ePlus Annual Report 2021

FY2021 Annual Report · ePlus

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Enabling trusted
and intuitive
access to financial
opportunities

Plus500 Ltd. Annual Report 2021

WELCOME

Plus500 delivered an excellent operational
and financial performance in 2021 and we
made significant progress with our strategic
roadmap to develop our position as a leading
global multi-asset fintech group. Given the
strong positive momentum delivered by the
Group in recent years, the Board continues to
expect that Plus500 will deliver sustainable
growth over the medium to long-term.

David Zruia, Chief Executive Officer

Read more in the CEO’s Q&A on pages 7 – 11

Plus500 Ltd. (“Plus500”, the “Company” or, together with its subsidiaries, the “Group”) is a
global multi-asset fintech group operating proprietary technology-based trading platforms.

2021 headlines

An outstanding year of positive operational and financial momentum:

– Excellent performance across all key metrics, including consistently strong

levels of Customer Income1;

– Significant milestone of over 22 million registered customers achieved on

Plus500’s platforms;

– Major opportunity to leverage this latent customer base, through new retention,
activation and monetisation activities and technology-based initiatives, including
new premium account offering;

– Continued high customer engagement, driven by Plus500’s market-leading

technology-based offering and brand recognition; and

– Robust financial position further strengthened, with substantial improvement

in cash balance.

Excellent progress in developing Plus500’s strategic position as a global
multi-asset fintech group:

– Significant progress made, in line with strategic plans to broaden Plus500’s
product range from its single product focus, helping to diversify the Group’s
revenue streams and geographic footprint;

– The Group’s first ever acquisitions made to establish Plus500’s position in the
high growth markets of futures and options on futures, to be developed through
continued investment in technology integration and a multi-dimensional market-
ing approach;

– Successful launch of a proprietary share dealing platform, ‘Plus500 Invest’, with

further roll-out in FY 2022; and

– On-going organic investments in marketing technologies, technology innovation
and product development, supported by the established R&D centres in Israel.

Further strategic developments achieved in Q1 2022:

– New regulatory licence granted in Estonia, which will further support the Group’s
business across European markets in its core product offering, complementing
the Group’s existing portfolio of regulatory licences globally; and

– Completed acquisition of a Type 1 regulated firm in Japan, expanding the
Group’s geographic footprint and representing a major growth opportunity
within the substantial retail trading market in Japan.

Further improvements on governance, regulation, social responsibility
and risk management matters:

– New Independent Non-Executive Directors appointed, including Prof. Jacob A.
Frenkel as Chair, expanding the range of experience of the Board of Directors of
the Company (“the Board”) and further diversifying its composition, as well as
enabling greater access to new growth markets, in particular the US;

– Consistent focus on sustainability initiatives, including donations to local com-
munity projects and on-going emphasis on customer care and protection; and

– Targeted hedging strategy initiated to minimise market risk.

Attractive returns continue to be delivered to shareholders, including
dividends and share buybacks to the amount of $200.2m related to FY 2021:

– Dividend payments in respect of FY 2021 of $120.0m ($1.1916 per share),

comprising:
– Final dividend of $37.8m ($0.3777 per share);
– Special dividend of $22.2m ($0.2218 per share); and
– Interim dividend of $60.0m ($0.5921 per share).

– Share buyback programmes in respect of FY 2021 of $80.2m, including $67.6m

in H2 2021, comprising:
– New programme to purchase up to $55.0m of the Company’s shares, which
includes a final buyback of $25.2m and a special buyback of $29.8m; and
– A programme of $12.6m was announced in August 2021 in respect of H1
2021, with an additional programme of $12.6m, announced in October
2021, as part of the FY 2021 final programme.

Contents

Strategic report

Group at a Glance
Chair’s Statement
Q&A with the Chief Executive Officer
Our Technology
Our Purpose, Strategy and Key Differentiators
Our Strategy in Action
Our Business Model
Key Performance Indicators
Key Stakeholder Relationships
Our ESG (Environmental, Social, Governance) Approach
Financial and Business Review
Group Tax Policy
Risk Management Framework
Going Concern and Viability Statement

2
4
7
14
20
22
24
26
28
30
38
40
41
46

Governance

48
Governance at a Glance
50
Chair's Introduction to Governance
UK Corporate Governance Code Compliance Statement 51
52
Board of Directors
54
Governance Report
59
Shareholder Engagement
60
Report of the Nomination Committee
64
Report of the Audit Committee
69
Report of the Regulatory & Risk Committee
71
Report of the ESG Committee
74
Report of the Remuneration Committee
81
Directors' Remuneration Report
89
Directors' Report
91
Corporate Law
92
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

94
98
99
100
101
102

Further information

Advisors

Inside back cover

1 Customer Income – Revenue from CFD Customer Income (customer
spreads and overnight charges) and Non-CFD Customer Income
(commissions from the Group’s futures and options on futures operation
and from ‘Plus500 Invest’, the Group’s share dealing platform)

2 EBITDA – Earnings before interest, taxes, depreciation and amortisation
3 New Customers – Customers depositing for the first time
4 Active Customers – Customers who made at least one real money trade

during the period

5 ARPU – Average Revenue Per User
6 AUAC – Average User Acquisition Cost

2021 Financial highlights

Revenue

$718.7m

EBITDA Margin %

54%

EBITDA2

$387.1m

Cash balance at year end

$749.5m

2021 Operational highlights

New Customers3

196,336

ARPU5

$1,764

Active Customers4

407,374

AUAC6

$877

Plus500 Ltd. 2021 Annual Report
Group at a Glance

A GLOBAL MULTI-ASSET
FINTECH GROUP

Our purpose

Enabling trusted and intuitive access to financial
opportunities.

Across financial instruments
Through broad product range.

Across countries
Through global scale with localised services.

Across devices
Through best-in-class technology.

Read more on page 56

BOARD SKILLS AND EXPERIENCE
(Number of Board members with the relevant skills and experience)

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

ESG

Enterprise Risk management

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsChair’s Introduction to Governance

Plus500 remains focused on its key priorities
in governance and sustainability, supported by
on-going engagement with key stakeholders
within the investment community.

Executive Director and was re-elected at the AGM held on 4 May 2021.
Furthermore, as approved at our 2021 Extraordinary General Meeting
(“EGM”) held on 16 March 2021, Ms. Tami Gottlieb was appointed as a
Non-Executive Director and External Director. These appointments further
diversify the composition of the Board and have broadened the Board’s
breadth of experience and knowledge.

Also, as announced on 18 March 2022, Prof. Varda Liberman has been
appointed as an Independent Non-Executive Director.

Prof. Liberman is an international renowned expert in the field of decision-
making and behavioural economics. In this capacity, she provides con-
sulting and workshops in key elements of managerial decision-making
and risk management to senior management of organisations across a
range of sectors, including healthcare, banking, investment and technol-
ogy. She is the Rector of Reichman University (IDC Herzliya) in Israel,
and one of its founders and leaders. She is a professor at the business
school, a visiting researcher at Stanford University, and the author of
several books and many scientific articles. During the years, she served
as a Director on several publicly traded corporate boards based in Israel,
including Tamir Fishman trust funds Ltd, and she currently serves as an
External Director at Cellcom Israel Ltd.

I would like to take this opportunity to welcome Varda to our Board, and
I am certain that this appointment will further expand the skills set on
the Board.

I would also like to take the opportunity to thank the two Board members
who stepped down during 2021.

Firstly, following my appointment as a Non-Executive Director (“NED”)
and Chair of the Board at our 2021 AGM held on 4 May 2021, Ms. Penny
Judd stepped down, having been a NED since 2016 and Chair since
2017. I would like to thank Penny for her contribution in leading a con-
tinued improvement in the Company’s governance approach and prac-
tices and I know that her guidance, support and advice were very much
appreciated by our other Board members during her tenure.

Our long serving Senior Independent Non-Executive Director (“SID”) and
External Director, Charles Fairbairn also stepped down at our 2021 AGM.
So, I would also like to thank Charles for his contribution to the develop-
ment of Plus500 since the IPO in 2013, as well as for his wise counsel
and guidance during that time. As previously announced, Ms. Anne Grim
serves as our SID, replacing Charles as of 4 May 2021.

Also, in June 2022 our long serving Independent Non-Executive Director
and External Director, Daniel King, will end his maximum nine-year term
under the provisions of the Companies Law. Daniel is currently the Chair
of both our Remuneration and ESG Committees.

Daniel has been with Plus500 since the IPO and his expertise working
with technology businesses, many of whom are based in Israel, has been
invaluable in helping to navigate the Board and the business through

Dear shareholder
In my first year as Chair of Plus500, I have taken the opportunity to review
and assess all aspects of our business, including our corporate govern-
ance and approach, as well as our activities in the area of sustainability.

I am pleased to say that I have found the Company’s governance frame-
work to be extremely robust, supported by a Board which is well balanced
and diverse, with a strong breadth and depth of knowledge and expertise.
In addition, management continues to place significant emphasis and
focus on ESG matters, particularly around protecting and caring for our
customers and people.

With this background in mind, I would like to take this opportunity to give
you an overview of the work of the Board during 2021. Corporate govern-
ance remained a key focus area for the Board during the year, and this
year we have managed to diversify the composition of the Board sig-
nificantly, in line with the Code and the recommendations of the Hamp-
ton-Alexander Review on gender equality in leadership positions.

In 2021, we continued to dedicate considerable time evaluating the work
of our Board and its committees, and undertook a review of the effective-
ness of the Board. The evaluation process was facilitated internally by
our Company Secretary and myself with the assistance of our external
advisors and included questionnaires which were completed by each
Board member. A detailed report on the results was presented to the
Board in December 2021 and next steps for 2022 were agreed in relation
to the Board and its Committees. In parallel, we have continued to imple-
ment the feedback and insights derived from our 2020 internal Board
evaluation. During 2019 we undertook an independent third party review
by Genius Boards Limited (“Genius Boards”). This was a valuable exercise
which resulted in a number of important recommendations which were
implemented during the course of 2020 and 2021, together with having
the internal reviews in 2020 and 2021. The Board intends to undertake
its next independent third party review during 2022, in accordance with
the recommendation specified in Provision 21 of the Code that FTSE
350 companies shall consider having such an external evaluation once
every three years. The feedback and findings of this independent review
shall be presented in our FY 2022 Annual Report.

As also noted, we were seeking to appoint additional Non-Executive
Directors to complement the Board’s existing skill set and to further
diversify its composition. I am delighted that as announced on 4 Febru-
ary 2021, Ms. Sigalia Heifetz was appointed as an Independent Non-

Plus500 Ltd. 2021 Annual Reportvarious challenges and to help optimise the many opportunities that
have arisen during his tenure. In addition, his leadership, contribution
and commitment as Chair of the Remuneration and ESG Committees
has been extremely appreciated. We wish Daniel all the best.

As announced on 18 March 2022, Anne Grim shall replace Daniel King
as the Chair of the Remuneration Committee and Steve Baldwin shall
replace Daniel King as the Chair of the ESG Committee. Also, Anne Grim
(being an External Director) shall replace Daniel as the third member of
the Nomination Committee alongside Steve Baldwin and myself, and an
additional member shall be appointed as the third member of the ESG
Committee, alongside Steve Baldwin and Anne Grim.

Executive remuneration remains a significant area of focus for investors
with holdings in companies listed in the UK. We consulted with external
consultants in previous years in order to align remuneration with share-
holders’ expectations. Consequently, in the period ahead of our 2021
AGM, the Remuneration Committee engaged extensively with shareholder
bodies and key shareholders and with the support of an external advisor,
the Group’s Remuneration Policy was restructured, as further detailed
in the Remuneration Committee Report. I am pleased that at our 2021
AGM, shareholders approved the new Remuneration Policy for Directors
and Executives for a three-year term.

During 2021, I met with a number of our major shareholders to introduce
myself as the new Chair of the Board and to ask for feedback on the
Company’s approach to governance, its strategic priorities and its oper-
ational and financial performance. Shareholder engagement is extremely
important and I will continue to meet regularly with key investors, as will
the rest of the Board members, to ensure we represent investors’ interests.

The Nomination Committee, chaired by Steve Baldwin, 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. During 2021, significant effort by the Nomination
Committee ensured a further diversification of the composition of the
Board, with the appointments of two female Non-Executive Directors, as
mentioned earlier. These efforts have continued in 2022, with the recent
appointment of an additional female Non-Executive Director.

Our oversight of the significant risks including regulatory, financial and
technology challenges facing the Group continues. The Regulatory &
Risk Committee, led by its new chair, Sigalia Heifetz, reviews these risks
and receives assurance from management and the Group’s advisors as
to how they are understood and mitigated to the level of risk acceptable
to the Board.

The Audit Committee, led by its new Chair, Tami Gottlieb, continues its
work overseeing the internal controls of the business, the internal audit
plan and its implementation and approvals of certain transactions as
required under the Companies Law. It also works closely with our exter-
nal auditors and oversees the production of the Consolidated Financial
Statements.

Also, in 2021 we have continued to develop and strengthen our ESG
Committee which was established at the end of 2020, to assess the
Group’s impacts and interactions with ESG aspects. Chaired by Daniel
King, the ESG Committee was supported by external advisors and con-
ducted an ESG materiality assessment, according to which the Group
has already begun to develop its ESG roadmap for the coming years.

UK Corporate Governance Code
Compliance Statement

As a Main Market listed company, following its admission to the Main
Market of the London Stock Exchange, and with respect to 2021,
Plus500 is required to comply with the principles and provisions of 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 2021 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 de-
tailed descriptions are available.

For the financial year ended 31 December 2021, the Company has
complied with the provisions of the Code, other than in respect of the
directors’ re-election mechanism (Provision 18 of the Code) and in rela-
tion to pay ratios and pay gaps (Provision 41 of the Code). While the
Code recommends the submission of all directors for re-election an-
nually, 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 Direc-
tors who meet certain statutory requirements of independence. The
Company’s External Directors are Daniel King (until June 2022), Anne
Grim and Tami Gottlieb. 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.

Also, the Committee has developed a new Environmental Policy, sup-
ported by an extensive gap analysis, to help us to become aligned with
the Task Force on Climate-Related Financial Disclosures (“TCFD”) recom-
mendations as detailed in our ESG report and in the Report of the ESG
Committee.

The following Governance Report describes the activities of the Board
and its committees during 2021 in more detail.

The Board has operated very efficiently during 2021, despite the impact
of the pandemic which has meant that all Board meetings were held as
hybrid sessions (which is a mixture of in-person and virtual attendance).
The Board held a number of meetings during the year to assess the
Group’s strategy and its progress against this strategy, as well as review-
ing key operational elements of the business. The Board remains very
supportive of executive management in developing the Group’s strategic
position as a global multi-asset fintech group, through a clear focus on
organic investments and acquisitions. This strategy is key to the Group’s
future success and has continued to drive the diversification of the
Group’s revenue streams, product range and geographic footprint. This
is evident by the progress made in 2021, with the US acquisitions and
the introduction of our new share dealing platform, ‘Plus500 Invest’.

Finally, and importantly, I would like to say some words of deep gratitude,
both personally and on behalf of the Board, to all of our management
and talented employees across our offices worldwide, for their hard work,
dedication and fantastic contribution to the Group’s culture, performance
and achievements during the year, especially in the context of a chal-
lenging pandemic-driven environment.

I look forward to reporting on the Board’s further progress in next year’s
Annual Report.

Prof. Jacob A. Frenkel
Chair of the Board

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsBoard of Directors
As at the date of this Annual Report

The role of the Board

The Board is responsible to shareholders for effective direction
and control of the Company and to promote the long-term suc-
cess of the Company, and determining the Group’s strategy,
vision and culture. In order to lead the development of the strat-
egy of the Company and the progress of financial performance,
the Board is provided with timely and comprehensive informa-
tion that enables it to effectively review and monitor the perfor-
mance of the Company and to ensure it is in line with its
objectives for achieving its strategic goals.

PROF. JACOB A. FRENKEL

ELAD EVEN-CHEN

Chair

Group Chief Financial Officer and Director

Tenure: 10 months (Appointed May 2021)

Tenure: 6 years (Appointed June 2016)

Prof. Jacob A. Frenkel is a Non-Executive Director and
Chair of the Board of Directors.

Elad Even-Chen is the Chief Financial Officer of the
Group and Vice President of Business Development.

Prof. Frenkel is a renowned global economist and
illustrious business leader, with significant experience
developed over many years of leadership. He is cur-
rently Chair of the Cabinet of Economic Experts of the
Minister of Finance of the State of Israel, Chair of the
Board of Trustees of the Group of Thirty (G-30), and
Chair of BrainStorm Cell Therapeutics Inc., a NASDAQ-
listed biotechnology company.

Prof. Frenkel served as Chairman of JPMorgan Chase
International (2009-2020), Chairman and CEO of the
G-30 (2001-2011), Vice Chairman of American Inter-
national Group, Inc. (2004-2009) and, Chairman of
Merrill Lynch International (2000-2004). He also served
as Chairman of the Board of Governors of Tel Aviv
University (2013-2021).

Prior to this he served two terms as the Governor of the
Bank of Israel (1991-2000), as the Economic Counsel-
lor and Director of Research at the International Mon-
etary Fund (1987-1991) having previously been a Chaired
Professor of Economics at the University of Chicago.

He is a Laureate of the Israel Prize in Economics and
is a recipient of several Honorary Doctoral Degrees
and other decorations and awards. He holds a range
of fellowships and advisory positions. He is a Honor-
ary Member of the American Academy of Arts and
Sciences, a Fellow of the Econometric Society, a Fellow
of the International Economic Association, a Senior
Advisor of Temasek International Advisors, a member
of the Competitive Markets Advisory Council of the
CME Group and a member of the G20 High Level Inde-
pendent Panel on Financing of the Global Commons
for Pandemic Preparedness and Response.

Prof. Frenkel holds a BA in economics and political
science from the Hebrew University of Jerusalem, and
an M.A. and Ph.D. in economics from the University
of Chicago.

DAVID ZRUIA

Chief Executive Officer and Director

Tenure: 2 years (Appointed April 2020)

David Zruia is the Chief Executive Officer.

David joined the Group in 2010 as a senior manager
in the marketing department. In that role, David was
instrumental in establishing the Group’s marketing
capabilities and in building awareness of, and recogni-
tion for, the Plus500 brand in key markets around the
world. He was appointed as the Group COO in 2013
and led the establishment and management of the
operational division of the Group, including KYC pro-
cesses, payment processing, back office, customer
service and risk management.

David holds a B.Sc. in Industrial Engineering and Man-
agement from the Technion – Israel Institute of Tech-
nology.

Elad joined the Group in 2011 and his responsibilities
cover a broad range of finance, business, corporate
and strategic functions.

Elad is also responsible for Plus500’s strategic busi-
ness development projects, including targeting and
executing acquisitions. He has therefore played a key
role in driving the Group’s strategic and financial per-
formance and its business expansion in recent years,
into new markets and new product areas.

Elad has an extensive corporate finance, legal and
regulatory background. Over the last 11 years he has
held a number of positions within the Group also acting
as the Company Secretary, Head of Risk and Head of IR.

Elad is a certified accountant in Israel and, prior to
joining the Group, he was a senior associate at KPMG.

Elad holds a BA in Accounting and Economics from
Tel-Aviv University, an LL.B Degree from the College
of Management and an MBA (specialising in Financial
Management) from Tel-Aviv University.

ANNE GRIM

Senior Independent Non-Executive Director and
External Director

Tenure: 1.5 years (Appointed September 2020)

Anne Grim is a Non-Executive Director and the Senior
Independent Director.

Upon Daniel King’s tenure finishing in June 2022, Anne
will chair the Remuneration Committee.

Anne is an experienced executive turned advisor, con-
sultant and Board Director with more than 30 years
in senior financial services leadership roles at Barclays,
Wells Fargo, American Express, Mastercard and most
recently (and formerly) as Chief Customer Officer at
Fidelity International. Her expertise is in customer
experience, strategic planning and execution, technol-
ogy innovation and business transformation.

Anne was an independent non-executive Board mem-
ber for RateSetter (up until 31 December 2021 when
RateSetter was acquired by Metro Bank PLC) and is
currently an independent non-executive Board mem-
ber for Insight Investment, Metro Bank PLC and Open-
work Holdings Ltd.

Anne is also an Advisor to the Investment Association’s
FinTech Engine and a Trustee on the UK board of
Opportunity International.

Anne holds a Bachelor’s degree in Mathematics and
Computer Science and a Master’s of Business Admin-
istration in Strategic Management and Finance, both
from the University of Illinois.

PROF. JACOB A. FRENKEL

DAVID ZRUIA

(Chair)

ELAD EVEN-CHEN

ANNE GRIM

Plus500 Ltd. 2021 Annual ReportCommittee membership Key:

Nomination
Audit
Regulatory & Risk
Remuneration
ESG
Disclosure

N (Chair)

STEVE BALDWIN

A (Chair)

TAMI GOTTLIEB

R (Chair)

E (Chair)

DANIEL KING

(Chair)

SIGALIA HEIFETZ

PROF. VARDA LIBERMAN

Changes to the Board during 2021 (and until the date of this Annual Report)

+ Gal Haber stepped down from the Board on 4 January 2021.
+ Sigalia Heifetz joined the Board on 4 February 2021.
+ Tami Gottlieb joined the Board on 16 March 2021.
+ Jacob A. Frenkel joined the Board on 4 May 2021.
+ Penny Judd stepped down from the Board on 4 May 2021.
+ Charles Fairbairn stepped down from the Board on 4 May 2021.
+ Varda Liberman joined the Board on 18 March 2022.

Government working for the Department of Investment
and Trade (DIT) as Head of High Growth & Emerging
Markets.

Daniel was previously Managing Partner of Blue Leaf
Capital, a private boutique venture capital and advi-
sory services company based in London and has held
managing director roles with Compete Inc, MySuper-
market.co.uk, and Experian Hitwise, overseeing its
EMEA operations and was a key member of staff that
led to the eventual acquisition of Hitwise by Experian
in June 2007.

Daniel holds a Bachelor’s Degree (hons) in Finance
and Accounting from Manchester University.

SIGALIA HEIFETZ

Independent Non-Executive Director

Tenure: 1 year (Appointed February 2021)

Sigalia Heifetz is a Non-Executive Director and Chair
of the Regulatory & Risk Committee.

