EXCHANGE
Plus500UK
Plus500CY
Plus500AU
Plus500SG
Plus500IL
Plus500SEY
Regulated by:
FCA
Regulated by:
CySEC
Regulated by:
ASIC
FMA
FSCA
Regulated by:
MAS
Regulated by:
ISA
Regulated by:
FSA
20
Plus500 Ltd. 2019 Annual Report KEY STAKEHOLDER RELATIONSHIPS
Stakeholder
Why it is important to engage
How we engage
Understanding customers’ needs is an integral part of providing a relevant
and up to date product offering that will attract a growing number of new
valuable customers and will assist in retaining existing customers, thereby
reducing churn
Automation has been central in the Group’s success to date and will continue
to be a main theme, as the Company operates a lean and efficient structure.
The Company regards its employees as the key asset to support and enable
its technology
Regulatory oversight is an integral part of the Group's business, as its
subsidiaries retain operating licences and are supervised by various
regulators across the globe. Regulatory compliance procedures are
constantly reviewed and enhanced, with a culture of compliance embedded
within the business, including open and constructive communications
with relevant regulatory bodies in current and potential future regulatory
jurisdictions
As a public listed company, Plus500 aims to provide fair, balanced and
understandable information to investors and shareholders. Maintaining a
close connection to its shareholders through transparent dialogue has always
been the Group’s focus. The Company continues to seek ways to enhance the
relationship with its shareholders and investors
Plus500 uses the services of various suppliers in order to provide its
customers with the best user experience. Suppliers assist with the ongoing
activities surrounding the Plus500 trading platform
Plus500 is the official sponsor of the Spanish football club, Atlético de
Madrid FC and of the Australian professional rugby union team, the Plus500
Brumbies. Both sponsorships have been highly successful, increasing brand
recognition with the Company’s current and potential global customer base
within its target markets
• Online and offline marketing channels
• Omni-channel customer-centric approach
• 24/7 customer support available in multiple languages
• Evaluation and feedback processes for employees and
management
• Competitive reward packages
• Encouraging employee training and development
• Non-Executive Director (Steven Baldwin) responsible for
workforce engagement
• Ongoing constructive interactions with relevant regulators
• Participation in regulators' coordination groups
• Contributions to public consultations issued by regulators
on relevant industry matters
• Annual reports
• Regulatory News Service
• Annual general meeting
•
•
Investor presentations
Investor conferences
• One-on-one meetings
• Relationships with suppliers allow the ongoing review and
monitoring of their performance levels
• Building strong partnerships with suppliers through open
two-way dialogue
• Ongoing relationships, including online and offline
marketing campaigns and the prominence of the
Company logo on all team jerseys
• Mutually beneficial relationship enhancing all brands
Customers
Employees
Regulators
Shareholders
and Investors
Suppliers
Sponsorships
21
Plus500 Ltd. 2019 Annual Report Stakeholder
Why it is important to engage
How we engage
Customers
Employees
Understanding customers’ needs is an integral part of providing a relevant
and up to date product offering that will attract a growing number of new
valuable customers and will assist in retaining existing customers, thereby
reducing churn
Automation has been central in the Group’s success to date and will continue
to be a main theme, as the Company operates a lean and efficient structure.
The Company regards its employees as the key asset to support and enable
its technology
Regulators
constantly reviewed and enhanced, with a culture of compliance embedded
Regulatory oversight is an integral part of the Group's business, as its
subsidiaries retain operating licences and are supervised by various
regulators across the globe. Regulatory compliance procedures are
within the business, including open and constructive communications
with relevant regulatory bodies in current and potential future regulatory
jurisdictions
• Online and offline marketing channels
• Omni-channel customer-centric approach
• 24/7 customer support available in multiple languages
• Evaluation and feedback processes for employees and
management
• Competitive reward packages
• Encouraging employee training and development
• Non-Executive Director (Steven Baldwin) responsible for
workforce engagement
• Ongoing constructive interactions with relevant regulators
• Participation in regulators' coordination groups
• Contributions to public consultations issued by regulators
on relevant industry matters
Shareholders
and Investors
As a public listed company, Plus500 aims to provide fair, balanced and
understandable information to investors and shareholders. Maintaining a
close connection to its shareholders through transparent dialogue has always
been the Group’s focus. The Company continues to seek ways to enhance the
relationship with its shareholders and investors
• Annual reports
• Regulatory News Service
• Annual general meeting
Investor presentations
•
•
Investor conferences
• One-on-one meetings
Suppliers
customers with the best user experience. Suppliers assist with the ongoing
Plus500 uses the services of various suppliers in order to provide its
activities surrounding the Plus500 trading platform
Plus500 is the official sponsor of the Spanish football club, Atlético de
Madrid FC and of the Australian professional rugby union team, the Plus500
Sponsorships
Brumbies. Both sponsorships have been highly successful, increasing brand
recognition with the Company’s current and potential global customer base
within its target markets
• Relationships with suppliers allow the ongoing review and
monitoring of their performance levels
• Building strong partnerships with suppliers through open
two-way dialogue
• Ongoing relationships, including online and offline
marketing campaigns and the prominence of the
Company logo on all team jerseys
• Mutually beneficial relationship enhancing all brands
22
Plus500 Ltd. 2019 Annual Report KEY PERFORMANCE INDICATORS
The Board monitors the Group's performance against
its objectives, and the financial performance of its
operations through a number of key performance
indicators (“KPIs”) regularly. In particular, these KPIs are
used to benchmark revenue generation and operating
costs, and to ensure the ongoing and improving
effectiveness of the Company's marketing budget to
maximise efficiency and returns on investment. The
Group's main KPI's, which follow the industry's common
practice, are set out below
91,388
91,388
199,720
199,720
NUMBER OF NEW CUSTOMERS
'New Customers’ are customers who have deposited
real money into their trading account for the first time in
the relevant financial period.
This is a consistent and relevant measure to track the
number of new customers the Group attracts on a
year-on-year basis. Continuing to attract new valuable
customers whilst engaging and retaining existing
customers is important to the overall strategy of the
Group. In 2019 the Group acquired a total of 91,388
New Customers (2018: 134,237).
NUMBER OF ACTIVE CUSTOMERS
‘Active Customers' are customers who made at least
one trade using real money on the trading platform in
the relevant financial period.
This measure reflects the level of customer activity
within the trading platform during the period and is
indicative of the degree of customer satisfaction. It is
important that the Group attracts and retains active
trading customers to continue to deliver sustainable
revenue and profits. In 2019 the Group had a total of
199,720 Active Customers (2018: 304,616).
23
Plus500 Ltd. 2019 Annual Report 1,775
1,775
1,046
1,046
AVERAGE REVENUE PER USER (ARPU)
Average Revenue Per User is calculated by dividing
the revenue by the number of Active Customers in the
relevant financial period.
This measure is affected by other factors such as
extreme periods of customer acquisition, periods of
low or high volatility in financial markets and Customer
Trading Performance. The Average Revenue Per User in
2019 was $1,775 (2018: $2,365).
AVERAGE USER ACQUISITION COST (AUAC)
Average User Acquisition Cost is used to show the
average cost of attracting a new customer. This is
calculated by dividing the total marketing expenses by
the number of New Customers in the relevant financial
period.
Along with ARPU, the direction of movement here
indicates the level of return on marketing investment.
The Company feels it is important to manage the
Average User Acquisition Cost to ensure a balanced
spend on customer acquisition. The Average User
Acquisition Cost in 2019 was $1,046 (2018: $934).
24
Plus500 Ltd. 2019 Annual Report OUR TECHNOLOGY
THE TRADING PLATFORM
The trading platform has been designed to be intuitive
and user-friendly, providing customers with a simple
and consistent interface across a wide variety of
devices, including mobile, tablet, web and PC. This
approach ensures that customers are able to enjoy
a multi-channel experience, providing them full
accessibility to trade in CFD's on underlying financial
instruments which are of interest to them, across all
formats and through a single customer account.
This offers the customer a familiar user interface
greatly reducing the learning curve when switching
between different devices. The upgrades introduced to
Plus500's trading platform in 2019 aim to increase its
appeal to higher value customers.
DEMO ACCOUNT
The Group offers potential customers the opportunity
to operate a free demo account for an unlimited period
of time. The demo account fully imitates the real
trading experience, providing customers with access
to all financial instruments, trading tools and features.
This ensures that customers have an opportunity to
familiarise themselves with the features of the
trading platform and to understand the product
before they choose to commence trading using a real
money account.
CUSTOMER INTERFACE AND BACK-END TO
THE TRADING PLATFORM
The trading platform operates a simple and
consistent, but highly localised user interface across
a number of desktop and mobile devices, available in
more than 50 countries and in 32 languages. It has
been designed to be as intuitive and as user-friendly as
possible and provides customers with real-time prices,
allowing customers to continuously monitor their open
positions and trading activity, with immediate access
to trade execution across a multitude of order types.
CONTINUED DEVELOPMENT OF THE
TRADING PLATFORM
The trading platform continues to evolve in order to
further improve systems scalability for meeting the
growing demands of the Group’s active customer base
and the increased customer activity, thus creating an
even more robust infrastructure which can support
substantial volumes. The Group is constantly updating
the financial instruments available on its platform to
meet customer demand and asset trends across the
geographies in which its offering is available.
25
Plus500 Ltd. 2019 Annual Report
The trend for trading CFDs on smartphones and tablets
continues, as the Group’s mobile platforms for both
smartphones and tablets now account for more than
80% of revenues in 2019. Plus500 remains an industry
leader in mobile as demonstrated through its maintained
position as the highest rated app in its sector in both the
AppStore and Google’s Play Store.
The success of the Group has been supported by
maintaining a tight and flexible cost structure. The
high degree of operating leverage within the business,
driven by the efficiency and automation of the trading
platform and the supporting elements, enables the
Group to generate a relatively high average revenue per
employee, whilst maintaining a relatively low average
cost per employee; these are metrics which the Board
believes compare favourably to some of the Group’s
primary peers.
* For illustrative purposes
26
Plus500 Ltd. 2019 Annual Report
OUR MARKETS
CFDs are highly flexible, internationally traded products,
which can be based on a wide range of underlying
financial instruments. The growth of this industry
over recent years has been aided by a number of
factors: increasing awareness of its existence through
online and social media channels; a growing desire
by individuals to control their finances along with
changes in financial regulation providing greater
freedoms; the ongoing growth in internet usage along
with the explosion in the use of mobile devices; and
the development of intuitive yet highly advanced online
trading platforms.
Together these have enabled individual customers to
trade in an increasingly wide variety of financial assets
and instruments that were previously inaccessible.
Within the broader industry, the Group is currently
focused solely on the provision of CFDs.
GLOBAL OPERATIONS
The Group operates from eight offices and provides
services to customers from more than 50 countries
worldwide. Our global operations enable us to cater for
our existing customers and to expand our offering to
potential new customers within additional territories,
while operating within the applicable local regulatory
regimes.
REGULATION
The Group is regulated in the EEA, UK, Australia, South
Africa, Israel, New Zealand, Singapore and the
Seychelles and its services are also available in certain
other jurisdictions across Asia, the Middle East and
elsewhere. The Group operates through six subsidiaries
which have been granted licences by regulators:
•
•
Plus500UK Ltd is authorised in the United Kingdom
by the Financial Conduct Authority (FCA) and has
obtained “passports” allowing it to offer its services
across the EEA;
Plus500CY Ltd is authorised in Cyprus by the
Cyprus Securities and Exchange Commission
(CySEC) and has similarly obtained “passports”
allowing it to offer its services across the EEA;
27
•
•
•
•
Plus500AU Pty Ltd is authorised in Australia by the
Australian Securities and Investments Commission
(ASIC), in New Zealand by the Financial Market
Authority (FMA) and in South Africa by the
Financial Sector Conduct Authority (FSCA);
Plus500IL Ltd is authorised in Israel by the Israeli
Securities Authority (ISA);
Plus500SG Pte Ltd is authorised in Singapore by
the Monetary Authority of Singapore (MAS); and
Plus500SEY Ltd is authorised in the Seychelles by
the Financial Services Authority (FSA).
The Group recognises that regulators around the globe
continue to increase scrutiny and standards in the retail
leveraged trading industry. The regulatory environment
continues to evolve in many of the Group’s European
markets and in other parts of the globe, such as the
anticipated product intervention orders which are
expected to come into force during 2020 in Australia.
As a result of a tightening global regulatory environment,
the Company believes there will be a greater need for
efficiency and automation of the business models of
industry participants and that, thanks to the scale of the
Group and its technology leadership positions, it is well
prepared to benefit from these trends.
BREXIT
The UK left the European Union on 31 January 2020
and is now in a transition period until 31 December
2020. Between now and the end of the year, EU law will
continue to apply with no change. Plus500 remains
well prepared for various scenarios for the UK's exit
from the EU, supported by the Group's separate EU
licence in Cyprus which enables it to operate in EU
regulated jurisdictions, in line with applicable regulatory
requirements. Plus500 will continue to assess any
future developments relating to the UK's exit from
the EU.
Plus500 Ltd. 2019 Annual Report 28
Plus500 Ltd. 2019 Annual Report FINANCIAL REVIEW
" Our corporate structure encourages
streamlined systems and efficiency across
the Group, enabling us to form a lean and
agile operating structure; this, in turn,
enables us to efficiently and quickly adapt
to ongoing changes to our industry and
business "
Elad Even-Chen
Chief Financial Officer
INTRODUCTION
2019 was a year of two distinct halves; very low
volatility in financial markets in Q1 resulted in
fewer opportunities for customers to trade, however,
more normal trading conditions returned in Q2 and
continued through to the year end, resulting in a much
improved second half performance.
Our corporate structure encourages streamlined
systems and efficiency across the Group, enabling
us to form a lean and agile operating structure; this,
in turn, enables us to efficiently and quickly adapt to
ongoing changes to our industry and business, thereby
enhancing our overall performance.
REVENUE
The Group delivered revenue of $354.5 million for 2019
(FY 2018: $720.4 million), which represents
approximately 93% of Customer Income.
in H2 2019 in comparison to H1 2019, and $126.7
million of EBITDA, representing approximately 66% of
annual 2019 EBITDA.
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Costs remained well under control during 2019,
reflecting the Group's optimised cost base.The
majority of the Group's costs are variable and are
positively correlated to enhanced performance,
including marketing and processing expenses.
Selling, General and Administrative expenses
decreased by 24% to $164.4 million (FY 2018: $215.1
million) attributed to general level of cost optimisation.
Higher marketing costs per customer were incurred as
a result of increased focus on acquisition of high
value customers. The balance of costs also includes
payroll and related expenses, variable bonuses and
share appreciation rights.
EBITDA
FINANCIAL EXPENSES
EBITDA for 2019 was $192.3 million (FY 2018: $506.0
million), with an EBITDA margin of 54% (FY 2018: 70%).
Net profit for 2019 was $151.7 million (FY 2018: $379.0
million). Earnings per Share15 were $1.35 (FY 2018:
$3.33). There was a much improved second half
performance, with a 19% increase in Customer Income
In 2019, the Company’s financial expenses amounted
to a net $0.8 million (FY 2018: $2.3 million), the
majority arising from foreign exchange and translation
differences. A significant proportion of the Company’s
cash is held in US dollars in order to provide a natural
hedge, therefore reducing the impact of currency
29
Plus500 Ltd. 2019 Annual Report
movements on financial expenses. This result reflects
an optimisation of financial cash management in
comparison to 2018, with reduced financial expenses
of $1.5 million.
BALANCE SHEET
Plus500’s business model continued to be highly cash-
generative with 88% operating cash conversion16
(FY 2018: 98%). 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. Earnings from
these customer trades are recognised in cash on
the Company’s balance sheet as customers’ trading
activity occurs and amounts are transferred from or
to the Company's accounts. In addition, the Company
requires relatively low levels of capital expenditure.
The combination of these features mean that a high
proportion of net income is rapidly converted into cash.
Plus500's total assets were $316.9 million as of
31 December 2019 (31 December 2018: $332.9
million); with equity of $284.1 million, representing
approximately 90% of the balance sheet as of 31
December 2019 (31 December 2018: $280.7 million).
Cash generated from operations during the year was
$170.1 million (FY 2018: $495.0 million); this resulted
in year end cash balances standing at $292.9 million
REVENUE
354.5M
720.4M
EBITDA
192.3M
506.0M
NET PROFIT
151.7M
379.0M
TOTAL DIVIDEND
PER SHARE
0.6501
1.9977
9
1
0
2
8
1
0
2
9
1
0
2
8
1
0
2
9
1
0
2
8
1
0
2
9
1
0
2
8
1
0
2
30
Plus500 Ltd. 2019 Annual Report (31 December 2018: $315.3 million). Cash balances
reduced during the year as a result of dividend
payments ($101.1 million) and two share buyback
programmes ($6.0 million and $41.2 million).
All amounts stated exclude client funds which are held
in segregated accounts and are subject to annual audit
and certification, in line with global best practices. The
amount of customer deposit, net in 2019 was $162.8
million (FY 2018: $107.2 million).
PRESENTATION OF CURRENCIES
average share price of £7.66. Following the year
end, the share buyback programme continued to its
completion, and an additional 749,854 Ordinary Shares
have been purchased, amounting to a total of $8.8
million, at an average share price of £9.06.
The Board declared a final dividend of $40.8 million
for the year ended 31 December 2019, representing
$0.3767 per share (FY 2018: $0.6191 per share), with an
ex-dividend date of 27 February 2020, a record date of
28 February 2020 and a payment date of 13 July 2020.
This makes a total dividend for the year of $0.6501 per
share (total dividend for 2018: $1.9977 per share).
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.
A new share buyback programme was commenced
in February 2020 to buy back up to $30 million of
the Company's shares (the "New Share Buyback
Programme").
Subject to the completion of the New Share Buyback
Programme, the resulting total distribution to
shareholders for 2019 will amount to a return to
shareholders of $151.7 million17 or 100% of net profit for
the year, in line with the Company's stated shareholder
returns policy.
The Board will continue to assess the availability of any
excess capital and prioritise its use, as it has always
done, and carefully evaluate any identified opportunities
against the long term benefit of organic investment or
returns to shareholders.
Elad Even-Chen
Chief Financial Officer
6 April 2020
SHAREHOLDER RETURNS
The Board considers the Group’s shareholder returns
policy annually, including the optimal balance between
allocating surplus funds to the payment of ordinary and
special dividends or share buybacks. The Company's
policy is to return at least 60% of net profits to
shareholders, to be distributed through a combination
of dividends and share buybacks, with at least 50% of
this distribution being made by way of dividends. This
policy applies to net profits on a half-yearly basis.
In October 2018 the Board approved a programme
to buy back an initial amount of $10 million of the
Company’s Ordinary Shares in accordance with the
authority granted at the Company’s AGM. Subsequently,
the Company purchased 487,500 Ordinary Shares in
accordance with this programme during 2019 up to
the termination of the programme, for an aggregate
purchase price of $6 million, and at an average share
price of £10.13.
In addition, the Board determined at the time of the
Group's half year results in August 2019 that enhanced
shareholder value could be delivered from buying
back the Company's shares and as a consequence, a
material share buyback programme to purchase up to
$50 million of the Company's shares was announced.
In 2019 the Company purchased 4,259,066 Ordinary
Shares in accordance with this programme, for an
aggregate purchase price of $41.2 million and an
31
Plus500 Ltd. 2019 Annual Report The table below shows the consolidated audited results for the two financial years ended 31 December
2019 and 31 December 2018, respectively:
Revenue
EBITDA
Profit before Tax
Net Assets18
2019
$354.5m
$192.3m
$189.3m
$284.1m
2018
$720.4m
$506.0m
$503.0m
$280.7m
The table below shows the consolidated audited cash flows of the Group for the two financial years ended
31 December 2019:
Net cash provided by operating activities
Net cash used in investing activities
2019
$127.3m
$(0.1)m
2018
$400.4m
$(0.7)m
Net cash used in financing activities
$(150.1)m
$(324.2)m
15 Earnings per Share – Calculated based on weighted average number of Ordinary Shares in issue as of 31 December 2019
16 Operating cash conversion – Cash generated from operations / EBITDA
17 The actual dividend to be paid by the Company on the dividend payment date will be less than the $40.8 million initially estimated since the
Company repurchased additional Ordinary Shares between the date of dividend declaration and the record date of the dividend, which
Ordinary Shares are held in treasury and not entitled to dividend payment
18 Net Assets are as of 31 December 2019 and as of 31 December 2018, respectively
32
Plus500 Ltd. 2019 Annual Report RISK MANAGEMENT FRAMEWORK
The management and control of risks in the Company
is embedded within day-to-day operating procedures.
The Company has developed a comprehensive risk
mitigation plan, to control exposure and provide secure
solutions. These procedures comprise of a range of
measures including corporate policies, operating rules,
systematic reporting, external audits, internal audits,
self-assessment and continuous monitoring by the
Regulatory & Risk Committee, the Board and the
executive management team.
RISK GOVERNANCE FRAMEWORK
The financial, market and regulatory environments in
which Plus500 operates inherently expose it to a number
of strategic, financial and operational risks. The Company
recognises the importance of understanding and
managing these risks and has determined levels of risk
that it believes are acceptable. Policies and procedures
have been developed within a robust risk management
framework that attempts to minimise various risks,
including market risk.
Plus500’s target customer base is exclusively individual
customers and the trading platform is not available to
institutional or corporate traders. As a result, Plus500
has a low customer concentration and therefore does
not rely on trading activity from a small number of
very large customers – the largest customer in 2019
contributed less than 1% of total Group revenue.
Additionally, the Company’s risk management
framework ensures that risk exposures are strictly
limited. The Company employs a combination of
real-time monitoring technology, predefined limits and
internal offsetting techniques across its hundreds of
thousands of customers to ensure risk is effectively
managed.
Plus500 monitors trading levels and exposure limits (for
example by customer, instrument and asset class), and
credit risk is limited by having all customers accounts
pre-funded. The Group also offers a margin close-out
policy to all of its customers on a cross border basis.
In 2019, approximately 85% of the days were profitable
with the majority of the remaining 15% of trading days
showing relatively immaterial negative revenue. The
average daily loss in 2019 was less than $411,000.
Although Customer Trading Performance fluctuates
over the short term and can fluctuate from year to year,
the Company considers performance over a longer
timeframe, which has tended to be broadly neutral. As
per Plus500’s business model, revenues are mainly
driven by the volume of trades executed on its trading
platform and the associated trading spreads and
overnight charges. Over the past six years, Customer
Income accounted for approximately 99% of revenues.
GOVERNANCE
The role of the Board
The Board is ultimately responsible for the risk strategy
and has developed a Risk Governance Framework.
The Board believes the robust, technology-driven
risk management systems of the Group are a key
competitive strength and an important factor in its
revenue generation. The implementation of the risk
strategy is delegated to management under the
more detailed supervision of the Regulatory & Risk
Committee.
The role of the Regulatory & Risk Committee
The Regulatory & Risk Committee receives updates
from management on risk, compliance and regulatory
issues and reviews the related internal systems.
The Regulatory & Risk Committee is responsible for
reviewing relationships with the regulatory authorities
and reviewing the adequacy and quality of the Group’s
systems and procedures for compliance with regulatory
requirements where the Group is regulated and in
other jurisdictions where the Group has a significant
market presence. The Regulatory & Risk Committee
also has responsibility for reviewing the Company’s
most significant risks to the achievement of strategic
objectives and reviewing the Company’s risk policy.
33
Plus500 Ltd. 2019 Annual Report
Second line of defence
A strong compliance function is in place in all territories
where the Group operates. The Board continues to
develop the Group’s compliance policies in line with
each of the regulatory environments in which the
Group’s offering is available.
Third line of defence
The third line of defence, independent assurance, is
provided by internal audit.
The role of the internal auditor is to examine, among
other things, the Company’s compliance with applicable
law and orderly business procedures. In accordance
with the Israeli Companies Law 5759-1999 (the
"Companies Law") the internal auditor is appointed
by the Board on the recommendation of the Audit
Committee, which also oversees the internal auditor’s
work plan, monitors its activities and assesses its
performance.
Pursuant to the Companies Law, 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 external auditor or its
representative.
The Company’s internal auditor is Brightman Almagor
Zohar & Co. (Deloitte Israel) a member firm of Deloitte
Touche Tohmatsu Limited.
Compliance with applicable regulations is also provided
by local advisors in the main territories that the Group
operates in, and advice on the regulatory regime is
considered when planning new licence applications.
LINES OF DEFENCE
Within the Risk Governance Framework, three lines of
defence are created through:
• Front-line risk management processes
• Regulatory compliance
•
Independent assurance provided by internal audit
First line of defence
The first line of defence consists of front-line risk
management processes operated by management within
the day-to-day trading activities of the Group’s business.
There are three elements to the management of day-to-
day trading risk:
a. Financial Risk Limitation Policies
The Group has developed proprietary risk
management systems that incorporate various real-
time financial risk limits.
b. Trading Limits
i. Customer limits
Monetary limits are placed on a customer’s:
(a) exposure to any single instrument;
(b) aggregate open positions as a whole; and
(c) aggregate deposit amounts.
Customer limits are determined with reference to,
amongst other things, a customer’s credit score,
trading history, location and other due diligence
results.
ii. Group limits
Monetary limits are also placed on the Group’s
exposure to individual instruments. These limits
are set according to, amongst other things, the
asset class, the size, the liquidity and the beta
(volatility) of the underlying instrument. In each
case, when these limits are reached the trading
platform automatically ceases to accept trades
from the relevant individual or on the underlying
instrument until such time as exposure levels
fall below the relevant threshold(s) or such
threshold(s) are reviewed and amended.
c. Hedging
To further manage risk the Group has a hedging policy
in place which would, in extremis, mitigate exposure of
the Group as a whole beyond certain thresholds.
34
Plus500 Ltd. 2019 Annual Report
The annual and ongoing elements of the Group’s risk
management processes are controlled by an established
risk identification, assessment and monitoring process.
The 2019 risk assessment process identified certain risks
and was narrowed down into major risks monitored by
the executive management and the Regulatory & Risk
Committee, then further consolidated into eight principal
risks closely monitored by the Board.
The Risk Factors section included within the Prospectus is
available at:
https://www.plus500.com/Docs/Plus500UK/Prospectus.pdf.
Throughout the year and up to the date of this report,
the Board has reviewed the effectiveness of the Group’s
internal controls system. As a result of this review, the
Board considers that the measures that have been or
are planned to be implemented, complement the Group's
risk management framework and are appropriate to the
Group’s circumstances, covering all controls, including
financial and operational controls and compliance with
applicable laws and regulations.
INTERNAL CONTROLS
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
outside of the ordinary course of business by the
Board;
the detailed budgeting and monitoring of costs
incurred in the development of new products;
a review of day to day management controls and
test of operating effectiveness of key controls;
an annual review of the internal controls system;
the reporting to, and review by, the Board on
changes in legislation, regulatory requirements
and practices within the sector, accounting and
regulatory and legal developments pertinent to the
Company; and
the appointment of experienced and suitably
qualified staff to take responsibility for key business
functions to ensure maintenance of high standards of
performance.
•
•
•
•
•
•
•
•
EMERGING AND PRINCIPAL RISKS
The Board has undertaken a robust assessment
of emerging and principal risks facing the Group
and how these risks are managed or mitigated
in accordance with Provision 28 of the Financial
Reporting Council’s UK Corporate Governance Code
2018 (the “Code”). Significant and emerging risks are
considered those that would threaten its business model,
future performance, solvency or liquidity. These are
outlined below and details of financial risks and their
management are set out in note 22 to the Consolidated
Financial Statements.
35
Plus500 Ltd. 2019 Annual Report
Business & Strategic Risks
Risk
Description
Management & Mitigation
Legal and
Jurisdictional
Risk
The risk that changes in the regulatory
frameworks in which the Group currently
operates could adversely affect its
performance
• Diversification of jurisdictions in which the Group
offers its services
• Offering trading accounts suitable for different
levels of customers
Regulatory changes could result in
the product offering becoming less
profitable, restrictions on the product
marketing, or a ban on the product
offering in one or more of the countries
in which the Group operates
• Monitoring market and regulatory sentiment,
developments and advice from compliance
functions on actual and possible changes and
taking remedial action
• Maintaining an open and robust dialogue with
regulators
Regulatory
Risk
Financial Risks
Risk
Description
Management & Mitigation
Business Risk
The risk of a commercially adverse
impact on the business resulting from:
•
•
The Group's strategic decision
making failing to seize business
opportunities or react to changes in
the market. This risk may result
in damage or loss, financial or
otherwise, to the Group as a whole
The risk that a third-party
organisation on which the Group
relies significantly will inadequately
provide or fail to deliver its outsourced
activities or contractual obligations to
the standard required
• Robust governance, challenge and oversight
• Managing the Group in line with the agreed
strategy, policies and risk appetite and periodic
reviews of such assumptions compared to
developments in the markets, business and
regulation
• Developing redundancies for material services
provided by third parties by having secondary
providers and alert systems, as well as automated
processes to operate redundancies
• Due diligence performed on service suppliers
ahead of outsourcing
• Service level agreements in place and regular
monitoring of performance
The risk of exposure to the market.
The market risk is mainly comprised of
the following main factors:
Market Risk
•
•
Price movements
Foreign currency exposures
The Group manages market risks by steering/
balancing natural hedge (client positions are
offsetting each other) and the Group risk tolerance
(for each financial market in which the Group's
customers trade). Market risk is mitigated by:
• The Group’s real time position monitoring and
alert system which allows the Group to constantly
manage its market exposure and adjust controls
• Defining daily/weekly/monthly Group market risk
limits for each financial market or instrument
If predetermined limits are exceeded, the Group
takes appropriate actions to reduce exposure (e.g.
margin requirement change)
•
36
Plus500 Ltd. 2019 Annual Report Financial Risks
Risk
Description
Management & Mitigation
The risk of clients or counterparties failing
to fulfil contractual obligations and/or
settlements resulting in financial loss,
• Client Credit Risk:
specifically:
The Group has a “no-credit” policy in which customers
can only fund their accounts from their own resources.
• Client credit risk:
Customers can set a wide range of loss risk mitigation
Leveraged trading can result in client
tools such as alerts and stops features
trading losses exceeding available funds
•
Institutional Credit Risk:
Credit Risk
in their account (mainly due to sharp
The Group engages only with prominent, high ranked and
market movements); such losses are
well-established financial institutions for the holding of its
absorbed by the Group (negative balance
own assets and in order to meet its regulatory obligations to
protection has always been offered to
safeguard client money in segregated accounts. The Group
all the Group’s customers, in all markets
periodically reviews its engagements with such financial
and across all underlying assets)
institutions to make sure they continue to operate within the
•
Institutional credit risk:
applicable standards and also diversify the Group's assets
The risk that financial counterparties will
across those financial institutions to reduce risk
not meet their obligations, risking both
client and Group assets
Liquidity
Risk
The risk that there is insufficient available
These forecasts incorporate the impact of all liquidity regulations
liquidity to meet the financial liabilities of
in force in each jurisdiction and other hindrances to the free
the Group
movement of liquidity around the Group. Key issues affecting the
The Group utilises liquidity forecasts to identify potential risks.
Group’s liquidity are discussed with the Board
37
Plus500 Ltd. 2019 Annual Report Operational Risks
Risk
Description
Management & Mitigation
Operational
Risk
The risk of enduring losses resulting
from inadequate or failed internal
processes due to people, failed
technology deployment, adoption
and innovation, external events
(such as natural disasters, major
utilities or infrastructure failure
etc.) or the inability to attract and
maintain competent staff which
the Group requires for operational
purposes
Information
and Data
Security Risk
• The risk of loss of technology
services caused by network
disruption and loss of systems,
data, and failure to restore
services of a third party in a
timely manner resulting in the
Group’s inability to offer its
services
• The risk of loss or misuse of
individuals’ personal information
provided to the Group
• Business and regulatory sign-off of processes and procedures to
ensure business efficiency and regulatory compliance
•
Investment in system development to improve process
automation
• Monitoring, quality checks and robust analysis of performance
to identify errors, inefficiencies, underlying causes and mitigation
plans
• Centralised operations - to enable rapid implementation of
business innovation, adjustments to business and
regulatory changes, monitoring and maintaining high standards
and cost-efficient structure
• Centralised technical operations, to ensure Group-wide
monitoring, issue handling and analysis
• Unified IT strategy focused on performance and growth
• Continuous development efforts towards operational risk
framework to ensure risk recognition and timely control
• Recruitment of highly competent employees and developed
employee retention programmes
• Enhanced staff training and oversight
• The Group has a clear business continuity plan, ensuring
quick recovery and cover for both IT and operational aspects
(connectivity, Distributed Dos Attacks, unresponsiveness of
server etc., as well as external events have an emergency plan
and contacts in place)
• Operating a multi-layered delivery, security and mitigation solution
• Continuous investment in increased functionality, scalability, capacity
and responsiveness of systems to monitor, react and prevent cyber
attacks
• Continuous real-time monitoring of incoming and outgoing network
activity
• Constant monitoring of systems performance and controls
• Selective software design methodologies and testing regimes
• A robust Group IT policy sets out strategic, stability, security and
performance standard as well as backup processes to enable service
availability in the event of failures
• Privacy as culture - creating awareness among employees
of privacy-related matters including proper use of personal
information, protection of such information and loss prevention
• Robust privacy oriented compliance program to ensure
compliance with applicable data privacy regulations
38
Plus500 Ltd. 2019 Annual Report GOING CONCERN AND VIABILITY STATEMENT
GOING CONCERN
Having given due consideration to the nature of
the Group’s business, the Group's budget and cash
flow forecasts for the period of three years ending 31
December 2022, taking into account the Company’s
anticipated investment commitments and working capital
requirements, the Board considers that the Company
and the Group are going concerns and the Consolidated
Financial Statements are prepared on that basis.
This treatment reflects the reasonable expectation
that the Group has adequate resources to continue in
business for over a period of at least twelve months
from the date of approval of the Consolidated Financial
Statements and the consideration of the various
risks set out on pages 33 to 38 and the financial risks
described in note 22 to the Consolidated Financial
Statements.
VIABILITY STATEMENT
In accordance with Provision 31 of the Code, the Board
has considered the Group’s current financial position
and future prospects and has a reasonable expectation
that the Group will be able to continue in operation and
meet its liabilities as they fall due over the three years
assessment ending 31 December 2022.
In reaching this conclusion, both the prospects and
viability considerations have been assessed:
Prospects
• The Group’s current financial position is outlined in
the Strategic Report.
• The Group’s business model: despite regulatory
changes in a number of jurisdictions, the core of the
current strategy remains in place and continues to
demonstrate sufficient cash generation to support
operations.
a collection of resource assumptions required to deliver
the Group strategy and associated revenue impacts with
consideration of key risks. This is used in conjunction
with external assumptions such as a region-by-
region review of the regulatory environment and
incorporation of any anticipated regulatory changes
as outlined in the Strategic Report, to revenue
modelling, market volatility, interest rates and industry
growth which materially impact the business. The
budget is used to set targets across the Group. The
budgeting process also covers liquidity and capital
planning and, in addition to the granular budget, a
three-year outlook is prepared using assumptions
on industry growth, the effects of regulatory change,
revenue growth from strategic initiatives and cost
growth required to support initiatives. The budget was
reviewed by the Board in December 2019 and received
final approval in February 2020.
• Ongoing review and monitoring of risks: these have
been identified in the Group’s Risk Appetite
Statement, outlined in the Group’s principal risks and
uncertainties (pages 36 to 38) and monitored monthly
by management, with review and challenge from the
Regulatory & Risk Committee.
Viability
Scenario stress testing of available liquidity and capital
adequacy are central to understanding the Group's viability.
Stress scenarios replicate adverse market conditions
and regulatory change, and are therefore considered in
the Group’s Individual Capital Adequacy Assessment
Process and Individual Liquidity Adequacy Assessment
documents, which are shared with our regulators on
request. The results of the stress testing showed that, due
to the robust nature of the business, the Group would be
able to withstand these scenarios, both in isolation and
combined scenarios, over the financial planning period by
taking management actions that have been identified.
• Assessment of prospects and assumptions:
conservative expectations of future business
prospects through delivery of the Group strategy as
presented to the Board through the budget approval
process. The annual budget approval process
consists of a detailed bottom-up process with a
12-month outlook which involves input from all relevant
functional and regional heads. The process includes
The Board has considered that three years is an
appropriate period over which to provide a viability
statement as this is the longest period over which the
Board reviews the success of strategic opportunities.
This timeline is also aligned with the period over which
internal stress testing occurs. The Board has no reason
to believe that the Group will not be viable over a longer
period, but given the uncertainty involved, in particular
39
Plus500 Ltd. 2019 Annual Report of regulatory change, the Board believes this period
presents the readers of the Annual Report with a
reasonable degree of confidence.
The Group also monitors performance against pre-
defined budget expectations and risk indicators, along
with strategic progress updates, allowing management
action to be taken where required, including the
assessment of new opportunities.
40
Plus500 Ltd. 2019 Annual Report CORPORATE SOCIAL RESPONSIBILITY REPORT
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 believes that
Corporate Social Responsibility (“CSR") is both its duty
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.
VALUES
Our core values include:
• putting our customers and stakeholders first
•
leading the industry while standing out and providing
an innovative, self-developed, high standard product
• Maintaining a dynamic and creative work environment
CULTURAL BENCHMARKS
The Company has conducted an internal process
together with its employees in order to define
measurable cultural benchmarks that from now on will
be monitored and assessed by the Board.
All of our people are offered rewarding careers with
opportunities for training, development and progression.
We allow our people to participate in our success
through a competitive reward package, alongside
share-related benefits that are intrinsically linked to the
financial and operational performance of Plus500.
We are committed to equal opportunity in employment
and to creating, managing and valuing diversity in the
workforce. We maintain an Equality and Diversity Policy
with respect to hiring, promotion, compensation, training
and assignment of responsibilities, termination, or any
other aspect of the employment relationship.
WELLBEING
We consider our people as our most valuable asset
and are therefore fully committed to their health and
wellbeing. We aim to provide our people with the most
optimal conditions to support a healthy and balanced
work environment. We encourage our people to make
use of our office facilities and to participate in organised
social activities, which include a private gym access,
yoga classes, team retreats, a varied library and other
benefits and social events. Plus500 is also a family
friendly company and we hold various family activities
for our people throughout the year.
DEVELOPMENT OF WORKFORCE AND
WORKFORCE ENGAGEMENT
DIVERSITY
Our success depends on our technology and our
technology depends on our people. We strive to
maintain a culture in which our highly talented people
can thrive and develop.
We compete for talent in the very competitive high
technology industry and our workforce is relatively
young and highly educated. CSR is as important to our
people as it is to us.
Our people come from diverse backgrounds and we
ensure that all our employees, both prospective and
current, are given access to equal opportunities no
matter their age, disability, gender reassignment,
marriage and civil partnership, pregnancy and maternity,
race, ethnic origin, colour, nationality, national origin,
religion or belief, or sex and sexual orientation. All
employees, whether they are part-time, full-time, or
temporary, will be treated fairly and with respect.
Plus500 operates in an entrepreneurial environment
where employees are encouraged to develop, innovate
and brainstorm new ideas. It is this culture that creates
continuous improvements in the technology, employee
satisfaction and loyalty.
We are committed to:
• create an environment in which individual differences
and the contributions of all team members are
recognised and valued
• create a working environment that promotes dignity
and respect for every person
41
Plus500 Ltd. 2019 Annual Report • not tolerate any form of intimidation, bullying, or
harassment, and to discipline those that breach the
policy
• make training, development and progression
opportunities available to all of our people
• promote equality in the workplace
• encourage anyone who feels they have been subject
to discrimination to raise their concerns and to take
those concerns seriously
• encourage our people to treat each other with dignity
and respect
• regularly review all employment practices and
procedures so that fairness is maintained at all times
The Equality and Diversity Policy is monitored and
reviewed annually by the Board to ensure that equality
and diversity is continually promoted in the workplace.
GENDER EQUALITY
We are committed to the progression of our talented
women at Plus500, and, as noted in our Chairman's
Introduction to Governance (page 51), we acknowledge
there is more to do at Board level. Nonetheless, we
are encouraged that our female representation at the
senior management team is relatively strong and is even
stronger on an overall Group level.
Our gender diversity statistics as of 31 December 2019
are as follows:
Gender Diversity
Male (%)
Female (%)
Board members
6 (86%)
1 (14%)
Senior management team
14 (64%)
8 (36%)
All employees
171 (49%)
178 (51%)
ANTI-BRIBERY AND ANTI-CORRUPTION
As a UK listed company we are subject to the UK
Bribery Act.
Plus500 operates a zero tolerance approach to bribery
and corruption. The Company’s Anti-bribery and
Corruption Policy ensures it conducts all business in
an honest, ethical manner whilst acting professionally
and fairly with integrity in business dealings and
relationships. The policy applies to all our people, as
well as, consultants, contractors, trainees, seconded
staff, homeworkers, casual workers and agency staff,
volunteers, interns, agents, sponsors, or any other
person associated with us, or any subsidiaries or their
employees, wherever located.
The policy covers:
• bribes;
• gifts, hospitality and expenses;
• facilitation payments;
• third party suppliers or agents;
• client entertainment and benefits;
• political contributions;
• charitable contributions.
The prevention, detection and reporting of bribery and
other forms of corruption are the responsibility of all of
us. All individuals are required to avoid any activity that
might lead to, or suggest, a breach of the policy. Internal
control systems and procedures are subject to regular
audits to provide assurance that they are effective in
countering bribery and corruption.
Training on the Anti-bribery and Corruption Policy
forms part of the introduction process for all of our
new recruits. All of our people receive regular, relevant
training on how to implement and adhere to the policy
and are asked to formally confirm compliance with the
policy on an annual basis.
The Board's Regulatory & Risk Committee reviews
the implementation of the Anti-bribery and Corruption
Policy. Every year the Committee considers the policy’s
suitability, adequacy and effectiveness.
COMMUNITY INVOLVEMENT AND SOCIAL
MATTERS
We encourage our people to get involved and
contribute to the community they live in. During
2019, the workforce at the Company's headquarters
donated clothing, toys and additional equipment
to local charities. Workforce social initiatives are
being supported by our recently established Social
Responsibility and Community Relations Committee
comprised of workforce volunteers, which oversees
the planning and performance of relevant activities.
In addition, the Company makes regular monetary
donations to various charities. Plus500 also maintains
strategic partnerships and alliances with community
42
Plus500 Ltd. 2019 Annual Report partners (internal and external), such as our ongoing
collaboration with top tier academic institutions like the
Technion – Israel Institute of Technology, participating
in innovation and entrepreneurship initiatives. We also
supported the Australian bushfire relief with a pledged
donation together with the Plus500 Brumbies sponsored
by the Group.
ENVIRONMENTAL MATTERS
We conduct our business using an online platform
and therefore we have a relatively low environmental
impact. Nonetheless, we are committed to managing
our environmental impact and are fully aware that by
considering the environment in our decision making,
particularly around technology adoption and office
selection, we can minimise our impact.
43
Plus500 Ltd. 2019 Annual Report 44
Plus500 Ltd. 2019 Annual Report SPONSORSHIPS
In January 2015, Plus500 announced a business
partnership via a sponsorship agreement with the
Spanish football club, Atlético de Madrid FC.
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.
45
Plus500 Ltd. 2019 Annual Report 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 and the club also regularly
participates in European tournaments such as the
UEFA Champions League, the most prestigious club
competition in Europe.
Atlético de Madrid FC 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, 2012 and 2018, and
won the UEFA Europa League in 2010, 2012 and 2018.
This partnership with Atlético de Madrid FC, 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.
46
Plus500 Ltd. 2019 Annual Report 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 Group’s existing
licences in Australia, New Zealand and South Africa,
all of these countries are participating in the Super
Rugby competition.
47
Plus500 Ltd. 2019 Annual Report 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
one of the most successful of the Australian teams,
having been the Super Rugby champions in 2001 and
2004 and won the Australian Conference Champions
in 2013, 2016, 2017 and 2019.
Together both sponsorships have been highly
successful, increasing brand recognition with the
Company’s global customer base and target markets.
48
Plus500 Ltd. 2019 Annual Report Plus500 Limited
GOVERNANCE
49
Plus500 Ltd. 2019 Annual Report 50
Plus500 Ltd. 2019 Annual Report CHAIRMAN'S INTRODUCTION TO GOVERNANCE
Penny Judd
Chairman
Dear Shareholder,
I would like to take this opportunity to give you an
overview of the work of the Board during 2019. Corporate
governance has remained a key theme for the Board during
the year.