Sigalia holds non-executive directorships at a number
of leading Israel-based corporations across a range of
sectors and industries, including Nesher Israel Cement
Enterprises Ltd, Clal Biotechnology Industries Ltd, RHI
Magnesita N.V, Maman Cargo Terminals and Handling
Ltd, Tamar Petroleum Ltd, Mashav Initiating & Develop-
ment Ltd and Vesta Investment & Management. She
also previously held Non-Executive positions at Bet
Shemesh Engines Ltd and Hadera Paper, prior to which
she was an audit partner at accountancy firm BDO.

Sigalia holds a Bachelor’s Degree in Accounting and
Economics from Tel Aviv University and an Executive
MBA from INSEAD and Tsinghua University.

PROF. VARDA LIBERMAN

Independent Non-Executive Director

Tenure: Appointed March 2022

Prof. Varda Liberman is a Non-Executive Director.

Prof. Liberman is an international renowned expert in
the field of decision-making and behavioural econom-
ics. In this capacity, she provides consulting and work-
shops in key elements of managerial decision-making
and risk management to senior managements of
organisations across a range of sectors, including
healthcare, banking, investment, technology, the judi-
cial system and the Israeli Defence Forces.

Prof. Liberman is the Rector of Reichman University
(IDC Herzliya) in Israel, and one of its founders and
leaders. She is a professor at the business school, a
visiting researcher at Stanford University, and the
author of several books and many scientific articles.
Over the years, she has held a variety of managerial
positions at the Reichman University, among them,
heading the mathematics and statistics studies, lead-
ing the decision-making area in the business school,
and founding and heading the MBA programme in
Healthcare Innovation.

Prof. Liberman holds a B.Sc. in Mathematics and Sta-
tistics, an M.Sc. in Mathematics and a Ph.D. in Math-
ematics, all from Tel Aviv University.

STEVE BALDWIN

Independent Non-Executive Director

Tenure: 5 years (Appointed June 2017)

Steve Baldwin is a Non-Executive Director and Chair
of the Nomination Committee.

Upon Daniel King’s tenure finishing in June 2022,
Steve will also chair the ESG Committee.

Steve is currently the Chair of TruFin Plc and is also a
Non-Executive Director of The Edinburgh Investment
Trust Plc. Steve has an extensive corporate finance
background and held the position of Head of Euro-
pean Equity Capital Markets and Corporate Broking
at Macquarie Capital until 2015 when he decided to
pursue a non-executive career. Prior to joining Mac-
quarie Capital, Steve was a Corporate Finance Director
at JP Morgan Cazenove for ten years and previously
a Vice President of Corporate Finance at UBS.

Steve qualified as a Chartered Accountant at Coopers
& Lybrand after graduating with a BA in Zoology from
St Catherine’s College, Oxford University.

TAMI GOTTLIEB

Independent Non-Executive Director and External
Director

Tenure: 1 year (Appointed March 2021)

Tami Gottlieb is a Non-Executive Director and Chair of
the Audit Committee.

Tami has a long track record in the financial services
industry in Israel and is currently an External Director
at Bank Leumi Le’Israel Ltd. – one of Israel’s two largest
commercial banks, where she is the Chair of the Audit
and Financial Reports Committees and a member of
the Remuneration and Business & Credit & Strategy
Committees, having previously been on the Technol-
ogy Committee and on the Risk Management Commit-
tee. Tami Gottlieb is also a Chair at Shefayim Holdings
Corporation, an External Director at Extell Limited and
a Director at Emilia Development. She is also a founder
and Managing Director of Harvest Capital Markets Ltd,
a wealth management and corporate finance boutique.

Tami holds a Bachelor’s Degree in International Relations
from the Hebrew University of Jerusalem and a Master’s
Degree in Economics from Indiana University.

DANIEL KING

Independent Non-Executive Director and External
Director

Tenure: 9 years (Appointed June 2013)

Daniel King is a Non-Executive Director and Chair of the
Remuneration and ESG Committees (until June 2022).

Daniel has spent the last two decades in executive and
senior management roles within technology corporates
as well as start-ups as an operator, advisor and inves-
tor with a focus on Fintech, eCommerce technology,
Big Data, BI, Analytics, SaaS platforms, and Market-
places for both B2B and B2C. He has extensive knowl-
edge in investing, fundraising, and scaling high-growth
companies including international expansion.

Daniel is currently a Venture Partner with Seedcamp,
one of Europe’s largest Venture Capital firms for early
stage funding. He is also Chair of StitcherAds a plat-
form for social commerce. Previously, he was President
& COO for Profitero, a SaaS provider of online insights
and e-commerce intelligence for retailers and brands
and prior to that was a specialist consultant to the UK

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements
Governance Report

The Board
The Board maintains full control and direction over appropriate strate-
gic, financial, organisational and compliance issues. The Company’s
organisational structure has clearly defined lines of authority, respon-
sibility 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 Group and the online financial trading industry as
a whole, along with associated financial and regulatory risks. At least
annually, and on other occasions as necessary, the Company’s senior
executives are invited to attend meetings of the Board in order to
present and discuss various matters relating to their functions and
areas of responsibilities.

Board activities during the year
The Board agrees at the end of each year the annual calendar and forward
meeting agenda for the following year, and additionally meets at such
other times as required. The matters accepted by the Board for consid-
eration at Board meetings are business strategy, operational highlights
and current trading, quarterly forecasts, budget and financial performance,
governance, organisational culture and risk & regulation, as further
detailed at the schedule of matters specifically reserved for decision by
the full Board members, which can be found on the Company’s website:
www.plus500.com.

Board Activity in 2021

Strategy

Business,
operational
highlights and
current trading

Quarterly
forecasts and
budget

Financial
performance

People,
governance,
risk and
regulation

Whistleblowing

Culture and
values

– A comprehensive strategy discussion was held in
December 2020, with support from a well-known glob-
al strategic advisory firm, at which a new vision and
strategy was discussed and agreed, in the context of a
detailed discussion about the competitive environment
and potential growth opportunities for the Group.

– During 2021 the Board discussed actions to deliver on
the strategy for the coming years, as set out on pages
20 – 21.

– The Board held strategic discussion, and approved the
acquisitions of Cunningham and CTS in line with the
Company’s strategy to evolve into a multi-asset fintech
group and expand the Group’s geographic footprint.

The Board received monthly updates including CEO
reviews, financial performance updates, business develop-
ment updates and risk and regulatory compliance reports.

Updates were provided and discussed on a monthly and
quarterly basis. Discussions on the 2022 budget were
held in October 2021 and in December 2021 and it received
final approval in December 2021.

The Board reviewed and approved the on-going trading
updates and results announcements. The Board consid-
ered and approved dividend distributions and share buy-
backs, 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 on-going updates on compliance
matters.

The Board reviewed and approved the Group’s Whistle-
blowing Policy, as it does on an annual basis, and received
an update by the Whistleblowing Supervisor that no com-
plaints were received in 2021.

The Board continued to monitor and review the Group’s
culture, values and performance primarily through regular
discussions with the Executive Directors, senior manag-
ment and their teams. In addition, Steve Baldwin, in his
role as the workforce engagement representative on the
Board held round table sessions with employees from
various departments of the Company, as well as with
certain employees of the Group’s subsidiaries.

Shareholder
returns

The Board declared the payment of dividends and adopt-
ed share buyback programmes during the year, in line with
the Group’s shareholder returns policy.

Other

– An internal effectiveness evaluation of the Board and

its committees has been conducted;

– Review of monthly reporting decks on Risk and Compli-

ance;

– Receiving on-going updates from Board committees’

chairs;

– Board trainings on various topics, including: ESG, Cyber
security, the UK Market Abuse Regulation, Israeli & UK
Corporate Law;

– Annual review and approval of Human Rights and Mod-

ern Slavery Statement; and

– Annual review and approval of Company’s policies and

procedures.

Plus500 Ltd. 2021 Annual ReportBoard committees
The Board has appointed six principal committees to which certain
aspects of the Board’s work are delegated, in order to assist the Board
in carrying out its responsibilities and as required under the Companies
Law. Each committee has adopted its own terms of reference, approved
by the Board, and establishes an annual plan. The full terms of refer-
ence of the Board’s committees are available on the Company’s website.
The Chair of each committee provides regular updates to the Board on
the matters discussed at the committee’s meetings and provides the
committee’s recommendations to the Board when required.

A brief description of the main roles of each of the Board’s committees
is set out below.

Remuneration Committee

The Remuneration Committee has been delegated responsibil-
ity for determining, within the agreed terms of reference and in
accordance with the Companies Law, the Group’s policy on the
remuneration packages of the Company’s Chief Executive Officer
and Chief Financial Officer, the Chair and other Non-Executive
Directors, the Company Secretary and other senior executives
and the Company’s remuneration policy. The Committee’s respon-
sibilities, main activities and priorities for the next reporting cycle
are set out on pages 74 – 80.

Nomination Committee

Disclosure 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 60 – 63.

Audit Committee

The Audit Committee has been delegated responsibility for ensur-
ing 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 Commit-
tee’s responsibilities, main activities and priorities for the next
reporting cycle are set out on pages 64 – 68.

Regulatory & Risk Committee

The Regulatory & Risk Committee has been delegated respon-
sibility 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 report-
ing cycle are set out on pages 69 – 70.

Environmental, Social and Governance Committee

The ESG Committee has been delegated responsibility for con-
sidering the adequacy of the Group’s ESG policies and processes.
The Committee’s responsibilities, main activities and priorities
for the next reporting cycle are set out on pages 71 – 73.

The Disclosure Committee assists the Board in fulfilling its obli-
gation 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 UK Market Abuse Reg-
ulations and the Disclosure Guidance and Transparency Rules
of the FCA, including the requirement for the Company to estab-
lish and maintain adequate procedures, systems and controls
to enable it to comply with these obligations. Whenever neces-
sary, the Committee meets to discuss the content of announce-
ments proposed to be released to the London Stock Exchange
and approve their content, where relevant.

Operation of the Board
The Board is responsible for the effective direction and control of the
Group. The Board is also responsible for the overall strategy and finan-
cial 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

– Recommended appointments to the Board.

The Company Secretary, Hila Barak, 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 Chair of the Board, the Senior Independent
Director, 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. Hila Barak is a
certified lawyer in Israel since 2012 and joined Plus500 after years of
experience in corporate and securities law, being an associate with one
of the leading law firms in Israel. Hila holds an LL.B, BA in Social science
and an Executive MBA, all from the University of Haifa. All Directors
have access to the advice and services of the Company Secretary, who

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements
Governance Report continued

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 calen-
dar. 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 twelve occasions in 2021 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
conference calls to update the members on operational and other
business matters. A summary of the key activities of the Board in 2021
is set out on page 54.

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 independ-
ent professional advice.

Induction of newly appointed Directors
Newly appointed Directors are made aware of their responsibilities
through the Company Secretary. The Company has accordingly imple-
mented an internal induction plan for newly appointed Directors in
which it provides the Directors with training sessions via internal meet-
ings, presentations and conversations which are conducted by Company
advisors (such as legal advisors), the senior management and other
relevant persons in order to enable greater awareness and understand-
ing of the Company’s business and the legal and business environment
in which it operates. Moreover, the induction plan includes provision
of various documents and reports, such as constitutional documents,
organisational chart and Group structure, previous Board minutes,
Group’s policies as well as PR and IR materials.

Chair of the Board
The Chair of the Board, Prof. Jacob A. Frenkel, is responsible for lead-
ing 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 challenge the discussed items. The
Chair is responsible for creating the open and engaging atmosphere
that enables the healthy and constructive discussions of the Board.
The Chair is also responsible for ensuring effective communication
between Executives, Non-Executive Directors, shareholders and between
other major stakeholders and the Board.

Chief Executive Officer
The Chief Executive Officer, David Zruia, acts as the main point of com-
munication between the Board and management and is responsible for
the day-to-day running of the business and implementation of strategy.

Chief Financial Officer
The Chief Financial Officer, Elad Even-Chen, is responsible for covering
a broad range of finance, business, corporate and strategic functions,
such as monitoring the operational and financial results, overseeing
liquidity management and managing the financial reporting of the Group.

Non-Executive Directors
Collectively, the Non-Executive Directors bring a valuable range of
expertise in assisting the Company to achieve its strategic goals. The
effectiveness of the Board benefits from the following skills, expertise
and experience offered by the current members of the Board: financial
services, finance and accounting, governance and regulatory, research
and development, ESG, risk and regulation, technology and other finan-
cial expertise.

Senior Independent Director
The Senior Independent Director, Anne Grim, acts as a sounding board
for the Chair, providing him with support in the delivery of his objectives
and leading the evaluation of the Chair on behalf of the other Directors.
The Senior Independent Director may also take responsibility for an
orderly succession process for the Chair, working closely with the
Nomination Committee. The Senior Independent Director also serves
on several Board committees and is available to shareholders if they
have concerns that contact through the normal channels of Chair, Chief
Executive or other Executive Directors has failed to resolve or for which
such contact is inappropriate.

Board composition
As of the date of this Annual Report, the Board comprises two Execu-
tive Directors (who constitute 22% of the Board): David Zruia and Elad
Even-Chen, and seven Non-Executive Directors (who constitute 78% of
the Board): Prof. Jacob A. Frenkel (Chair of the Board), Anne Grim
(Senior Non-Executive Director), Daniel King, Steve Baldwin, Sigalia
Heifetz, Tami Gottlieb and Prof. Varda Liberman. Prof. Frenkel was
independent on appointment, in accordance with the requirements of
the Code. As a Senior Independent Director, Anne Grim is available to
meet with shareholders if they have concerns which are not being
addressed through the usual channels of the Chair, the Chief Executive
Officer or the Chief Financial Officer.

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 Daniel King, Anne Grim and Tami Gottlieb. Under the
Companies Law the term of office of an External Director is three years,
which can be extended for two additional three-year terms. External
Directors are elected by shareholders subject to a special majority and
may be removed from office only in limited cases. Mr. King’s nine years
tenure ends in June 2022, after which the Board will have two External
Directors – Anne Grim and Tami Gottlieb and will therefore, be fully
aligned with the provisions of the Companies Law. 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 Direc-
tor 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 independ-
ence requirements.

Plus500 Ltd. 2021 Annual ReportBoard composition and attendance in FY 2021

Chair of the Board

Prof. Jacob A. Frenkel1

Executive Directors

David Zruia

Elad Even-Chen

Senior Independent Non-Executive, External Director

Anne Grim

Independent Non-Executive, External Director

Daniel King

Tami Gottlieb2

Independent Non-Executive Director

Steve Baldwin

Sigalia Heifetz3

Past Directors

Gal Haber4

Penny Judd5

Charles Fairbairn6

SCHEDULED MEETINGS
ELIGIBLE TO ATTEND

SCHEDULED MEETINGS
ATTENDED

6 (100%)

12 (100%)

9 (90%)7

12 (100%)

11 (100%)

6 (100%)

1. Prof. Jacob A. Frenkel was appointed on 4 May 2021.
2. Tami Gottlieb was appointed on 16 March 2021.
3. Sigalia Heifetz was appointed on 4 February 2021.
4. Gal Haber stepped down from the Board on 4 January 2021, prior to any scheduled meeting of the Board.
5. Penny Judd stepped down from the Board at the 2021 AGM held on 4 May.
6. Charles Fairbairn stepped down from the Board at the 2021 AGM held on 4 May.
7. Tami Gottlieb was unable to attend one Board meeting due to illness.

General note: Prof. Varda Liberman was appointed as a Board member in March 2022, thus she is not included in the Board’s attendance table in FY 2021.

Election of Directors
Following recommendations from the Nomination Committee and a
review by the Chair of the Board, 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 2022 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 busi-
ness 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 strategy agreed by the
Board. The Chair and the Non-Executive Directors held discussions and
met during the year, without the Executive Directors’ presence, in order
to review and monitor management performance. Also during the year,
the Non-Executive Directors, led by the Senior Independent Director, met
without the Chair’s presence, in order to, among others, evaluate his
performance. As of FY 2022, such discussions are intended to be sched-
uled at least twice a year.

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 company.

Conflicts of interest
The Company has procedures for the disclosure and review of any
conflicts of interest, or potential conflicts of interest, 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 (unless the chair of the Board, the Audit Com-
mittee or the Remuneration Committee, as the case may be, determines
that such person’s presence at the meeting is required for presentation
of the relevant transaction) 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 has a personal interest in the transaction, then
shareholders’ approval 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
this year.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsGovernance Report continued

Board evaluation
Provision 21 of the Code recommends that FTSE 350 companies
consider having an external evaluation once every three years. The
previous externally facilitated Board evaluation was carried out in 2019
with the feedback report presented by Genius Boards.

Board training and development
On a regular basis, all Board members are given updates on changes
and developments in the business and the environment in which the
Group operates, in order to further develop the understanding and
awareness of the Board.

The evaluation covered attending several Board meetings and Com-
mittee meetings, interviewing the Board, the Company Secretary and
several executives and relevant advisors to the Company.

The Company Secretary and the legal advisors provide updates to the
Board on any relevant legislative and regulatory corporate governance-
related changes on an on-going basis.

The Company expects to have its next externally facilitated Board
evaluation in 2022.

During the year, the Board also conducted an internal Board effective-
ness evaluation, led by the Chair and the Company Secretary with the
support of the Company’s external advisors. The Board members were
requested to complete questionnaires and to evaluate the performance
of the Board and its committees during 2021, as well as the performance
of the Chair and their own performance as Board members. The ques-
tionnaires were developed by the Chair and the Company Secretary,
taking into consideration the findings of the 2020 internal evaluation
and also the Financial Reporting Council’s Guidance on Board Effective-
ness, and were circulated to all Board members and each Committee
member for completion.

The Company Secretary discussed the feedback received from the
completed questionnaires with the Chair, the Senior Independent Direc-
tor and each committee chair. A final report on the feedback, comments
and suggestions received was circulated to the Board and its Commit-
tees, and was presented by the Company Secretary and discussed by
the Board at its meeting held in December 2021.

The findings determined, among other things, that the Board has made
good progress from FY 2020 in relation to:

– Remuneration matters, including an approval of a new Remuneration

Policy for Directors and Executives;

– Time management at the Board and Committee meetings;
– Process for attracting and selecting new Directors;
– Board composition – gender and fields of experience and expertise;
– Progressing well in the ESG journey;
– Management information is freely available to the relevant parties,
with better content and format of the management reports contained
in the Board packs;

– Good regulatory, risk and business knowledge on the Board; and
– Timeliness of succession planning.

Opportunities for improved effectiveness were also identified, and the
Board, supported by the Company Secretary, will apply themselves
delivering the agreed actions arising from the internal review in 2022.

During the year the Directors attended training on various areas includ-
ing ESG, cyber security, the UK Market Abuse Regulation and Israeli &
UK Corporate Law.

Ensuring that the Annual Report is fair, balanced and understand-
able
In relation to the Annual Report and the Consolidated Financial State-
ments for the year ended 31 December 2021, 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.

The Company encourages the engagement of both institutional and
private investors. During 2021, in light of COVID-19 restrictions and
related public health guidance by various governments, the majority
of investor meetings were conducted by the Company through virtual
channels, including conference calls and video conferences. The Chief
Executive Officer, David Zruia, and Chief Financial Officer, Elad Even-
Chen met regularly with institutional investors, particularly with regard
to the issuance of half and full year results. They were accompanied
at these meetings by the Company’s Head of Investor Relations, who
manages Plus500’s relationships and communications with the invest-
ment community. The Chair of the Board also met regularly with key
investors during the year.

Communication with private individuals is maintained through the
Annual General Meeting and any Extraordinary General Meeting, the
Company’s annual and interim reports and the scheduled, or otherwise
required, trading updates. The Chair of the Audit, Remuneration, Nom-
ination, Regulatory & Risk and ESG Committees are 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 regulatory news, financial statements, investor pres-
entations and other reports.

Regular updates are provided to the Board on meetings with sharehold-
ers and analysts, as well as on brokers’ opinions. Non-Executive Direc-
tors are available to meet major shareholders, as required. Investors
are also encouraged to contact the Company’s Head of Investor Rela-
tions at: ir@Plus500.com.

Plus500 Ltd. 2021 Annual ReportShareholder Engagement

Major interests in shares
As at 21 March 2022, 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 Com-
pany’s capital or voting rights:

FUND MANAGER

Odey Asset Management

Schroder Investment Management

The Vanguard Group, Inc

BlackRock Inc

NUMBER
OF
SHARES

9,057,360

5,289,085

4,419,730

4,273,471

9.09

5.31

4.44

4.29

2022 Annual General Meeting
Given many of the Company’s Board members are based in international
locations, and with travel restrictions remaining in place in certain
geographies, in order to facilitate an effective participation by the
shareholders from various jurisdictions, the Company’s 2022 Annual
General Meeting will be held as a hybrid meeting. Going forward, sub-
ject to future changes to travel restrictions, it is expected that the
Company’s AGMs will be held on a physical or hybrid basis.

Details of all resolutions to be proposed at the 2022 Annual General
Meeting will be included in the Notice of the 2022 Annual General
Meeting to be circulated by the Company to all shareholders in due
course.

2021 Annual General Meeting
The 2021 Annual General Meeting was held on 4 May 2021 as a virtual
meeting, due to the UK government restrictions following the COVID-19
pandemic.

All resolutions proposed at the 2021 AGM were duly passed by share-
holders by means of a poll vote.

Following consultations made with shareholders ahead of the 2021
AGM, the Remuneration Committee excluded special, one-off bonuses
in future Executive Remuneration plans in the Company’s new Remu-
neration Policy. A resolution to approve the new Remuneration Policy
was approved by over 94% of shareholders’ votes at the AGM.

The Board noted that two resolutions passed at the 2021 AGM had
more than 20% of votes cast against them. These resolutions related
to an advisory vote on the Directors’ Remuneration Report and a tax-
related bonus payment regarding the Company obtaining a highly
beneficial approval from the Israeli Tax Authority and the Israel Innova-
tion Authority as a Preferred Technological Enterprise. Since the AGM
results, the Board have engaged with various shareholder advisory
bodies and a number of shareholders, taking into account their feedback.

The Board always takes the outcome of shareholders’ votes seriously
and, going forward, will continue its engagement and dialogue with
shareholders and their representatives and will continue to consider
related shareholders’ feedback, with a view to implementing the feed-
back, as appropriate.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Nomination Committee

“With several significant appointments
made in 2021, including of Prof. Jacob
A. Frenkel as the Board’s new Chair,
substantial progress was made in ex-
panding the range of the Board’s ex-
pertise and further diversifying its
composition.”