In 2019, we spent considerable time evaluating the
work of the Board and its committees. This year
we undertook an independent third party review by
Genius Boards Limited (“Genius Boards”). This was
a valuable exercise which resulted in a number of
recommendations that I am considering with the Board,
including some useful observations of best practice
for Board meetings and continuing self reflection and
feedback.
As noted in last year’s report, we had already identified
the need to consider appointing an additional non-
executive director to complement the Board’s existing
skill set and this view was confirmed by the external
review. Therefore we have engaged professional
recruitment specialists to undertake a search for an
additional non-executive director to join our Board. We
will seek the best possible candidate taking particular
note of the need for diversity and the recommendations
of the Hampton-Alexander Review on gender equality in
leadership positions.
Certain changes were made to UK Corporate
Governance Code requirements that came into effect in
2019. In particular, the Board is required to understand
more deeply the engagement it has with our people.
Steven Baldwin is the non-executive director designated
to workforce engagement, meeting with our people
regularly to discuss any topics that they may wish
to raise.
Executive remuneration remains a significant issue
for UK listed companies. We consulted with external
consultants in previous years in order to align
remuneration with shareholders' expectations and we
took seriously the votes against the Executive Directors’
remuneration packages at the EGM in 2019.
The Remuneration Committee subsequently engaged
extensively with shareholder bodies and key shareholders
in developing the Executive Directors’ remuneration
packages for 2020 that were presented at the EGM earlier
this year.
Although we felt that the packages have moved
significantly further towards the UK norm, and were
also revised as a result of feedback received from
shareholders following the publication of the initial
2020 EGM Notice, we acknowledge that the proposal
51
Plus500 Ltd. 2019 Annual Report
required further amendment and that there is further
work for the Committee to do in order to achieve a
package that is compliant with UK norms, and is also
referring to our need to retain and incentivise our
management team in accordance with the standards
of the hi-tech environment that we operate in. We will
continue to work with our shareholders to further align
remuneration with the shareholder returns.
Shareholder engagement is extremely important and I
will continue to meet regularly with key shareholders, as
will the rest of the Board, to ensure we represent their
interests.
The Nomination Committee continues to review the
skills that we need while always considering diversity
and the need for independent thinking and challenge.
The Committee will also continue to review the size of
the Board to confirm that it is appropriate with a good
mix of skills, experience and knowledge and the ability
to maintain appropriate oversight of the executive team
and provide constructive challenge and support.
Our oversight of the significant risks including
regulatory, financial and technology challenges facing
the Group continues. The Regulatory & Risk Committee
reviews these risks and receives assurance from
management as to how they are understood and
mitigated to the level of risk acceptable to the Board.
The Audit Committee continues its work overseeing the
internal controls of the business and is assisted in this
by our internal auditors. It also works closely with our
external auditors and oversees the production of the
annual accounts and our financial reporting.
The following report describes the activities of the
Board and its committees during 2019 in more detail.
I look forward to reporting on the Board’s further
progress in next year’s annual report.
Penny Judd
Chairman
52
Plus500 Ltd. 2019 Annual Report
BOARD OF DIRECTORS
THE ROLE OF THE BOARD
The Board is responsible to shareholders for effective
direction and control of the Company which is aimed
at providing 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 it to review and monitor the
performance of the Company and to ensure it is in line
with its objectives for achieving its strategic goals.
Committee membership Key:
Nomination
Audit
Regulatory & Risk
Disclosure
Remuneration
Chairman
53
PENNY JUDD
CHAIRMAN
Date of appointment: June 2016
Committee membership:
Penny Judd is a Non-Executive Director, chairman
of the Board and chairman of the Regulatory & Risk
Committee. Penny Judd is a chartered accountant with
over 30 years of experience in compliance, regulation,
corporate finance and audit.
Penny Judd was Managing Director and EMEA Head
of Compliance at Nomura International Plc until June
2016. Penny Judd was also a Managing Director and
EMEA Head of Compliance at UBS investment bank
for nine years. She was a consultant to the London
Investment Banking Association (now AFME) and a
corporate finance executive at Cazenove & Co.
Penny Judd was previously the UKLA Head of Equity
Markets for six years and also worked for ten years at
KPMG as a Corporate Finance Manager and Auditor.
Penny Judd sits on the Boards of Trufin Plc, Alpha
Financial Management Consulting Plc and Team 17 Plc,
in each case as a Non-Executive Director and Chair of
the Audit Committee.
Plus500 Ltd. 2019 Annual Report
ASAF ELIMELECH
CHIEF EXECUTIVE OFFICER
Date of appointment: February 2016
Committee membership:
CHARLES FAIRBAIRN
SENIOR INDEPENDENT NON-EXECUTIVE
DIRECTOR & EXTERNAL DIRECTOR
Date of appointment: July 2013
Committee membership:
Asaf Elimelech is Chief Executive Officer of the Group.
He previously served as the CEO of Plus500AU Pty
Ltd. and has worked for the 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 to ensure that the Group, through its
subsidiaries, met its strategic goals.
Prior to joining Plus500, Asaf 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. Asaf Elimelech holds a
B.A. in Accounting and Economics from Haifa University
and is a certified accountant in Israel.
Charles Fairbairn is a Non-Executive Director, the
Senior Independent Director and Chairman of the
Audit Committee. Charles Fairbairn has held similar
positions for a number of publicly traded companies
over the past 18 years including Research Now Ltd., the
online research company of which he was a founder
investor, Statpro Group Plc, providing analytics for
asset managers, and Brightview Plc, an internet service
provider. Charles Fairbairn graduated from Durham
University with a BA (Hons) in Economics and then
qualified as a Chartered Accountant with Deloitte
Haskins & Sells in London. Having spent seven years
at Deloitte Haskins & Sells, he joined Pearson Plc as
Group Accountant, Group Chief Accountant and latterly
Finance Director of Pearson New Entertainment, a start-
up division. Over the following 20 years, 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. Charles 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.
54
Plus500 Ltd. 2019 Annual Report DANIEL KING
INDEPENDENT NON-EXECUTIVE DIRECTOR
AND EXTERNAL DIRECTOR
Date of appointment: June 2013
Committee membership:
STEVEN BALDWIN
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of appointment: June 2017
Committee membership:
Steven Baldwin is a non-executive director and
chairman of the Nomination Committee. He has an
extensive corporate finance background and held the
position of Head of European Equity Capital Markets
and Corporate Broking at Macquarie Capital until 2015
when he decided to pursue a non-executive career.
He is currently the Senior Independent Non-Executive
Director of TruFin Plc and is also a Non-Executive
Director of The Edinburgh Investment Trust Plc. Prior
to joining Macquarie Capital, Steven Baldwin was a
Director at JP Morgan Cazenove for ten years and
was a Vice President of Corporate Finance at UBS.
He qualified as a Chartered Accountant at Coopers &
Lybrand.
Daniel King has over 20 years’ experience in
e-commerce technologies, data and analytics, digital
and online media and has extensive knowledge in
developing and scaling high-growth companies.
Daniel King is currently the President & COO for Profitero,
a SaaS provider of online insights and e-commerce
intelligence for retailers and brands. Previously, Daniel
King worked for UK Trade & Investment as Head of High
Growth & Emerging Markets, working with companies
and individual investors looking to set up their business
or investment in the UK. Daniel King was previously
Managing Partner of Blue Leaf Capital, a private
boutique venture capital and advisory services company
based in London. Prior to this Daniel King held managing
director roles with Compete Inc; 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.
Daniel King is also a non-executive director of several
private companies and advises companies on their business
model, growth strategies, and international expansion plans.
55
Plus500 Ltd. 2019 Annual Report GAL HABER
MANAGING DIRECTOR
ELAD EVEN-CHEN
GROUP CHIEF FINANCIAL OFFICER
Date of appointment: June 2013
Committee membership:
Date of appointment: July 2016
Committee membership:
Gal Haber is Managing Director of the Company.
Gal Haber has over 20 years’ experience in software
programming and business development. One of the
Company's founders, he currently holds the position of
Managing Director, having previously held the position
of Chief Executive Officer. Gal Haber led the design of
the user-friendly trading platform, which represents one
of the key competitive advantages for the business.
Elad Even-Chen is the Chief Financial Officer of the
Group, Vice President of Business Development
and Head of Investor Relations. Elad Even-Chen’s
responsibilities cover a broad range of finance,
business, corporate and strategic functions, including
managing the Group finance departments, and
is responsible for Plus500’s strategic business
development projects and their financial angles.
Before founding Plus500, Gal 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, Gal Haber worked for Top Image Systems
Ltd., the enterprise content management specialist.
Gal Haber holds a B.Sc. in Computer Science from the
Technion – Israel Institute of Technology.
Elad Even-Chen joined the Group in 2011.
Elad Even-Chen is a certified accountant in Israel and,
prior to joining the Group, he was a senior associate
at KPMG, specialising in commerce and real estate
audit. Elad 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.
56
Plus500 Ltd. 2019 Annual Report UK CORPORATE GOVERNANCE CODE
COMPLIANCE STATEMENT
As a Main Market listed company, with effect from
admission to the Main Market of the London Stock
Exchange, and with respect to 2019, Plus500 is required to
comply with corporate governance policies and practices
consistent with the UK Corporate Governance Code 2018
(the "Code") (a copy of which can be found on the website
of the Financial Reporting Council: www.frc.org.uk), or
otherwise explain its reasons for non-compliance.
The following statement is therefore made in respect of
the year ended 31 December 2019 in compliance with
this requirement. The following sections of this report
explain how the principles of the Code were applied and
provide cross-references to other sections of the report
and/ or the Company’s website (www.plus500.com)
where more detailed descriptions are available.
For the financial year ended 31 December 2019, the
Company has complied with the provisions of the
Code, other than in respect of the directors' re-election
mechanism and in relation to pay ratios and pay
gaps. While the Code recommends the submission
of all directors for re-election annually, as a company
registered in Israel, it is subject to mandatory corporate
governance requirements under the Companies Law,
which require that the Company must always have at
least two External Directors (as described below). The
Company’s External Directors are Charles Fairbairn
and Daniel King. The External Directors must meet
certain statutory requirements of independence and,
as prescribed by the mandatory requirements of the
Companies Law, must be elected for three-year terms
and not annually as the Code recommends.
Plus500 is not required to compile gender pay gaps
and pay ratios under the Companies Law whereas
companies incorporated in the United Kingdom are
required to do so under UK legislation.
57
Plus500 Ltd. 2019 Annual Report UK CORPORATE GOVERNANCE CODE
COMPLIANCE STATEMENT
GOVERNANCE REPORT
THE BOARD
BOARD ACTIVITIES DURING THE YEAR
The Board maintains full control and direction over
appropriate strategic, financial, organisational and
compliance issues. The Company’s organisational structure
has clearly defined lines of authority, responsibility and
accountability, which are 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 agrees an annual calendar and forward
meeting agenda during the previous year and additionally
meets at such other times as required. The matters
accepted by the Board for consideration at Board
meetings are business strategy, operational highlights
and current trading, quarterly forecast, budget and
financial performance, governance and risk and
regulation.
Board Activity in 2019
Strategy
Strategy discussions were held on May and December 2019, at
which the Board discussed actions to deliver on the strategy for the
coming years.
Business, operational highlights
and current trading
The Board received monthly updates including CEO reviews, financial
and risk and regulatory compliance reports.
Quarterly forecast and budget
Updates were provided and discussed on a monthly basis. A discussion on
the 2020 budget was held in December 2019 and it received final approval
in February 2020.
Financial performance
Governance, risk and regulation
The Board reviewed and approved the ongoing trading updates and
results announcements.
The Board considered and approved dividend distributions and share
buybacks, the Consolidated Financial Statements and the Annual Report.
The Board received updates and conducted discussions about
regulatory developments and emerging risks.
It also received training and briefings on regulatory changes and updates, in
addition to ongoing updates on compliance matters.
Other
An external effectiveness evaluation of the Board and committees has
been conducted and a discussion was held to address follow up and
action items.
58
Plus500 Ltd. 2019 Annual Report BOARD COMMITTEES
The Board has appointed five principal committees to
which certain aspects of the Board’s work are delegated:
Nomination Committee
The Nomination Committee has been delegated
responsibility for the oversight of appointments to the
Board and the senior management team. The Committee’s
responsibilities, main activities and priorities for the next
reporting cycle are set out on pages 65 to 69.
Audit Committee
The Audit Committee has been delegated responsibility
for ensuring the financial performance of the Group is
properly reported on and reviewed and the monitoring of
the external auditor, the internal auditor and oversight of
internal controls. The Committee’s responsibilities, main
activities and priorities for the next reporting cycle are set
out on pages 71 to 76.
Regulatory & Risk Committee
The Regulatory & Risk Committee has been delegated
responsibility for the monitoring and oversight of risk
management and mitigation and the approval of risk
appetite. The Committee’s responsibilities, main activities
and priorities for the next reporting cycle are set out on
pages 77 to 78.
Remuneration Committee
The Remuneration Committee has been delegated
responsibility for determining, within the agreed terms
of reference, the Group’s policy on the remuneration
packages of the Company’s Chief Executive Officer, Chief
Financial Officer and Managing Director, the Chairman
and the other Non-Executive Directors, the Company
Secretary and other senior executives. The Committee’s
responsibilities, main activities and priorities for the next
reporting cycle are set out on pages 79 to 85.
Disclosure Committee
The Disclosure Committee assists the Board in fulfilling
its obligation to make timely and accurate disclosure
of all information that is required to be disclosed to
meet legal and regulatory requirements and obligations
under the Market Abuse Regulations and the Disclosure
Guidance and Transparency Rules of the FCA and the
requirement for the Company to establish and maintain
adequate procedures, systems and controls to enable it
to comply with these obligations. The Committee meets
to discuss the content of announcements proposed
to be released to the Stock Exchange and approve their
content where relevant.
OPERATION OF THE BOARD
The Board is responsible to shareholders for the
effective direction and control of the Group.The Board
is also responsible for the overall strategy and financial
performance of the Group and has a formal schedule
of matters reserved for its approval. The schedule of
matters covers key strategic, financial and operational
matters including:
• approval of the Group’s strategic aims and objectives;
• approval of the annual operating and capital expenditure
budgets of the Group, and any material changes to them;
• changes to the Group’s capital structure, management
and control structure;
• contracts which are material strategically or by
reason of size, entered into by the Company or any
subsidiary in the ordinary course of business; and
• recommending appointments to 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. Dana Comber
is a certified lawyer in Israel. All directors have access
to the advice and services of the Company Secretary,
who is responsible to the Board for ensuring that Board
procedures are complied with. Both the appointment
and removal of the Company Secretary is a matter for
the Board as a whole.
BOARD EFFECTIVENESS
The Board holds its meetings in accordance with its
scheduled calendar. Each Board meeting is preceded by
a clear agenda and any relevant information is provided
to the directors in advance of the meeting. The Board
met on eight occasions in 2019 to review, formulate and
approve the Group’s strategy, budgets and corporate
actions and to oversee the Group’s progress towards its
goals. The Board also holds regular telephone calls to
59
Plus500 Ltd. 2019 Annual Report
update the members on operational and other business
matters. A summary of the key activities of the Board in
2019 is set out on page 58.
Where directors have concerns which cannot be
resolved about the running of the Company or a
proposed action, they may request that their concerns
are recorded in the Board minutes. An agreed procedure
exists for directors in the furtherance of their duties to
take independent professional advice.
Newly appointed directors are made aware of their
responsibilities through the Company Secretary.
The Company provides the directors with training
sessions via internal meetings, presentations and
conversations which are 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 Chairman is responsible for leading the Board
and ensuring its effectiveness by setting the relevant
agenda and providing sufficient time for constructive
discussions in which the Board has the ability to
Board Composition
Chairman
Penny Judd
Executive Directors
Gal Haber
Asaf Elimelech
Elad Even-Chen
Senior Independent Non-Executive, External Director
Charles Fairbairn
Independent Non-Executive, External Director
Daniel King
Independent Non-Executive Director
Steven Baldwin
challenge the discussed items. The Chairman is
responsible for creating the open and engaging
atmosphere that enables the healthy and constructive
discussions of the Board. The Chairman is also
responsible for ensuring effective communication
between Executives, Non-Executive Directors,
shareholders and between other major stakeholders
and the Board, in line with the Company's Written
Statements of Responsibilities. The Chief Executive
Officer acts as the main point of communication
between the Board and the management and is
responsible for the day-to-day running of the business
and implementation of strategy.
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
offered by current members of the Board: financial
services, finance and accounting, governance and
regulatory, research and development, technology and
CFD trading and financial instrument expertise.
Scheduled meetings
eligible to attend
Scheduled meetings
attended
8
8
8
8
8
8
8
8
8
8
8
8
8
8
60
Plus500 Ltd. 2019 Annual Report 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 Steven Baldwin. Penny Judd
was independent on appointment, in accordance with
the requirements of the Code. As Senior Independent
Director, Charles Fairbairn is available to meet with
shareholders if they have concerns which are not being
addressed through the usual channels of the Chief
Executive Officer, the Chief Financial Officer or the
Chairman.
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 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. In addition to the
above, 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 and Remuneration Committees must comply
with the director independence requirements.
ELECTION OF DIRECTORS
Following recommendations from the Nomination
Committee and review by the Chairman, the Board considers
that all directors continue to be effective, remain committed
to their roles and have sufficient time available to perform
their duties. Information with respect to directors re-election
will be set out in the 2020 Notice of AGM.
INDEPENDENCE OF NON-EXECUTIVE
DIRECTORS AND TIME COMMITMENT
Each of the Non-Executive Directors is considered to be
independent of management and is considered by the
Board to be free from any business or other relationships
that could compromise their independence. Their role
is to effectively advise and challenge management, and
to monitor management’s success in delivering the
61
strategy agreed by the Board. Non-Executive Directors
held discussions and met during the year, without the
Executive Directors present, in order to review and
monitor management performance.
Each director is aware of the need to allocate
sufficient time to the Company in order to fulfil their
responsibilities and is notified of all scheduled Board
and Board Committee meetings. None of the Non-
Executive Directors hold any directorships in any FTSE
100 companies.
CONFLICTS OF INTEREST
The Company has procedures for the disclosure and review
of any conflicts of interest, or potential conflicts, which
the directors may have. The Board members are asked to
disclose any conflicts of interest at each scheduled Board
meeting. Each director is aware of their responsibility to
avoid conflicts of interest and to disclose any conflict or
potential conflict of interest to the Board. 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 shall not attend that meeting
or vote on that matter, unless a majority of the respective
forum has a personal interest in the matter as well. If
a majority of the Board, the Audit Committee or the
Remuneration Committee, as applicable, has a personal
interest in the transaction, then 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.
BOARD EVALUATION
Plus500, in accordance with Provision 21 of the UK
Corporate Governance Code, carried out an external
Board Evaluation in the second half of 2019, with the
feedback report presented by Genius Boards at the
December Board meeting.
The evaluation covered attending several Board
meetings and Committee meetings, interviewing the
Board Directors, the Company Secretary and several
executives and relevant advisors to the Company.
Plus500 Ltd. 2019 Annual Report The observations and interviews gave the evaluator
and the participant a safe, unattributed environment to
discuss, inter alia:
Governance
•
Board administration, governance, cycles, agendas
and papers
•
Structure of the Board and the Board Committees
• Director composition of the Board and Committees,
and further executive membership on Committees
Board Dynamics
• Meetings, content, discussion, debate, challenge and
assurance
• Contribution, quality, environment, commitment
• Chairmanship and leadership of each meeting
Board Behaviour
• Communication, engagement and interactions
•
•
of the directors
Support, working together and independent thought
Strategic focus, attention to corporate risks, delivery
under director’s duties
Board Effectiveness
• Culture, shared objectives, focus on what is right for
the business
• Decision making, long term and sustainable focus,
delivery through executives
• Accountable and holding the business to account
The findings determined that the Board was effective in
relation to:
Opportunities for improved effectiveness were also
identified. To improve effectiveness, the Board is
evaluating the results of the external evaluation and taking
measures to address and strengthen different focus areas
resulting from the evaluation, including appointment of
additional Non-Executive Directors to support the delivery
of desired outcomes of the evaluation and ongoing review
of evaluation outcome progress against time and delivery
benchmarks.
The Board, supported by the Company Secretary, will
apply themselves delivering the agreed actions arising
from this review. The Company recognises the value
of Environmental, Social, and Governance ("ESG")
expectations of the investor community and is engaging
and evidencing the progress achieved, noting the
applicable ESG lens.
ENSURING THAT THE ANNUAL REPORT IS
FAIR, BALANCED AND UNDERSTANDABLE
In relation to the Annual Report and the Consolidated
Financial Statements for the year ended 31 December
2019, the Board, in conjunction with the Audit Committee
have sought to ensure that the Annual Report is fair,
balanced and understandable. The Board considers that,
taken as a whole, the Annual Report is fair, balanced and
understandable, and provides the information necessary
for shareholders to assess the Company's position,
performance, business model and strategy.
•
•
Financial wellbeing, transparency of information, is
entrepreneurial and is delivering value to investor
stakeholders
Effective support and engagement with the internal
stakeholder, creating a family culture and long term
staff engagement
Progressing the governance journey
Technology innovation and creativity
•
•
• Growth and expansion, led by CEO and CFO who
work well together and know the business
• Management information is willingly available to the
relevant parties
• Good regulatory, risk and business knowledge on the
Board
62
Plus500 Ltd. 2019 Annual Report
SHAREHOLDER ENGAGEMENT
2019 ANNUAL GENERAL MEETING
The 2019 Annual General Meeting was held on 18 June
2019 at the offices of Liberum Capital.
All resolutions were duly passed by shareholders by
means of a poll vote. The Board noted that more than
20% of the votes were cast against Resolution 5 relating
to the re-appointment of Steven Baldwin, the chair of
the Nomination Committee, due in part to the desire
of certain shareholders to see greater diversity on the
Board, particularly around female representation. Since
the AGM result, the Company has actively engaged with
shareholders to better understand their concerns and
the Board has subsequently undertaken an external
evaluation process and has initiated a formal process
for the addition of a new independent non-executive
director. The Board will continue its engagement and
dialogue with shareholders and their representatives on
this matter.
2020 ANNUAL GENERAL MEETING
In light of the restrictions relating to COVID-19, the Board
has agreed to defer the 2020 AGM to a later date. Whilst
the Company hopes that this postponement will allow
for the holding of a customary Annual General Meeting,
changes to the usual arrangements may be made.
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 to all
shareholders in due course.
The Company encourages the participation of both
institutional and private investors. In 2019, the Chief
Executive Officer, Asaf Elimelech, and Chief Financial
Officer, Elad Even-Chen met regularly with institutional
investors, usually with regard to the issuance of half and
full year results. The Chairman of the Board and Senior
Non-Executive director meet regularly with key investors
as well.
Communication with private individuals is maintained
through the Annual General Meeting, the Company’s
annual and interim reports and the scheduled, or otherwise
required, trading updates. The Chairmen of the Company’s
Audit, Remuneration, Nomination and Regulatory & 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 on its website (www.plus500.com), which
includes copies of the Company’s press releases, financial
presentations and reports.
Regular updates are provided to the Board on meetings
with shareholders and analysts, as well as on brokers'
opinions. Non-Executive Directors are available to meet
major shareholders, as required. Investors are also
encouraged to contact the Company’s Investor Relations
at: ir@Plus500.com.
MAJOR INTERESTS IN SHARES
As at 3 April 2020, being the latest practicable date
before the approval of this report, the Company is aware
of the following persons who, directly or indirectly, were
interested in 3% or more of the Company’s capital or
voting rights:
Notifying party
No. of shares held or
controlled %
Odey Asset Management
9,159,542
8.56
BlackRock Inc
6,279,869
5.87
Sparta 24 Ltd.
5,433,089
5.08
The Vanguard Group, Inc
4,577,202
4.28
The Goldman Sachs Group, Inc
3,617,347
3.38
Bank Hapoalim
3,536,042
3.30
63
Plus500 Ltd. 2019 Annual Report 64
Plus500 Ltd. 2019 Annual Report REPORT OF THE NOMINATION COMMITTEE
Steven Baldwin
Chairman of Nomination Committee
Dear Shareholder,
As the Chairman of the Nomination Committee, I am
pleased to take this opportunity to give you an overview
of the work of the Nomination Committee during 2019.
The Board composition remained unchanged during
the year and this has provided continuity prior to and
during the process of the Company's move up to the
Main Market. However, the Board is committed to
continuously evaluating and reviewing the structure,
size and composition of the Board, including the
balance of skills, knowledge, experience and diversity of
the Board while factoring in the Company’s strategy, risk
appetite and future development.
The Company appointed Genius Boards as an external
evaluator to assess and determine the appropriateness
of the Board’s composition and the individual directors
holding their respective positions. As part of the
evaluation process, Genius Boards conducted face-to-
face meetings with directors and relevant Company
advisors. Genius Boards has no connection with
the Company or with individual directors. One of the
outcomes of the evaluation was the need to strengthen
the Board with the appointment of further non-executive
directors to enhance the Board’s composition.
During 2019, the Committee has undertaken a review
of the composition of the Board and taken into account
the findings of the external review conducted. As a
consequence of this work, the Committee determined
that it should commence a search for a suitable new
independent non-executive director. The Board is
committed to diversity of gender, ethnicity, background,
nationality and professional experience as the key
pillars of this search.
A recruitment process for a new independent non-
executive director is now underway and the Board
has engaged True Europe LLP ("True Search") as its
external search consultancy to undertake the search.
The Company and the individual directors have no
connection with True Search.
The Committee is mindful of the Hampton-Alexander
Review and through our search for a new non-executive
director, the Board is aiming to increase female
presence on the Board, which currently includes one
female non-executive director (our chairman, Penny
Judd) to help ensure that the Company increases its
talent diversity.
65
Plus500 Ltd. 2019 Annual Report
The Nomination Committee also evaluated the
nomination of Board members for re-election at the
2019 AGM in June and while all resolutions were
passed with strong levels of shareholder support, a
significant minority voted against resolution 5, which
related to my re-election as director.Total votes received
in favour of this resolution were 79.71% and votes
against totaled 20.29%.
Since the 2019 AGM, the Company has actively
engaged with shareholders during conferences,
scheduled meetings as part of the half yearly road
show and also through ad-hoc meetings, in order to
understand and address their concerns. As a result
of discussion with shareholders, the Committee
understands that the size of the vote against my re-
election was due in part to the desire for greater gender
diversity on the Board. The Committee is investing
significant time and effort into achieving greater gender
diversity through the appointment of an additional
female non-executive director and the Board will keep
shareholders up to date with progress on this important
matter.
Due to the enhanced role of the Nomination Committee
set out in the UK Corporate Governance Code, we
are continuing to develop our programme of activity
accordingly. Throughout 2019, the Nomination
Committee also spent time reviewing and discussing
succession planning across the business.
The Committee is continuing to take steps to ensure
that there is a strong talent pipeline with the necessary
set of skills and expertise, whilst considering female
representation and other diversity pillars as part of this
process.
Steven Baldwin
Chairman of the Nomination Committee
66
Plus500 Ltd. 2019 Annual Report
COMMITTEE COMPOSITION
The Nomination Committee comprises Steven Baldwin,
Daniel King, Charles Fairbairn and Gal Haber, and is
chaired by Steven Baldwin. The Code recommends that
a majority of the members of a nomination committee
should be independent non-executive directors. The
Board considers Steven Baldwin, Charles Fairbairn
and Daniel King to be independent for the purposes
of the Code. Details of the skills and experience of the
Committee members are set out at page 68 of the report.
Details of individual attendance at meetings are set out in
the Committee Attendance table below.
Committee Attendance
Nomination
Committee
Gal Haber
Charles Fairbairn
Daniel King
Steven Baldwin
Scheduled
meetings
eligible to attend
Scheduled
meetings
attended
4
4
4
4
4
4
4
4
COMMITTEE RESPONSIBILITIES AND
ACTIVITIES
The Nomination Committee has responsibility for
reviewing the structure, size and composition (including
the skills, knowledge and experience) of the Board,
considering succession planning and ensuring diversity at
Board-level. The other key governance mandates pursuant
to the written terms of reference of the Nomination
Committee (which are available on the Company's
website) are as follows:
•
to oversee succession planning for directors and
other senior executives, taking into account the
challenges and opportunities facing the Company;
to identify, and nominate for the approval of the Board,
candidates to fill Board vacancies (including external
directors vacancies);
to make recommendations concerning the continuation
in office of any director at any time, including the
suspension or termination of service; and
•
•
•
to prepare a description of the role and capabilities
required for a particular appointment.
The Nomination Committee meets not less than
twice a year and at such other times as required.
The Nomination Committee takes into account the
challenges and opportunities facing the Group and
what skills and expertise will therefore be needed on the
Board and Committees in the future, whilst remaining
committed to diversity of gender, ethnicity, background,
nationality and professional experience and developing
a talent pipeline reflective of this diversity.
A summary of the major activities and decisions of the
Committee in 2019 is set out below.
Summary of major activities and decisions of the
Committee in 2019
Re-election of directors
Board
Composition
Review of core skills and experience
of the Board and the independence of
the Non-Executive Directors
Review of membership of committees
Review tenure of the directors
Succession
Planning
Review of Company’s succession plans
Foster the development of talented
employees throughout the business
Diversity
Review of Equality and Diversity policy
Review of diversity on the Board
External Board
Evaluation
Discussion and assessment of external
Board evaluation findings
Following the activities of the Committee in 2019, the
Committee is confident that each director brings a
unique set of skills and experience which enable the
Board to be reflective of a diverse and varying range of
perspectives and opinions and to enable the Company
to achieve its strategy and targets going forward.
The Committee believes that each director's
contribution is important to the Company's long term
sustainable success.
67
Plus500 Ltd. 2019 Annual Report Relevant skills and experience on the Board
Penny
Judd
Elad
Even-Chen
Asaf
Elimelech
Gal
Haber
Charles
Fairbairn
Daniel
King
Steven
Baldwin
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Audit and risk management
Finance, banking, financial
services and fund management
Capital raising, mergers,
acquisitions, investment and
transactions
Marketing
Compliance & Regulation
Shareholder relations
Digital technology
Innovation
Committee membership Key:
Executive Director
Non-Executive Director
68
Plus500 Ltd. 2019 Annual Report PRIORITIES FOR 2020 FINANCIAL YEAR
Board Diversity Policy
objectives
Progress update
In the coming year the Committee will continue to focus
on key themes such as diversity and succession planning
and ensuring a diverse talent pipeline throughout the
Group. As noted above, the Committee also aims to
complete the appointment of an additional female non-
executive director and will continue to review the Board
composition with a view to making any further changes
deemed appropriate.
Ensuring the selection and
appointment process for
employees and directors
includes a diverse range of
candidates
DIVERSITY
The Board’s policy on diversity commits to:
Improve gender diversity
at Board and senior
management level
Review employees’
recruitment procedure
which includes non-
discriminatory selection
process, allowing the
recruitment of a diverse
workforce.
The Board has appointed
True Search to assist in
the search for another
female Board
member.
•
•
•
ensuring the selection and appointment process for
employees and directors includes a diverse range of
candidates;
disclosing statistics on gender diversity in every
Annual Report (page 42); and
reviewing this policy from time to time and continuing
to disclose this policy in the Annual Report.
As stated above, the Board is strongly committed
to achieving greater gender diversity through the
appointment of a new female non-executive director
in the near future in 2020. The Board anticipates
that this appointment will help alleviate shareholder
concerns relating to the current gender imbalance on
the Board. However, the Board is also mindful that the
appointment of an additional female director will not
meet the 33% target for female board representation set
out in the Hampton-Alexander Review. The Board will
therefore continue to focus on gender diversity as a key
priority and to engage with its shareholders and keep
stakeholders up-to-date in respect of developments on
this topic.
The Committee notes the updated requirement under
the Disclosure Guidance and Transparency Rules (DTR)
for our 2019 Annual Report to disclose diversity policies
with regard to aspects such as age, gender, educational
and professional backgrounds. Our diversity data is
disclosed in our Corporate Responsibility report on
pages 41 to 43.
Review Board diversity
policy
The Committee has
reviewed and approved
the Board's diversity
policy.
SUCCESSION PLANNING
The Committee has spent time in 2019 considering the
important matter of succession planning across the
business. In order to ensure minimal business disruption
in the event of any unexpected senior management
or Board departures, the Committee is committed to
continue developing plans for identifying appropriate
successors in the short, medium and long-term, whilst
also having regard to the importance of diversity
throughout the Group.
Due to the size of the Group it is not always possible to
identify internal successors for all roles throughout the
business. Nevertheless, the Committee has reviewed
plans for the succession of senior management roles
throughout the business and has identified appropriate
candidates as potential successors.
69
Plus500 Ltd. 2019 Annual Report 70
Plus500 Ltd. 2019 Annual Report REPORT OF THE AUDIT COMMITTEE
Charles Fairbairn
Chairman of the Audit Committee
The Committee also reviewed a list of non-audit
services provided this year by the Company’s external
auditor and approved its plan for 2020.
Charles Fairbairn
Chairman of the Audit Committee
Dear Shareholder,
I am pleased to take this opportunity to give you an
overview of the work of the Audit Committee during 2019.
The Audit Committee performs a key role in the Group’s
governance framework, in assessing internal controls
across the Group and ensuring the integrity of the Group’s
financial results.
Both financial reporting and the associated assurance
of these reports that the Audit Committee is
responsible for review have been important priorities
during the year.
With the assistance of Deloitte, our internal auditor, we
reviewed and monitored a multi-year internal audit plan
and associated risk survey which we will continue to
review and update over time.
71
Plus500 Ltd. 2019 Annual Report
COMMITTEE 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 is
chaired by Charles Fairbairn, and its other members are
Daniel King and Steven Baldwin. All of the members are
therefore independent Non-Executive Directors.
The directors consider that Charles Fairbairn has recent
and relevant financial experience in accordance with
the requirements of the Code. Details of the skills and
experience of the Committee members are set out on
page 68 of the report. Details of individual attendance at
meetings is set out in the Committee Attendance table.
Committee Attendance
In addition, under the Companies Law, the Audit
Committee is required to monitor deficiencies in
the administration of the Company, including by
consulting with the internal auditor and independent
accountants, to review, classify and approve related
party transactions and extraordinary transactions, to
review the internal auditor’s audit plan and to establish
and monitor whistleblower procedures.
The Audit Committee meets not less than four times a
year and otherwise as required. The Audit Committee
met on seven occasions during 2019. The internal and
external auditors have the right to attend meetings.
The relevant Executive Directors, the Company’s legal
advisors and other persons may, by invitation from
the Audit Committee, attend meetings. At least once
per year, the Audit Committee meets privately with the
external auditor.
Scheduled
meetings eligible
to attend
Scheduled
meetings
attended
A summary of the major activities and decisions of the
Committee in 2019 is set out below:
Audit
Committee
Charles Fairbairn
Daniel King
Steven Baldwin
7
7
7
7
7
7
COMMITTEE RESPONSIBILITIES
AND ACTIVITIES
The Audit Committee is responsible for ensuring that
the financial performance of the Group is properly
reported on and reviewed. The other key governance
mandates pursuant to the written terms of reference
of the Audit Committee (which are available on the
Company's website) are as follows:
• to monitor the integrity of the Consolidated Financial
Statements of the Group (including annual and
interim accounts and results announcements);
• to monitor the adequacy and effectiveness of the
Company’s internal financial controls and internal
control and risk management systems;
• to advise on the appointment of the Company’s
external auditor and on their remuneration; and
• to monitor and review the effectiveness of the
Company’s internal audit function.
Summary of major activities and decisions of the
Committee in 2019
Financial
Performance
Review
Review of the financial performance and
Consolidated Financial Statements of
the Company
Internal Audit
Review
Review assessments of the control
environment via internal audit reports,
and progress on implementing internal
and audit recommendations
External Audit
Review
Risk Control
Review progress on implementing
external audit recommendations.
Monitor and review the effectiveness
and independence of the external audit
function
Assist the Board in the monitoring
of the Group’s internal controls and
risk management systems and their
effectiveness
72
Plus500 Ltd. 2019 Annual Report SIGNIFICANT ACCOUNTING AND FINANCIAL
JUDGEMENTS IN 2019
The Committee considered a number of significant
accounting and financial judgements and estimates,
which were discussed with the external auditors in the
planning stage of the audit, and received the external
auditor's confirmation that no additional matters have
arisen and require the Committee's attention.
The significant judgements considered were: revenue
recognition, the control environment, non-compliance
with laws and regulations and appropriateness of the
going concern basis of the Financial Statements and
the level of cash required within the business to satisfy
both external regulators and the Group's attitude to
market risk.
Key financial reporting and significant financial
judgements
How the issue was addressed by the Audit
Committee
• The Committee held meetings, among others, with the
operation, R&D and risk teams to verify compliance of
revenue recognition from all related aspects such as: IT
general controls, access to programs and supporting
data, program changes and computer operations for the
platform and for the ERP system
• The Committee also discussed this matter with the
external auditor at the planning and conclusion phases of
the audit
• The Audit Committee concluded the revenue recognition
process is appropriate and controls are efficient and are
appropriately disclosed in the Financial Statements
• The Committee reviewed the Internal Audit Reports
produced in the year, discussed key findings with
management and reviewed the implementation of all
Internal Audit report recommendations brought forward
from previous years, in addition the Committee reviewed
key Audit risk topics in assessing the Internal Audit
reports commissioned for 2019
• The Audit Committee concluded the internal controls are
efficient
• The Committee, in conjunction with the work of the
Regulatory & Risk Committee, reviewed regulatory
reports prepared by the dedicated team, in addition to
reviews performed by external consultants to ensure
compliance with local regulations in the areas the Group
operates
• The Committee considers the grid of audits and
regulatory reviews and reviews their findings. The
relevant aspects of such reviews to the Committees’
work are being discussed and assessed by the
Committee
• Based on discussions with management and
discussions held in the Regulatory & Risk Committee, the
Audit Committee came to the conclusion that the Group
is compliant with all required regulations and there is no
need for provisions
Revenue recognition
The recognition of revenue is
a key matter to be reviewed,
monitored and tested
Review and
assessment of the
control environment
The Audit Committee is
ultimately responsible of the
supervision over the control
environment. A key role of the
Committee is to provide oversight
and reassurance to the Board
with regard to the integrity of the
Company’s financial reporting,
internal control policies and
procedures for the identification,
assessment and reporting of risk
Review and
assessment of non-
compliance with laws
and regulations
A key risk to the business is the
fact that the Group’s business
is subject to various laws and
regulations in different countries
according to its activity
73
Plus500 Ltd. 2019 Annual Report Key financial reporting and significant financial
judgements
How the issue was addressed by the Audit
Committee
Going concern and viability are
key matters for the operations of
the Group
• The Committee has reviewed the assessment setting out
the key assumptions related to the nature of the Group’s
business, budget reports and cash flow forecasts for the
period of three years ending 31 December 2022, taking
into account the Company’s anticipated investment
commitments and working capital requirements
• These reports detailed the impact of outcomes of stress
tests after applying multiple scenarios to determine how
the Group is able to cope with deterioration in liquidity
profile or capital position
• The Committee agreed to recommend the Going
Concern and Viability Statement to the Board for
approval
The Group requires a level of
cash to ensure that it can operate
its trading platform and maintain
sufficient cash in its regulated
entities to satisfy regulators and
operational needs
• The Committee reviews on an ongoing basis the level
of cash required from regulatory, operationally and risk
perspective
• The Audit Committee concluded that cash amounts are
sufficient
Review and
assessment of
appropriateness of
the going concern
basis of the Financial
Statements and long-
term viability
Review and
assessment of the
level of cash required
within the business to
satisfy both external
regulators and the
Group's attitude to
market risk
74
Plus500 Ltd. 2019 Annual Report EXTERNAL AUDITOR
It is the responsibility of the Audit Committee to keep
under review the scope and cost effectiveness of
the external auditor. This includes recommending
to the Board the appointment of the external auditor
and reviewing the scope of the audit, approving the
audit fee and, on an annual basis, satisfying itself that
the auditor is independent. The external auditor is
engaged to express an opinion on the Consolidated
Financial Statements. The external auditor discusses
with management the reporting of operational results
and the financial state of the Company, to the extent
necessary to express their audit opinion.
to the Board that the external auditor be proposed for
re-election at the upcoming Annual General Meeting.
AUDIT TENDER PROCESS
The Company will tender the external auditor
appointment for the financial year ended 31 December
2023. The Committee remains satisfied with the
external audit process and is currently not planning to
undertake a formal tender process until the financial
period ended 31 December 2023. The Group is required
to rotate the audit partner responsible for the Group
audit every five years, with this year being the third year
for the current audit partner.
PERFORMANCE AND EFFECTIVENESS OF
THE EXTERNAL AUDITOR
NON-AUDIT SERVICES
Kesselman & Kesselman, a member firm of
PricewaterhouseCoopers International Limited, is
retained to perform audit and audit-related work on
the Company and the majority of its subsidiaries. The
Committee assesses the auditor’s independence and
effectiveness at least on an annual basis.
The Audit Committee monitors the nature and extent
of non-audit work undertaken by the auditors. Given the
non-audit work undertaken by the external auditor and
the Committee’s oversight of its work, the Committee
is satisfied that the independence and objectivity of
the external auditor was adequately safeguarded
throughout 2019. Nevertheless, the external auditor’s
independence and objectivity is kept under review
and is a standing item on the agenda for the Audit
Committee.
In addition, the Audit Committee periodically monitors
the cost of non-audit work undertaken by the external
auditor. The Audit Committee considers that it is in a
position to take action if at any time it believes there is a
risk of the auditor’s independence and objectivity being
undermined through the award of this task.
Having assessed the external auditor’s effectiveness
and independence during 2019, the Audit Committee
concluded that the audit process as a whole had
been conducted robustly and that the team selected
to undertake the audit had done so thoroughly and
professionally. The Audit Committee reviewed the re-
appointment of the external auditor and recommended
75
The Company maintains a Non-Audit Services Policy in
order to ensure that the provision of non-audit services
do not impair the external auditor’s independence or
objectivity. During 2019, Kesselman & Kesselman, a
member firm of PricewaterhouseCoopers International
Limited, provided non-audit services, such as tax
assessments and advice and regulatory reporting
requirements, which totalled $0.3 million (including
assurance related services of $0.1 million).
OVERVIEW OF THE NON-AUDIT
SERVICES POLICY
Under the policy, all services provided by the external
auditor (other than the audit itself) are regarded as non-
audit services. The policy draws a distinction between
permitted services (which could be provided subject
to conditions set by the Committee) and prohibited
services. The type of non-audit services deemed to be
permitted include assurance work on non-financial data,
tax services including tax advisory, and reporting best
practice.
The Committee has provided pre-approval which allows
management to appoint the external auditor to conduct
permitted non-audit services if they fall below a set fee
level. The Committee reviews the pre-approval limit on
an annual basis and it is currently set at $50,000. Any
non-audit service provided by the external auditor is
reported to the Board. In the event that the provision
of non-audit services would exceed $50,000, the
Committee would request Board approval.
Plus500 Ltd. 2019 Annual Report INTERNAL AUDITOR
Pursuant to the Companies Law, the Board must
appoint an internal auditor recommended by the Audit
Committee. An internal auditor may not be:
•
a person who holds more than 5% of the
Company’s outstanding shares or voting rights;
a person who has the power to appoint a director or
the Chief Executive Officer of the Company;
an officer or director of the Company; or
a member of the Company’s independent
accounting firm, or anyone on its behalf.
•
•
•
The process
During the drafting process of the 2019 Annual
Report and Consolidated Financial Statements, the
Committee is given the opportunity to comment
and provide feedback on the drafts. The Committee
also considers whether the content provided in the
report has illustrated the whole picture for the year.
The Committee then evaluates whether the report is
consistent throughout, with a clear layout and linkage to
the different front and back sections, and whether it is
presented in a logical manner to the shareholders.
The role of the internal auditor is to examine, among
other things, the Company’s compliance with applicable
laws and orderly business procedures. The Audit
Committee is required to oversee the activities and to
assess the performance of the internal auditor, as well
as to review the internal auditor’s work plan. Brightman
Almagor Zohar & Co. (Deloitte Israel), a member firm
of Deloitte Touche Tohmatsu Limited, serves as the
Company’s internal auditor.
Conclusion
Following the review, it was the Committee’s opinion
that the 2019 Annual Report and Consolidated
Financial Statements are representative of the
year and, taken as a whole, present a fair, balanced
and understandable overview and the information
necessary for shareholders to assess the financial
position, governance, performance, business model and
strategy of the Group.