Steve Baldwin, Chair of the Nomination Committee

Dear shareholder
As the Chair of the Nomination Committee, I am pleased to have this
opportunity to give you an overview of the work of the Committee during
2021.

The Board is committed to evaluating and reviewing the structure, size
and composition of the Board on a continual basis, including the bal-
ance of skills, knowledge, experience and diversity (including gender
diversity) of the Board while factoring in the Company’s strategy, risk
appetite and future development.

During the year, the Committee undertook a review of the broader
composition of the Board, and identified a need to add further Independ-
ent Non-Executive Directors to increase the Board‘s talent diversity.
Subsequently, an external headhunter, True Europe LLP (“True Search”)
was engaged to support the process and to identify potential candidates
with the required skills, experience and diversity credentials.

The Committee engaged the services of True Search and candidate
briefs were compiled and lists of appropriate candidates for each brief
were drawn up with input from the Board and its advisors. Other than
in respect of recruitment services, True Search has no other connection
with the Company or any of its Directors.

I am pleased that in 2021 we welcomed to the Board two female Direc-
tors, Ms. Sigalia Heifetz, who was appointed in February 2021 as an
Independent Non-Executive Director (and was re-elected at our 2021
AGM), and Ms. Tami Gottlieb, whose nomination for appointment as
an Independent Non-Executive Director and External Director was
approved by our shareholders at our 2021 EGM held in March 2021.
Tami was also appointed as the Chair of the Audit Committee following
the departure of Charles Fairbairn.

Also, during 2021 the Committee led the search for a new Chair of the
Board to succeed Penny Judd, who served as a Non-Executive Director
since 2016 and as our Chair since 2017. True Search was engaged
again to support the process and to identify potential candidates with
the required skills, background experience and expertise. After a thor-
ough and transparent process, Prof. Jacob A. Frenkel was identified
as the best suited candidate and I am pleased that his appointment
was approved by the Company’s shareholders at our 2021 AGM held
on 4 May 2021, with excellent support from 99.83% of those voting.

The Committee also identified a need to add an additional Independent
Non-Executive Director in 2022 to increase the Board‘s talent diversity
and was also mindful that Daniel King, our long serving Independent
Non-Executive Director and External Director had served since the
Company’s IPO in 2013 and would not be eligible under the Companies
Law for re-election in 2022. Following a further search process, and as
announced on 18 March 2022, Prof. Varda Liberman was appointed
as an Independent Non-Executive Director.

The new Board members have gone through an extensive induction
process, as further described on page 56 above.

The Board is committed to diversity of gender, ethnicity, background,
nationality and professional experience and these were the key pillars
of the searches. Hence, I am delighted that our Board composition was
significantly diversified during FY 2021 by the addition of three Inde-
pendent Non-Executive Directors – Ms. Sigalia Heifetz, Ms. Tami Got-
tlieb and Prof. Jacob A. Frenkel, as the Chair of the Board, and also very
recently with the appointment of Prof. Varda Liberman as an additional
Independent Non-Executive Director.

Plus500 Ltd. 2021 Annual ReportCommittee composition
The Nomination Committee comprises Steve Baldwin, Daniel
King and Prof. Jacob A. Frenkel, and is chaired by Steve Baldwin.
The Code recommends that a majority of the members of a
nomination committee should be Independent Non-Executive
Directors. The Board considers Steve Baldwin, Daniel King and
Jacob Frenkel to be independent for the purposes of the Code.
Upon Daniel King’s tenure finishing in June 2022, Anne Grim,
the Senior Independent Director and External Director, shall
replace Daniel King as a member of the Nomination Committee.
Details of the skills and experience of the Committee members
are set out on pages 52 – 53 of this Annual Report. Details of
individual attendance at meetings are set out in the Committee
attendance table below.

Committee attendance (in FY 2021)

Steve Baldwin (Chair)

Daniel King

Prof. Jacob A. Frenkel1

Past members

Gal Haber2

Charles Fairbairn3

SCHEDULED
MEETINGS
ELIGIBLE TO
ATTEND

SCHEDULED
MEETINGS
ATTENDED

3 (100%)

2 (100%)

1. Prof. Jacob A. Frenkel was appointed as a member of the Committee on

12 May 2021.

2. Gal Haber stepped down from the Committee (and from the Board) on

4 January 2021, prior to any scheduled meeting of the Committee.

3. Charles Fairbairn stepped down from the Committee on 3 February 2021,

prior to any scheduled meeting of the Committee.

These appointments have increased the gender diversity on the Board,
and have ensured that the Company increases its talent diversity, in
line with the Code and the recommendations of the Hampton-Alexan-
der Review on gender equality in leadership positions. Following these
additional appointments, I am pleased to report that, as of the date of
this Annual Report, the Board comprises 44% female Directors (four
female Directors out of nine Directors). Also, following Daniel King’s
tenure finishing in June 2022, the Board will comprise 50% female
Directors (four female Directors out of eight Directors).

I would like to thank Daniel for all his help during his time on the Com-
mittee.

During the year, the Committee recommended to the Board that a new
Senior Independent Director be appointed to replace Charles Fairbairn
who was stepping down as the Senior Independent Director at the 2021
AGM held in May 2021. The Committee took into consideration the
recommendations of the final Hampton-Alexander Report published in
February 2021, which recommended that as a matter of best practice
companies should have a woman in at least one of the four roles of Chair,
CEO, SID and CFO. I am pleased that Ms. Anne Grim was appointed as
our new SID, as of May 2021. Further details of Anne’s qualifications can
be found on page 52.

According to the evaluation carried out by the Board, all Non-Executive
Directors are considered to be independent in character and judgement
and no cross-directorships exist between any of the Directors.

Due to the enhanced role of the Nomination Committee set out in the
Code, we are continuing to develop our programme of activity accord-
ingly. Throughout 2021, the Nomination Committee dedicated time to
review and discuss succession planning across the business, in order
to ensure, among other things, that there is a good pipeline of female
successors to many of the senior management roles throughout the
business.

The Committee will continue this year 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.

I look forward to reporting on the Nomination Committee’s further
progress in the next year’s Annual Report.

Steve Baldwin
Chair of the Nomination Committee
22 March 2022

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements

Report of the Nomination Committee
continued

Committee responsibilities and activities
The Nomination Committee has responsibility for reviewing the struc-
ture, size and composition (including the skills, knowledge and experi-
ence) 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 execu-
tives, 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 the Group is facing and which
skills and expertise are therefore needed on the Board and its Commit-
tees 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
2021 is set out below:

Board
composition &
Time commit-
ment

– Re-election of Directors;
– Review of core skills and experience of the Board and

the independence of the Non-Executive Directors;

– Review of membership of committees;
– Appointment of three Independent Non-Executive Direc-

tors (including a new Chair of the Board);

– Appointment of a new Senior Independent Director;
– Appointment of new Chairs of the Audit Committee and

the Regulatory & Risk Committee; and

– Review of time commitment of the Non-Executive Direc-

tors.

Succession
planning

– Review tenure of the Directors;
– Review of the Company’s written succession plan; and
– Foster the development of talented employees through-

out the business.

Diversity

2021 internal
Committee
evaluation

– Review and amend the Equality, Diversity and Inclusion
Policy, in line with the Code and the 33% target for female
board representation set out in the Hampton-Alexander
Review; and

– Review of Board diversity on the Board, and signifi-
cantly increased the female representation on the Board.

– Discussion and assessment of the 2020 and 2021
internal Nomination Committee evaluation findings.

Governance

– Review of the Committee’s terms of reference in light

of the Code and the Companies Law; and

– Review of 2021 Nomination Committee Report which

is included within this Annual Report.

Following the activities of the Committee in 2021, the Committee is
confident that each Director brings a unique set of skills and experience
which enables the Board to be reflective of a diverse and varying range
of perspectives and opinions and enables 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.

Priorities for FY 2022
In the coming year the Committee will continue to focus on key themes
such as diversity and succession planning and ensuring a diverse tal-
ent pipeline throughout the Group.

Equality, Diversity and Inclusion
The Board’s policy on equality, diversity and inclusion commits to:

– Ensuring the selection and appointment process for employees and

Directors includes a diverse range of candidates;

– Ensuring that no unlawful discrimination occurs at any stage in the
selection process on the grounds of age, disability, gender reassign-
ment, marriage and civil partnership, maternity, pregnancy, race, religion
or belief, gender or sexual orientation, ethnicity, country of origin,
nationality and cultural background;

– Disclosing statistics on gender diversity in this Annual Report (page 33);

and

– Reviewing the policy from time to time and continuing to disclose the

policy in the Annual Report.

The Board has taken significant steps to increase gender diversity. All
Board appointments are made objectively based on an individual’s skills
and expertise and consistent with the Company’s Equality, Diversity
and Inclusion Policy.

Board Equality, Diversity and Inclusion Policy

OBJECTIVES

PROGRESS UPDATE

Ensuring the selection and appoint-
ment process for employees and
Directors includes a diverse range
of candidates

Ensuring that no unlawful discrimi-
nation occurs at any stage in the
selection process on the grounds
of age, disability, gender reassign-
ment, marriage and civil partnership,
maternity, pregnancy, race, religion
or belief, gender or sexual orienta-
tion, ethnicity, country of origin,
nationality and cultural background

Improve gender diversity at Board
and senior management level

Review Board equality, diversity
& inclusion policy

Review employees’ recruitment proce-
dure which includes, among others, a
non-discriminatory selection process,
allowing the recruitment of a diverse
workforce.

Review employees’ recruitment proce-
dures which include non-discriminato-
ry selection process, at all stages of
the selection process.

One female Non-Executive Director was
appointed in September 2020 and two
additional female Non-Executive Direc-
tors were appointed in Q1 2021, follow-
ing the engagement with True Search.
Also, an additional female Non-Execu-
tive Director was appointed in March
2022.

The Committee has reviewed and
approved the updated Board’s equality,
diversity & inclusion policy, a copy of
which is available on the Company’s
website.

Plus500 Ltd. 2021 Annual ReportRelevant skills and experience on the Board

JACOB A.
FRENKEL

DAVID
ZRUIA

ELAD
EVEN-CHEN

DANIEL
KING

STEVE
BALDWIN

ANNE
GRIM

NED

SIGALIA
HEIFETZ

TAMI
GOTTLIEB

VARDA
LIBERMAN

NED

Audit and risk management

NED

Finance, banking, financial
services and fund manage-
ment

Capital raising, mergers,
acquisitions, investment and
transactions

Marketing

Compliance & Regulation

Shareholder relations

Digital technology

Innovation

ESG

NED

Enterprise Risk management

NED

ED Executive Director NED Non-Executive Director

Succession planning
The Committee has spent time in 2021 considering the important
matter of succession planning across the business and reviewed the
written Succession Planning Procedure. In order to ensure minimal
business disruption in the event of any unexpected senior management
or Board departures, the Committee is committed to continue develop-
ing 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 inter-
nal successors for all roles throughout the business. Nevertheless, the
Committee has reviewed plans for the succession of senior manage-
ment roles throughout the business and has identified appropriate
candidates as potential successors (both immediate successors and
long-term successors).

NED

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Audit Committee

“The Audit Committee performs a key
role in the Group’s governance frame-
work, in assessing internal controls
across the Group and ensuring the in-
tegrity of the Group’s financial results.”

Tami Gottlieb, Chair of the Audit Committee

Dear shareholder
I am honoured to have been appointed as the new chair of the Audit
Committee of the Board in May 2021. The Committee functions very
efficiently, supported by a number of consistent and professional
processes that form the basis of the Committee’s monitoring and review
framework. I would like to thank Charles Fairbairn, my predecessor, for
his efforts in establishing this solid foundation on which to manage
the Committee.

With that in mind, I am pleased to take this opportunity to give you an
overview of the work of the Committee during 2021. The Audit Com-
mittee 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.

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 refer-
ence 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 announce-
ments);

– 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

Priorities for the Audit Committee during the year included financial
reporting and the associated assurance of these reports.

audit function.

With the assistance of Deloitte, our internal auditor during FY 2021, we
reviewed and monitored a multi-year internal audit plan which we will
continue to review and update over time. In January 2022, we concluded
that given the increase in the scope of business of the Group and the
diversification of its portfolio and geographical scope, it would be in
our interest to replace Deloitte as our internal auditor. As a result, and
after due process, we appointed E&Y as our new internal auditors, as
of FY 2022.

The Committee also reviewed a list of non-audit services provided this
year by the Company’s external auditor and approved its audit plan for
2022.

I look forward to reporting on the Audit Committee’s progress going
forward, in next year’s Annual Report.

In addition, under the Companies Law, the Audit Committee is required
to monitor deficiencies in the business management 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, to oversee the performance of the Company’s internal auditor
and the internal control functions and to establish and monitor whistle-
blower procedures.

The Audit Committee meets not less than four times a year at appropri-
ate intervals in the financial reporting and audit cycle and otherwise
as required. The Audit Committee met on six occasions during 2021.
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 Chair of the Audit Committee,
attend meetings. At least twice per year, the Audit Committee meets
privately with the external auditor to discuss issues relating to the
Company’s management and as required under the Companies Law.

Tami Gottlieb
Chair of the Audit Committee
22 March 2022

Plus500 Ltd. 2021 Annual Report
A summary of the major activities and decisions of the Committee in
2021 is set out below:

Financial
performance
review

Internal audit
review

Review of the financial performance and review of the
Consolidated Financial Statements of the Group twice a
year.

Review assessments of the control environment via inter-
nal audit reports, and monitor progress on implementing
internal audit recommendations.

External audit
review

Review progress on implementing external audit recom-
mendations. Monitor and review the effectiveness and
independence of the external audit function.

Risk control

2021 internal
Committee
evaluation

Assist the Board in the monitoring of the Group’s internal
controls and risk management systems and their effective-
ness.

Discussion and assessment of the 2020 and 2021 inter-
nal Audit Committee evaluation findings.

Governance

– Review of the Committee’s terms of reference in light

of the Code and the Companies Law.

– Review of 2021 Audit Committee Report which is

included within this Annual Report.

Significant accounting and financial judgements in 2021
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,
uncertain tax positions, the control environment, compliance with laws
and regulations and appropriateness of the going concern basis of the
Consolidated Financial Statements and the level of cash required within
the business to satisfy both external regulators and the Group’s market
risk management.

External auditor
It is the responsibility of the Audit Committee to keep under review the
scope and effectiveness of the external auditor. This includes recom-
mending the appointment of the external auditor to the Board 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 conducts the audit accord-
ing to the audit plan which include different audit procedures like con-
firmations, testing samples and discussing with management the
reporting of operational results and the financial status of the Group,
to the extent necessary to express their audit opinion.

Committee composition
The Code recommends that an audit committee should include
at least three members who are Independent Non-Executive
Directors, and that at least one member should have recent and
relevant financial experience. The Companies Law requires that
an audit committee consist of at least three Directors qualified
to serve as members of an audit committee under the Compa-
nies Law, including all External Directors, and must be comprised
of a majority of Directors meeting certain independence criteria
of the Companies Law. The Chair of the audit committee must
be an External Director.

The Audit Committee is chaired by Tami Gottlieb (as of May
2021) who succeeded Charles Fairbairn, and its other members
are Daniel King (until his tenure finishing in June 2022), Steve
Baldwin, Anne Grim and Prof. Varda Liberman (appointed as of
March 2022). All of the members are therefore independent
Non-Executive Directors under the Code and meet the criteria
for independence under the Companies Law. Tami Gottlieb,
Daniel King and Anne Grim are considered External Directors
under the Companies Law.

The Board considers that Tami Gottlieb has recent and relevant
financial experience in accordance with the requirements of the
Code. All of the Committee members have relevant Diversified
Financial Services experience. Details of the skills and experience
of the Committee members are set out on pages 52 – 53. Details
of individual attendance at meetings are set out in the Commit-
tee attendance table below.

Committee attendance (in FY 2021)

Tami Gottlieb (Chair)1

Daniel King

Steve Baldwin

Anne Grim

Past members

Charles Fairbairn2

SCHEDULED
MEETINGS
ELIGIBLE TO
ATTEND

SCHEDULED
MEETINGS
ATTENDED

4 (80%)3

6 (100%)

3 (100%)

1. Tami Gottlieb was appointed as a member of the Committee on 16 March

2021 and serves as the Chair of the Committee as of 4 May 2021.

2. Charles Fairbairn (previous Chair of the Committee) stepped down from

the Committee and the Board on 4 May 2021.

3. Tami Gottlieb was unable to attend one Committee meeting due to illness.

General note: Prof. Varda Liberman was appointed as a member of the Com-
mittee in March 2022, thus she is not included in the Committee’s attendance
table in FY 2021.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements
Report of the Audit Committee continued

Performance and effectiveness of the external auditor
Kesselman & Kesselman, a member firm of PricewaterhouseCoopers
International Limited, was appointed as the Company’s external audi-
tor in 2013 and has been retained since then to perform audit and
audit-related work on the Company and other local offices of Pricewa-
terhouseCoopers perform audit and audit-related work on the majority
of the Company's subsidiaries. The Committee assesses the auditor’s
independence and effectiveness at least on an annual basis, through
closed sessions and enquiries by the Committee members.

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 Commit-
tee is satisfied that the independence and objectivity of the external
auditor was adequately safeguarded throughout 2021. 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 2021, the Audit Committee concluded that the auditor has dem-
onstrated professional scepticism and judgement and that the audit
process as a whole has been conducted robustly and that the team
selected to undertake the audit has done so thoroughly and profession-
ally. The Audit Committee reviewed the re-appointment of the external
auditor and recommended to the Board that the external auditor be
proposed for re-election at the upcoming Annual General Meeting.

Audit tender process
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. In FY 2022, the external audit
engagement partner will be rotated.

Non-audit services
The Company maintains a Non-Audit Services Policy in order to ensure
that the provision of non-audit services do not impair the external audi-
tor’s independence or objectivity. During 2021, Kesselman & Kesselman,
a member firm of PricewaterhouseCoopers International Limited, and
other local offices of PricewaterhouseCoopers, provided non-audit
services, such as tax assessments and advice and regulatory reporting
requirements, which totalled $1.0m (including assurance related services
of $0.3m). The assurance related services include mainly local regulatory
reporting requirements for the regulated subsidiaries which are linked
directly with the external auditors’ services. In addition, part of the non-
audit services in the amount of $0.7m are related to tax assessments
which are provided by the external auditor according to common practice
in specific territories.

The non-audit services fee constitutes 62.5% of the fees payable to the
external auditor in 2021.

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 assur-
ance 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. 2021 Annual ReportKEY FINANCIAL REPORTING AND SIGNIFICANT FINANCIAL JUDGEMENTS

HOW THE ISSUE WAS ADDRESSED BY THE AUDIT COMMITTEE

Revenue recognition

The recognition of revenue is a key matter
to be reviewed, monitored and tested

Uncertain tax positions

The Audit Committee is responsible for the
adequacy of the uncertain tax positions

Review and assess-
ment of the control
environment

Review and assessment
of compliance with laws
and regulations

Review and assess-
ment of appropriate-
ness of the going
concern basis of the
Financial Statements
and long-term viability

Review and assess-
ment of the level of
cash required within
the business to satisfy
both external regula-
tors and the Group’s
attitude to market risk

The Audit Committee has the ultimate
responsibility for the supervision of the
control environment. A key role of the Com-
mittee is to provide oversight and reas-
surance to the Board with regard to the
integrity of the Company’s financial report-
ing, internal control policies and proce-
dures for the identification, assessment
and reporting of risk

A key risk to the business is the fact that
the Group’s business is subject to various
laws and regulations in different jurisdic-
tions according to its activity

Going concern and viability are key matters
for the operations of the Group

The Group requires a level of cash to
ensure that it can operate its trading plat-
forms and maintain sufficient cash in its
regulated entities to satisfy regulatory and
operational needs

– The Audit 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 Audit Committee 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 effective and are appropriately disclosed in the Financial Statements.

– The Audit Committee held meetings, among others, with management and tax advi-
sors to assist in assessing the technical aspect of the Group’s tax positions, includ-
ing understanding the correspondence with the different tax authorities and
reviewing other third parties’ advice obtained by management.

– The Audit committee discussed this matter with the external auditor through the

process of the audit, and received periodical updates during the year.

– The Audit Committee concluded that the provision for uncertain tax positions is

reasonable.

– The Audit Committee reviewed the internal audit reports produced in the year, dis-
cussed 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 produced for 2021.

– The Audit Committee concluded the internal controls are effective. No significant
internal control failings were identified during the year. Where any gaps were identi-
fied, processes were put in place to address them and these are continually monitored.

– The Committee, in conjunction with the work of the Regulatory & Risk Committee,
reviewed regulatory reports prepared by the Risk & Compliance teams, to ensure
compliance with local regulations in the areas the Group operates in.

– The Committee considers the grid of audits and regulatory assessments and reviews
their findings. The relevant aspects of such assessments to the Committees’ work
are 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 the required regulations.

– The Audit 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 2024, taking into account the
Group’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 Audit Committee agreed to recommend the Going Concern and Viability State-

ment to the Board for approval.

– The Audit Committee reviews on an on-going basis the level of cash required from

a regulatory, operationally and risk perspective.

– The Audit Committee concluded that the cash amounts held are sufficient for all the

above-mentioned perspectives.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Audit Committee continued

Fair, balanced and understandable
The Audit Committee undertakes a duty to consider whether
the 2021 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 Audit 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.

The process
The Committee reviews the Consolidated Financial Statements
and recommends to the Board of Directors to approve the Con-
solidated Financial Statements.

During the drafting process of the 2021 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 man-
ner to the shareholders.

Conclusion
Following the review, it was the Committee’s opinion that the
2021 Annual Report and Consolidated Financial Statements are
representative of the year and, taken as a whole, present a fair,
balanced and understandable overview and provides the infor-
mation necessary for shareholders to assess the financial posi-
tion, governance, performance, business model and strategy of
the Group.

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 Execu-

tive 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 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, and the Committee has done
so in FY 2021. The Committee concluded that the internal audit func-
tion was an effective provider of assurance over the Company’s risks
and controls and appropriate resources were available as required.
Brightman Almagor Zohar & Co. (Deloitte Israel), a member firm of
Deloitte Touche Tohmatsu Limited, served as the Company’s internal
auditor in FY 2021.

In January 2022, the Company agreed with Deloitte that they will step
down as internal auditors of the Company. Following receipt of a rec-
ommendation from the Audit Committee, the Board has appointed E&Y
as the Company's new internal auditors as of FY 2022.