WHISTLEBLOWING POLICY
The Company operates a Whistleblowing Policy which
allows anonymous reporting to assist individuals
who believe that they have discovered malpractice
or impropriety within the Group. It provides a
method of properly addressing bona fide concerns
that individuals within the Group might have, while also
offering whistleblowers protection from victimisation,
harassment or disciplinary proceedings. The Audit
Committee reports to the Board on the effectiveness
of the Company's whistleblowing mechanism and on
any matter that arises as a result of it. The current
Whistleblowing Policy supervisor is Daniel King.
FAIR, BALANCED AND UNDERSTANDABLE
The Audit Committee undertakes a duty to consider
whether the 2019 Annual Report and Consolidated
Financial Statements taken as a whole, are fair,
balanced and understandable, while final determination
lies within the responsibilities of the Board. The
Committee, on behalf of the whole Board, also
assesses whether there is enough information in the
Annual Report and Consolidated Financial Statements
necessary for shareholders to evaluate the financial
position, performance, governance, business model and
strategy of the Group.
76
Plus500 Ltd. 2019 Annual Report REPORT OF THE REGULATORY & RISK COMMITTEE
Penny Judd
Chairman
Our priorities for the coming year will be to continue to
monitor regulatory changes and to seek to continue to
enhance the risk assessment and monitoring within the
business in the face of changing regulatory and market
conditions, including the impact of COVID-19 virus.
Penny Judd
Chair of the Regulatory & Risk Committee
Dear Shareholder,
Regulatory compliance and risk management underpin
the integrity of our business model and continued
delivery of our strategy. The Regulatory & Risk
Committee receives regular reports on both compliance
and risk and challenges the performance in these areas.
It also receives reports on specific areas where more
detailed testing or investigation is felt appropriate. These
are described more fully in the following report.
In addition, the Board undertook a thorough review of
the risks to the business and updated its internal risk
matrix accordingly. We have also monitored new areas
of regulatory compliance such as emerging risks and
developments in securities markets regulation.
The Committee and the Board have received reports on
the implementation of the product intervention measures
introduced in Europe, preparation for the anticipated
ASIC product intervention measures with respect to retail
customers in Australia and potential Brexit scenarios. The
Committee received comfort that the applicable measures
have been considered and effectively implemented.
77
Plus500 Ltd. 2019 Annual Report The Regulatory & Risk Committee has responsibility for
reviewing the Company’s most significant risks to the
achievement of strategic objectives and any emerging
risks, reviewing the Company’s Risk Policy, ensuring
that the Company’s Board ethics are being adhered to
and that the Company continues its commitment to
issues concerning social responsibility.
Summary of major activities and decisions of the
Committee in 2019
Periodic regulatory and compliance
reports review
Regulatory
Review
Oversee the implementation of new
regulatory requirements
Monitor and assess the Group's
relationships with regulatory authorities
Licence
Application
Review
Risk
Review and
Assessment
Review licence applications submitted
during the period
Review periodic risk reports
Review risk assessment programmes
and internal risk management controls
COMMITTEE COMPOSITION
The Regulatory & Risk Committee is chaired by Penny
Judd. The other members are Charles Fairbairn, Asaf
Elimelech and Elad Even-Chen. The Regulatory & Risk
Committee receives updates from management on
risk, compliance and regulatory issues and reviews
the related internal systems. Details of individual
attendance at meetings is set out in the Committee
Attendance table.
Committee Attendance
Regulatory & Risk
Committee
Scheduled
meetings
eligible to attend
Scheduled
meetings
attended
Penny Judd
Charels Fairbairn
Asaf Elimelech
Elad Even-Chen
6
6
6
6
6
6
6
6
COMMITTEE RESPONSIBILITIES AND
ACTIVITIES
The Regulatory & Risk Committee meets not less
than three times a year and otherwise as required.
The Regulatory & 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 applicable laws, regulations and orders as
required. Its activity includes reviewing relationships
with regulatory authorities such as the FCA, ASIC,
CySEC, FSCA, FMA, ISA, MAS, FSA and other regulatory
authorities, as appropriate, in jurisdictions where
the Group has a significant presence; reviewing risk
assessment programmes and internal controls and risk
management.
78
Plus500 Ltd. 2019 Annual Report
REPORT OF THE REMUNERATION COMMITTEE
Daniel King
Chairman of the Remuneration Committee
Dear Shareholder,
I am pleased to present an overview of the work of the
Remuneration Committee during 2019.
The Board recognises that directors’ remuneration is
a key consideration for shareholders of the Company.
Plus500 operates within an extremely competitive
environment, where performance depends to a great
degree on the individual contributions of the directors
and employees, and the Company believes in rewarding
vision and innovation.
The Remuneration Committee has continued its
efforts to change the remuneration arrangements of
the executive directors and employees to better align
executive compensation with UK governance standards
followed by Main Market-listed companies and
move further towards a structure in line with investor
expectations and developments in best practice.
In order to adapt the remuneration structure to ensure
that it meets the needs of Plus500, the Remuneration
Committee consulted with KPMG’s UK based
remuneration practice (“KPMG LLC”), and have together
continued to evolve a set of remuneration principles
to provide an improved framework for a robust
remuneration structure.
Under this framework, the Remuneration Committee is
driving for the adoption of remuneration arrangements
that align executive compensation nearer to UK
governance standards, while also remaining sensitive
to the business needs in retaining and motivating an
exceptional management team who are resident in
Israel, where the Company is registered.
The circumstances of the Company place the
Remuneration Committee in the position of needing to
strike a balance between the structured remuneration
practices in the UK and the more varied set of
arrangements available to Israel-based companies.
This is fundamental as the Company needs to retain
and incentivise a management team operating in the
extremely competitive environment of the Israeli high-
tech industry, characterised by numerous successful
companies, including major US-listed competitors,
operating in close proximity.
The remuneration packages of the executive directors
are comprised of the following four elements:
• Annual Salary. A fixed annual salary set at a rate
which is below the lower quartile for comparably
sized UK companies and FTSE 250 companies.
The annual salary is maintained at these low levels
79
Plus500 Ltd. 2019 Annual Report in line with the Company’s philosophy of “low fixed/
high variable pay potential” which ensures that
total remuneration levels are fully aligned with
performance and shareholder interest.
• Annual Bonus. A conventional capped annual bonus,
set by reference to a multiple of the annual salary,
payable subject to achievement of KPIs, with a
portion of the achieved annual bonus deferred and
paid over a three year period. The achieved annual
bonus is partially share settled to further align the
interests of management and that of shareholders
and allow the management team to build up an
appropriate level of shareholding (a minimum of
two times base salary) in line with UK corporate
governance best practice.
• LTIP Award. A conventional LTIP award payable
subject to achievement of KPIs, with a conventional
long-term vesting period and lock-up period. The size
of the LTIP is significantly less than that provided
to executives of comparably sized UK companies
and FTSE 250 companies, in light of the Share
Appreciation Rights (SARs) remuneration element
described below, which is more customary in Israel
than an LTIP.
• Share Appreciation Rights. The share appreciation
rights are a long-term cash incentive payable tied
to the long term performance of the Company’s
Ordinary Shares, and payable subject to achievement
of KPIs and a long-term vesting period. The share
appreciation rights have been used by the Company
very successfully since its initial flotation on AIM
in 2013 in order to remain competitive in the Israeli
hi-tech market as its primary measure for staff
retention. Listed hi-tech companies in Israel use
share appreciation rights as one of their primary
retention mechanisms. Removing this element
would put the Company at a substantial competitive
disadvantage relative to other high-tech companies
and make it substantially unable to retain talent.
Further, if share appreciation rights were to be
removed, the only available alternative to retain
talent would be to increase fixed pay (i.e. effectively
bringing it more in line with UK market median
levels), which would not be in line with shareholder
interest. It is further noted that share appreciation
rights are used to incentivise management more
generally (not only CEO and CFO), therefore
providing some uniformity of treatment across
the management team, promoting a culture of
collaboration among all executives as everybody
shares the same incentives.
The above factors are reflected in the changes to the
executive directors' remuneration which were approved
by the Company’s shareholders in the Extraordinary
General Meeting (the "2019 EGM"), held in January 2019.
In accordance with Israeli law, all changes to directors’
remuneration require prior approval of the Company’s
shareholders. Accordingly, the remuneration packages
for the Executive Directors for 2019, which are
described below, were approved by the shareholders in
the 2019 EGM held in January 2019 and therefore, there
was no advisory vote on the 2019 remuneration in the
Company’s 2019 AGM.
The remuneration packages for the Executive Directors
for 2020 were approved by the shareholders in the EGM
held in February 2020. The Committee and the Board
noted that there were a number of votes (35%) cast
against the 2020 remuneration terms of Asaf Elimelech
and Elad Even-Chen proposed at the February 2020
EGM. The Board and the Remuneration Committee
take these votes seriously and will continue to consider
shareholder feedback before deciding which steps
to take to ensure the Remuneration Policy is better
understood and implemented as appropriate. The Board
and the Remuneration Committee also reiterates the
commitment to achieving and maintaining the highest
governance standards.
Corporate Governance Reforms
The new UK Corporate Governance Code is effective for
financial years beginning on or after 1 January 2019.
The Company has therefore taken steps during 2019 to
ensure compliance with the UK Corporate Governance
Code. The table below sets out a summary of the new
requirements relating to executive remuneration and
the Committee’s approach to the implementation of the
same.
The Remuneration Committee believes that the
executive remuneration arrangements are clear and
understandable and ensure that the Executive Directors
are not incentivised to take unnecessary risks.
80
Plus500 Ltd. 2019 Annual Report
2018 UK Corporate Governance Code (the "UK Corporate Governance Code" or the "Code")
Code requirements
Compliance and implementation
Remuneration Committee chairman
to have served on a remuneration
committee for at least 12 months
before appointment
Daniel King has been chairman of the remuneration committee for over six years
Review of workforce remuneration and
related policies
The Remuneration Committee, together with KPMG LLC, reviewed remuneration
policies. Workforce remuneration was reviewed and discussed by the Remuneration
Committee
Share awards to be subject to a total
vesting and holding period of five
years or more
2020 LTIP is subject to three years vesting, additional two years of lock-up period
and achievement of KPIs determined by the Remuneration Committee
Formal policy for post-employment
shareholding
The vesting of the LTIP of the Executive Directors is subject to the continued
employment of the applicable Executive Director with the Company during the three
year vesting period
Alignment of executive directors’
pension contribution to override
formulaic outcomes
Not applicable as the Executive Directors do not receive a pension contribution
Remuneration schemes and policies
should enable the use of discretion to
override formulaic outcomes
Performance conditions for 2020 LTIP is subject to three years vesting, additional
two years of lock-up period and achievement of KPIs determined by the
Remuneration Committee
Compensation commitments in
directors’ terms of appointment
should not reward poor performance
The Executive Directors’ 2020 remuneration packages contain best practice malus
and clawback provisions
Remuneration policy and practices
to support clarity, simplicity, risk,
predictability, proportionality and
alignment to culture
The updated remuneration practices support the key factors set out in the Code. The
arrangements are transparent, complexities have been removed, engagement with
stakeholders is promoted and structures are more proportionate and predictable
Engagement with the workforce to
explain how executive remuneration
aligns with wider company pay policy
Steven Baldwin, as the director dedicated to workforce engagement, meets with the
workforce on a half yearly basis and the employees have the opportunity to discuss
executive remuneration. In addition, employees can contact him directly to discuss
remuneration at any time
81
Plus500 Ltd. 2019 Annual Report The Remuneration Committee firmly believes that the
changes made to the 2020 remuneration practices are
a significant step forward. I do hope that shareholders
can remain confident that the Committee will continue
to evaluate the success of the remuneration
arrangements to ensure that they appropriately reward
strong performance and enable the recruitment and
retention of key individuals to drive further success at
Plus500.
Daniel King
Chairman of the Remuneration Committee
82
Plus500 Ltd. 2019 Annual Report COMMITTEE COMPOSITION
COMMITTEE RESPONSIBILITIES
AND ACTIVITIES
The UK Corporate Governance Code recommends that
all members of the Remuneration Committee be Non-
Executive Directors, independent in character and
judgement and free from any relationship or
circumstance which may, could or would be likely to, or
appear to, affect their judgement. The Remuneration
Committee comprises of three independent Non-
Executive Directors: Daniel King, Charles Fairbairn and
Steven Baldwin, and is chaired by Daniel King. Details
of the skills and experience of the Remuneration
Committee members can be found on page 68. Details
of individual attendance at meetings is set out in the
Committee Attendance table.
Committee Attendance
Remuneration
Committee
Daniel King
Charles Fairbairn
Steven Baldwin
Scheduled
meetings eligible
to attend
Scheduled
meetings
attended
3
3
3
3
3
3
The Remuneration Committee meets not less than
twice a year and at such other times as required.
The Remuneration Committee has responsibility for
determining, within the agreed terms of reference, the
Group’s policy on the remuneration packages of the
Company’s Chief Executive Officer, Chief Financial
Officer, Managing Director, the Chairman and the other
Non-Executive Directors, the Company Secretary and
other senior executives determined by the Committee.
The other key activities of the Committee pursuant to
the written terms of reference of the Remuneration
Committee (which are available on the Company's
website) are as follows:
• to review the on-going appropriateness and relevance
of the Company’s Remuneration Policy;
• approving and recommending to the Board and
•
the shareholders, the total individual remuneration
package of the Chairman, each Executive and
Non-Executive Director, the Chief Executive Officer,
Chief Financial Officer and Managing Director
(including bonuses, incentive payments and share
options or other share awards);
in determining remuneration policies for the
Company’s senior management and/or individual
remuneration packages of each Executive
Director, the Chairman and other designated
senior executives, are required to give regard to
the relevant legal and regulatory requirements,
the provisions of the Companies Law, the provisions
and recommendations of the Code and associated
guidance, and institutional investor expectations;
• to approve and determine the targets for any
performance-related pay schemes; and
• to review the design of all share incentive plans for
approval by the Board and (if required or deemed
appropriate) the shareholders.
83
Plus500 Ltd. 2019 Annual Report A summary of the major activities and decisions of the Committee in 2019 is set out below:
Summary of major activities and decisions of the Committee in 2019
Salary
Bonus
• Executive Directors’ remuneration review
• Review and approval of Non-Executive Directors' fees
• Review and approval of Chairman’s fees
• Review of senior management fees
• Review of the performance of the Chief Executive Officer and the Executive
Directors compared to the targets set and approval of annual bonus awards for
2019 based on performance targets
Long Term
Incentive Plan
• Review of Executive Director’s 2020 LTIP (including addition of KPIs)
• Review of updated clawback and malus provisions
• Review of corporate governance reforms and determined appropriate levels of
disclosure for the 2019 Directors’ Remuneration Report
• Review of AGM season remuneration report results, and investor and proxy
Governance
agencies' views on remuneration
• Review of the Committee’s terms of reference in light of the UK Corporate
Governance Code
• Review of 2019 Annual Remuneration Report
Other
• Review of remuneration consultant costs and appointment
• Review of workforce remuneration policies and comparison of such policies with
senior management policies
• Review talent pipeline
REMUNERATION POLICY
During the year the Remuneration Committee has
reviewed and monitored the remuneration policy. The
2019 remuneration policy operated as intended and
reacted to Company's performance and quantum.
In accordance with the Companies Law, the
Remuneration Committee is required to review and
approve compensation guidelines for directors
and executives ("Compensation Guidelines"), and
recommend that the Board and shareholders adopt
such guidelines. The Compensation Guidelines must be
approved or ratified at least once every three years.
In 2019 the Remuneration Committee reviewed the
Company’s remuneration practices. It was deemed
necessary to update the current Compensation
Guidelines and adopt updated clawback and malus
provisions. The Company amended its Compensation
Guidelines for directors and executives with respect
to clawback and malus and will present its
recommendation for shareholders’ approval in the
Company’s 2020 AGM.
The Company Secretary ensures that the Remuneration
Committee fulfils its duties under its terms of reference
and provides regular updates to the Remuneration
Committee on relevant regulatory developments
in the UK, information on Israeli market trends and
compensation structures on a broader Group level.
STAKEHOLDER ENGAGEMENT
Employees
The Board regularly communicates with and receives
feedback from the Group's employees through a variety
of channels. Steven Baldwin, as the designated non-
executive director dedicated to workforce engagement,
meets on a half yearly basis with the workforce and
at such meetings employees have the opportunity to
share their views, including on executive and employee
remuneration. In addition, employees can contact
Steven Baldwin directly via email on matters they wish
to discuss with him or the Board. Steve Baldwin also
regularly communicates with employees who have
connections with other stakeholders of the Company,
such as customers and suppliers. Steven reports any
84
Plus500 Ltd. 2019 Annual Report In an effort to address and understand shareholder
concerns, the Board and the Remuneration Committee
have during 2019 met and communicated with
shareholder bodies and a number of shareholders.
Meetings and conferences with shareholders are
scheduled throughout the calendar year and others
are also arranged on an ad-hoc basis. Such meetings
enable the Board to maintain and strengthen its
relationships with shareholders. The Board and
the Committee will continue to seek shareholder
engagement to understand shareholder concerns
around Executive Directors' remuneration and endeavor
to implement appropriate changes to alleviate
shareholder concerns.
key messages deriving from such conversations to the
Board and ensures that such messages are considered
as part of the Board's decision making process. The
Company is not obliged to comply with Section 172
of the UK Companies Act 2006. Plus500 holds regular
employee workshops and briefings on a variety of
topics and conducts round table discussions with
employees.
The Company seeks to consider and act on
employee feedback and is committed to ensuring
that its remuneration structures are supported by its
employees. The Company is also continually working
to develop best practice in line with the UK Corporate
Governance Code and is considering whether additional
channels of employee communication are required
in order to better develop employee engagement and
foster stronger connections with its workforce.
Shareholders
The Chairman of the Board and the chairman of the
Remuneration Committee are in regular communication
with shareholders of the Company on a variety of
matters and are grateful for shareholders’ engagement
and feedback. As noted above, there were a significant
number of votes cast against the 2020 remuneration
packages of Asaf Elimelech and Elad Even-Chen at the
Company’s Extraordinary General Meeting held on 20
February 2020. Following engagement with shareholder
bodies and selected shareholders throughout the
process, the Board has taken into account their
feedback and amended the initially proposed
remuneration arrangements accordingly, which included
a decrease in the amount of Long Term Incentive
Plan and Share Appreciation Rights, and the addition
of performance measures to the Share Appreciation
Rights. The Board and the Committee are eager to
address and understand shareholder concerns relating
to remuneration structures and will continue to work to
improve governance standards whilst at the same time
ensuring that remuneration structures appropriately
reward strong performance and enable the recruitment
and retention of key individuals.
85
Plus500 Ltd. 2019 Annual Report 86
Plus500 Ltd. 2019 Annual Report DIRECTORS’ REMUNERATION REPORT
ANNUAL REPORT ON REMUNERATION 2019
AUDITED INFORMATION –
DIRECTORS’ REMUNERATION –
1 January 2019 to 31 December 2019
INTRODUCTION
This report sets out information about the remuneration
of the directors, including the Chief Executive Officer
and the Chief Financial Officer of the Company, for the
year ended 31 December 2019.
Single figure of remuneration
The detailed emoluments received by the Executive
and Non-Executive Directors during the year ended 31
December 2019 are detailed below.
The information provided in the section and
accompanying notes has been audited by
Kesselman & Kesselman, a member firm
of PricewaterhouseCoopers International Limited.
US$000
Salary/ Fees
Benefits
Annual Bonus
Long Term
Incentive Plan
(LTIP)
Share
Appreciation
Rights
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Chairman
Penny Judd
192
120
Executive
Directors
Asaf Elimelech
480
327
Elad Even-Chen
480
327
Gal Haber
403
347
Non-executive
Directors
Charles Fairbairn
152
121
Daniel King
83
73
Steven Baldwin
83
73
Total
1,873
1,388
-
-
-
-
-
-
-
-
87
-
-
-
-
-
-
-
-
-
-
-
785
4,740
51
785
4,740
51
-
-
-
-
-
-
-
-
-
-
-
-
1,570
9,480
102
-
-
-
-
-
-
-
-
-
-
192
120
665
963
1,981
6,030
665
963
1,981
6,030
-
-
-
-
-
-
-
-
403
347
152
121
83
73
83
73
1,330
1,926
4,875
12,794
Plus500 Ltd. 2019 Annual Report COMMENTARY ON THE SINGLE
FIGURE TABLE
Share Appreciation Rights
Share appreciation rights are a deferred cash incentive
subject to continued employment over a long-term
period (two years in the case of the share appreciation
rights granted at the 2019 EGM and three years in the
case of the share appreciation rights granted in the
2020 EGM) and tied to the long term performance of
the Company’s Ordinary Shares. The share appreciation
rights granted at the 2020 EGM are also subject to
achievement of non-financial KPIs, as set by the
Remuneration Committee. The share appreciation rights
have been used by the Company very successfully since
its initial flotation on the AIM in 2013 in order to remain
competitive in the Israeli hi-tech market as its primary
measure for staff retention. At the 2019 EGM each of Mr.
Elimelech and Mr. Even-Chen were granted with a share
appreciation right in the amount of NIS 2,500,000, which
will vest on 31 December 2020.
2019 Annual Bonus
Each of Asaf Elimelech and Elad Even-Chen are entitled
to an annual bonus. The 2019 annual bonus was
subject to criteria relating to profitability, regulatory and
operational criteria and also encompassed an element of
a discretionary bonus. The 2020 annual bonus is subject
to achievement of financial and non-financial KPIs
and does not include a discretionary bonus element.
A summary of the 2019 / 2020 Company’s bonus
calculation is set out in the table on page 89.
Pension
The Group operates various employee pension schemes.
The schemes are generally funded through payments to
insurance companies or trustee administered pension
funds. Directors do not receive pension contributions.
Long Term Incentive Plan
The Long Term Incentive Plan (LTIP) is an award
programme for Executive Directors designed to
incentivise the creation of long-term returns for
shareholders. The 2019 LTIP will vest on the third
anniversary from the date of grant, January 2022, with
an additional two years lock up period. Although the
2019 LTIP was not subject to performance conditions,
following shareholder feedback, the Remuneration
Committee have added performance KPIs to the 2020
LTIP. A summary of the 2019 LTIP and 2020 LTIP are set
out in the table below.
Further details in relation to these arrangements are set
out in the table on pages 89 to 90.
88
Plus500 Ltd. 2019 Annual Report
Non-Founders Executive Directors’ Annual Bonus Calculation
2019(i)
2020(ii)
Criteria
Outcome
Award
(USD ‘000)
Shareholders Approved
Financial
Bonus
Profitability bonus capped at
240% of annual service fee
(NIS 4,080,000) - calculated
as 0.7% of (2019 EBITDA-
$200m).