Whistleblowing policy
The Group operates a Whistleblowing Policy which encourages all
individuals within the Group (including employees, partners, consult-
ants, contractors, suppliers, customers and other third parties) to feel
confident to voice concerns internally in a responsible, anonymous,
confidential and effective manner when they discover information
which they believe shows serious malpractice or impropriety, and to
question and act upon those concerns. It provides a method of properly
addressing bona fide concerns of such individuals, while offering whistle-
blowers protection from victimisation, harassment or disciplinary
proceedings. Such an anonymous reporting can be undertaken in local
languages. The Audit Committee reports to the Board on the effective-
ness of the Group’s whistleblowing mechanism and on any matter that
arises as a result of it. The current Whistleblowing Policy supervisor is
Daniel King. No whistleblowing complaints were received in 2021. Upon
Daniel King’s tenure finishing in June 2022, Steve Baldwin shall replace
Daniel and serve as the new Whistleblowing Supervisor.

Plus500 Ltd. 2021 Annual ReportReport of the Regulatory & Risk Committee

“With a global regulatory network al-
ready well established, the Group re-
mains well positioned for potential fu-
ture changes to the regulatory
environment across the markets in
which it operates.”

Sigalia Heifetz, Chair of the Regulatory & Risk Committee

Dear shareholder
I am privileged to have been appointed as Chair of the Regulatory &
Risk Committee and I would like to thank Penny Judd, as my predeces-
sor, for her dedication and focus on ensuring that the Committee has
a clear framework from which to operate.

Regulatory compliance and risk management underpin the integrity of
our business model and continued delivery of our strategy. The Regu-
latory & Risk Committee receives regular reports on both compliance
and risk and challenges the performance in these areas. It also receives
AML reports, internal audit reports relating to the Group’s regulated
entities, and other reports on specific areas where more detailed test-
ing or investigation is felt appropriate. These are described more fully
in the following report.

In addition, the Board undertook a robust assessment of the principal
risks facing the Group 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 implemen-
tation of preparation for the ASIC product intervention order, which
came into force in March 2021, with respect to retail customers in
Australia, setting leverage restrictions, similar to ESMA levels, to all
Plus500AU operations (ASIC, FMA, FSCA). Also, the Committee and
the Board have received reports in relation to the potential Brexit sce-
narios and reports relating to the new trading products launched by
the Group in 2021 – share dealing through ‘Plus500 Invest’ and futures
and options on futures. Following this, the Committee received comfort
that the applicable measures have been considered and effectively
implemented.

The Group’s portfolio of licences is an increasingly valuable asset, given
its scarcity and the growing complexity of obtaining new licences. I am
pleased that during Q1 2022 this portfolio of operating licences was
further strengthened.

The licence granted in Estonia in February 2022 will further support
the Group’s business across European markets in its core product
offering, and the acquisition of a Type 1 regulated firm in Japan, com-
pleted in March 2022, represents a major growth opportunity for the
Group, through an immediate presence in the substantial retail trading
market in Japan.

Our priorities for the coming year will be to continue to monitor regula-
tory 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 continued impact of the COVID-19
pandemic.

More specifically, we will continue to assess, and seek to enhance, our
approach to risk management, which is based on ensuring our risk
exposures are aligned with our risk appetite across the product port-
folio.

From a regulatory and compliance perspective, with a global regulatory
network already well established, the Group remains well positioned
for potential future changes to the regulatory environment across the
markets in which it operates.

I look forward to reporting on the Regulatory & Risk Committee’s further
progress in next year’s Annual Report.

Sigalia Heifetz
Chair of the Regulatory & Risk Committee
22 March 2022

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements
Report of the Regulatory & Risk Committee
continued

Committee composition
The Regulatory & Risk Committee is chaired by Sigalia Heifetz
(appointed as a member in February 2021 and as the Chair in
May 2021), succeeding Penny Judd. The other members are
Elad Even-Chen, Tami Gottlieb (appointed in March 2021), Prof.
Jacob A. Frenkel (appointed in May 2021) and Prof. Varda Liber-
man (appointed in March 2022). According to the Committee’s
terms of reference (which are available on the Company’s web-
site) the Committee shall comprise at least three members, and
the activities of the Committee should involve participation by
the Chair of the Audit Committee. The Chief Financial Officer
should be a committee member. Tami Gottlieb, Chair of the
Audit Committee is also a member of the Regulatory & Risk
Committee, as well as Elad Even-Chen, the Group’s Chief Finan-
cial Officer. Details of individual attendance at meetings is set
out in the Committee attendance table below.

Committee attendance (in FY 2021)

Sigalia Heifetz (Chair)1

Elad Even-Chen

Tami Gottlieb2

Prof. Jacob A. Frenkel³

Past members

Penny Judd4

Charles Fairbairn5

SCHEDULED
MEETINGS
ELIGIBLE TO
ATTEND

SCHEDULED
MEETINGS
ATTENDED

2 (67%)6

3 (100%)

2 (100%)

1 (100%)

1. Sigalia Heifetz was appointed as a member of the Committee on 4 Febru-
ary 2021 and serves as the Chair of the Committee as of 4 May 2021.
2. Tami Gottlieb was appointed as a member of the Committee on 24 March

2021.

3. Prof. Jacob A. Frenkel was appointed as a member of the Committee on

12 May 2021.

4. Penny Judd (previous Chair of the Committee) stepped down from the

Committee on 4 May 2021.

5. Charles Fairbairn stepped down from the Committee on 3 February 2021,

prior to any scheduled meeting of the Committee.

6. Sigalia Heifetz was unable to attend one Committee meeting due to illness.

General note: Prof. Varda Liberman was appointed as a member of the Com-
mittee in March 2022, thus she is not included in the Committee’s attendance
table in FY 2021.

Committee responsibilities and activities
The Regulatory & Risk Committee meets not less than three times a year
and otherwise as required. The Regulatory & Risk Committee receives
monthly updates from management on risk, compliance, AML and regu-
latory issues and reviews the related internal reports. The Regulatory &
Risk Committee has responsibility for providing oversight with respect to
current and potential future risk exposures of the Group and for oversee-
ing and monitoring the Group’s compliance with applicable laws, regula-
tions and orders as required. Its activities include reviewing relationships
with regulatory authorities such as 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, the Financial Services Authority (FSA) in the Sey-
chelles, Commodities Futures Trading Commission (CFTC) and National
Futures Association (NFA) in the US, the Estonian Financial Supervision
Authority (EFSA) in Estonia, the Financial Services Agency (FSA) in Japan
and other regulatory authorities, as appropriate, in jurisdictions where the
Group has a significant operation. The Committee is also responsible for
reviewing risk assessment programmes and internal controls.

The Regulatory & Risk Committee is responsible for reviewing the Group’s
most significant risks to the achievement of strategic objectives and any
emerging risks, reviewing the Group’s Risk Management Policy, ensuring
that the Company’s Board ethics are being adhered to. The other key
governance mandates, pursuant to the written terms of reference of the
Regulatory & Risk Committee, are as follows:

– To review the Group’s capability to identify and manage new risk types;
– To review the most significant risks to the achievement of strategic

objectives;

– To review incident reports to monitor incidents and remedial activity; and
– To consider and approve the remit of the risk management function and
ensure that it has adequate resources and appropriate access to informa-
tion to enable it to perform its function effectively and in accordance with
the relevant professional standards.

A summary of the major activities and decisions of the Committee in
2021 is set out below.

Regulatory &
Compliance
review

– Periodic regulatory, compliance and AML reports review.
– Periodic AML reports (on the Group’s regulated entities) 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

2021 internal
Committee
evaluation

Governance

– Review licence applications submitted during the period.

– Review periodic risk reports, including VaR reports.
– Review risk assessment programmes and internal risk man-

agement controls.

– Review emerging and principal risks for the period.
– Review and assess current approach to hedging as well as

possible options for future approach in this area.

– Discussion and assessment of the 2020 and 2021 internal

Regulatory & Risk Committee evaluation findings.

– Review of the Committee’s terms of reference.
– Review of 2021 Regulatory & Risk Committee Report which is

included within this Annual Report.

Plus500 Ltd. 2021 Annual Report
Report of the ESG Committee

“The Company supports the recommendations
published by the Financial Stability Board’s
Task Force on Climate-Related Financial Dis-
closures and during 2021, the Committee
worked with a specialist ESG consultant,
which conducted a rigorous gap analysis and
assessment of the Group’s ESG reporting
and disclosure.”

Daniel King, Chair of the ESG Committee

Dear shareholder
ESG has become a critical element of organisational culture, operations,
reporting and disclosure and is now a highly prevalent theme across
global capital markets. This has been driven by growing public pressure,
increasing regulator engagement and investors integrating ESG into
their investment analysis.

The assessment identified several ESG priority areas for Plus500 –
namely, customer care and protection, organisational culture, cyber
security, systems infrastructure and leadership and governance. Our
commercial and operational approach and progress during 2021 in
each of the areas can be found elsewhere in this Annual Report, in
particular in the ESG section on pages 30 – 37.

In this dynamic and complex environment, ESG issues can have a direct
impact on a company’s competitive advantage and operational perfor-
mance. Furthermore, investors are seeking more understanding and
detail about how companies are managed in this regard.

In this context, and with increasing reporting and disclosure require-
ments for companies in this area, the Board established its ESG Com-
mittee in 2020, primarily to regularly review and assess the Group’s
ESG activities and align them with industry and market best practice.

With this in mind, the Committee, the Board and the Group remain
committed to developing Plus500’s ESG strategy, and will continue to
broaden its disclosure on ESG in order to ensure key stakeholders have
a clear and comprehensive understanding of the Group’s activities in
these areas.

As the Chair of the ESG Committee, I am pleased to provide an overview
of the work carried out by the ESG Committee in 2021, as well as its
objectives and priorities.

As a starting point, the Committee initiated a Materiality Assessment,
which was carried out at the beginning of 2021, to identify key ESG
priorities and risk factors and to establish a framework for the Group’s
future approach in these areas and, ultimately, to increase the Group’s
resilience over the long-term.

The framework for this assessment was based on internationally
accepted standards and frameworks such as the Sustainability Account-
ing Standards Board (SASB) and the Global Reporting Initiative (GRI),
and was driven by the findings and insights from interviews with a
number of key individuals from the Board, the executive team and
several major shareholders.

With the assessment laying the foundations of the Group’s approach
in this area, the Committee made strong progress during the year to
develop our position in ESG, in particular by refreshing our reporting
and disclosure, in line with the latest regulatory and disclosure require-
ments, as exemplified in various sections of this Annual Report.

The Company supports the recommendations published by the Finan-
cial Stability Board’s Task Force on Climate-Related Financial Disclosures
(TCFD) and during 2021, the Committee worked with a specialist ESG
consultant, which conducted a rigorous gap analysis and assessment
of the Group’s ESG reporting and disclosure, against its UK-listed peer
group and a range of US-listed fintech groups. This assessment has
helped to provide a foundation for the Group’s on-going approach to
ESG reporting and disclosure going forward.

More specifically, conclusions from this assessment have helped to
inform the Group’s initial reporting and disclosure against the TCFD
recommendations, which includes the reporting of our Scope 1 and
Scope 2 emissions data, for the first time. This information, including
the Group’s future plans to continue to align itself to the TCFD recom-
mendations, is outlined in the ESG section on pages 36 – 37 of this
Annual Report.

Also, during the year, the Committee and the Board developed an
Environmental Policy, which is available on the Company’s website. As
a technology-based business, Plus500 does not carry out any industrial
activity and is not involved in anything which would emit environmen-
tally harmful substances but has made various commitments, includ-
ing, to protect the environment, to reduce waste as well as water, energy,
and resource use and to monitor the Group’s environmental performance.

The Committee reviewed the Donations & Volunteering Procedure and
received a report from the Company’s Donations Committee detailing
the type and amounts of donations made during 2020-2021 (both

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the ESG Committee continued

monetary and in kind donations), the profile of charitable and non-profit
organisations which received the donations and future charitable ini-
tiatives.

Having served as an Independent Non-Executive Director and External
Director since the Company’s IPO in 2013, I will end my third and final
three-year term under the provisions of the Companies Law pertaining
to the term of an External Director, in June 2022. Therefore, as I am
not eligible under the Companies Law for re-election this year, I will be
stepping down from the Board and all related Board Committees.

So, in my final ESG Committee report, I would like to say that it has
been a privilege to have Chaired this Committee since it was established.
It is crucial that the Board ensures Plus500’s approach to the relevant
elements of ESG continues to develop and are clearly understood by
the investment community. To this end, I wish Steve Baldwin the best
of luck as my successor as Chair of the ESG Committee, and I am sure
he will provide dynamic leadership in such a vital area for the Group.

Daniel King
Chair of the ESG Committee
22 March 2022

Committee composition
The ESG Committee is chaired by Daniel King. The other mem-
bers are Steve Baldwin and Anne Grim. According to the Com-
mittee’s written terms of reference (which are available on the
Company’s website) the Committee shall comprise at least three
members, a majority of the members of the Committee should
be Independent Non-Executive Directors and at least one mem-
ber shall be an External Director. All of the Committee members
are Independent Non-Executive Directors and Anne Grim and
Daniel King are also considered as External Directors.

As of June 2022, Steve Baldwin will Chair the ESG Committee
and an additional member will be appointed to the Committee,
alongside Steve Baldwin and Anne Grim. Details of individual
attendance at meetings is set out in the Committee attendance
table below.

Committee attendance (in FY 2021)

Daniel King (Chair)

Steve Baldwin

Anne Grim

SCHEDULED
MEETINGS
ELIGIBLE TO
ATTEND

SCHEDULED
MEETINGS
ATTENDED

4 (100%)

Plus500 Ltd. 2021 Annual Report
Committee responsibilities and activities
The overall responsibilities of the ESG Committee are to assess the
following pillars:

– Environmental: the Group’s impact on the natural environment and its
adaptation to climate change including greenhouse gas emissions,
energy consumption, generation and use of renewable energy, biodi-
versity and habitat, impact on water resources and the status of water
bodies, pollution, resources efficiency, the reduction and management
of waste, and the environmental impact of the Group’s supply chain;
– Social: the Group’s interactions with employees, commercial counter-
parties, stakeholders and the communities in which it operates and
the role of the Group in society, workplace policies (for example,
employee relations and engagement, diversity, non-discrimination and
equality of treatment, health and safety and well-being), ethical procure-
ment, any social or community projects undertaken by the Group and
social aspects of the supply chain, community and stakeholder engage-
ment or partnerships; and

– Governance: the ethical conduct of the Group’s business including its
business ethics policies, code of conduct and counterparty due dili-
gence.

The other key governance mandates, pursuant to the written terms of
reference of the ESG Committee, are as follows:

– To ensure that sufficient focus and resource is given to implementing,

monitoring and management;

– To consider the adequacy of the Group’s ESG policies and processes

by reviewing reports prepared by management on:
– review of any key learnings from internal or external reviews and
investigations of any marketing, advertising campaigns and pro-
motional activities which have had a significant negative impact on
the brand or image of the Group;

– diversity in the workplace;
– security and health and safety in respect of the Group’s employees

and premises;

– charitable donations and pro bono programmes; and
– the Company’s impact on the environment.

A summary of the major activities and decisions of the Committee in
2021 is set out below:

Reports and
Policies review

– Periodic review of ESG reports.
– Review of succession planning (from a gender diver-

Adoption of an
Environmental
Policy

Donations and
Charitable
initiatives
review

Materiality
Assessment

Gap Analysis

2021 internal
Committee
evaluation

Governance

sity perspective).

– Review of Donations & Volunteering Procedure.

– Adoption of a new Policy – Environmental Policy.

– Review type and amounts of donations made during
2020-2021 (both monetary and in-kind donations), pro-
file of charitable and/or non-profit organisations which
received the donations and future charitable initiatives.

– Review of, and feedback on, detailed materiality assess-

ment.

– Discussion and agreement on key priority areas emanat-
ing from this assessment, including an approach on
future reporting and disclosure in each of these areas.

– Working with a specialist ESG consultant to conduct
gap analysis of the Group’s ESG reporting and disclosure,
compared to our UK-listed peer groups and US-listed
fintech groups.

– Discussed and agreed approach for Group’s ESG report-
ing and disclosure, based on the findings of this analy-
sis.

– This included discussion on the rationale of initial report-
ing of the Group’s Scope 1 and Scope 2 emissions data
(which is included on page 36 of this Annual Report).

– Discussion and assessment of the 2020 and 2021

internal ESG Committee evaluation findings.

– Review of the Committee’s terms of reference.
– Review of 2021 ESG Report which is included within

this Annual Report.

– Review of 2021 ESG Committee Report which is includ-

ed within this Annual Report.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Remuneration Committee

“The newly approved remuneration pol-
icy for FY 2021-FY 2023 provides
some far-reaching changes from the
previous policy to ensure that we are
making significant strides to align to a
UK norm.”

Daniel King, Chair of the Remuneration Committee

The Committee understands that historically shareholders have had
concerns about Executive Directors pay and it has therefore undertaken
a thorough and comprehensive review of the remuneration policy and
operation concluded in Q1 2021 with the support of external advisors
Korn Ferry with a clear understanding of market practice and investor
expectations. This has been followed with a period of consultation with
a substantial number of our shareholders and shareholder advisory
bodies. Feedback from investors has been positive overall noting the
substantial changes made. Investors have also understood that there
is a small number of matters that are not fully aligned with UK investor
expectations and that the Committee will look to review these matters
again over the policy period and at the latest at the next policy renewal
in 2024. The Committee refined certain aspects of its original propos-
als and is grateful for investor feedback on these matters.

The newly approved remuneration policy for FY 2021, FY 2022 and FY
2023 provides some far-reaching changes from the previous policy to
ensure that we are making significant strides to align to a UK norm.
The Committee is however cognisant of distinct sector and market
dynamics in Israel where Plus500 is headquartered, the competition
over talent in the Israeli market place and in the sector as a whole (this
competition intensified in 2021 which saw a large amount of Israeli
tech companies IPO in the international markets and an ever intensify-
ing competition for talents within the sector in Israel). I would also like
to emphasise that the changes proposed have a significant impact on
the way in which the current Executive Directors are paid. The Com-
mittee will therefore continue its journey over future policy reviews,
keeping the approach and the structure of the Executive Directors’
packages under review but it very much hopes that investors will
continue to be supportive of the substantial progress that has been
made in moving towards a UK norm at this time.

As part of our remuneration policy review, we have considered our
remuneration reporting. Our 2021 Remuneration Report provides clearer
and more transparent disclosures more closely aligned to UK practice.
We will continue to evolve this reporting to provide additional disclosures
in future years so as to make our disclosure more aligned to UK best
practice and the UK Directors’ Remuneration Reporting Regulations.

Dear shareholder
As the Chair of the Remuneration Committee, and on behalf of the
Board, I am pleased to present the Remuneration Committee Report
for the year ended 31 December 2021.

Plus500 is a corporate entity registered in Israel and is therefore not
legally required to comply with the requirements applicable to a UK
incorporated listed company. The Directors’ Remuneration Report,
which will be put to shareholders’ vote (as an advisory vote) at the 2022
AGM, has been prepared with a view of the standards for a UK listed
company, while making required adjustments in order to conform with
the requirements under the Israeli law and market practices in Israel.

To this end, our Directors’ Remuneration Report provides a short over-
view of the new Directors’ Remuneration Policy which was approved
by shareholders at the 2021 AGM held on 4 May 2021, with an excellent
support of over 94% of the votes and the Annual Report on Remu-
neration that sets out the remuneration paid in respect of performance
in 2021.

Going forward, shareholders’ approval will be sought for our Remu-
neration Policy once every three years or earlier if a change to policy
is required, as was sought in 2021 for the years 2021, 2022 and 2023.
Shareholders will be aware that as an Israeli company we are required
to obtain shareholder approval to the remuneration packages for our
Executive Directors. If changes are made to the annual remuneration
packages, shareholders’ approval will be sought.

Plus500 Ltd. 2021 Annual ReportRationale for proposed increase in remuneration of Chair of the
Board
The rationale for the Remuneration Committee’s proposed increased
in the remuneration of Prof. Frenkel as Chair of the Board is set out
below.

Firstly, the Remuneration Committee has taken into account Prof.
Frenkel’s more than 40 years of experience in global economics and
in leading and advising major multi-national financial organisations
and high-profile public sector institutions. In particular, he has significant,
long-standing experience in the US financial, futures and capital markets,
with a long track record of engaging with regulators and major govern-
ment agencies and institutions in the US and around the world. His
detailed biography can be found on page 52.

Secondly, the Group is already benefiting from leveraging his substan-
tial and established global relationship network.

With this in mind, and given his significant leadership and contribution
to Board meetings already in evidence over the last ten months, Prof.
Frenkel is proving to be a significant asset to the Company in crafting
its strategic objectives and advancing the development of its opera-
tions.

Some of the progress achieved by Plus500 in FY 2021 and in Q1 2022
would not have occurred without the leadership, guidance and contact
network of Prof. Frenkel, in particular the Group’s significant progress
made in the US futures and options on futures market during the year.

The Remuneration Committee therefore believes that the proposed
increase in Prof. Frenkel’s remuneration is appropriate for the level of
value that he is providing, and will continue to provide, for the Group
and its shareholders.

Next steps
The proposed increase in remuneration of the Non-Executive Directors
of the Board, including those of Prof. Frenkel as an Independent Non-
Executive Director and Chair of the Board, will be put to a shareholder
vote at the Company’s 2022 AGM.

Concluding remarks
The Committee and I would like to thank our investors who had been
supportive and approved our new remuneration policy. I am grateful for
the engagement, feedback and support we have received from our
shareholders as we have finalised these new remuneration arrangements.

The Committee and the Board noted that two of the resolutions which
were passed at the 2021 AGM had more than 20% of votes cast against
them. These resolutions related to an advisory vote on the Directors’
Remuneration Report and a tax-related bonus payment regarding the
Company obtaining a highly beneficial approval from the Israeli Tax
Authority and the Israel Innovation Authority as a Preferred Techno-
logical Enterprise.

Business performance
2021 was another year of major operational, financial and strategic
success for Plus500, building on its long-term track record of performance
since the IPO in 2013. The Group delivered further positive momentum
during the year, driven by another very strong year of customer acquisi-
tion and retention, which ensured that Plus500’s operational and finan-
cial performance was well ahead of pre-pandemic levels.

While we have had to deal with the continued impact of COVID-19 in
terms of managing our business, we have not been affected in the
same way as many other businesses. The Company has not received
any government support and none of the employees have been fur-
loughed but have retained their normal remuneration arrangements
with payment of bonuses in the usual way reflecting business perfor-
mance for 2021.

2021 operation of policy
Following a year of outstanding performance, the annual bonus targets
were met in full with bonus payable to David Zruia of $1,590,000 and
Elad Even-Chen of $1,590,000.

Under the new policy, Share Appreciation Rights will no longer be
awarded to the Executive Directors.

Full details of the remuneration payable for 2021 performance and
performance against targets is set out in the Annual Report on Remu-
neration.

The Committee is comfortable that the remuneration paid for 2021 is
aligned to the strong performance in the year and investor returns.

Proposed increase in fees for Chair and Non-Executive Directors
Given the long-standing experience, high calibre and value creation
being delivered by the Chair of the Board and its Non-Executive Direc-
tors, the Remuneration Committee proposes to increase the remu-
neration of the Chair of the Board and the remuneration of each of the
Board’s Non-Executive Directors.

Further details of these proposed changes can be found in the Notice
of the 2022 Annual General Meeting, to be circulated by the Company
to all shareholders in due course.

Rationale for proposed increase in remuneration of Non-Executive
Directors
During FY 2021 and Q1 2022, the Group has significantly expanded its
international operations, making an initial entry in the US for the first
time, through two acquisitions, and by establishing a new operation in
Europe through a new licence in Estonia and in Asia, through an acqui-
sition in Japan. In addition, the Group is expected to establish further
new operations in additional geographies over the next 12 months and
into the future.

With the expanded, and expanding, global operations of the Group,
additional time, availability and attention is required of the Non-Exec-
utive Directors. The Remuneration Committee therefore believes the
remuneration increase being proposed is commensurate with the
increased attention and time required of the Non-Executive Directors,
to take account of an expanded and more globally diversified business.

In addition, this proposed level of remuneration is appropriate and in
line with US Non-Executive remuneration, which is relevant as several
of the Board’s Non-Executive Directors are either based in the US or
spend a significant amount of time there.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Remuneration Committee
continued

As mentioned in our 2020 Remuneration Committee Report, our Remu-
neration Committee and Board resolved that payment of this one time
bonus was advisable and in the interest of the Company on the basis
of assessing the real value of this project while understanding that this
particular project is not typically part of the on-going duties of a CFO.
The Board is in no doubt that the Preferred Technological Enterprise
status would not have been secured were it not for Elad Even-Chen’s
enormous and unrelenting commitment to achieving it. The fact that
these approvals for the years 2017, 2018, 2019, 2020 and 2021 were
secured during the height of the COVID-19 pandemic when face to face
meetings and discussions were not possible is all the more impressive.

Following consultations made with shareholders ahead of our 2021
AGM, the Remuneration Committee excluded special, one-off bonuses
in future Executive Remuneration plans in the Company’s updated Remu-
neration Policy. A resolution to approve the updated Remuneration
Policy was approved by over 94% of shareholders’ votes at the 2021
AGM.

The Board always takes the outcome of shareholder votes seriously
and, going forward, will continue its engagement and dialogue with
shareholders and their representatives and will continue to consider
related shareholder feedback, with a view to implementing this feedback,
as appropriate.

Lastly, given this will be my final report as Chair of the Remuneration
Committee, I would like to say that it has been an honour to serve the
Board, the Company and our shareholders in this important role over
the last years. In that time, the Board’s approach to Remuneration has
remained clear, rigorous and aligned with market practice. So, I hope
to have left the Committee, and its practices and processes, in good
shape for my successor, Anne Grim, to continue its positive work, for
which I wish her the best of luck.

Since the 2021 AGM results, the Board engaged with various shareholder
advisory bodies and a number of shareholders, taking into account
their feedback.

Daniel King
Chair of the Remuneration Committee
22 March 2022

Plus500 Ltd. 2021 Annual ReportAnnual report on remuneration 2021
This section of the Annual Report describes the implementation
of the Terms of Reference, Israeli law requirements and the
provisions of the Code.

Committee responsibilities and activities
The Remuneration Committee meets not less than twice a year
and at such other times as required. The Remuneration Com-
mittee has responsibility for determining, within the agreed
terms of reference, the Companies Law provisions and subject
to the remuneration policy of the Group, the Group’s policy on
the remuneration packages of the Company’s Chief Executive
Officer, Chief Financial Officer, the Chair of the Board and the
other Non-Executive Directors, the Company Secretary and other
senior executives determined by the Committee.

The other key governance mandates of the Committee pursuant
to the Companies Law and the written terms of reference of the
Remuneration Committee are as follows:

– Reviewing the remuneration policy and approving a Remu-

neration Policy at least once in every three years;

– Approving and recommending to the Board and, where appli-
cable, the shareholders, the total individual remuneration pack-
age of the Chair of the Board, each Executive and
Non-Executive Director, the Chief Executive Officer, Chief Finan-
cial Officer and other office holders (including bonuses, incen-
tive 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 Chair of the Board and other designated
senior executives, the Remuneration Committee is required to
give regard to the relevant legal and regulatory requirements,
the provisions of the Companies Law, the provisions and recom-
mendations of the Code and associated guidance;

– Approving and determining the targets for any performance-

related pay schemes; and

– Reviewing the design of all share incentive plans for approval
by the Board and (if required or deemed appropriate) the share-
holders.

The Committee approved its new terms of reference in 2021
(which are available on the Company’s website).

Committee composition
The Code recommends a remuneration committee to consist
of at least three members and that all of its members 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 Companies Law requires a remuneration committee to con-
sist of at least three members, and all of the External Directors
must be members of the committee (one of which to be appointed
as the chair) and constitute the majority thereof. The remaining
members must be Directors who qualify to serve as members of
the Audit Committee as defined in the Companies Law and whose
compensation is in accordance with the compensation require-
ments applicable to the External Directors. The Chair of the Remu-
neration Committee must be an External Director.

The Remuneration Committee comprises four independent
Non-Executive Directors: Daniel King, Anne Grim, Sigalia Heifetz
and Tami Gottlieb and is chaired by Daniel King. Sigalia Heifetz
and Tami Gottlieb joined the Committee on 4 February 2021
and 16 March 2021, respectively. Daniel King, Anne Grim and
Tami Gottlieb are considered External Directors under the Com-
panies Law. Upon Daniel King’s end of tenure in June 2022, Anne
Grim, who qualifies to serve as the Chair of the Remuneration
Committee under the Companies Law (being an External Direc-
tor) and under the Code (having served on the Committee for
more than twelve months), will chair the Remuneration Com-
mittee. Details of the skills and experience of the Remuneration
Committee members can be found on pages 52 – 53.

Committee attendance (in FY 2021)

REMUNERATION COMMITTEE

Daniel King (Chair)

Anne Grim

Sigalia Heifetz1

Tami Gottlieb2

Past members

Steve Baldwin3

Charles Fairbairn4

SCHEDULED
MEETINGS
ELIGIBLE TO
ATTEND

SCHEDULED
MEETINGS
ATTENDED

3 (100%)

2 (67%)5

1 (100%)

1. Sigalia Heifetz was appointed as a member of the Committee on 4 February

2021.

2. Tami Gottlieb was appointed as a member of the Committee on 16 March

2021.

3. Steve Baldwin stepped down from the Committee on 12 May 2021, follow-
ing the Board’s decision that the Remuneration Committee comprise up to
four members, to ensure an appropriate balance of Board members on
each Board Committee.

4. Charles Fairbairn stepped down from the Committee on 3 February 2021,

prior to any scheduled meeting of the Committee.

5. Tami Gottlieb was unable to attend one Committee meeting due to illness.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Remuneration Committee
continued

A summary of the major activities and decisions of the Committee in
2021 is set out below:

Salary/base
service fees

Bonus

Long Term
Incentive Plans
(“LTIPs”)/
Restricted
Share Units
(“RSUs”)

2021 internal
Committee
evaluation

Governance

– Executive Directors’ remuneration review.
– Review and approval of Non-Executive Directors’ fees
and recommendations to our shareholders and obtain-
ing a benchmark from a leading consultant on this issue.
– Review and approval of Chair’s fees and recommenda-

tions to our shareholders.

– 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
2021 based on performance targets.

– Review of Executive Directors’ 2021 LTIP and RSU plans

(including addition of KPIs).

– Review of updated clawback and malus provisions.

– Discussion and assessment of the 2020 and 2021
internal Remuneration Committee evaluation findings.

– Review of corporate governance and determining appro-
priate levels of disclosure for the 2021 Directors’ Remu-
neration Report.

– Review of 2021 AGM season remuneration report
results, and investor and shareholder advisory bodies’
views on remuneration.

– Review of the Committee’s terms of reference in light

of the Code and the Companies Law.

– Review of 2021 Remuneration Committee Report which

is included within this Annual Report.

– Review of 2021 Directors’ Remuneration Report which

is included within this Annual Report.

Other

– Review of remuneration consultant costs and appoint-

ment.

– Review of workforce remuneration policies and com-
parison of such policies with senior management policies.

– Review talent pipeline and its remuneration.

The Company Secretary ensures that the Remuneration Committee
fulfils its duties under the Companies Law and its terms of reference
and provides regular updates to the Remuneration Committee on rel-
evant regulatory developments in the UK, information on Israeli market
trends and compensation structures on a broader Group level.

Remuneration policy
Pursuant to the Companies Law, all public Israeli companies, including
companies whose shares are only publicly traded outside of Israel, such
as the Company, are required to adopt a written remuneration policy for
their Directors and Executives, which addresses certain items prescribed
by the Companies Law. The adoption, amendment and restatement of
the policy is to be recommended by the Remuneration Committee and
approved by the Board and the Company’s shareholders.

As mentioned above, the Committee has undertaken a thorough and
comprehensive review of the remuneration policy and operation, con-
cluded in Q1 2021 with the support of external advisors Korn Ferry.
Following the review, the Committee and the Board resolved to bring
an amended Remuneration Policy for the approval of the Company’s
shareholders at its 2021 AGM.

In developing the new Remuneration Policy, the Remuneration Com-
mittee consulted with major shareholders (covering over 50% of the
issued share capital) for their views on the proposals and also engaged
with shareholder advisory bodies. Based on the independent advice
received from Korn Ferry, as well as the feedback received from the
major shareholders and the shareholder advisory bodies. Following
this process, our new Remuneration Policy was approved by sharehold-
ers at the 2021 AGM on 4 May 2021.

The new remuneration policy and operation of policy for the years 2021,
2022 and 2023, provides some far-reaching changes from the previous
policy and operation to ensure that we are making significant strides
to align to a UK norm. The Committee is however cognisant of distinct
sector and market dynamics in Israel where Plus500 is headquartered,
the competition over talent in the Israeli marketplace and in the sector
as a whole. It would also like to emphasise that the changes made to
the policy have a significant impact on the way in which the current
Executive Directors are paid. The Committee will therefore continue its
journey over future policy reviews, keeping the approach and the struc-
ture of the Executive Directors’ packages under review but very much
hopes that investors will be supportive of the substantial progress that
has been made in moving towards a UK norm at this time.

Amongst other matters, the new Remuneration Policy for Executive
Directors provides for the:

– Reduction of incentive quantum and rebalancing from short-term to

long-term incentives;

– Changes to the annual bonus structure which includes a reduction of
the maximum bonus opportunity and moving the entire deferred bonus
element into shares;

– Removal from the policy of the ability to pay discretionary bonuses;

and

– Changes to the long-term incentive structure which includes removal
of the Share Appreciation Rights long-term incentive which pays out
100% in cash, replacing this with performance shares.

Plus500 Ltd. 2021 Annual ReportStakeholder engagement
Employees
The Board regularly communicates with and receives feedback from
the Group’s employees through a variety of channels. Steve Baldwin,
as the designated Non-Executive Director dedicated to workforce
engagement, meets on a yearly basis with the Group’s workforce and
at such meetings employees have the opportunity to share their views,
including on executive and employee remuneration.

In addition, employees can contact Steve Baldwin directly via email on
matters they wish to discuss with him or with the Board. Steve Baldwin
also regularly communicates with the senior management who have
connections with other stakeholders of the Company, such as custom-
ers and suppliers. Steve reports any key messages deriving from such
conversations to the Board and ensures that such messages are con-
sidered 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 its employ-
ees worldwide.

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 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 Chair of the Board and the Chair 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 mentioned in the Remuneration Committee Chair’s Statement and
the section above on our remuneration policy, in developing the new
Policy, the Committee consulted with major shareholders (covering over
50% of the issued share capital) for their views on the proposals and
also engaged with other shareholder advisory bodies. Feedback from
investors has been positive overall noting the substantial changes made.
Investors have also understood that there is a small number of matters
that are not fully aligned with UK investor expectations and that the
Committee will look to review again these matters over the policy period
and at the latest at the next policy renewal due in FY 2024. Following
initial feedback, the Committee refined certain aspects of its original
proposals and is grateful for investor feedback on these matters.

Following this shareholders’ engagement, the Remuneration Commit-
tee excluded special, one-off bonuses in future Executive Remuneration
plans in the Company’s Remuneration Policy. A resolution for this
updated Remuneration Policy was approved by over 94% of sharehold-
ers’ votes cast at the 2021 AGM.

Approach to recruitment and remuneration of Executive Directors
Plus500 believes that strong, effective leadership is fundamental to its
continued growth and success in the future. This requires the ability
to attract, retain, reward and motivate highly-skilled Executive Directors,
with the competencies needed to excel in a rapidly changing market-
place and to continually motivate their employees.

When setting remuneration packages for new Executive Directors, pay
will be set in line with the remuneration policy of the Company. Several
factors will be considered, including: the geography in which the role
competes or is recruited from; the candidate’s experience and skills;
the remuneration levels of other Executive Directors and colleagues in
peer companies in Israel and in the international market; market stand-
ards and norms in the UK and the international markets.

If necessary, Executive Directors may be provided with contributions
towards relocation expenses, housing, school fees etc., but for no more
than necessary.

Non-Executive Directors
Non-Executive Directors are appointed for a one-year term and are
subject to re-election at each AGM. Notwithstanding, External Directors
are appointed by shareholders for a three-year term and are subject to
re-election by shareholders at an EGM or AGM every three years. The
term of office can be terminated by the Non-Executive Director with
two months’ written notice, or by the Company with immediate effect
if the Non-Executive Director is not re-elected or is otherwise removed
from office in accordance with the Articles. Notwithstanding, External
Directors’ service may be terminated by the Company only in such
circumstances and manner provided under the Companies Law. Upon
termination no additional payments are due.

According to the Companies Law, the appointment of External Directors
is for a period of three years from the date of appointment by the
Company’s shareholders (which may be extended for two more three-
year terms).

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsReport of the Remuneration Committee
continued

The table below details the date and period of appointment of each Non-Executive Director

NAME

POSITION

DATE OF
APPOINTMENT
TO THE BOARD
OF DIRECTORS

DATE OF
RE-APPOINTMENT
TO THE BOARD
OF DIRECTORS

PERIOD OF
APPOINTMENT

Prof. Jacob A. Frenkel

Independent Non-Executive Director and Chair

May 2021

Senior Independent Non-Executive Director and External Director

September 2020

Anne Grim

Daniel King

Independent Non-Executive Director and External Director

Steve Baldwin

Independent Non-Executive Director

Sigalia Heifetz

Independent Non-Executive Director

Tami Gottlieb

Independent Non-Executive Director and External Director

Prof. Varda Liberman

Independent Non-Executive Director

June 2013

June 2017

February 2021

March 2021

March 2022

N/A

June 2019

May 2021

N/A

1 year

3 years

1 year

3 years

N/A until the 2022 AGM

The table below details the date and period of appointment of each Executive Director presiding

NAME

David Zruia

POSITION

Executive Director

Elad Even-Chen

Executive Director

DATE OF
APPOINTMENT
TO THE BOARD
OF DIRECTORS

DATE OF
RE-APPOINTMENT
TO THE BOARD
OF DIRECTORS

April 2020

June 2016

May 2021

PERIOD OF
APPOINTMENT

1 year

Plus500 Ltd. 2021 Annual ReportDirectors’ Remuneration Report

Annual report on remuneration 2021

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 2021.

Audited information – Directors’ remuneration – 1 January 2021 to 31 December 2021

Single figure of remuneration
The detailed emoluments received by the Executive and Non-Executive Directors during the year ended 31 December 2021 are detailed below.

The information provided in the section and accompanying notes has been audited by Kesselman & Kesselman, a member firm of Pricewater-
houseCoopers International Limited.

SALARY/BASE
SERVICE FEES7

OTHER
EXPENSES8

TOTAL
FIXED PAY

ANNUAL
BONUS

LTIPs/RSUs

SHARE
APPRECIATION
RIGHTS

TOTAL
VARIABLE PAY

TOTAL

(US$000)

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Executive Directors

David Zruia

Elad Even-Chen

Non-Executive Directors

636

319

498

220

142

–

Jacob A. Frenkel1 (Chair)

4729 N/A

Anne Grim2

Daniel King

Steve Baldwin

Tami Gottlieb3

Sigalia Heifetz4

Past Non-Executive
Directors

Penny Judd5

Charles Fairbairn6

100

103

N/A

194

153

–

856

778

472

100

103

N/A

194

153

406 1,590 1,015

–

498 1,590 1,972

265

–

752

964

1,590 1,767 2,446 2,173

1,855 2,936 2,633 3,434

–

472

100

103

N/A

194

153

–

1. Prof. Jacob A. Frenkel was appointed as a Non-Executive Director and Chair of the Board at the 2021 AGM held on 4 May 2021.
2. Anne Grim was appointed as a Non-Executive Director and External Director on 16 September 2020.
3. Tami Gottlieb was appointed as a Non-Executive Director and External Director on 16 March 2021.
4. Sigalia Heifetz was appointed as a Non-Executive Director on 4 February 2021.
5. Penny Judd stepped down from the Board at the 2021 AGM held on 4 May 2021.
6. Charles Fairbairn stepped down from the Board at the 2021 AGM held on 4 May 2021.
7. The remuneration terms comprised of a salary for David Zruia and service contract fees for Elad Even-Chen (the “base service fees”).
8. Includes social and other contractual related expenses.
9. An amount of ILS 345,000 was paid by allotment of ordinary shares of the Company.

General notes:
(a) Prof. Varda Liberman was appointed as a Board member in March 2022, thus she is not included in the above table which relates to FY 2021.
(b) No Restricted Share Units (“RSUs”) awards had performance periods ending in the financial years ended on 31 December 2021 and 2020.
(c) In line with the UK reporting regulations, LTIP awards shall be reported in the year that the performance period ends with the value of the award on grant date. No LTIP

awards presented accordingly in the financial year ended on 31 December 2020.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statements
Directors’ Remuneration Report continued

Executive Director’s service contract
Elad Even-Chen, an Executive Director, provides his consulting services to the Company pursuant to a service contract. The terms of his service
contract are summarised below.

Elad Even-Chen – Chief Financial Officer
The consulting services of Elad Even-Chen are provided to the Company through Elad Even-Chen Consulting Services Ltd., pursuant to the
service contract entered into by the parties. Elad Even-Chen Consulting Services Ltd. is also entitled to participate in a bonus, legacy SAR entitle-
ments, LTIP schemes and other contractual related expenses on terms decided by the Remuneration Committee for specific projects provided
by the consultant.

Commentary on the single figure table

Base salary, base service fees and social and other contractual related expenses
David Zruia’s base salary in 2021 was ILS 2,060,000 as approved by the AGM on 4 May 2021. Elad Even-Chen’s base service fees in 2021 was
ILS 2,060,000 as approved by the AGM on 4 May 2021.

Annual Bonus
The 2021 annual bonus for the Executive Directors was determined based on the achievement of the performance measures and targets set
out below:

FINANCIAL
METRICS

EPS

40%

WEIGHTING

OBJECTIVES

PERFORMANCE

Actual basic EPS for FY 2021 is $3.06

ACHIEVEMENT
(% OF MAXIMUM)

100%

Revenue

20%

Actual Revenue for FY 2021 is $718.7m

100%

Achievement of an EPS growth rate. Target EPS
threshold of $1.98. Minimum threshold is 15% lower
EPS from the target threshold EPS and the
maximum payout is made for reaching a 15%
increase from the target threshold, calculated on
a linear basis.

Achievement of revenue growth rate. Target revenue
threshold of $438.7m. Minimum threshold is 15%
lower revenue from the target threshold revenue
and the maximum payout is made for reaching a
15% increase from the target threshold, calculated
on a linear basis.

Total

60%

100%

The Committee carefully assessed performance against objectives set for the annual bonus and noting exceptionally strong performance against
all of the objectives set, determined full achievement of the objectives.

The details of some of the specific targets and performance against them are not disclosed as the Board believes they are commercially sensi-
tive. They will remain market sensitive because they are an integral part of our on-going business operations.

The Remuneration Committee has provided as much information as it is able, given the nature of the objectives, so that investors can be com-
fortable that the Remuneration Committee has used a thorough approach in setting the objectives and targets and measuring the outcome.

Plus500 Ltd. 2021 Annual ReportNON-FINANCIAL
METRICS

WEIGHTING

OBJECTIVES

Operational

40%

Total

40%

Achievement of operational targets comprise
three elements: Customers and Systems,
Operations and Risk & Regulation

PERFORMANCE

Parameters achieved for 2021

ACHIEVEMENT
(% OF MAXIMUM)

100%

Based on the performance described above the Committee agreed the following 2021 bonus awards based on 100% of the maximum
opportunity.

2021 bonus awards (US$000)

David Zruia

Elad Even-Chen

CASH BONUS

1,060

BONUS
ALLOCATED
IN SHARES

530

TOTAL
ANNUAL BONUS

1,590

MAXIMUM OPPORTUNITY
AS PERCENTAGE OF
ANNUAL SALARY/BASE

SERVICE FEES*

250%

* Percentage calculation based on annual employment/contractual agreements in ILS.

An amount equal to 33.33% of the Annual Bonus achieved was paid by way of allotment of ordinary shares of the Company on 31 December
2021. The number of ordinary shares allotted on the payment date were calculated based on the ordinary share price at 1 January 2021, as
adjusted for dividends.

Share Appreciation Rights (“SARs”)
SARs are a deferred cash settled award subject to providing continued service or employment over long-term periods and tied to the long-term
performance of the Company’s ordinary shares.