33.33% is subject to deferral
Did not
meet the
profitability
bonus
requirements
-
Annual Bonus
Non-Financial
Bonus
Regulatory/Operational
bonus capped at 160%
of annual service fee
(NIS 2,720,000) - new
licences up to NIS 620,000;
regulatory compliance up to
NIS 1,200,000; personal and
operational goals up to NIS
900,000.
33.33% is subject to deferral
New licences
application
and no
notable
breaches of
regulatory
licences
in any
subsidiary
785
Financial KPIs: Up to
60% (NIS 4,080,000)
payable subject to
achievement of an
EPS growth rate set
by the Remuneration
Committee and
calculated on a linear
basis (which will be
retrospectively disclosed
within the 2020 annual
audited accounts)
33.33% is subject to
deferral
Non-Financial KPIs: Up
to 40% (NIS 2,720,000)
payable subject to
achievement of three
non-financial KPIs:
strategic (1/3), risk (1/3)
and operational (1/3), as
set by the Remuneration
Committee (which
will be retrospectively
disclosed within the
2020 annual audited
accounts)
33.33% is subject to
deferral
Discretionary
Bonus
The discretion
of the Remuneration
Committee, based only on
exceptional events
No grant of
discretionary
bonus
-
No Discretionary Bonus
Grant of NIS 2,500,000 of
SARs at a base reference
price of 1,349.80 pence,
with a maximum payout
amount of NIS 10,000,000
which will vest after two
years from the date of grant
in December 2018
-
665 (iv)
Grant of NIS 2,500,000 of
SARs at a base reference
price of 798 pence, with
payout capped at NIS
7,500,000, which will
vest after three years
from the date of grant in
December 2019
Subject to achievement
of operational KPIs, as
set by the Remuneration
Committee (which
will be retrospectively
disclosed within the
annual audited accounts
in the applicable years)
Share
Appreciation
Rights (iii)
89
Plus500 Ltd. 2019 Annual Report
2019(i)
2020(ii)
Criteria
Outcome
Award
(USD ‘000)
Shareholders Approved
LTIP
NIS 1,000,000 of Ordinary
Shares at reference date of
1 January 2019 (adjusted
for dividends). Vesting date
is January 2022, subject to
a further two year lock-up
NIS 1,000,000 of Ordinary Shares,
at reference date of 1 January 2020
(adjusted for dividends). Vesting date is
January 2023, subject to a further two
year lock-up and subject to achieving
the following KPIs (each of which will be
retrospectively disclosed within the 2020
annual audited accounts)
1. TSR KPI: Up to 40% (NIS 400,000)
subject to achieving the three year
FTSE 250 TSR target set by the
Remuneration Committee and
calculated on a linear basis, with
30% payable upon achievement of
median TSR for FTSE 250 and 100%
payable upon achievement of upper
quartile TSR for FTSE 250
2. EPS KPI: Up to 40% (NIS 400,000)
subject to achieving the three year
compounded annual EPS growth rate
set by the Remuneration Committee
and calculated on a linear basis,
with 30% payable upon achievement
of 5% compounded annual EPS
growth rate and 100% payable upon
achievement of 12% compounded
annual EPS growth rate
3. HR KPI: Up to 20% (NIS 200,000)
subject to achieving HR criteria
related to churn and growth of R&D
team, as set by the Remuneration
Committee
Total
1,446
(i) Further details are provided in the notes to the January 2019 EGM which are available at the Company's website
(ii) Further details are provided in the notes to the February 2020 EGM which are available at the Company's website
(iii) The entitlement for Share Appreciation Rights only matures following completion of two years of employment
from the grant date, and with respect to 2020 Share Appreciation Rights, following completion of three years of
employment from the grant date
(iv) The award granted is with respect to Share Appreciation Rights granted to the Non-Founder Executives in
December 2017 and were fully vested in December 2019
90
Plus500 Ltd. 2019 Annual Report 2020 NON-FOUNDER EXECUTIVE DIRECTORS
REMUNERATION
The Remuneration Committee has continued its
efforts to modify the remuneration arrangements
of the Executive Directors to better align executive
compensation with UK governance standards followed
by Main Market-listed companies and move further
towards a structure in line with investor expectations
and developments in best practice. The Company
issued its 2020 EGM notice following consultation with
KPMG LLC and with shareholder bodies and selected
shareholders.
Having considered the feedback received from
shareholder bodies and selected shareholders following
the release of the 2020 EGM Notice, the Company
reduced the suggested remuneration payable under the
2020 LTIP and share appreciation rights, added KPIs
to the share appreciation rights awards and reduced
the cap on the potential share appreciation rights
payout. The amended remuneration arrangements
were approved by the shareholders at the EGM held on
February 2020.
Although the revised remuneration packages were
approved at the 2020 EGM, given the number of
votes (35%) cast against the 2020 remuneration of
Asaf Elimelech and Elad Even-Chen, this is an area
which the Committee is continuing to review and seek
shareholder and employee feedback on. The Committee
fully recognises that further work is required in the area
to align remuneration with shareholder expectations.
2020 ANNUAL BONUS
The 2020 annual bonus has an aggregate value of
up to 400% of the service contract fee, subject to
achievement of the following KPIs:
•
Financial KPIs: Up to 60% payable subject to
achievement of an EPS growth rate set by the
Remuneration Committee and calculated on a
linear basis;
• Non-Financial KPIs: Up to 40% payable subject to
achievement of the following non-financial KPIs:
strategic (1/3), operational (1/3) and risk (1/3) as
set by the Remuneration Committee.
91
The award of discretionary bonus has been removed
from 2020 remuneration package, in order to align
the remuneration structure to the new UK Corporate
Governance Code.
The Remuneration Committee recognises that the
bonus opportunity as a percentage of the service fee
may appear significant. However, given the relatively
low fixed pay, which is below the lower quartile for
comparably sized UK companies and FTSE 250
companies, the overall bonus quantum is in line with the
Company’s closest competitors.
In line with the Company’s historical practices and in
order to remain competitive in the Israeli high-tech
market as its primary measure of staff retention,
the payment of deferred bonus amounts shall be
accelerated in the event of a change of control of the
Company in accordance with the terms of the Executive
Directors’ service contracts.
2020 LONG TERM INCENTIVE PLAN
Following shareholder feedback, the Remuneration
Committee introduced the following new performance
conditions into the 2020 LTIP:
•
TSR KPI: Up to 40% subject to achieving the three
year FTSE 250 TSR target set by the Remuneration
Committee and calculated on a linear basis, with
30% payable upon achievement of a median TSR
for FTSE 250 and 100% payable upon achievement
of upper quartile TSR for FTSE 250;
EPS KPI: Up to 40% subject to achieving the three
year compounded annual EPS growth rate set by
the Remuneration Committee and calculated on a
linear basis, with 30% payable upon achievement of
5% compounded annual EPS growth rate and 100%
payable upon achievement of 12% compounded
annual EPS growth rate;
•
• HR KPI: Up to 20% subject to achieving HR criteria
related to churn and growth of R&D team, as set by
the Remuneration Committee.
SHARE APPRECIATION RIGHTS
Following shareholder feedback, the Remuneration
Committee added operational KPIs which will be
disclosed within the annual audited accounts in the
applicable years.
Plus500 Ltd. 2019 Annual Report
CLAWBACK AND MALUS PROVISIONS
The Executive Directors’ 2020 remuneration packages
are subject to clawback and malus provisions
authorising the Remuneration Committee to reduce any
payout due (including, for the avoidance of doubt, to nil)
in the event:
•
of discovery of a material misstatement in the
audited consolidated accounts of the Company
(which includes the Company’s subsidiaries)
resulting in a restatement of such accounts; and/or
•
•
•
it is determined that the assessment of the payout
was based on error, or inaccurate or misleading
information; and/or
action or conduct of a participant, which, in the
reasonable opinion of the Committee, amounts
to fraud or material dishonesty or leads to
employment termination for serious misconduct;
and/or
the Company or a subsidiary of the Company
suffers a material failure of risk management,
provided that the participant’s fraud or material
dishonesty or gross negligence significantly
contributed to such material failure of risk
management.
In any of the events listed above, the Committee
may also:
•
require the participant to pay to the Company an
amount equal to some or all of the payout; and/or
•
•
reduce the amount of any future bonus payable to
the participant; and/or
reduce or cancel any awards under any other
Company equity or cash incentive plan, that have
not yet been satisfied.
92
Plus500 Ltd. 2019 Annual Report
FURTHER INFORMATION ON 2019 REMUNERATION
Directors’ shareholdings and share plan interests
Summary of all directors’ shareholdings and share plan interests as at 31 December 20191
Outstanding scheme interests 31/12/19
Actual shares held
Unvested
scheme
interests2
Total shares
subject to
outstanding
scheme
interests
As at 1 January
2019
As at 31
December 2019
Total of all
share
scheme
interests and
shareholdings
at 31/12/193
Executive Directors
Gal Haber
-
-
1,805,457
1,805,457
1,805,457
Asaf Elimelech
16,092
16,092
Elad Even-Chen
16,092
16,092
-
-
30,460
46,552
30,460
46,552
Non-Executive
Directors
Penny Judd4
Charles Fairbairn
Daniel King
Steven Baldwin
Notes:
-
-
-
-
-
-
-
-
25,691
25,691
25,691
40,000
55,000
55,000
27,169
27,169
27,169
-
-
-
1 Save as disclosed above, none of the directors has any interest in the share capital of the Company or of any of
its subsidiaries nor persons connected to the directors (within the meaning of s.252 of the Companies Act) have
any such interest, whether beneficial or non-beneficial.
2 2019 LTIP awards that have not vested
3 All share plan interests together with any holdings of Ordinary Shares
4 The shares are registered in the name of Penny Judd’s spouse, Julian Judd
93
Plus500 Ltd. 2019 Annual Report DIRECTORS’ SERVICE CONTRACTS AND
NON-EXECUTIVE DIRECTORS’ LETTERS OF
APPOINTMENT
the date of appointment (which may be extended for two
more three year terms). Charles Fairbairn and Daniel King
were re-elected for a further three year term effective
from the 2019 Annual General Meeting.
Executive Directors – Service Contracts
Each of the Executive Directors provides their services
to the Company pursuant to a service contract. The
terms of their service contracts are summarised below.
Each Non-Executive Director is expected to commit to a
minimum of 24 days per year in fulfilling their duties as a
director of the Company.
Gal Haber – Managing Director
The services of Gal Haber are provided to the Company
pursuant to a service contract entered into by the
Company with Wavesoft Ltd. In addition, Gal Haber has
entered into an appointment letter with the Company.
Wavesoft is also entitled to participate in a bonus
scheme on terms decided by the Committee.
Asaf Elimelech – Chief Executive Officer
The services of Asaf Elimelech are provided to the
Company pursuant to a service contract entered into
by the Company with Asaf Elimelech Consultation and
Regulatory Services Ltd.
Elad Even-Chen - Chief Financial Officer
The services of Elad Even-Chen are provided to the
Company pursuant to a service contract entered into by
the Company with Elad Even-Chen Consulting Services
Ltd.
NON-EXECUTIVE DIRECTORS’ LETTERS OF
APPOINTMENT
On their initial appointment, each of the Non-Executive
Directors signed a letter of appointment with the
Company, for an initial period of three years.
Other than the External Directors, there are no existing or
proposed service contracts or consultancy agreements
between any of the directors and the Company which
cannot be terminated by the Company within twelve
months without payment of compensation.
Copies of the directors’ letters of appointment and
service agreements are available for inspection at
the Company’s registered office. The Chairman of
the Company does not receive any fees for acting
as Chairman other than the fees as a Non- Executive
Director.
The Chairman and Non-Executive Directors do not
participate in any long-term incentive or annual bonus
schemes, nor do they accrue any pension entitlement.
In addition, there are more stringent regulations around
the exact roles of Non-Executive Directors. The Audit and
Remuneration Committee Chairmen must be External
Directors who once appointed serve for three years
but are then restricted from becoming the Chairman or
holding any paid role at the Company for two years after
they leave the Board.
EXTERNAL BOARD APPOINTMENTS
The letters of appointment of Penny Judd and Steven
Baldwin as Non-Executive Directors require them to
retire and be subject to re-election at each Annual
General Meeting in accordance with Provision 18 of
the UK Corporate Governance Code. The amendments
have been drafted such that renewed appointment
will not necessitate a new letter of appointment. The
appointments of Penny Judd and Steven Baldwin can be
terminated on two months’ notice by either the Company
or the Non-Executive Director.
Where Board approval is given for an Executive Director
to accept an outside non-executive directorship, the
individual is entitled to retain any fees received. The
Board assesses and confirms that such appointment
will not have any material impact on the performance
of the director, and do not affect the director's
commitments and duties as director of the Company.
Steven Baldwin is currently a non-executive director of
TruFin Plc and The Edinburgh Investment Trust Plc.
As required under, and subject to the Companies Law,
the appointments of Charles Fairbairn and Daniel King
as External Directors are for a period of three years from
Penny Judd is currently a non-executive director of
TruFin Plc, Alpha Financial Markets Consulting Plc and
Team17 Group Plc.
94
Plus500 Ltd. 2019 Annual Report ADVISORS
The Committee appointed KPMG LLC as remuneration
consultants (non-audit services). KPMG LLC provided
remuneration assistance with the transition to a
more UK corporate governance compliant structure
after the move to the Main Market and advice
in relation to compliance with the UK Corporate
Governance Code. Their advice linked Executive
remuneration, Non-Executive remuneration and recent
shareholder guidance, with similar companies and
market developments. KPMG LLC is a member of
the Remuneration Consultants’ Group, and as such
chooses to operate pursuant to a code of conduct that
requires remuneration advice to be given objectively
and independently. KPMG Ltd. is the auditor of
Plus500CY Ltd., it is a different and separate entity from
KPMG LLC that provided the remuneration consultant,
KPMG LLC has no connection to the Company or
individual directors. As such, the Committee is satisfied
that the advice provided by KPMG LLC in relation to
remuneration matters is objective and independent.
STATEMENT OF VOTING AT 2019 EXTRAORDINARY GENERAL MEETING
The table below shows votes cast by proxy at the EGM held on 21 January 2019 in respect of the directors’
remuneration.
Statement of voting on remuneration
Votes for number of
shares and percentage
of shares voted
Votes against number of
shares and percentage of
shares voted
Votes withheld
number of shares
Increase in fees payable
to Penny Judd
Increase in fees payable
to Charles Fairbairn
Increase in fees payable
to Steven Baldwin
Increase in fees payable
to Daniel King
Increase to service fees
to Wavesoft Ltd for Gal
Haber’s Services
Remuneration terms for
Asaf Elimelech
Remuneration terms for
Elad Even-Chen
76,273,101
98.67%
76,273,101
98.67%
77,213,529
99.89%
77,213,529
99.89%
76,336,929
98.75%
39,723,986
52.45%
39,473,053
52.12%
1,031,055
1.33%
1,031,055
1.33%
87,572
0.11%
87,572
0.11%
964,172
1.25%
36,014,411
47.55%
36,265,344
47.88%
6,000
6,000
9,055
9,055
9,055
1,571,759
1,571,759
95
Plus500 Ltd. 2019 Annual Report PAYMENTS TO PAST DIRECTORS
During the year, no director has departed from the
Board and therefore there were no payments to
directors who departed in 2019.
PAYMENTS FOR LOSS OF OFFICE
There were no payments for loss of office to past
directors in 2019.
MOST HIGHLY REMUNERATED EXECUTIVES
IN 2019
The table below shows the remuneration of the
Company's five most highly compensated executives in
2019 (including two of its Executive Directors).
2019 Fees ($)
1
2
3
4
5
Asaf Elimelech
1,980,988
Elad Even-Chen
1,980,988
David Zruia
1,100,632
Nir Zatz
Ari Shotland
809,411
750,603
This report has been approved by the Board of Directors
of Plus500 Limited.
Signed on behalf of the Board.
Daniel King
Chairman of the Remuneration Committee
6 April 2020
96
Plus500 Ltd. 2019 Annual Report DIRECTORS' REPORT
The directors of Plus500 present their report for the year ended 31 December 2019.
The directors believe that the requisite components of this report are set out elsewhere in this Annual Report and/ or
on the Company’s website (www.plus500.com).The table below sets out where the necessary disclosure can be found.
Directors
Results and dividends
Articles of Association
Share Capital
Directors that have served during the year and summaries of the
current director’s key skills and experience are set out on pages 53 to
56 and on page 68.
Results for the year ended 31 December 2019 are set out in the
financial review on pages 29 to 32 and the Consolidated Statement
of Comprehensive Income on page 110. Information regarding the
proposed final dividend can be found in the financial review on page
31. Dividend payments made during the year ended 31 December
2019 can be found in the notes to the Consolidated Financial
Statements on page 128.
The Company’s full Articles of Association can be found on the
Company’s website at https://www.plus500.co.uk/Investors/
Constitutional Documents. Any amendments made to the Articles of
Association may be made by a special resolution of shareholders.
Details of the Company’s share capital are set out in note 20 to the
Consolidated Financial Statements on page 133. At the close of
business on 3 April 2020, the Company had 107,006,952 Ordinary
Shares in issue, and additional 7,881,425 Ordinary Shares are held in
treasury by the Company.
Authority to purchase own shares
The Company has authority to purchase its own shares and a further
authority will be sought at the upcoming Annual General Meeting.
Directors’ interests
Details of the directors’ beneficial interests are set out in the
Remuneration Report on page 93.
The Company has given indemnities to each of the directors in
respect of any liability arising against them in connection with the
Company’s (and any associated company’s) activities in the conduct
of their duties. These indemnities are subject to the conditions set
out in their indemnification agreements and remain in place at the
date of this report.
Directors’ and Officers’ Liability Insurance cover is in place at the date
of this report. Cover is reviewed annually and the last renewal was
carried out in October 2019.
Notifiable major shares interests of which the Company has been
made aware are set out on page 63 of the Governance Report.
The Company did not make any donations to political organisations
during the year.
In December 2019 the Company reapproved and published on its
website its policy on diversity https://cdn.plus500.com/media/
Investors/Docs/EqualityAndDiversityPolicy.pdf
Directors’ indemnities
Directors’ and Officers’ Liability Insurance
Major interests in shares
Political contributions
Diversity policy
97
Plus500 Ltd. 2019 Annual Report Financial risk
Activities in research and development
Auditors
Details of the Company’s policies on financial risk management and
the Company’s exposure to price risk, credit risk, liquidity risk and
cash flow risk are outlined in note 22 to the Consolidated Financial
Statements.
Details about the Company’s future developments can be found in
the Strategic Report on pages 25 to 26.
A resolution to reappoint Kesselman & Kesselman, a member firm of
PricewaterhouseCoopers International Limited as external auditors
will be proposed at the 2020 Annual General Meeting.
Post balance sheet events
There have been no post balance sheet events.
Audit information
•
Each of the directors at the date of the approval of this report
confirms that:
•
so far as he/she is aware, there is no relevant audit information
of which the Company’s auditors are unaware; and
he/she has taken all the reasonable steps that he/she ought to
have taken as a director to make himself/herself aware of any
relevant audit information and to establish that the Company’s
auditors are aware of the information.
Listing Rule 9.8.4R disclosures
The table below sets out where disclosures required in compliance with Listing Rule 9.8.4R are located.
Interest capitalised and tax relief
Page
n/a
Parent company participation in a placing by a
listed subsidiary
Publication of unaudited financial information
n/a
Contracts of significance
Page
n/a
n/a
Details of long term incentive schemes
87-92
Provision of services by a controlling shareholder
n/a
Waiver of emoluments by a director
Waiver of future emoluments by a director
Non pre-emptive issues of equity for cash
Non pre-emptive issues of equity for cash by
major subsidiary undertakings
n/a
n/a
n/a
n/a
Agreements with controlling shareholders
Shareholder waivers of dividends
Shareholder waivers of future dividends
n/a
n/a
n/a
The Directors’ Report has been approved by the Board of Directors of Plus500 Limited.
Signed on behalf of the Board
Elad Even-Chen
Chief Financial Officer
6 April 2020
98
Plus500 Ltd. 2019 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
(the "Takeover Code") 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% or more of the shares or
the right to appoint 25% 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% of the shares voted on the matter,
as well as 75% 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% or more of the voting rights in the company. This
rule does not apply if there is already another holder of
at least 25% 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% of the voting rights in the company, if
there is no other shareholder of the company who holds
more than 45% of the voting rights in the company.
99
Plus500 Ltd. 2019 Annual Report •
the purchaser acquires more than 98% 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% or 98%, as
applicable, of the company’s shares or class of
shares, the purchaser may not own more than
90% 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 below), 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.
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% 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% 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% 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% 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.
100
Plus500 Ltd. 2019 Annual Report DIRECTORS’ RESPONSIBILITY STATEMENT
They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps
in the prevention and detection of fraud and other
irregularities.
Each of the directors confirms that, to the best of each
person’s knowledge and belief:
•
The Group's Consolidated Financial Statements,
which have been prepared in accordance with IFRS,
give a true and fair view of the assets, liabilities,
financial position and profit of the Group;
The Directors’ Report includes a fair review of the
development and performance of the business
and the position of the Group, together with a
description of the principal risks and uncertainties
that it faces.
•
The directors consider that the Annual Report and
Accounts, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for shareholders to assess the Group's position,
performance, business model and strategy.
The directors are also responsible for preparing the
Directors’ Report, Strategic Report, Corporate
Governance Report and the Directors’ Remuneration
Report.
Signed on behalf of the Board
Asaf Elimelech
Chief Executive Officer
6 April 2020
The directors are responsible for preparing the annual
report and the Consolidated Financial Statements
in accordance with applicable law and regulations.
The Companies Law requires the directors to prepare
Consolidated Financial Statements for each financial
year. Under that law the directors have elected to
prepare the Consolidated Financial Statements in
accordance with International Financial Reporting
Standards as issued by the IASB (“IFRS”). The directors
must not approve the Consolidated Financial
Statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group
and the Comprehensive Income of the Group for that
period. The directors considered the information
provided in the Annual Report and how it assists the
Company's shareholders in understanding the Group's
position, performance business model and strategy.