As of FY 2021 and FY 2022 there are no new SARs entitlements for Executive Directors.

In respect of FY 2020 SARs granted on 31 December 2019, the remuneration package to David Zruia included SARs granted in the amount of
$634,737 (ILS 2,200,000) in December 2019 and will be vested after three years in December 2022. The remuneration package to Elad Even-Chen
included SARs granted in the amount of $721,293 (ILS 2,500,000) in December 2019 and will be vested after three years in December 2022.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsDirectors’ Remuneration Report continued

2021 LTIP/RSUs Awards
Scheme interests awarded during the year ending 31 December 2021
Executive Directors were granted Long Term Incentive Plan (“LTIP”) and Restricted Share Units (“RSUs”) Grants in respect of 2021 which will vest
after three years to the extent performance targets and KPIs have been achieved, as summarised in the table below.

PERFORMANCE MEASURE

WEIGHTING

THRESHOLD (25% OF MAX)

TARGETS

Relative TSR vs bespoke group

Relative TSR vs FTSE 250

EPS

Strategic

Operational

20%

10%

30%

20%

Median

Subject to achieving EPS target,
as set by the Board

Subject to achieving strategic objectives,
as set by the Board and related to growth
through M&A, new products and new markets

Subject to achieving operational objectives,
as set by the Board and related to customer
growth and people objectives

The details for the LTIPs and RSUs awards granted to each Executive Director are shown below.

MAXIMUM (100% OF MAX)

Median plus 10% p.a.

Upper Quartile

David Zruia

Elad Even-Chen

GRANT DATE

1 January 2021

NUMBER OF
SHARES GRANTED

FACE VALUE OF
THE AWARD (USD)

MAXIMUM OPPORTUNITY
AS PERCENTAGE OF
ANNUAL SALARY/BASE

VESTING DATE

SERVICE FEES1

80,856

1,597,791

31 December 2023

1,597,791

31 December 2023

250%

1. Percentage calculation based on annual amounts of the contractual agreements in ILS.

General notes:
(a) Face value of the award and the number of shares granted on grant date are calculated with reference to share price on 1 January 2021 of 1,450 GBP pence and FX rate

USD/ILS of 3.223.

(b) David Zruia’s award is structured as RSUs, in accordance with the provisions of the Capital Gain route under Section 102 of the Israeli Tax Ordinance.

The ordinary shares allotted on the vesting date, which are subject to a lock-up period, shall be subject to a two-year lock-up beginning on the
vesting date.

On the vesting date the Company shall allot to the employee or service contractor, ordinary shares, subject to the service condition and achiev-
ing specific KPIs as described in the table above for each grant.

The number of ordinary shares allotted on the vesting date shall be calculated based on the ordinary share price at grant date as specified in
the table above for each plan, as adjusted for dividends. An amount equal to the applicable tax liability connected to the LTIPs, RSUs and annual
bonus deferred in shares plans shall be added by way of gross-up and be paid in cash to fund the tax liability. The allotted ordinary shares will
be transferred out of the treasury shares of the Company.

The 2019 LTIP Grant was subject to service condition and was not subject to any additional KPIs or conditions. The 2019 LTIP Grant was vested
on 31 December 2021 and the Company issued 19,111 of its treasury shares.

Payments to past Directors and payments for Loss of Office
Non-Executive Directors Penny Judd and Charles Fairbairn both stepped down from the Board at the 2021 AGM held on 4 May 2021. They were
not entitled to and subsequently did not receive any payment for Loss of Office.

All amounts paid are set out in the Single figure of remuneration table.

Plus500 Ltd. 2021 Annual ReportFurther information on 2021 remuneration
Directors’ shareholdings and share plan interests
Summary of Directors’ shareholdings and share plan interests as at 31 December 20211.

OUTSTANDING SCHEME
INTERESTS AS AT 31/12/2021

BENEFICIAL OWNERSHIP IN SHARES

SUBJECT TO
PERFORMANCE
CONDITIONS

WITHOUT
PERFORMANCE
CONDITIONS

AS AT
1 JANUARY
2021

AS AT
31 DECEMBER
20212

100,726

119,430

–

27,324

–

17,000

54,100

N/A5

–

27,169

–

N/A6

N/A7

25,691

55,000

46,031

184,075

5,424

–

30,993

–

25,6918

55,0009

SHAREHOLDING
REQUIREMENT
(% OF SALARY/BASE
SERVICE FEES)

CURRENT
SHAREHOLDING
AS AT 31/12/2021
(% OF SALARY/BASE
SERVICE FEES)

200%

128%

511%

–

Executive Directors

David Zruia

Elad Even-Chen3

Non-Executive Directors

Jacob A. Frenkel

Anne Grim

Daniel King

Steve Baldwin

Tami Gottlieb

Sigalia Heifetz

Past Non-Executive Directors

Penny Judd4

Charles Fairbairn

As of 31 December 2021, none of the presiding Board members held more than 0.18% in the Company’s issued share capital.

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. As at 31 December 2021 and up to the date of this Annual Report.
3. The shares are registered in the name of Elad Even-Chen Consulting Services Ltd. or Elad Even-Chen.
4. The shares are registered in the name of Penny Judd’s spouse, Julian Judd.
5. Prof. Jacob A. Frenkel was appointed as a Director on 4 May 2021.
6. Tami Gottlieb was appointed as a Director on 16 March 2021.
7. Sigalia Heifetz was appointed as a Director on 4 February 2021.
8. Penny Judd shareholding as at date when stepped down from the Board, 4 May 2021.
9. Charles Fairbairn shareholding as at date when stepped down from the Board, 4 May 2021.
10. Gal Haber shareholding as at date when stepped down from the Board, 4 January 2021.

General notes:
(a) Prof. Varda Liberman was appointed as a Board member in March 2022, thus she is not included in the above table which relates to FY 2021. Also, as of the date of this

Annual Report she does not hold any beneficial ownership in shares.

(b) Outstanding scheme interest as at 31 December 2021 include 2020 and 2021 LTIP/RSU awards that have not vested, and vested deferred bonus for 2019

and 2020.

(c) Beneficial ownership in shares include all share plan interests together with any holdings of ordinary shares.
(d) Current shareholding as at 31 December 2021 as a % of salary/base service fees were calculated based on share price as at 31 December 2021 of and FX GBP/ILS as of

that date.

(e) There have not been any changes in Directors’ beneficial ownership in shares of the Company between 31 December 2021 and the date of this Annual Report.
(f) Gal Haber held 2,069,769 shares as at the date when steeped down from the Board, 4 January 2021.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsDirectors’ Remuneration Report continued

Performance graph and table
Plus500 was admitted to the Alternative Investment Market of the London Stock Exchange on 24 July 2013. Following a period of sustained
growth, the Company applied for Admission to the Main Market which became effective on 26 June 2018.

The chart below shows the TSR performance of £100 invested in Plus500 at IPO vs performance of the FTSE All Share index. As part of the
Company’s continued commitment to strengthen corporate governance, the reporting of Directors’ remuneration in 2021 is being aligned to a
greater extent with the regulations applicable to a UK incorporated company. This disclosure will be built up over the coming years in line with
these requirements.

TSR performance of £100 invested in Plus500 at IPO vs performance of the FTSE All Share index

£3,000

£2,500

£2,000

£1,500

£1,000

£500

£0

Plus500

FTSE AllShare index

31 Dec
2012

31 Dec
2013

31 Dec
2014

31 Dec
2015

31 Dec
2016

31 Dec
2017

31 Dec
2018

31 Dec
2019

31 Dec
2020

31 Dec
2021

CEO single figure total remuneration ($000s)

Annual bonus achieved for 2021 (as % of maximum opportunity)

2021

2,446

100%

Relative importance of the spend on pay
The following table sets out the change in dividends and overall spend on pay in the years ended 31 December 2021 and 2020.

US$ IN MILLIONS

Total gross employee and other related expenses pay

Dividends

Share buybacks

Includes the increase of the Group number of employees and service contractors.

2020

50.8

141.6

88.8

2021

58.9

144.9

64.9

PERCENTAGE CHANGE

16%*

(27%)

Non-Executive Directors’ letters of appointment
On their initial appointment, each of the Non-Executive Directors (who are not External Directors) signed a letter of appointment with the Company,
for an initial period commencing upon the date of their appointment by the Board and ending on the date of the next AGM (and with respect to
External Directors – ending on the date which is three years from the date of their appointment).

The letters of appointment of Prof. Jacob A. Frenkel, Steve Baldwin, Sigalia Heifetz and Prof. Varda Liberman 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 Code. The letters have been
drafted such that renewed appointment will not necessitate a new letter of appointment. The appointments of Prof. Jacob A. Frenkel, Steve Baldwin,
Sigalia Heifetz and Prof. Varda Liberman can be terminated by the Non-Executive Director with two months’ written notice, or by the Company with
immediate effect if the Non-Executive Director is not re-elected or is otherwise removed from office in accordance with the Articles.

Plus500 Ltd. 2021 Annual ReportAs required under, and subject to the Companies Law, the appointments
of Daniel King, Anne Grim and Tami Gottlieb as External Directors are
for a period of three years from the date of appointment (which may
be extended for two more three-year terms). Daniel King was re-elected
for a third and final three-year term effective from the 2019 AGM held
in June 2019. Consequently, his nine-year term will end in June 2022.
Anne Grim was elected for her first three-year term effective from the
2020 AGM held in September 2020. Tami Gottlieb was elected for her
first three-year term effective from the 2021 Extraordinary General
Meeting held in March 2021.

Tami Gottlieb is currently an External Director of Bank Leumi Le’Israel
Ltd., an External Director of Extell Limited and a Non-Executive Director
of Emilia Development (O.F.G) Ltd.

Prof. Varda Liberman is currently an External Director of Cellcom Israel
Ltd. and Aquarius Engines (A.M) Ltd.

Non-Executive Director fees
The current annual fees for our presiding Non-Executive Directors are
as follows:

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.

NAME

Jacob A. Frenkel

ROLE

Chair

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 12 months without payment of compensation.

Copies of the letters of appointment of the Chair and the other Non-
Executive Directors of the Company are available for inspection at the
Company’s registered office during normal business hours.

The Chair and Non-Executive Directors do not participate in any long-
term incentive or annual bonus schemes, nor do they accrue any
pension entitlement. The Chair’s current remuneration is as detailed in
the 2021 AGM Notice as published on 25 March 2021. Further details
with respect to the decision of our Remuneration Committee and Board
to increase the remuneration of both cash and shares paid to our Chair,
subject to shareholders approval, are included in the Notice of the 2022
Annual General Meeting to be circulated by the Company to all share-
holders in due course.

In addition, there are more stringent regulations around the exact roles
of Non-Executive Directors. The Audit and Remuneration Committees’
Chair must be External Directors who once appointed serve for three
years (which may be extended for two more three-year terms) but are
then restricted from becoming the Chair of the Board or holding any
paid role at the Company for two years after they leave the Board.

External board appointments
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 appoint-
ment will not have any material impact on the performance of the
Director, and will not affect the Director’s commitments and duties as
a Director of the Company.

Below are the details of external Board memberships of the Company’s
NEDs, in publicly listed companies, as of the date of this Annual Report:

Steve Baldwin is currently Chair of TruFin Plc and a Non-Executive
Director of The Edinburgh Investment Trust Plc.

Prof. Jacob A. Frenkel is currently the Chair of BrainStorm Cell Thera-
peutics Inc., a NASDAQ publicly listed biotechnology company.

Anne Grim is currently a Non-Executive Director of Metro Bank Plc and
Insight Investment Management (subsidiary of Bank of New York Mel-
lon, a NYSE publicly listed company).

Sigalia Heifetz is currently a Non-Executive Director of RHI Magnesita
N.V, Clal Biotechnology Industries Ltd, Maman - Cargo Terminals and
Handling Ltd. and Tamar Petroleum Ltd.

Anne Grim

Daniel King

Steve Baldwin

Tami Gottlieb

Sigalia Heifetz

NED & SID, External Director

NED, External Director

NED

NED, External Director

NED

FEE

£350,000

£75,000

For further details with respect to the structure of the remuneration
paid to our Chair please refer to our 2021 AGM Notice published on 25
March 2021.

Further details with respect to the decisions of our Remuneration
Committee and Board to increase the fees paid to our presiding Non-
Executive Directors (and to approve the same fees to our newly appointed
Director, Prof. Varda Liberman) and to increase the fees paid to our
Chair, all subject to shareholders approval, are included in the Notice
of the 2022 Annual General Meeting to be circulated by the Company
to all shareholders in due course.

External advisors
From 17 November 2020 and during Q1 2021, and in respect of the
2020 Annual Report and 2021 Remuneration Policy, the Remuneration
Committee received independent advice from Korn Ferry LLC on the
Remuneration Policy review and market practice. Korn Ferry is a signa-
tory to the Remuneration Consultants’ Code of Conduct and has con-
firmed to the Committee that it adheres in all aspects to the terms of
the Code. The Remuneration Committee is satisfied that the advice
provided by Korn Ferry LLC in relation to remuneration matters is objec-
tive and independent.

In February 2022, the Committee appointed Ernst & Young Global
Limited (EY) as an independent advisor to carry out a detailed bench-
marking exercise in relation to the proposed increase in the remunera-
tion of Prof. Jacob A. Frenkel as an Independent Non-Executive
Director and Chair of the Board, to be voted on at the Company’s 2022
AGM. The Remuneration Committee is satisfied that the advice provided
by EY in relation to this remuneration matter is objective and independ-
ent.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsDirectors’ Remuneration Report continued

Statement of voting on remuneration at 2021 meetings
The table below shows votes cast by proxy at the EGM held on 16 March 2021 and the AGM held on 4 May 2021 in respect of the Directors’
remuneration.

AGM RESOLUTIONS

Renew Remuneration Policy

Approve fees to Jacob Frenkel

Approve remuneration terms for David Zruia

Approve remuneration terms for Elad Even-Chen

Approve a tax bonus payment to Elad Even-Chen

FOR

% VOTES CAST

AGAINST

% VOTES CAST

VOTE WITHHELD

53,681,868

57,154,752

48,829,840

55,226,737

31,678,733

94.46

99.97

85.42

96.61

55.24

59.17

3,150,107

14,603

8,336,335

1,939,438

25,670,302

23,413,830

5.54

0.03

14.58

3.39

44.76

40.83

337,200

–

3,000

–

4,267

Advisory vote – Approve the Directors’ Remuneration Report

33,930,938

EGM RESOLUTIONS

Approve fees to Tami Gottlieb

Approve increase in fees to Anne Grim

Approve fees to Sigalia Heifetz

FOR

% VOTES CAST

AGAINST

% VOTES CAST

VOTE WITHHELD

53,565,509

99.98

8,071

0.02

11,967

Most highly remunerated executives in 2021
The table below shows the remuneration of the Company’s five most highly compensated executives in 2021 (including two Executive Directors):

NAME

Elad Even-Chen

David Zruia

Ari Shotland

Nir Zatz

Alon Cohen Naznin

2021 FEES ($)

2,633,136

2,445,808

1,856,978

1,558,037

1,169,652

Implementation of policy in 2022
2022 Executive Directors’ remuneration
In Q1 2021 the Remuneration Committee has continued its efforts to modify the remuneration arrangements of the Executive Directors to bet-
ter align executive compensation with UK governance standards followed by Main Market-listed companies and move further towards a struc-
ture in line with investor expectations and developments in best practice. The remuneration for Executive Directors for FY 2022 remained the
same as it was in FY 2021.

The Company’s new remuneration policy was approved by the shareholders for the years FY 2021, FY 2022 and FY 2023 at the 2021 AGM and
received over 94% approval.

This report has been approved by the Board of Directors of Plus500 Limited.

Signed on behalf of the Board

Daniel King
Chair of the Remuneration Committee
22 March 2022

Plus500 Ltd. 2021 Annual ReportDirectors’ Report

The Directors of Plus500 present their report for the year ended 31 December 2021. 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 Directors’ key skills and experience are set
out on pages 52 – 53 and on page 63.

Results for the year ended 31 December 2021 are set out in the financial and business review on pages 38 – 40 and
the Consolidated Statement of Comprehensive Income on page 98. Information regarding the final and special divi-
dends can be found in the financial review on page 40. Dividend payments made during the year ended 31 December
2021 can be found in the notes to the Consolidated Financial Statements on page 115.

The Company’s full Articles of Association can be found on the Company’s website.
https://cdn.plus500.com/media/Investors/ConstitutionalDocuments/ArticlesOfAssociation.pdf
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 22 to the Consolidated Financial Statements on page 118.
At the close of business on 21 March 2022, the Company had 99,598,282 ordinary shares in issue, and an additional
15,290,095 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 Directors’ Remuneration Report on page 85.

Directors’ indemnities

The Company has given indemnities to each of the Directors in respect of any liability arising against them in connec-
tion 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

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 2021.

Major interests in shares

Notifiable major shares interests of which the Company has been made aware are set out on page 59.

Political contributions

The Company did not make any donations to political organisations during the year.

Equality, Diversity & Inclusion policy

In December 2021 the Company reapproved and published on its website its policy on equality & diversity.
https://cdn.plus500.com/media/Investors/CorporateGovernance/EqualityDiversityAndInclusionPolicy.pdf

Financial risk

Details of the Company’s policies on financial risk management and the Company’s exposure to market price risk,
credit risk, liquidity risk and cash flow risk are out-lined in note 25 to the Consolidated Financial Statements.

Research and Development

Details about the Company’s future developments can be found in the Strategic Report on pages 7 – 11.

Auditors

A resolution to reappoint Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited
as external auditors will be proposed at the 2022 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.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsDirectors’ Report continued

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

Publication of unaudited financial information

Details of long-term incentive schemes

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

Parent company participation in a placing by a listed subsidiary

Contracts of significance

Provision of services by a controlling shareholder

Agreements with controlling shareholders

Shareholder waivers of dividends

Shareholder waivers of future dividends

The Directors’ Report has been approved by the Board of Directors of Plus500 Ltd.

Signed on behalf of the Board

Elad Even-Chen
Chief Financial Officer
22 March 2022

n/a

Page 81 to 86

n/a

Plus500 Ltd. 2021 Annual ReportCorporate 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. It shall be noted that the Company has incor-
porated 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, pursuant to the Companies Law, for purposes of the share-
holder 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. Shares in one of the merging companies
held by the other merging company or certain of its affiliates are disen-
franchised 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, under certain circumstances, the provisions of the Com-
panies 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.

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 shall 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 special 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.

In addition, under the Companies Law, the entry by two or more share-
holders into a shareholders’ agreement, where such shareholders’
agreement will result in such shareholders holding in concert shares
in a company in an amount exceeding the thresholds set out above,
may also be subject to the requirement to publish a special tender offer.

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 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 Com-
panies Law) and will have no rights whatsoever for so long as they are
held by the acquirer.

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 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 above), offers are also subject to the takeover provisions
incorporated in the Company’s Articles of Association, which provisions
refer to compliance with Rules 4, 5, 6 and 8 of the UK City Code on
Takeovers.

Plus500 Ltd. 2021 Annual ReportStrategic ReportGovernanceFinancial statementsDirectors’ Responsibility Statement

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 Stand-
ards 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
provides 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 Finan-
cial 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.

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 knowl-
edge 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, 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.

This report has been approved by the Board.

Signed on behalf of the Board

David Zruia
Chief Executive Officer
22 March 2022

Plus500 Ltd. 2021 Annual Report
FINANCIAL
STATEMENTS

In this section

Independent Report
of the Auditors

94 – 97

Consolidated Financial
Statements in US Dollars ($)

Consolidated Statement
of Comprehensive Income

Consolidated Statement
of Financial Position

Consolidated Statement
of Changes in Equity

Consolidated Statement
of Cash Flows

100

101

Notes to the Consolidated
Financial Statements

102 – 125

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernanceFor illustrative purposesIndependent Report of the Auditors
Independent Report of the Auditors

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 2021 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 2021;

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.

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
Independence
including
Standards issued by the International Ethics Standards Board for
Accountants (“IESBA Code”). We have fulfilled our other ethical
responsibilities in accordance with the IESBA Code.

International

– The consolidated statement of comprehensive income for the year

Key audit matters

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 and other explanatory
information.

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.

Kesselman & Kesselman, PwC Israel, 146 Derech Menachem Begin St. Tel-Aviv 6492103,
P.O. Box 7187 Tel-Aviv 6107120 Telephone: +972 -3- 7954555, Fax: +972 -3- 7954556, www.pwc.com/il

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Plus500 Ltd. 2021 Annual Report

Plus500 Ltd. 2021 Annual Report95

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance95 Plus500 Ltd. 2021 Annual Report Kesselman & Kesselman, PwC Israel, 146 Derech Menachem Begin St. Tel-Aviv 6492103, P.O. Box 7187 Tel-Aviv 6107120 Telephone: +972 -3- 7954555, Fax: +972 -3- 7954556, www.pwc.com/il 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”). Trading income represents Customer Income, which mainly includes revenue from CFD Customer Income (customer spreads and overnight charges), and Customer Trading Performance, which includes gains/losses on customers’ trading positions, arising on client trading activity. In respect of trading income generated from CFD, the Group has developed and operates an online and mobile trading platform for trading CFDs. The computation of the 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 calculation 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 programmes 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 amounts 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 Platform, we read client activity reports and read a sample of client complaints. No material issues noted. UNCERTAIN TAX PROVISIONS As discussed in Note 3 and Note 10 to the consolidated financial statements, the Group operates in a multinational tax environment and is subject to tax laws, regulations and transfer pricing guidelines for intercompany transactions across several tax jurisdictions. Furthermore, the Company’s tax years for 2020 and 2021 were not assessed by the Israeli tax authorities. The subsidiaries of the Group have not yet been subject to tax assessments since their inception. The Group recognises tax provisions from uncertain tax positions when there is more likely than not a likelihood that the tax position will be sustained upon examination by the taxation authorities based on the technical merits of the position. Auditing management's estimate of amounts related to tax provisions involves auditor judgement and challenging management because management’s estimates are complex, judgemental and based on interpretations of tax laws, regulations and legal rulings. Among the audit procedures we performed, we involved our tax specialists to assist us in assessing the technical merits of the Group’s tax positions. This included assessing the Group’s correspondence with the relevant tax authorities and evaluating income tax opinions or other third-party advice obtained by the Group. In addition, we evaluated the appropriateness of the Group’s accounting for its tax positions. We analysed the Group’s assumptions and data used to determine the amount of tax provision and tested the accuracy of the calculations. We also evaluated whether the Group’s disclosures complied with the accounting framework. No material issues noted. Independent Report of the Auditors continued
Independent Report of the Auditors continued

Other information

The Directors are responsible for the other information, which
includes reporting based on the Task Force on Climate-related
Financial Disclosures
recommendations. The other
information comprises all of the information in the Annual Report (but
does not include the consolidated financial statements and our
auditor’s report thereon).

(TCFD)

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, we have also agreed to report
on certain matters as described below in accordance with the Listing
Rules of the United Kingdom Financial Conduct Authority (FCA) as if
the Company were a UK incorporated premium listed entity.

Corporate governance statement

Under the UK Corporate Governance Code 2018, we have reviewed
the Directors’ statements in relation to going concern, longer-term
viability and that part of the corporate governance statement relating
to the company’s compliance with the provisions of the UK Corporate
Governance Code, which the Listing Rules of the Financial Conduct
Authority specify for review by auditors of premium listed companies.
Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Other
information section of this report.

Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the corporate governance
statement, included within the Statement on Corporate Governance
is materially consistent with the financial statements and our
knowledge obtained during the audit:

– The Directors’ confirmation that they have carried out a robust

assessment of the emerging and principal risks;

– The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;

The Directors’ statement in the financial statements about whether
they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any
material uncertainties to the Company’s ability to continue to do so
over a period of at least twelve months from the date of approval
of the financial statements;

– The Directors’ explanation as to their assessment of the
Company’s prospects, the period this assessment covers and why
the period is appropriate;

– The Directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions;

– The Directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the
Company’s position, performance, business model and strategy;
– The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and

– The section of the Annual Report describing the work of the audit

committee.

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.

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.

Kesselman & Kesselman, PwC Israel, 146 Derech Menachem Begin St. Tel-Aviv 6492103,
P.O. Box 7187 Tel-Aviv 6107120 Telephone: +972 -3- 7954555, Fax: +972 -3- 7954556, www.pwc.com/il

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Plus500 Ltd. 2021 Annual Report

Plus500 Ltd. 2021 Annual Report97

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance97 Plus500 Ltd. 2021 Annual Report Kesselman & Kesselman, PwC Israel, 146 Derech Menachem Begin St. Tel-Aviv 6492103, P.O. Box 7187 Tel-Aviv 6107120 Telephone: +972 -3- 7954555, Fax: +972 -3- 7954556, www.pwc.com/il 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 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; and – 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 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 22 March 2022 Consolidated Statement of Comprehensive
Consolidated Statement of Comprehensive
Income
Income

US dollars in millions

Trading income

Selling and marketing expenses

Administrative and general expenses

Operating profit

Financial income

Financial expenses

Financial income, net

Profit before income tax

Income tax expense

Profit and comprehensive income for the year

Basic earnings per share (In US dollars)

Diluted earnings per share (In US dollars)

The accompanying notes are an integral part of the financial statements.

Year ended 31 December

Note

2021

718.7

279.8

54.3

384.6

10.4

8.6

1.8

386.4

75.8

310.6

3.06

3.05

2020

872.5

315.4

43.5

513.6

16.6

6.9

9.7

523.3

23.2

500.1

4.71

9898

Plus500 Ltd. 2021 Annual Report

Consolidated Statement of Financial Position

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance99Consolidated Statement of Financial Position Plus500 Ltd. 2021 Annual Report As of 31 December US dollars in millions Note 2021 2020 Assets Non-current assets Property, plant and equipment 15 2.6 2.5 Goodwill and other intangible assets, net 23 28.0 – Right of use assets 20 5.6 6.0 Long-term other receivables 4.4 1.7 Total non-current assets 40.6 10.2 Current assets Income tax receivable – 6.1 Other receivables and others 14 32.7 10.0 Cash and cash equivalents 16 749.5 593.9 Total current assets 782.2 610.0 TOTAL ASSETS 822.8 620.2 Liabilities Non-current liabilities Lease liabilities (net of current maturities) 20 4.2 5.3 Share based compensation 9 0.3 1.8 Total non-current liabilities 4.5 7.1 Current liabilities Share based compensation 9 7.3 7.4 Income tax payable 89.9 2.2 Other payables 17 41.7 22.8 Service suppliers 18 15.5 22.5 Current maturities of lease liabilities 20 2.0 1.6 Trade payables – due to clients 19 0.6 1.0 Total current liabilities 157.0 57.5 TOTAL LIABILITIES 161.5 64.6 Equity Ordinary shares 22 0.3 0.3 Share premium 22.2 22.2 Cost of Company’s shares held by the Company 12 (207.5) (145.7) Retained earnings 846.3 678.8 Total equity 661.3 555.6 TOTAL EQUITY AND LIABILITIES 822.8 620.2 David Zruia Chief Executive Officer Elad Even-Chen Group Chief Financial Officer Prof. Jacob A. Frenkel Non-Executive Director and Chairman Date of approval of the consolidated financial statements by the Company’s Board of Directors: 22 March 2022. The accompanying notes are an integral part of the financial statements. Registered Company number (Israel): 514142140 Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity

US dollars in millions

Balance at 1 January 2020

Changes during the year ended 31 December 2020

Profit and comprehensive income for the year

Share based compensation

Transactions with shareholders:

Dividend

Issue of treasury shares to settle equity share based compensations

Acquisition of treasury shares

Balance at 31 December 2020

Changes during the year ended 31 December 2021

Profit and comprehensive income for the year

Share based compensation

Transactions with shareholders:

Dividend

Issue of treasury shares to settle equity share based compensations

Acquisition of treasury shares

Balance at 31 December 2021

The accompanying notes are an integral part of the financial statements.

Ordinary
shares

Share
premium

Cost of
Company’s
shares held by
the Company

Retained
earnings

0.3

22.2

(57.0)

318.6

Total

284.1

–

500.1

1.8

–

0.1

(88.8)

(141.6)

(0.1)

–

(88.8)

0.3

22.2

(145.7)

678.8

555.6

–

310.6

4.9

–

3.1

(64.9)

(144.9)

(3.1)

–

(64.9)

0.3

22.2

(207.5)

846.3

661.3

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Plus500 Ltd. 2021 Annual Report

Consolidated Statement of Cash Flows

101

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance101Consolidated Statement of Cash Flows Plus500 Ltd. 2021 Annual Report Year ended 31 December US dollars in millions 2021 2020 Operating activities: Cash generated from operations (see Note 26) 383.0 546.6 Income tax received (paid), net 16.3 (23.1) Interest received, net 6.2 5.2 Net cash flows provided by operating activities 405.5 528.7 Investing activities: Acquisition of subsidiaries, net of cash acquired (see Note 23) (32.5) – Purchase of property, plant and equipment (0.8) (0.3) Net cash flows used in investing activities (33.3) (0.3) Financing activities: Dividend paid to equity holders of the Company (144.9) (141.6) Payment of principal in respect of lease liabilities (2.0) (1.8) Acquisition of treasury shares (64.9) (88.8) Net cash flows used in financing activities (211.8) (232.2) Increase in cash and cash equivalents 160.4 296.2 Balance of cash and cash equivalents at beginning of the year 593.9 292.9 Gains (losses) from effects of exchange rate changes on cash and cash equivalents (4.8) 4.8 Balance of cash and cash equivalents at end of the year 749.5 593.9 The accompanying notes are an integral part of the financial statements. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements
Statements

Note 1 – General information
Information on activities

Plus500 Ltd. (the “Company”) and its subsidiaries (the “Group”) is a
global multi-asset fintech group operating proprietary technology-
based trading platforms. Plus500 offers customers a range of trading
products, including Contracts for Difference (“CFDs”) and share
dealing, as well as futures and options on futures. The Company 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 2,500 underlying financial
instruments internationally. Additionally, the Company has developed
and operates a share dealing trading platform.

The Group’s offering is available internationally with main market
presence in the UK, Australia, the US, the European Economic Area
(“EEA”) and the Middle East and has customers located in more than
50 countries worldwide. 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, the Financial Services
Authority (“FSA”) in the Seychelles, the Commodities Futures Trading
Commission (“CFTC”) in the US, the Estonian Financial Supervision
Authority (“EFSA”) in Estonia (as of February 2022) and the Financial
Services Agency (“FSA”) in Japan (as of March 2022).

The Company also has a subsidiary in Bulgaria which provides
operational services to the Group.

The Company has been listed since 2013. Since 2018, Plus500 Ltd.
has been a FTSE 250 listed entity, following the Company’s shares
being admitted to the premium listing segment of the Official List of
the FCA and to trading on the London Stock Exchange Main Market
for listed securities.

The address of the Company’s principal offices is Building 25, Matam,
Haifa 3190500, Israel.

Note 2 – Summary of significant accounting
policies
a. Basis of accounting and accounting policies

The Group’s consolidated financial information as of 31 December
2021 and 2020 and for each of the two years in the period ended on
31 December 2021 are in compliance with International Financial
Reporting Standards that consist of standards and interpretations
issued by the International Accounting Standard Board (“IFRSs”).

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
in respect of revaluation
convention subject to adjustments
of financial assets at fair value through profit or loss presented at
fair value.

b. Going concern

The Group has considerable financial resources, a broad range of
financial instruments, and a substantial active customer base which
is diversified geographically worldwide. As a consequence, the Board
of Directors of the Company (the “Board”) believes that the Group is
well placed to manage its business risks in the context of the current
economic outlook. Accordingly, the Board has a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Board therefore
continues to adopt the going concern basis in preparing these
consolidated financial statements.

c. Principles of consolidation

The Company, from an accounting perspective, controls the
subsidiaries since it is exposed to, or has rights to, variable returns
from its involvement with the entities and has the ability to affect
those returns through its power over them.

1) The consolidated financial statements include the accounts of the

Company and its subsidiaries.

2) Intercompany balances and transactions between the Group’s

entities have been eliminated.

3) Accounting policies of the subsidiaries have been changed
where necessary to ensure consistency with the policies adopted
by the Group.

d. Earnings per share

Basic earnings per share
is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of the Company’s ordinary shares in issue during the
year, excluding ordinary shares purchased by the Company and held
as treasury shares.

Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume exercise
of all potential dilutive ordinary shares. The instruments that are
potentially dilutive ordinary shares are equity instruments granted to
employees and service contractors (see Note 9). A calculation is done
to determine the number of shares that could have been acquired at
fair value (determined as the average annual market share price of the
Company’s shares) based on the monetary value of the subscription
rights attached to outstanding equity instruments. The number of
ordinary shares calculated as above is compared with the number of
ordinary shares that would have been issued assuming the exercise
of the equity instruments (see also Note 11).

e. 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 three operating
sectors: CFD trading; share dealing; and futures and options on
futures. In the year 2021 the Group presents its operation as one
operating segment.

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Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance103 Plus500 Ltd. 2021 Annual Report Note 2 – Summary of significant accounting policies continued f. 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 US 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 (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Gains and losses arising from changes in exchange rates are presented in the consolidated statement of comprehensive income among “financial income (expenses)”. g. Trading income Trading income represents Customer Income, which includes revenue from CFD Customer Income (customer spreads and overnight charges), Non-CFD Customer Income (commissions from the Group’s futures and options on futures operation and from the Group’s share dealing platform) and Customer Trading Performance, which includes gains/losses on customers’ trading positions, arising on client trading activity, primarily in CFDs on shares, indices, ETFs, options, commodities, cryptocurrencies and foreign exchange. 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. h. Share based compensation 1) Cash settled 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 (“SARs”). The fair value of the employees and service contractors received in exchange for the grant of the rights are recognised as an expense in the consolidated statement of comprehensive income. At the end of each reporting period, the Group evaluates the SARs based on their fair value as prorated over the period and the change in the prorated fair value is recognised in the consolidated statement of comprehensive income. 2) Equity settled The Group operates equity-settled share based compensation plans, under which it receives services from employees and service contractors as consideration for ordinary shares and Restricted Share Units (“RSUs”). The fair value of the services received by employees and service contractors in exchange for the grant of ordinary shares or RSUs are recognised as an expense in the consolidated statement of comprehensive income. The fair value of equity settled share based compensation arrangements granted to employees and service contractors is recognised as employee benefit expenses and other related expenses applicable for the service contractors, with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted: – including any market performance conditions (e.g. the Company's share price); – excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and continuing to be employed or rendering services to the entity over a specified time period); and – including the impact of any non-vesting conditions (e.g. the requirement for employees and service contractors to hold shares for a specific period of time). The total expenses are recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the Group revises its estimates of the number of ordinary shares and RSUs that are expected to vest based on the non-market performance vesting and service conditions. The impact of the revision to original estimates, if any, in the consolidated statement of comprehensive income, is recognised with a corresponding adjustment to equity. i. Treasury shares Treasury shares are ordinary shares of the Company held by the Company and presented as a reduction of equity, at the consideration paid, including any incremental attributable costs, net of tax. Treasury shares do not have a right to receive dividends or to vote. The Board approves share buyback programmes. The share buyback programmes are funded from the Company’s net cash balances. The ordinary shares are being purchased at fair value (see Note 12). j. 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 its 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 and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 2 – Summary of significant accounting
policies continued
k. Deferred income tax

Deferred income tax is recognised, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements.

Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the statement of
financial position 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.

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.

l. 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:

m. Financial instruments

1) Classification

The Group classifies
measurement categories according to IFRS 9:

financial assets

its

the

following

– Those to be measured subsequently at fair value through profit and

loss, and

– Those 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 consolidated statement of comprehensive income.

Financial assets are classified as current if they are expected to
mature within 12 months after the end of the reporting period,
otherwise, they are classified as non-current.

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 assets have expired or have
been transferred and the Group has transferred substantially all the
risks and rewards of ownership.

3) Measurement

At initial recognition, the Group measures a financial asset at its fair
value and in the case of a financial asset not at fair value through
profit or loss (“FVTPL”), plus transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVTPL are expensed in the
consolidated statement of comprehensive income.

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 25.

Computers and office equipment

Leasehold improvements

n. Cash and cash equivalents

Percentage of
annual depreciation

6–33

Leasehold improvements are depreciated by the straight-line method
over the terms of the lease (including reasonably assured options
periods), or the estimated useful life (10 years) of the improvements,
whichever is shorter.

The asset’s residual value, the depreciation method and useful lives
are reviewed, and adjusted if appropriate, at least once a year.

An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.

Cash and cash equivalents include cash on hand, short-term bank
deposits and other highly liquid short-term investments, the original
maturity of which does not exceed three months.

All of the regulated subsidiaries hold money on behalf of their clients
in accordance with the client money rules required by the relevant
regulatory framework. Such monies are classified as “segregated
in accordance with the regulatory requirements.
client funds”
Segregated client funds comprise client funds held in segregated
client money accounts.

Segregated client money accounts hold statutory trust status
restricting the Group’s ability to control the monies and accordingly
such amounts are not reflected as Group assets in the consolidated
statement of financial position.

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105

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance105 Plus500 Ltd. 2021 Annual Report Note 2 – Summary of significant accounting policies continued o. Dividends Dividend distribution is recognised as a liability in the consolidated statement of financial position in the period which the dividends are approved by the Board. p. 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. The Group recognises an accrual and an expense for bonuses for senior management based on formulae that take into consideration specific financial and non-financial measures and for other employees based on management decision. q. Service suppliers Service suppliers are obligations to pay for services that have been acquired in the ordinary course of business from suppliers. 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. Service suppliers are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. r. Trade payables – due to clients As part of its business, the Group receives from its customers deposits to secure their trading positions, held in segregated client money accounts. Assets or liabilities resulting from profits or losses on open positions are carried at fair value. Amounts due from or to clients are netted against, or presented with, the deposit with the same counterparty where a legally enforceable netting agreement is in place and where it is anticipated that assets and liabilities will be netted on settlement. “Trade payables – due to clients” represent balances with clients where the combination of customers' 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 consolidated statement of financial position and classified as current liabilities as the demand is due within one year or less. s. IFRS 16 – “Leases” The Group’s leases include real estate lease agreements. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group reassesses whether a contract is, or contains, a lease only if the terms and conditions of the contract are changed. At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date, including, inter alia, the exercise price of the exercise options if the Group is reasonably certain to exercise that option. Simultaneously, the Group recognises a right of use asset in the amount of the lease liability. The lease term is the non-cancellable period for which the Group has the right to use an underlying asset, together with both the periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Group is reasonably certain to exercise that option. After the commencement date, the Group measures the right of use asset applying the cost model, less any accumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. Assets are depreciated by the straight-line method over the estimated useful lives of the right of use assets or the lease period, whichever is shorter. The depreciation periods for the real estate leases by the Group is between one to five years. 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 the consolidated statement of comprehensive 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. Payments associated with short-term leases of real estate and all leases of low-value assets are recognised on a straight-line basis as an expense in the consolidated statement of comprehensive income. Short-term leases are leases with a lease term of 12 months or less without an exercise option. t. Business combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises: – fair values of the assets transferred; and – liabilities incurred to the former owners of the acquired business. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

v. Impairment of assets

Goodwill and intangible assets that have an indefinite useful life, are
not subject to amortisation and are tested annually for impairment, or
more frequently if events or changes in circumstances indicate that
they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-financial assets
other than goodwill that suffered an impairment are reviewed
impairment at the end of each
for possible reversal of the
reporting period.

Note 3 – Significant accounting estimates
Considering uncertain tax positions

The assessment of amounts of current and deferred taxes requires
the Group’s management to take into consideration uncertainties that
its tax position will be accepted and of incurring any additional tax
expenses. This assessment is based on estimates and assumptions
based on interpretation of tax laws and regulations, and the Group’s
past experience. It is possible that new information will become
known in future periods that will cause the final tax outcome to be
different from the amounts that were initially recorded. Such
differences will impact the current and deferred income tax assets
and liabilities in the period in which such determination is made. See
also Note 2j and Note 10.

Note 2 – Summary of significant accounting
policies continued
t. Business combinations continued

Identifiable assets acquired, and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date.

Over the fair value of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value of the net
identifiable assets of the business acquired, the difference is
recognised directly in the consolidated statement of comprehensive
income as a bargain purchase.

u. Intangible assets

1) Goodwill

Goodwill represents the surplus of the consideration that has been
transferred for the acquisition of a subsidiary company, over the net
amount of the identifiable assets and liabilities that have been
acquired as at the time of the acquisition.

Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised but it is tested for impairment
annually, or more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less
accumulated impairment losses.

Goodwill is allocated to cash-generating units for the purpose of
impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose. The units
or groups of units are identified at the lowest level at which goodwill
is monitored for internal management purposes.

2) Licence

Licence acquired in a business combination is recognised at fair value
at the acquisition date. It has an indefinite useful life, is not subject to
amortisation and is tested annually for impairment.

3) Customer relationships and technology

Customer relationships and technology acquired in a business
combination are recognised at fair value at the acquisition date. They
have a definite useful life of five years and are subsequently carried at
cost less accumulated amortisation and impairment losses.

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Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance107 Plus500 Ltd. 2021 Annual Report Note 4 – Trading income The trading income attributed to geographical areas according to the location of the customer is as follows: Year ended 31 December US dollars in millions 2021 2020 European Economic Area (“EEA”) 329.0 365.3 United Kingdom 88.9 109.9 Australia 61.6 112.0 Rest of the World 239.2 285.3 718.7 872.5 Note 5 – Selling and marketing expenses Year ended 31 December US dollars in millions 2021 2020 Payroll and related expenses 21.4 18.0 Variable bonuses 8.8 4.8 Share based compensation 4.0 6.6 Commissions to media buying 20.7 16.9 Advertising and technology costs 151.4 204.2 Commissions to processing companies 40.8 53.0 Server and data feeds commissions 11.7 8.4 Other 21.0 3.5 279.8 315.4 Note 6 – Administrative and general expenses Year ended 31 December US dollars in millions 2021 2020 Payroll and related expenses 11.6 8.0 Variable bonuses 5.4 6.8 Share based compensation 7.7 6.6 Professional and regulatory fees 18.5 14.6 Depreciation and amortisation 2.5 2.3 Other 8.6 5.2 54.3 43.5 Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 7 – Operating expenses
The presentation below reflects the breakdown of operating expenses by nature of expense:

US dollars in millions

Employee benefits and other related expenses

IT and technology costs

Commissions to processing companies

Advertising, marketing and commissions to media buying

Professional and regulatory fees

Depreciation and amortisation

Other

Year ended 31 December

2021

58.9

38.2

40.8

145.6

18.5

2.5

29.6

334.1

2020

50.8

55.3

53.0

174.2

14.6

2.3

8.7

358.9

In the years ended 31 December 2021 and 2020, IT and technology costs together with additional allocated other technological related costs
were $58.4 million and $70.3 million, respectively.

Note 8 – Auditors’ remuneration

US dollars in millions

Audit of 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

Note 9 – Share based compensation
a. Cash settled share based compensation programmes

1) Background

Year ended 31 December

2021

2020

0.3

0.6

0.3

0.7

1.0

1.6

0.2

0.3

0.5

0.1

0.2

0.3

0.8

The Group grants Share Appreciation Rights to selected employees and service contractors (the “Grant”).

The rights are settled in cash at the end of the period of two or three years following the Grant date for those who remain employed or continue
to render services as service contractors by the Group.

The rights represent the total Grant amounts 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 the Grant (the “Share Price on Grant Date”).

As of the end of each period, the fair value of the rights is calculated by the total Grant amounts 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 vesting date) divided by the Share
Price on Grant Date, as prorated over the period.