In preparing these Consolidated Financial Statements,
the directors are required to:
•
Present fairly the financial position, financial
performance and cash flows of the Group;
Present information, including accounting
policies, in a manner that provide relevant, reliable,
consistent and understandable information;
• Make judgements and accounting estimates that
•
•
•
•
are reasonable;
State whether applicable IFRS have been followed,
subject to any material departures disclosed and
explained in the Consolidated 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
Group's financial position and financial performance;
Prepare the Consolidated Financial Statements on
the going concern basis unless it is inappropriate to
presume the Group will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position
of the Group and enable them to ensure that the
Consolidated Financial Statements comply with
applicable law.
101
Plus500 Ltd. 2019 Annual Report 102
Plus500 Ltd. 2019 Annual Report Plus500 Limited
FINANCIAL STATEMENTS
103
Plus500 Ltd. 2019 Annual Report TABLE OF CONTENTS
INDEPENDENT REPORT OF THE AUDITORS
CONSOLIDATED FINANCIAL STATEMENTS IN
U.S. DOLLARS ($):
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Page
105-109
110
111-112
113
114
115-139
104
Plus500 Ltd. 2019 Annual Report INDEPENDENT REPORT OF THE AUDITORS
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance
with the International Ethics Standards Board
for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) that is relevant to our audit
of the consolidated financial statements. We have
fulfilled our other ethical responsibilities in accordance
with the IESBA Code.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the consolidated financial statements of
the current period. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
To the shareholders of Plus500 Ltd.
REPORT ON THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Opinion
In our opinion, the consolidated financial statements
present fairly, in all material respects the consolidated
financial position of Plus500 Ltd. (the "Company")
and its subsidiaries (the "Group") as at 31 December
2019 and its consolidated results of operations and
its consolidated cash flows for the year then ended
in accordance with International Financial Reporting
Standards ("IFRSs") as issued by the International
Accounting Standards Board.
What we have audited
The Group’s consolidated financial statements
comprise:
•
•
•
•
•
the consolidated statement of financial position as
at 31 December 2019;
the consolidated statement of comprehensive
income for the year then ended;
the consolidated statement of changes in equity for
the year then ended;
the consolidated statement of cash flows for the
year then ended; and
the notes to the consolidated financial statements,
which include a summary of significant accounting
policies.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs). Our
responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the consolidated financial statements section of our
report.
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
105
Plus500 Ltd. 2019 Annual Report KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY
AUDIT MATTER
Revenue recognition
The Group has developed and operates an online
and mobile trading platform for trading Contracts for
Difference – CFDs.
The Group generates its trading income from Customer
Income, which includes revenue from customer
spreads and overnight charges, and Customer
Trading Performance, which includes gains/losses on
customers’ trading positions.
The computation of revenue is carried out automatically
by using its own developed platform which is an internal
IT system (the “Platform”).
The revenue is calculated based on several parameters.
Part of the parameters that feed into that calculations
are received from external quotation suppliers and
others depend on internally developed program code
within the Platform.
The revenue depends on a combination of the effective
operation and accuracy of controls over, and access
rights to, the Platform.
Our audit predominantly focused on the Group's
control environment, including the IT environment. We
tested key controls over the revenue process, from the
acceptance of a new customer, through the trading
activity to the revenue that is recorded in the Company's
general ledger.
We tested the operating effectiveness of IT general
controls, including: access to programs and supporting
data, program changes and computer operations for
the Platform and for the ERP system. In addition, we
tested program development controls over the ERP
system.
We also tested, through a combination of controls and
substantive testing techniques, the following:
•
Profit/loss calculations in respect of closed
positions;
• Calculation of the fair value adjustment of year-end
positions held by clients and the calculation of the
“open positions” report produced by the Platform;
• Appropriate use of feeds the Group receives from
its data suppliers to confirm the integrity of the
feeds used to calculate the open/ close position;
and
• Controls associated with cash reconciliations
and reconciliations with external counterparties
throughout the year including client deposits/
withdrawals.
We agreed cash accounts of client deposits to external
third party evidence at the year-end by receiving
independent confirmations from banks and other third
party providers. In addition we tested the interface
between the data of client money as presented in the
Platform to the general ledger to ensure completeness
and accuracy.
Finally, to address the risk that fraudulent adjustments
or transactions had been entered into the trading
systems, we read client activity reports and read a
sample of client complaints.
No material issues noted.
106
Plus500 Ltd. 2019 Annual Report
GOING CONCERN
We have reviewed the directors’ statement relating to
Going Concern as if the Company was a UK incorporated
premium listed entity. We have nothing to report having
performed our review.
OTHER INFORMATION
The directors are responsible for the other information.
The other information comprises all of the information
in the Annual Report and Accounts (but does not include
the consolidated financial statements and our auditor’s
report thereon).
Our opinion on the consolidated financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other
information identified above and, in doing so, consider
whether the other information is materially inconsistent
with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report in this
regard.
Based on the responsibilities described above and our
work undertaken in the course of the audit, the Listing
Rules of the United Kingdom Financial Conduct Authority
(FCA) require us also to report, or we are voluntarily
reporting, on certain matters as described below.
THE DIRECTORS’ ASSESSMENT OF THE
PROSPECTS OF THE GROUP
We have reviewed of the directors’ statement that they
have carried out a robust assessment of the principal
risks facing the Group and statement in relation to the
longer-term viability of the Group as if the Company
was a UK incorporated premium listed entity. Our review
was substantially less in scope than an audit and only
consisted of making inquiries and considering the
directors’ process supporting their statements; checking
that the statements are in alignment with the relevant
provisions of the UK Corporate Governance Code issued
in July 2018 (the “Code”); and considering whether the
statements are consistent with the knowledge acquired
by us in performing our audit. We have nothing to report
having performed our review.
UK CORPORATE GOVERNANCE CODE
We have nothing to report in respect of our responsibility
to report when the directors’ statement relating to the
company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the
Code specified, under the Listing Rules of the FCA, for
review by the auditors.
RESPONSIBILITIES OF MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE
FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
Management is responsible for the preparation and fair
presentation of the consolidated financial statements
in accordance with IFRSs as issued by the International
Accounting Standards Board, and for such internal
control as management determines is necessary
to enable the preparation of consolidated financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and
using the going concern basis of accounting unless
management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for
overseeing the Group’s financial reporting process.
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
107
Plus500 Ltd. 2019 Annual Report AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a
whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect
a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of
users taken on the basis of these consolidated financial
statements.
•
conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a
going concern.
Evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:
•
Identify and assess the risks of material
misstatement of the consolidated financial
statements, whether due to fraud or error, design
and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting
estimates and related disclosures made by
management.
•
• Conclude on the appropriateness of management’s
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events or
• Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or
business activities within the Group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the Group audit. We remain solely
responsible for our audit opinion
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated
financial statements of the current period and are
therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that
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
108
Plus500 Ltd. 2019 Annual Report
a matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this
independent auditor’s report is Maya Ben Shmuel.
Tel Aviv, Israel
Kesselman & Kesselman
Certified Public Accountants (lsr.)
A member firm of PricewaterhouseCoopers
International Limited
Maya Ben Shmuel
Partner
Tel Aviv, Israel
6 April 2020
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
109
Plus500 Ltd. 2019 Annual Report CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
U.S. dollars in millions
TRADING INCOME
Selling and marketing expenses
Administrative and general expenses
OPERATING PROFIT
Financial income
Financial expenses
FINANCIAL EXPENSE - NET
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE
PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR
U.S. dollars
EARNINGS PER SHARE (basic and diluted)
Note
3
4
5
8
9
Year ended 31 December
2019
354.5
138.9
25.5
190.1
6.7
7.5
(0.8)
189.3
37.6
151.7
2018
720.4
175.9
39.2
505.3
6.1
8.4
(2.3)
503.0
124.0
379.0
1.35
3.33
The accompanying notes are an integral part of the financial statements.
110
Plus500 Ltd. 2019 Annual Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION
U.S. dollars in millions
Note
2019
2018
As of 31 December
ASSETS
Non-current assets
Property, plant and equipment
Right of use assets
Long term other receivables
Total non-current assets
Current assets
Income tax receivable
Other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Lease liabilities (net of current maturities)
Share-based compensation
Total non-current liabilities
Current liabilities
Share-based compensation
Income tax payable
Other payables
Service suppliers
Current maturities of lease liabilities
Trade payables – due to clients
Total current liabilities
TOTAL LIABILITIES
12
18
8
13
14
18
7
7
8
15
16
18
17
2.8
5.3
1.2
9.3
2.8
11.9
292.9
307.6
316.9
4.1
-
4.1
4.8
1.8
10.3
10.0
1.6
0.2
28.7
32.8
3.3
-
1.5
4.8
0.8
12.0
315.3
328.1
332.9
-
0.3
0.3
7.3
9.9
20.1
14.3
-
0.3
51.9
52.2
The accompanying notes are an integral part of the financial statements.
111
Plus500 Ltd. 2019 Annual Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(CONTINUED)
As of 31 December
U.S. dollars in millions
Note
2019
2018
EQUITY
Ordinary shares
Share premium
Cost of Company's shares held by the Company
Retained earnings
Total equity
TOTAL EQUITY AND LIABILITIES
20
10
0.3
22.2
(57.0)
318.6
284.1
316.9
0.3
22.2
(9.8)
268.0
280.7
332.9
Asaf Elimelech
Chief Executive Officer
Elad Even-Chen
Group Chief Financial Officer
Penny Judd
Non-Executive Director and
Chairman
Date of approval of the consolidated financial statements by the Company's Board of Directors:
6 April 2020.
The accompanying notes are an integral part of the financial statements.
Registered Company number (Israel): 514142140
112
Plus500 Ltd. 2019 Annual Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
U.S. dollars in millions
Ordinary
shares
Share
premium
Cost of
Company's
shares held by
the Company
Retained
Earnings
Total
BALANCE AT 1 JANUARY 2018
0.3
22.2
(7.5)
210.9
225.9
CHANGES DURING THE YEAR ENDED 31
DECEMBER 2018
Profit and comprehensive income for the year
TRANSACTION WITH SHAREHOLDERS
Dividend
Acquisition of treasury shares
-
-
-
-
-
-
BALANCE AT 31 DECEMBER 2018
0.3
22.2
CHANGES DURING THE YEAR ENDED 31
DECEMBER 2019
Profit and comprehensive income for the year
TRANSACTION WITH SHAREHOLDERS:
Dividend
Acquisition of treasury shares
-
-
-
-
-
-
-
-
(2.3)
(9.8)
-
-
379.0
379.0
(321.9)
(321.9)
-
(2.3)
268.0
280.7
151.7
151.7
(101.1)
(101.1)
(47.2)
-
(47.2)
BALANCE AT 31 DECEMBER 2019
0.3
22.2
(57.0)
318.6
284.1
The accompanying notes are an integral part of the financial statements.
113
Plus500 Ltd. 2019 Annual Report CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in millions
OPERATING ACTIVITIES
Cash generated from operations (see Note 23)
Income tax paid, net
Interest received, net
Net cash flows provided by operating activities
INVESTING ACTIVITIES
Repayment of deposits
Purchase of restricted deposits
Purchase of property, plant and equipment
Net cash flows used in investing activities
FINANCING ACTIVITIES
Dividend paid to equity holders of the Company
Payment of principal in respect of leases liabilities
Acquisition of own shares
Net cash flows used in financing activities
Year ended 31 December
2019
2018
170.1
(47.6)
4.8
127.3
-
-
(0.1)
(0.1)
495.0
(98.4)
3.8
400.4
0.2
(0.3)
(0.6)
(0.7)
(101.1)
(321.9)
(1.8)
(47.2)
-
(2.3)
(150.1)
(324.2)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(22.9)
75.5
BALANCE OF CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE YEAR
Gains (Losses) from exchange differences on cash and cash equivalents
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR
315.3
0.5
292.9
241.9
(2.1)
315.3
The accompanying notes are an integral part of the financial statements.
114
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL INFORMATION
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Information on activities
Plus500 Ltd. (hereafter – the Company) and its
subsidiaries (hereafter – the Group) has developed and
operates an online and mobile trading platform within
the CFD sector enabling its international customer
base of individual customers to trade CFDs on over
2,800 underlying financial instruments internationally.
The Group currently offers CFDs referenced to equities,
indices, commodities, options, ETFs, cryptocurrencies
and foreign exchange.
The Group’s offering is available internationally with a
significant market presence in the UK, Australia, the
European Economic Area (EEA) and the Middle East
and has customers located in more than 50 countries.
The Group operates through operating subsidiaries
regulated by the Financial Conduct Authority (FCA)
in the UK, the Australian Securities and Investments
Commission (ASIC) in Australia, the Cyprus Securities
and Exchange Commission (CySEC) in Cyprus, the
Israel Securities Authority (ISA) in Israel, the Financial
Markets Authority (FMA) in New Zealand, the Financial
Sector Conduct Authority (FSCA) in South Africa, the
Monetary Authority of Singapore (MAS) in Singapore
and the Financial Services Authority (FSA) in the
Seychelles (Obtained in January 2020).
The Company also has a subsidiary in Bulgaria which
provides operational services to the Group.
a. Basis of accounting and accounting policies
The Group's financial information as of 31 December
2019 and 2018 and for each of the two years in the
period ended on 31 December 2019 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. Going concern
The Group has considerable financial resources, and a
substantial active customer base which is diversified
geographically worldwide. As a consequence, the
Directors believe that the Group is well placed to
manage its business risks in the context of the current
economic outlook. Accordingly, the Directors have a
reasonable expectation that the Group has adequate
resources to continue in operational existence for the
foreseeable future. They therefore continue to adopt the
going concern basis in preparing these consolidated
financial statements.
On 24 July 2013, the Company's shares were admitted
to trading on AIM market of the London Stock Exchange
in the Company's initial public offering ("IPO"). On 26
June 2018, the Company's shares were admitted to the
premium listing segment of the Official List of the FCA
and to trading on the London Stock Exchange PLC's
Main Market for listed securities and trading of the
Company's shares on the AIM market of London Stock
Exchange PLC was cancelled.
The Group is engaged in one operating segment - CFD
trading.
c. 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
2.
include the accounts of the Company and its
subsidiaries.
Intercompany balances and transactions
between the Group's entities have been
eliminated.
115
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
3. Accounting policies of the subsidiaries have
been changed where necessary to ensure
consistency with the policies adopted by the
Group.
Open client positions are carried at fair value and gains
and losses arising on this valuation are recognised as
trading income, as well as gains and losses realised on
positions that have closed.
d. 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.
e. 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
consolidated statement of comprehensive income
among "financial income (expenses)".
f. Trading income
Trading income represents Customer Income, which
includes revenue from customer spreads and overnight
charges, and Customer Trading Performance, which
includes gains/losses on customers’ trading positions,
arising on client trading activity, primarily in contracts
for difference on shares, indices, ETFs, options,
commodities, cryptocurrencies and foreign exchange.
g. Share-based compensation
The Group operates a cash- settled share-based
compensation plan, under which it receives services
from employees and service contractors as consideration
for Share Appreciation Rights. The fair value of the
employee services received in exchange for the grant
of the rights are recognised as an expense in the
consolidated statements of comprehensive income. At
the end of each reporting period, the Group evaluates
the Share Appreciation Rights based on their fair value as
prorated over the period and the change in prorated fair
value is recognised in the consolidated statements of
comprehensive income.
h. Treasury shares
Treasury shares are shares of the Company held
by the Company. The Board approves buyback
programmes. The buyback programmes are funded
from the Company's net cash balances. The shares are
being purchased at fair value. (see note 10 for further
information).
i. Current income tax
Tax is recognised in the consolidated statement of
comprehensive income.
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.
j. Deferred income tax
Deferred income tax is recognised, using the liability
method, on temporary differences arising between the
116
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
by the balance sheet date and are expected to apply
when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
The Group recognises 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.
(CONTINUED)
Percentage
of annual depreciation
Computers and office
equipment
Leasehold
improvements
6-33
10
Leasehold improvements are amortised by the straight-
line method over the terms of the lease, 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.
Deferred income tax assets are recognised only to the
extent that it is probable that future taxable profit will be
available against which the temporary differences can
be utilised.
An assets' carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
k. Property, plant and equipment
The cost of a property, plant and equipment item is
recognised as an asset 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:
l. Financial instruments
1. Classification
The Group classifies its financial assets in the
following measurement categories according to
IFRS 9:
• these to be measured subsequently at fair value
through profit and loss, and
• these to be measured at amortised cost.
The classification depends on the entity's business
model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses
will be recorded in the statement of comprehensive
income.
2. Recognition and derecognition
Regular way purchases and sales of financial
assets are recognised on trade-date, the date on
which the Group commits to purchase or sell the
assets. Financial assets are derecognised when
the rights to receive cash flows from the financial
117
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
assets have expired or have been transferred and
the Group has transferred substantially all the risks
and rewards of ownership.
which the dividends are approved by the Group’s Board
of Directors.
3. Measurement
At initial recognition, the Group measures a
financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at
FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are
considered in their entirety when determining
whether their cash flows are solely payment of
principal and interest.
Details on how the fair value of financial
instruments is determined are disclosed in note 22.
m. 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.
o. 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.
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 recognised as employee benefit
expense commensurate with receipt from employees of
the service in respect of which they are entitled for the
contributions.
All of the subsidiaries, except the subsidiary in Bulgaria,
hold money on behalf of clients in accordance with the
client money rules required by the relevant regulatory
framework. Such monies are classified as ‘segregated
client funds’ in accordance with the regulatory
requirements. Segregated client funds comprise client
funds held in segregated client money accounts.
p. Other payables and service suppliers
Other payables and service suppliers are obligations to
pay for services that have been acquired in the ordinary
course of business from suppliers. Other payables and
service suppliers are classified as current liabilities if
payment is due within one year or less. If not, they are
presented as non-current liabilities.
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.
n. Dividends
Dividend distribution is recognised as a liability in the
Group's statement of financial position in the period
Other payables and service suppliers are recognised
initially at fair value and subsequently measured at
amortised cost using the effective interest method.
q. 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.
Assets or liabilities resulting from profits or losses on
118
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
r. New International Financial Reporting Standards,
Amendments to Standards and New interpretations
Of which are:
Current lease liabilities
Non-Current lease liabilities
(CONTINUED)
U.S. dollars in
millions
Operating lease commitments
disclosed as at 31 December
2018
Add: adjustments as a result of a
different treatment of extension
and termination of lease options
Lease liability recognised as at
1 January 2019
4.1
2.6
6.7
U.S. dollars in
millions
1.5
5.2
6.7
Right-of use assets were measured at the amount
equal to the lease liability, adjusted by the amount of
any prepaid or accrued lease payments relating to
that lease recognised in the balance sheet as at 31
December 2018. There were no onerous lease contracts
that would have required an adjustment to the right-of-
use assets at the date of initial application.
The recognised right-of-use assets relate to office
space and real estate type of assets.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
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 reported in the
balance sheet and classified as current liabilities as the
demand is due within one year or less.
New and amended standards adopted by the Group
for the first time for the financial year beginning on or
after 1 January 2019:
IFRS 16 – "Leases" (hereafter – IFRS 16)
The Group has adopted IFRS 16 retrospectively from
1 January 2019, but has not restated comparatives
for the 2018 reporting period, as permitted under the
specific transitional provisions in the standard. The
reclassifications and the adjustments arising from
the new leasing rules are therefore recognised in the
opening balance sheet on 1 January 2019. The nature
and effect of these changes are disclosed below.
On adoption of IFRS 16, the Group recognised lease
liabilities in relation to leases which had previously been
classified as 'operating leases' under the principles
of IAS 17 Leases. These liabilities were measured at
the present value of the remaining lease payments,
discounted using the lessee's incremental borrowing
rate as of 1 January 2019. The weighted average
lessee's incremental borrowing rate applied to the lease
liabilities on 1 January 2019 was 4%.
119
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Amendment to IAS 12 "Taxes on Income"
(hereinafter - "the Amendment to IAS 12")
The Amendment to IAS 12, which was issued as part
of the Annual Improvements to IFRS Standards 2015–
2017 cycle, clarifies that the income tax consequences
of dividends are recognised when a liability to pay a
dividend is recognised. The income tax consequences
of dividends are recognised in profit or loss for the
period, other comprehensive income or equity according
to where the entity originally recognised those past
transactions or events.
Prior to the Amendment to IAS 12, its provisions were
relevant to situations where the tax rates on the
distributed profit were different from the tax rate on
undistributed profits. The Amendment clarifies that
those provisions are relevant to all tax consequences of
dividends.
The Amendment to IAS 12 is effective for annual
reporting periods beginning on or after 1 January
2019 to the income tax consequences of dividends
recognised on or after the beginning of the earliest
comparative period. The first-time adoption of the
amendment to IAS 12 did not have a material impact on
the Group's consolidated financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
r. New International Financial Reporting Standards,
Amendments to Standards and New interpretations
(continued)
New and amended standards adopted by the Group
for the first time for the financial year beginning on or
after 1 January 2019 (continued):
IFRIC 23 – Uncertainty over income tax treatments
IFRIC 23 clarifies how the recognition and
measurement requirements of IAS 12 "Income Taxes"
are applied where there is uncertainty over income tax
treatments.
An uncertain tax treatment is any tax treatment applied
by an entity where there is uncertainty over whether
that treatment will be accepted by the tax authority.
The uncertainty may exist until the relevant taxation
authority or a court takes a decision in the future.
Consequently, a dispute or examination of a particular
tax treatment by the taxation authority may affect an
entity’s accounting for a current or deferred tax asset
or liability. IFRIC 23 provides guidance on accounting
treatment for the following issues related to income
tax-related uncertainties:
• how to determine the measurement unit for
considering the accounting treatment, i.e. whether an
entity considers uncertain tax treatments separately;
• the assumptions an entity makes about the
examination of tax treatments by taxation authorities;
• how an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax
rates; and
• how an entity considers changes in facts and
circumstances.
The Group adopted the standard as of 1 January 2019.
The adoption of IFRIC 23 did not have a material effect
on the Group's consolidated financial statements.
120
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - TRADING INCOME
(CONTINUED)
The Trading income attributed to geographical areas according to the location of the customer is as follows:
U.S. dollars in millions
European Economic Area (EEA) *
United Kingdom
Australia
Rest of the World
Year ended 31 December
2019
150.9
38.6
51.2
113.8
354.5
2018
384.7
100.5
84.8
150.4
720.4
* Other than the United Kingdom which is presented separately in the table above.
NOTE 4 - SELLING AND MARKETING EXPENSES
Year ended 31 December
U.S. dollars in millions
Payroll and related expenses
Variable Bonuses
Share-based compensation
Commission to agents
Advertising
Commissions to processing companies
Server and data feeds commissions
Third party customer support
Sundry
2019
14.9
2.2
1.9
8.1
87.5
15.8
7.2
0.4
0.9
138.9
2018
15.0
2.9
4.3
15.6
109.8
20.1
6.9
0.5
0.8
175.9
121
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - ADMINISTRATIVE AND GENERAL EXPENSES
U.S. dollars in millions
Payroll and related expenses
Variable Bonuses
Share-based compensation
Professional fees and regulatory fees
Office expenses
Travelling expenses
Public company expenses
Nonrefundable VAT
Sundry
Year ended 31 December
2019
2018
7.7
3.0
1.8
5.8
2.8
0.5
0.9
0.8
2.2
25.5
7.1
10.1
4.6
*6.2
5.0
0.8
*3.1
1.6
0.7
39.2
*These amounts in 2018 include an aggregate amount of $ 4.0 million which is related to the admission to the premium listing
segment of the official list of the FCA (see note 1).
NOTE 6 - AUDITORS' REMUNERATION
U.S. dollars in millions
Audit Plus500 Ltd's consolidated financial statements
Audit of Plus500 Ltd's subsidiaries
Total audit fees
Other assurance related services
Tax compliance services
Total non-audit fees
Total fees
Year ended 31 December
2019
2018
0.2
0.3
0.5
0.1
0.2
0.3
0.8
0.2
0.2
0.4
*0.4
0.2
0.6
1.0
* These amounts include expenses related to the admission to the premium listing segment of the official list of the
FCA (see note 1).
122
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - SHARE-BASED COMPENSATION
(CONTINUED)
a. Background
The Group grants "Share Appreciation Rights" to selected employees and service contractors upon approval of the
Board of Directors and management (hereafter - the grant).
The rights are settled in cash at the end of the period of two or three years after the date of grant for those who
remain employed or continue to render services as a service contractor by the Group.
The rights represent the total amount of grant divided by the average closing price of the ordinary shares of the
Company on the Main Market over the course of the 60 trading days immediately preceding the dates of grant
(hereafter - the share price on grant date).
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 Main Market over the
course of the 60 trading days immediately preceding the end of each period (or the payout date) including dividends
paid between the grant date and the end of each period (or the exercise date) divided by the average closing price
of the ordinary shares of the Company on the Main Market over the course of the 60 trading days immediately
preceding the end of each period, as prorated over the period.
b. The following table specifies the dates of grants and the grant rights as of each date
Grant date
Settlement date
3 January 2016
3 January 2018
17 April 2016
17 April 2018
30 December 2016
30 December 2018
31 December 2017
31 December 2019
19 March 2018
19 March 2020
1 July 2018
1 July 2020
30 December 2018
30 December 2020
31 December 2019
31 December 2021
31 December 2019
31 December 2022
* Share price in pence on grant date.
Share price
(GBP)*
Number of
rights granted
Number of
employees
388.81
563.25
541.21
943.23
1,075.70
1,528.93
1,349.80
797.85
797.85
3,122
41
3,722
3,321
286
58
3,490
3,503
2,925
26
1
45
72
1
5
107
105
5
123
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7 - SHARE-BASED COMPENSATION (continued)
c. Share based compensation liability
U.S. dollars in millions
Current liability
Non-current liability
d. Share based compensation expenses
U.S. dollars in millions
Selling and marketing expenses
Administrative and general expenses
e. Share based – number of rights outstanding
Number of rights
Opening balance as at 1 January
Rights granted
Rights exercised
Rights forfeited
Closing balance as at 31 December
As at 31 December
2019
4.8
-
4.8
2018
7.3
0.3
7.6
Year ended 31 December
2019
1.9
1.8
3.7
2019
7,071
6,428
(3,187)
(102)
10,210
2018
4.3
4.6
8.9
2018
9,702
3,834
(6,319)
(146)
7,071
During 2019 and 2018, 3,187 and 6,319, rights were exercised in total amount of $4.7 million and $12.9 million
respectively. The average exercise price per granted right was approximately $1,475 and $2,041 respectively.
124
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - INCOME TAX EXPENSE
(CONTINUED)
a. Corporate taxation in Israel
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 was 24% in 2017 and was 23% in 2018 and thereafter.
b. Corporate taxation in subsidiaries
Principal tax rate
Subsidiary
UK
CY
AU
2019
19%
12.5%
30%
2018
19%
12.5%
30%
Tax regulation
Tax laws in the United Kingdom
Tax laws in Cyprus
Tax laws in Australia
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 income taxes
The Deferred income taxes relates mainly to payroll expenses of the share-based compensation plan (see note 7). The
Deferred tax assets were computed in 2019 and 2018 at tax rate of 23% and 23%, respectively and a portion for $0.6
million will be settled in 2020.
d. Taxes on income included in the consolidated income statements for the reported periods
Year ended 31 December
U.S. dollars in millions
Current taxes:
Current taxes in respect of current year's profits
Deferred income taxes:
Change of deferred taxes asset (See c above)
Taxes on income expenses
2019
37.3
37.3
0.3
37.6
2018
124.4
124.4
(0.4)
124.0
125
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - INCOME TAX EXPENSE (continued)
(CONTINUED)
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 8a above) and the actual tax expense:
Year ended 31 December
U.S. dollars in millions
Income before taxes on income,
as reported in the consolidated income statements
Theoretical tax expense in respect
of this year's income - at 23%
Decrease in taxes resulting from different tax rates
applicable to foreign subsidiaries
Increase (decrease) in taxes in respect of currency
differences and expenses not deductible for tax purposes
Tax expenses (income) in relation to previous years
Taxes on income for the reported period
2019
189.3
43.5
(2.9)
(2.9)
(0.1)
37.6
2018
503.0
115.7
(1.2)
4.3
5.2
124.0
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.
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 2014-2019 as well. Due to the application
of temporary provision on the 2007-2013 tax years, as above, and the possibility for extension to 2014-2019,
management expects at this stage that the new legislation will not apply to tax years preceding 2019.
Considering that the temporary provision applies to the 2007-2013 tax years and Company's assessment on the
likelihood for extension to cover 2014-2019, as above, the Company computed its taxable income for 2009-2019
based on the Israeli accounting standards that existed prior to adopting IFRS in Israel.
126
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 8 - INCOME TAX EXPENSE (continued)
g. Final tax assessments
The Company has final tax assessments for the year 2016.
All of the subsidiaries have only been subject to self-assessments since their incorporation.
NOTE 9 - 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.
Profit attributable to equity holders of the Company
(In U.S dollars)
31 December
2019
2018
151,657,311
379,026,541
Weighted average number of ordinary shares in issue*
112,460,599
113,895,770
* After weighting the effect of the buyback programme. See note 10.
NOTE 10 - ACQUISITION OF THE COMPANY'S SHARES BY THE COMPANY
The Board approves buyback programmes. The buyback programmes are funded from the Company's
net cash balance.
Year ended
31 December
2018
2019
Number of ordinary
shares that were
purchased
130,963
4,746,566
Aggregate purchase
amount (US $ in million)
Average price
of shares bought back
2.3
47.2
£13.58
£8.19
During the period starting 1 January 2020 up to the signing date of the consolidated financial statements (see note
24), the Company bought back additional 2,023,750 ordinary shares (or 1.8%) in the capital of the Company for an
aggregate purchase amount of $23.1 million pursuant to these buyback programmes. Shares were bought back at
an average price of £9.01.
127
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - DIVIDEND
(CONTINUED)
The amounts of dividends for the years 2019 and 2018 declared and distributed by the Company's Board of
Directors are as follows:
Date of declaration
Amount of dividend
US $ in millions
Amount of dividend
per share US $
Date of payment to
shareholders
14 February 2018
10 August 2018
12 February 2019
13 August 2019
164.9
157.0
*70.2
**30.9
1.4479
1.3786
0.6191
0.2734
23 July 2018
22 November 2018
9 July 2019
28 November 2019
On 12 February 2020 the Company declared a final dividend in an amount of $40.8 million. See note 24.
* Between the date of the dividend announcement (12 February 2019) and the record date of the dividend (22 February 2019) the
number of issued and outstanding Ordinary Shares of the Company decreased by 225,000 Ordinary Shares from 113,682,268
Ordinary Shares to 113,457,268 Ordinary Shares, as a result of the repurchase by the Company of Ordinary Shares during
such period and the classification of such repurchased Ordinary Shares as dormant shares that are not entitled to dividends.
Accordingly, 113,457,268 Company Ordinary Shares were entitled to payment of the dividend of $0.6191 per share on 9 July
2019, resulting in an aggregate dividend to all Company shareholders of $70.2 million.
** Between the date of the dividend announcement (13 August 2019) and the record date of the dividend (30 August 2019) the
number of issued and outstanding Ordinary Shares of the Company decreased by 384,432 Ordinary Shares from 113,289,768
Ordinary Shares to 112,905,336 Ordinary Shares, as a result of the repurchase by the Company of Ordinary Shares during
such period and the classification of such repurchased Ordinary Shares as dormant shares that are not entitled to dividends.
Accordingly, 112,905,336 Company Ordinary Shares were entitled to payment of the dividend of $0.2734 per share on 28
November 2019, resulting in an aggregate dividend to all Company shareholders of $30.9 million.
128
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - PROPERTY, PLANT AND EQUIPMENT
(CONTINUED)
Composition of assets, grouped by major classifications and changes therein in 2019 is as follows:
U.S. dollars in millions
Cost
Balance at beginning of year
Additions
Balance at end of year
Accumulated depreciation
Balance at beginning of year
Additions
Balance at end of year
Depreciated balance as of 31 December 2019
Depreciated balance as of 31 December 2018
NOTE 13 - OTHER RECEIVABLES
U.S. dollars in millions
Prepaid expenses
Other
Computers and
office equipment
Leasehold
improvements
Other
Total
1.6
0.1
1.7
1.3
0.1
1.4
0.3
0.3
3.8
-
3.8
1.0
0.5
1.5
2.3
2.8
0.3
-
0.3
0.1
-
0.1
0.2
0.2
5.7
0.1
5.8
2.4
0.6
3.0
2.8
3.3
As of 31 December
2019
7.8
4.1
11.9
2018
8.7
3.3
12.0
As of 31 December 2019 and 2018, the total amount of prepaid expenses includes mainly expenses related to
Company's sponsorship agreement with Atlético de Madrid Football Club (see note 19).
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.
129
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - CASH AND CASH EQUIVALENTS
Cash and cash equivalents by currency of denomination:
(CONTINUED)
As of 31 December
U.S. dollars in millions
USD
EURO
GBP
AUD
NIS
Other
Gross cash and cash equivalents
Less: segregated client funds
Own cash and cash equivalents
NOTE 15 - OTHER PAYABLES
U.S. dollars in millions
Payroll and related expenses
Accrued expenses
Other
2019
275.5
104.9
12.4
23.7
12.5
26.5
455.5
(162.6)
292.9
2019
8.5
1.6
0.2
10.3
2018
288.5
76.0
12.5
19.3
7.8
18.1
422.2
(106.9)
315.3
2018
17.0
2.8
0.3
20.1
As of 31 December
The financial liabilities included among other payable, and accruals are for relatively short periods; therefore, their
fair values approximate or are identical to their carrying amounts.
130
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 - SERVICE SUPPLIERS
(CONTINUED)
Service suppliers are comprised mainly of amounts due to advertising service suppliers, their fair values
approximate or are identical to their carrying amounts.
NOTE 17 - TRADE PAYABLES - DUE TO CLIENTS
As of 31 December
U.S. dollars in millions
Customers deposits, net*
Segregated client funds
* Customers deposits, net are comprised of the following:
Customers deposits
Less- financial derivative open positions:
Gross amount of assets
Gross amount of liabilities
2019
162.8
(162.6)
0.2
221.1
(68.3)
10.0
162.8
2018
107.2
(106.9)
0.3
145.2
(46.8)
8.8
107.2
* As of 31 December 2019, and 2018, the total amount of 'Trade payables - due to clients' includes bonuses to the clients.
131
Plus500 Ltd. 2019 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 18 - LEASES
Effective 1 January 2019, the Company adopted IFRS 16.
Under IFRS 16 all leases are recognised as a right-of-use asset and a corresponding liability at the date at which the
leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to statement of income over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter
of the asset's useful life and the lease term on a straight-line basis.
In applying IFRS 16 for the first time, the Company used the following practical expedients permitted:
1. Recognising an expense on a straight-line basis over the lease term (without recognising a liability and a Right of
Use Asset) for operating leases with a remaining lease term of less than 12 months at 1 January 2019, and leases for
which the underlying asset is of low value;
2. The use of hindsight in determining the lease term where the contract contains options to extend or terminate
the lease.
a. Rights-of-use assets
U.S. dollars in millions
Real estate leases
At 1 January 2019
Additions
Amortisation
At 31 December 2019
b. Lease liabilities:
6.7
0.2
(1.6)
5.3
U.S. dollars in millions
Real estate leases
At 1 January 2019
Additions
Interest expense
Lease payments
Exchange differences
At 31 December 2019
6.7
0.2
0.3
(1.8)
0.3
5.7
Total
6.7
0.2
(1.6)
5.3
Total
6.7
0.2
0.3
(1.8)
0.3
5.7
132
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 - COMMITMENTS
a. 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.
b. 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 20 - SHARE CAPITAL
Composed of ordinary shares of NIS 0.01 par value, as follows:
Authorised
Issued and fully paid
Less treasury shares *
Outstanding shares
Number of shares 31 December
2019
300,000,000
114,888,377
(5,857,675)
109,030,702
2018
300,000,000
114,888,377
(1,111,109)
113,777,268
* Number of accumulated shares that were bought by the Company as part of the buyback programmes.
NOTE 21 - RELATED PARTIES AND KEY MANAGMENT
a. Key management personnel definition:
The Directors and other members of management classify as "persons discharging management responsibility"
in accordance with IAS 24 and the Market Abuse Regulation.
In addition the five founding shareholders are also defined as key management personnel, one of which is a
Director. These shareholders provide services to the Company directly or through companies, they control.
The Directors' Remuneration Report discuss all benefits and share-based payments earned during the year and
the preceding year by the Directors.
b. Company's liability in respect of related parties and key management services (part of Other Payable)
U.S. dollars in millions
Related parties and Key Management liability
As at 31 December
2019
5.3
2018
14.0
133
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 21 - RELATED PARTIES AND KEY MANAGEMENT (continued)
c. Expenses to related parties and key management:
U.S. dollars in millions
Service fees (Selling and marketing expenses)
Service fees (Administrative and general expenses)
Directors fees (Administrative and general expenses)
2019
4.3
7.0
0.6
2018
5.8
15.2
0.8
Year ended 31 December
The average number of key management personal during the year was 20 (FY 2018: 20).
On 1 January 2019 the Board of directors approved
a long-term incentive plan for two Non-Founders
Executive Directors'. The terms of the plan are NIS
1,000,000 of ordinary shares at reference date of 1
January 2019 (adjusted for dividends). Vesting date is
January 2022, subject to a further two year lock-up.
On 20 February 2020 the Board of directors approved
a long term incentive plan for two Non-Founders
Executive Directors'. The terms of the plan are NIS
1,000,000 of ordinary shares, subject to KPIs, at
reference date of 1 January 2020 (adjusted for
dividends). Vesting date is January 2023, subject to a
further two year lock-up.
NOTE 22 - FINANCIAL RISK MANAGEMENT
The Group specialises in the field of Contracts for
Differences ("CFDs") 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
minimise 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 markets
conditions and the levels of client activity. The
Group utilises 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.
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.
134
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22 - 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.
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
CFDs trading activities on foreign exchange, stocks,
indices, commodities, options, 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 department for
each product, and also for groups of products where it
is considered that their price movements are likely to
be positively correlated.
135
(CONTINUED)
Daily profit on closed positions:
U.S. dollars in millions
2019
2018
Highest profit
Highest loss
Average
7.6
(4.7)
0.9
19.4
(2.0)
1.9
During the years 2019 and 2018, as to the closed
positions, there were 310 and 336 profitable trading
days, respectively.
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.
If the U.S. dollar had strengthened by 1% in respect
of balances denominated in other currencies, with
all other variables unchanged, the exposure on
income after taxes in respect of those balances
would be gain (loss) of:
As of 31 December
U.S. dollars in millions
2019
2018
EUR
AUD
GBP
0.1
(0.1)
0.3
(0.4)
(0.3)
(0.5)
The exposure in respect to balances denominated
in other currencies is immaterial.
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
As of 31 December 2019 and 2018 counterparties
holding of the Group's cash and cash equivalents,
credit cards, client funds and deposits have credit
ratings as follows:
Credit Rating*
2019
2018
AA+ to AA-
A+ to A-
BBB+ to B+
Remaining
counterparties
26%
42%
25%
7%
15%
76%
-
9%
* The financial institutions were rated by the same third party.
As of 31 December 2019, the amounts held by the
remaining counterparties are held in a few banks
worldwide. The balance in each of those banks
does not exceed 3% (2018: 4%) of total cash and
cash equivalents, credit cards, client funds and
deposits.
The Group’s largest credit exposure to any single
bank as of 31 December 2019 was $79.9 million
or 18% of the exposure to all banks (2018: $118.0
million or 28%).
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.
NOTE 22 - FINANCIAL RISK MANAGEMENT
(continued)
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 funds when losing more than they have
in their accounts, all customer accounts are pre-
funded.
Client credit risk - 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).
Institutional credit risk - The risk that financial
counterparties will not meet their obligation, risking
both client and the Group’s assets.
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.
136
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 22 - FINANCIAL RISK MANAGEMENT
(continued)
d. Liquidity risk
Liquidity risk is the risk that the Group will
encounter difficulty in meeting obligations arising
from its financial 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 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.
e. Capital Management
1. Plus500UK
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
137
and monitored by the management of the Group.
As of 31 December 2019 and 2018, the UK
Subsidiary had £35.1 million and £33.3 million,
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. Plus500CY
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 2019 and 2018, the regulatory capital
of the CY Subsidiary was €71.7 million and €56.5
million, 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 2019 and 2018, Pillar 1 Capital
Adequacy ratio was 31.2% and 40.4% 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. Plus500AU
The AU Subsidiary is regulated by ASIC, FMA and
FSCA. The AU Subsidiary manages its capital
resources on the basis of regulatory capital
requirements and its own assessment of capital
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 22 - FINANCIAL RISK MANAGEMENT
(continued)
required to support all material risks. The AU
Subsidiary manages its capital through Net
Tangible Assets (NTA) assessment in accordance
with rules and guidelines implemented by ASIC
and FMA, and Capital Liquidity assessment in
accordance with rules and guidelines implemented
by FSCA.
As at 31 December 2019 and 2018, the AU
Subsidiary held Net Tangible Assets of AUD
21.1 million and AUD 16.3 million respectively,
of regulatory capital, which is in excess of the
requirement from ASIC, FMA and FSCA.
4. Plus500SG
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 2019 and 2018, the SG
Subsidiary held regulated capital of SGD 7.2 million
and SGD 7.1 million, respectively, of regulatory
capital, which is in excess of its MAS requirements.
5. Plus500IL
The IL Subsidiary is regulated by the 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 2019 and 2018, the IL
Subsidiary held regulated capital of $8.0 million
and $3.5 million, respectively, of regulatory capital,
which is in excess of its ISA requirements.
f. Other business risks
The Group’s business is subject to various laws
and regulations in different countries according
to its activity and other countries from where the
Group operates. Any regulatory action, tax or legal
challenge against the Group for non-compliance
with any regulatory or legal requirement could result
in significant fines, penalties, or other enforcement
actions, increased costs of doing business through
adverse judgement or settlement, reputational harm,
the diversion of significant amounts of management
time and operational resources, and could require
changes in compliance requirements or limits on
the Group’s ability to expand its product offerings, or
otherwise harm or have a material adverse effect on
the Group’s business.
g. Fair value estimation
Financial derivative open positions (offset from, or
presented with, deposits from clients within 'Trade
payable - due to clients') (see also note 17) 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 maximise 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.
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 (trading
spread).
138
Plus500 Ltd. 2019 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23 - CASH GENERATED FROM OPERATIONS
U.S. dollars in millions
Cash generated from operations activities
Net income for the period
Adjustments required to reflect the cash flows from operating
activities:
Depreciation and amortisation
Amortisation of right of use assets
Liability for share-based compensation
Settlement of share-based compensation
Taxes on income
Interest expenses in respect of leases
Exchange differences in respect of leases
Interest income
Foreign exchange losses (gains) on operating activities
Operating changes in working capital:
Decrease (increase) in other receivables
Decrease in trade payables due to clients
Increase (decrease) in other payables
Decrease in Service suppliers
Cash flows from operating activities
NOTE 24 - SUBSEQUENT EVENTS
(CONTINUED)
Year ended 31 December
2019
151.7
0.6
1.6
3.7
(7.5)
37.6
0.3
0.3
(4.8)
(0.3)
31.5
0.1
(0.1)
(8.8)
(4.3)
(13.1)
170.1
2018
379.0
0.7
-
8.9
(5.5)
124.0
-
-
(4.2)
0.5
124.4
(3.9)
(4.2)
8.0
(8.3)
(8.4)
495.0
Following the year end, in January 2020, a new licence was granted to the Group by the Financial Services Authority
in the Seychelles.
On 12 February 2020 the Company declared a final dividend in an amount of $40.8 million ($0.3767 per share). The
dividend is due to be paid to the shareholders on 13 July 2020.
On 12 February 2020, the Board has resolved in principle to conduct a new share buyback programme to buy back an
amount of up to $30.0 million of the Company’s Ordinary Shares.
During the year 2020 up to the signing date of the consolidated financial statements for the year ended 31 December
2019, Company has continued to purchase its own shares under the buyback programme. See note 10.
139
Plus500 Ltd. 2019 Annual Report
140
Plus500 Ltd. 2019 Annual Report Plus500 Limited
FURTHER INFORMATION
141
Plus500 Ltd. 2019 Annual Report ADVISORS
Sponsor and Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY, UK
Joint Broker
Credit Suisse International
1 Cabot Square, Canary Wharf
London E14 4QJ, 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
60 Great Portland Street
London W1W 7RT, UK
Legal Advisor (Israel)
Naschitz, Brandes, Amir & Co.
5 Tuval Street
Tel Aviv 6789717, Israel
Legal Advisor (United Kingdom)
Bryan Cave 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
142
Plus500 Ltd. 2019 Annual Report Plus500 Limited
ANNUAL REPORT AND ACCOUNTS 2019
www.plus500.com
Published in March 2020