108108

Plus500 Ltd. 2021 Annual Report

109

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance109 Plus500 Ltd. 2021 Annual Report Note 9 – Share based compensation continued 2) The following table specifies the dates of grants and the grant rights as of each date Grant date Vesting date Share price (GBP)*Number of rights granted*Number of employees 31 December 2019 31 December 2021 797.85 3,503 105 31 December 2019 31 December 2022 797.85 2,925 5 12 February 2020 12 February 2022 855.46 40 2 31 August 2020 31 August 2022 1,303.93 97 6 30 December 2020 30 December 2022 1,507.08 2,342 127 30 December 2020 30 December 2023 1,507.08 647 3 28 February 2021 28 February 2023 1,411.13 13 1 31 August 2021 31 August 2023 1,404.43 14 1 31 December 2021 31 December 2023 1,320.98 1,136 55 *Share price in GBP pence on grant date. 3) Cash settled share based compensation liability As at 31 December US dollars in millions 2021 2020 Current liability 7.3 7.4 Non-current liability 0.3 1.8 7.6 9.2 4) Cash settled share based compensation expenses Year ended 31 December US dollars in millions 2021 2020 Selling and marketing expenses 4.0 6.6 Administrative and general expenses 2.8 5.1 6.8 11.7 5) Cash settled share based compensation – number of rights outstanding Number of rights 2021 2020 Opening balance as at 1 January 8,768 10,210 Rights granted 1,163 3,126 Rights vested (3,208) (3,668) Rights forfeited (1,051) (900) Closing balance as at 31 December 5,672 8,768 During 2021 and 2020, 3,208 and 3,668 rights were vested in total amount of $6.9 million and $8.6 million, respectively. The average vesting price based on GBP pence per granted right was approximately $2,160 and $2,351, respectively. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 9 – Share based compensation continued
b. Equity settled share based compensation programmes

Background

The Group grants long-term incentive plans (“LTIPs”) to selected employees located outside of Israel and service contractors (the “LTIP Grants”).

The Group grants Restricted Stock Units (“RSUs”) to selected employees located in Israel (the “RSUs Grants”).

In respect of certain projects, the Group grants bonuses with a partial deferred element settled in ordinary shares of the Company to selected
service contractors and employees (the “Deferred Bonuses”).

During 2021 and 2020, the Group recognised $4.9 million and $1.5 million, respectively, as expenses in respect of the equity share based
compensation plans and Deferred Bonuses in the consolidated statement of comprehensive income as administrative and general expenses.
In 2020, an amount of $0.3 million was booked to retained earnings.

As of 31 December 2021 and 2020, retained earnings include an amount of $3.5 million and $1.7 million, respectively, in respect of the equity
share based compensation and Deferred Bonuses plans.

1) LTIP Grants

The following table specifies the dates of LTIP Grants and the number of ordinary shares as of each date, as granted for employees and service
contractors.

Grant date

1 January 2019

1 January 2020

1 January 2021

*Share price in GBP pence on grant date.

Vesting date

31 December 2021

31 December 2022

31 December 2023

Share price
(GBP)*

Number of ordinary
shares granted on
grant date

Number of
employees and
service contractors

1,370

886

1,450

15,259

75,627

122,496

The 2019 LTIP Grant was subject to service condition and was not subject to any additional KPIs or conditions. The 2019 LTIP Grant was
vested on 31 December 2021 and the Company issued 19,111 of its treasury shares.

The 2020 LTIP Grant is subject to service condition and additional KPIs as follows:

KPI

TSR

40%

DESCRIPTION

TYPE OF CONDITION

Subject to achieving the three-year FTSE 250 TSR target 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

Market

EPS

40%

Subject to achieving the three-year compounded annual EPS growth rate 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

Performance

20%

Subject to achieving HR criteria related to churn and growth of specific departments

Performance

110110

Plus500 Ltd. 2021 Annual Report

111

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance111 Plus500 Ltd. 2021 Annual Report Note 9 – Share based compensation continued b. Equity settled share based compensation programmes continued The 2021 LTIP Grant is subject to service condition and additional KPIs as follows: KPI % DESCRIPTION TYPE OF CONDITION TSR 20% Subject to achieving the three-year TSR target and calculated on a linear basis, with 25% payable upon achievement of median TSR for bespoke group and 100% payable upon achievement of median TSR for bespoke group plus 10% per annum Market TSR 10% Subject to achieving the three-year TSR target and calculated on a linear basis, with 25% payable upon achievement of median TSR for FTSE 250 and 100% payable upon achievement of upper quartile TSR for FTSE 250 Market EPS 30% Subject to achieving EPS target, as set by the Board Performance Strategic 20% Subject to achieving strategic objectives, as set by the Board and related to growth through M&A, new products and new markets Performance Operational 20% Subject to achieving operational objectives, as set by the Board and related to customer growth and people objectives Performance The final number of ordinary shares to be allotted on the vesting date will be determined according to the share price at the grant date of 1 January 2021 and 2020, less the accumulated amount of dividends paid in cash during the vesting period. The fair value at grant date of the LTIP Grants is measured according to the value of the grant amount and expensed over the vesting period with a corresponding increase in equity, taking into account the best available estimate of the number of shares expected to vest under the service and performance conditions. On the vesting date the Company shall allot to the employee or service contractor, ordinary shares, subject to the service condition and achieving specific KPIs as described in the table above for each grant. The number of ordinary shares allotted on the vesting date shall be calculated based on the ordinary share price at grant date as specified in the table above for each grant, as adjusted for dividends. The allotted ordinary shares will be transferred out of the treasury shares of the Company. The ordinary shares allotted on the vesting date, which are subject to a lock-up period, shall be subject to a two-year lock-up beginning on the vesting date. 2) RSU Grants The following table specifies the dates of RSU Grants and the number of units as of each date. Grant date Vesting date Share price (GBP)*Number of RSUs granted Number of employees 1 January 2020 31 December 2022 886 116,045 8 1 January 2021 31 December 2023 1,450 160,926 8 *Share price in GBP pence on grant date. Each RSU represents the right to receive one ordinary share, par value of NIS 0.01 per share, subject to the terms and conditions of the grant as approved by the Board of Directors and in accordance with the provisions of the Capital Gain route under Section 102 of the Israeli Tax Ordinance and regulations (the “102 Capital gain Route”). Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 9 – Share based compensation continued
b. Equity settled share based compensation programmes continued

In respect of the RSUs granted on 1 January 2020, the employees are entitled to the RSUs upon completing a three-year service period in
addition to KPIs as follows:

KPI

TSR

40%

DESCRIPTION

TYPE OF CONDITION

Market

EPS

40%

Performance

20%

Subject to achieving HR criteria related to churn and growth of specific departments

Performance

In respect of the RSUs granted on 1 January 2021, the employees are entitled to the RSUs upon completing a three-year service period in
addition to KPIs as follows:

KPI

TSR

DESCRIPTION

TYPE OF CONDITION

20%

Subject to achieving the three-year TSR target and calculated on a linear basis, with 25% payable upon
achievement of median TSR for bespoke group and 100% payable upon achievement of median TSR
for bespoke group plus 10% per annum

Market

TSR

10%

Subject to achieving the three-year TSR target and calculated on a linear basis, with 25% payable upon
achievement of median TSR for FTSE 250 and 100% payable upon achievement of upper quartile TSR
for FTSE 250

Market

EPS

30%

Subject to achieving EPS target, as set by the Board

Strategic

20%

Subject to achieving strategic objectives, as set by the Board and related to growth through M&A, new
products and new markets

Performance

Operational 20%

Subject to achieving operational objectives, as set by the Board and related to customer growth and
people objectives

Performance

During 2021, 19,870 and 12,560 RSUs were forfeited in respect of the 2020 and 2021 grants, respectively.

On the vesting date, the employees shall be entitled to a cash payment equal to the aggregate dividends paid in cash to shareholders that were
payable in each grant vesting period with respect to the number of issued shares that were actually allotted to the employees on the vesting
date with respect to the RSUs.

The allotted ordinary shares will be transferred out of the treasury shares of the Company. On the vesting date, the shares will be transferred
to a trustee by the Company.

The ordinary shares allotted on the vesting date, which are subject to a lock-up period, shall be subject to a two-year lock-up beginning on the
vesting date.

3) Deferred Bonus grants

The following table specifies the dates of Deferred Bonuses grants and the number of shares as of each grant date.

The employees and service providers are entitled to the Deferred Bonuses upon completing a service period of one year and subject to achieving
additional KPIs.

The 2019 and 2020 Deferred Bonuses shall be paid in three equal instalments beginning on 31 December of the year after the vesting date, by
way of allotment of ordinary shares of the Company. The number of ordinary shares allotted on any deferred payment date shall be calculated
based on the ordinary share price on grant date, as adjusted for dividends.

The 2021 Deferred Bonuses shall be paid in one instalment on 31 December of the bonus year, by way of allotment of ordinary shares of the
Company. The number of ordinary shares allotted on the deferred payment date shall be calculated based on the ordinary share price on grant
date, as adjusted for dividends.

112112

Plus500 Ltd. 2021 Annual Report

Plus500 Ltd. 2021 Annual Report113

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance113 Plus500 Ltd. 2021 Annual Report Note 9 – Share based compensation continued b. Equity settled share based compensation programmes continued Grant date Vesting date Share price (GBP)*Number of ordinary shares on grant date Number of employees and service contractors 1 January 2019 31 December 2019 1,370 13,834 2 1 January 2020 31 December 2020 886 56,298 2 1 January 2021 31 December 2021 1,450 53,904 2 *Share price in GBP pence on grant date. On 31 December 2021 and 2020, the Company issued 5,780 and 5,280 of its treasury shares, in accordance with the Deferred Bonuses plan of 2019. On 31 December 2021, the Company issued 24,434 of its treasury shares, in accordance with the Deferred Bonuses plan of 2020. On 31 December 2021, the Company issued 58,062 of its treasury shares, in accordance with the Deferred Bonuses plan of 2021. The Company recognised the value of the issued shares on 31 December 2021 according to the fair value measured for each plan on 1 January 2019, 1 January 2020 and 1 January 2021, respectively. Note 10 – Income tax expense Law for the Encouragement of Capital Investments, 5719-1959 The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the “Investment Law”, provides certain incentives for capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law). New tax benefits under the 2017 Amendment that became effective on 1 January 2017 (“2017 Amendment”) The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on 29 December 2016, and is effective as of 1 January 2017. The 2017 Amendment provides new tax benefits, as described below, and is in addition to the other existing tax beneficial programmes under the Investment Law. The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a Preferred Technological Enterprise (“PTE”) and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as Preferred Technology Income, as defined in the Investment Law. Dividends distributed by a PTE, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority (“ITA”) allowing for a reduced tax rate). a. Company taxation in Israel The full corporate tax rate in Israel for the years 2021 and 2020 is 23%. Under the 2017 Amendment, provided the conditions stipulated therein are met, technological income derived by Preferred Companies from “Preferred Technological Enterprise” (as defined in the 2017 Amendment), would be subject to reduced corporate tax rates of 12%. A Preferred Company distributing dividends from technological income derived from its PTE would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty). In May 2019, the Company obtained a tax ruling from the ITA and subject to the Company complying with the conditions stipulated by the tax ruling, which the Company met, and the Investment Law, the Company is considered as a PTE. At the beginning of July 2020, the Company received an approval from the Israeli Innovation Authority (“IIA”) that together with the tax ruling received from the ITA in May 2019, recognises the Company as a PTE for the years 2017, 2018 and 2019. Accordingly, the applicable tax rate for the preferred technological income of a PTE for these years was 12%. The Company is also considered as PTE for the years 2020 and 2021. As a result, the Company’s corporate tax rate for the years 2021 and 2020 is 12%. In January 2022, the Company’s status as a PTE, as accredited by the ITA under the tax regime in Israel, has been extended for the years 2022, 2023, 2024, 2025 and 2026. Consequently, the Company’s corporate tax rate for each of these years will be reduced from 23% to 12% and the withholding tax rate applicable for dividends will be reduced from 25% to 20%, subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate (see Note 27). In July 2020, the Company received approximately $47.0 million rebates (including interest) reflecting the reduced tax rate for FY 2018. In January 2021, the Company received approximately $30.0 million rebates (including interest) reflecting the reduced tax rate for FY 2017 and in August 2021, the Company received approximately $37.2 million in tax rebates (including interest) reflecting the reduced tax rate for FY 2019. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 10 – Income tax expense continued
b. Tax assessments

The Company has final tax assessments up to the year 2019.

The assessments of amounts of current and deferred taxes require the Group’s management to take into consideration uncertainties that its
tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on
interpretation of tax laws and regulations, and the Group’s past experience. It is possible that new information will become known in future
periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the
current and deferred income tax assets and liabilities in the periods in which such determination is made.

c. Corporate taxation in subsidiaries

Subsidiary

Principal tax rate

2021

19%

12.5%

30%

2020 Tax regulation

19% Tax laws in United Kingdom

12.5% Tax laws in Cyprus

30% Tax laws in Australia

Other Group subsidiaries do not have significant taxable income and the overall effect of the income of those subsidiaries on the Group’s tax
expenses is immaterial.

d. Deferred income taxes

The deferred income taxes relate mainly to payroll and related expenses of the share based compensation plans (see Note 9). The deferred tax assets
were computed in 2021 and 2020 at tax rates of 23% and 12%, respectively.

e. Taxes on income included in the consolidated income statement for the reported years

US dollars in millions

Current taxes:

Current taxes in respect of current year’s profits

Tax income in respect of previous years

Deferred income taxes:

Change of deferred tax assets (see d above)

Taxes on income expenses

f. Reconciliation of the theoretical tax expense

Year ended 31 December

2021

2020

77.6

0.5

78.1

(2.3)

75.8

78.7

(55.1)

23.6

(0.4)

23.2

Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular corporate tax rate applicable to a
company in Israel (Note 10a above) and the actual tax expense:

US dollars in millions

Income before taxes on income, as reported in the consolidated income statement

Theoretical tax expense in respect of this year’s income – at 23%

Less tax benefits arising from preferred technological income in respect of the current year

Decrease in taxes resulting from different tax rates applicable to foreign subsidiaries

Impact of change in tax rates on deferred tax balances and temporary differences

Decrease in taxes in respect of currency differences and expenses not deductible for tax purposes

Tax income in relation to previous years

Taxes on income for the reported period

Year ended 31 December

2021

386.4

88.9

(4.3)

(0.8)

(2.8)

(5.7)

0.5

75.8

2020

523.3

120.4

(33.8)

(0.5)

0.3

(8.1)

(55.1)

23.2

114114

Plus500 Ltd. 2021 Annual Report

115

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance115 Plus500 Ltd. 2021 Annual Report Note 11 – 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. 31 December 2021 2020 Profit attributable to equity holders of the Company (US dollars in millions) 310.6 500.1 Weighted average number of ordinary shares in issue*: Basic 101,456,641 106,086,540 Dilutive effect of equity share based compensation 529,601 212,352 Diluted 101,986,242 106,298,892 Basic earnings per share (in US dollars) 3.06 4.71 Diluted earnings per share (in US dollars) 3.05 4.71 *After weighting the effect of the share buyback programmes. See Note 12. Note 12 – Cost of Company’s shares held by the Company The Board of Directors approves share buyback programmes. The share buyback programmes are funded from the Company’s net cash balances. Year ended 31 December Number of ordinary shares purchased Aggregate purchase amount (US $ in millions) Average price of shares purchased 2020 5,584,528 88.8 £12.66 2021 3,406,211 64.9 £13.90 During the years ended 31 December 2021 and 2020, the Company issued 179,537 and 5,280 of its treasury shares, respectively, in accordance with the various share based equity settled compensation grants (see Note 9). During the period starting 1 January 2022 and up to 21 March 2022, as the latest practicable date before the signing date of the consolidated financial statements (see Note 27), the Company purchased an additional 626,498 ordinary shares (or 0.5%) in the capital of the Company for an aggregate purchase amount of $12.0 million pursuant to these share buyback programmes. The ordinary shares were bought back at an average price of £14.25. Note 13 – Dividends The amounts of dividends and the amounts of dividends per share for the years 2021 and 2020 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 12 February 2020 40.6 0.3767 13 July 2020 11 August 2020 101.0 0.9531 11 November 2020 17 February 2021 84.9 0.8292 12 July 2021 17 August 2021 60.0 0.5921 11 November 2021 On 15 February 2022, the Company declared a final dividend and a special dividend in the amounts of $37.8 million and $22.2 million, respectively (see Note 27). * Between the dividend announcement date and the record date of the dividend, the number of issued and outstanding ordinary shares of the Company decreased as a result of the repurchase by the Company of ordinary shares during such period and the classification of such repurchased ordinary shares as treasury shares that are not entitled to dividends. However, this did not affect the dividend per share as announced on the dividend announcement date. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 14 – Other receivables and others

US dollars in millions

Securities

Prepaid expenses

Other

As of 31 December

2021

18.2

5.2

9.3

32.7

2020

–

6.6

3.4

10.0

As of 31 December 2021 and 2020, the total amount of prepaid expenses includes prepaid expenses related to the Company’s sponsorship
agreements (see Note 21).

As of 31 December 2021, the fair value amount of the securities was $18.2 million.

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.

Note 15 – Property, plant and equipment
Composition of assets, grouped by major classifications and changes therein in 2021 is as follows:

US 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 2021

Depreciated balance as of 31 December 2020

Note 16 – Cash and cash equivalents
Cash and cash equivalents by currency of denomination:

US dollars in millions

USD

EUR

GBP

AUD

ILS

Other

Gross cash and cash equivalents

Less: segregated client funds

Own cash and cash equivalents

116116

Plus500 Ltd. 2021 Annual Report

Computers and
office equipment

Leasehold
improvements

Other

Total

2.0

0.6

2.6

1.6

0.2

1.8

0.8

0.4

3.8

0.2

4.0

1.9

0.4

2.3

1.7

1.9

0.3

0.1

0.2

0.1

0.2

2021

728.0

181.2

68.1

54.0

20.8

47.4

1,099.5

(350.0)

749.5

6.1

0.8

6.9

3.6

0.7

4.3

2.6

2.5

As of 31 December

2020

543.3

250.7

91.2

90.0

18.1

69.5

1,062.8

(468.9)

593.9

Plus500 Ltd. 2021 Annual Report

117

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance117 Plus500 Ltd. 2021 Annual Report Note 17 – Other payables As of 31 December US dollars in millions 2021 2020 Payroll and related expenses 24.6 19.0 Accrued expenses 16.4 3.6 Other 0.7 0.2 41.7 22.8 The financial liabilities included among other payables are for relatively short periods. Therefore, their fair values approximate or are identical to their carrying amounts. Note 18 – Service suppliers Service suppliers are comprised mainly of amounts due to advertising service suppliers, their fair values approximate or are identical to their carrying amounts. Note 19 – Trade payables – due to clients As of 31 December US dollars in millions 2021 2020 Customers’ deposits, net* 350.6 469.9 Segregated client funds (350.0) (468.9) 0.6 1.0 * Customers’ deposits, net are comprised of the following: Customers’ deposits 428.3 507.2 Less – financial derivative open positions: Gross amount of assets (130.4) (123.8) Gross amount of liabilities 52.7 86.5 350.6 469.9 *The total amount of ‘Trade payables – due to clients’ includes bonuses to clients. Note 20 – Leases The Group has real estate lease agreements. a) Right of use assets: Real estate leases US dollars in millions At 1 January 2020 5.3 Additions 2.4 Amortisation (1.7) At 31 December 2020 6.0 Additions 2.7 Disposals (0.6) Modification (0.7) Amortisation (1.8) At 31 December 2021 5.6 Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 20 – Leases continued
b) Lease liabilities:

Real estate leases

At 1 January 2020

Additions

Interest expense

Lease payments

Exchange differences

At 31 December 2020

Additions

Disposals

Interest expense

Lease payments

Modification

Exchange differences

At 31 December 2021

US dollars in millions

5.7

2.4

0.2

(1.8)

0.4

6.9

2.7

(0.7)

0.2

(2.0)

(0.9)

–

6.2

Note 21 – Commitments
a. The Company and Club Atlético de Madrid, S.A.D. (“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. On 24 April 2020 the Company and Atlético Madrid signed an extension of the agreement for the season 2021/22.

b. The Company and Club BSC Young Boys Betriebs AG (“BSC Young Boys”) entered into a sponsorship agreement on 2 June 2020 under which
the Company is entitled to advertise and promote itself as the main sponsor of BSC Young Boys for the 2020/21, 2021/22 and 2022/23
seasons.

c. The Company and Club Legia Waeszawa S.A (“Legia”) entered into a sponsorship agreement on 9 August 2020 under which the Company is

entitled to advertise and promote itself as the main sponsor of Legia for the 2020/21, 2021/22 and 2022/23 seasons.

d. The Company and Club Atalanta Bergamasca Calcio SPA (“Atalanta”) entered into a sponsorship agreement on 18 August 2020 under which
the Company is entitled to advertise and promote itself as the main sponsor of Atalanta for the 2020/21, 2021/22 and 2022/23 seasons.

Note 22 – 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 ordinary shares
as of 31 December

2021

2020

300,000,000

114,888,377

(14,663,597)

(11,436,923)

100,224,780

103,451,454

*Number of accumulated ordinary shares that were purchased by the Company as part of the share buyback programmes, less issue of treasury shares.

118118

Plus500 Ltd. 2021 Annual Report

119

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance119 Plus500 Ltd. 2021 Annual Report Note 23 – Goodwill and other intangible assets, net On 19 July 2021, Plus500US Inc., a wholly owned subsidiary of the Company, completed the acquisition of all of the membership interests of Cunningham Commodities LLC. (“Cunningham”), a regulated Futures Commission Merchant (“FCM”), and Cunningham Trading Systems LLC. (“CTS”), a technology trading platform provider, operating in the futures and options on futures market (together, the “Acquisition”). The Acquisition consideration was funded from the Company’s existing cash balances and was paid on completion. Due to the timing of the transaction closing date, the fair values assigned to assets acquired and liabilities assumed are preliminary, based on management’s estimates and assumptions and may be subject to change as additional information is received. The Company expects to finalise the valuation as soon as practicable, but not later than one year from the Acquisition date. According with the purchase price allocation, Goodwill and other intangible assets, net, comprises of: Licence of $24.2 million, Customer relationships of $1.9 million, Technology of $0.2 million and Goodwill of $1.7 million. The assets and liabilities recognised as a result of the Acquisition are as follows: US dollars in millions Cash 0.5 Other receivables 6.0 Long-term other receivables 0.4 Service suppliers (0.3) Other payables (1.6) Goodwill and other intangible assets, net 28.0 Net assets acquired 33.0 From the Acquisition date and up to 31 December 2021, the acquired business contributed approximately 1% out of the total Group revenues for the year ended on 31 December 2021. No impairment was recorded as of 31 December 2021. Note 24 – Related parties and key management a. Key management personnel definition: The Directors and other members of management are classified as Persons Discharging Management Responsibility (“PDMR”) in accordance with IAS 24 and the Market Abuse Regulation. The Directors’ Remuneration Report discusses all the benefits and share based compensations 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 payables): As at 31 December US dollars in millions 2021 2020 Related party and key management liability 11.6 13.6 c. Expenses to related parties and key management: Year ended 31 December US dollars in millions 2021 2020 Payroll and related expenses and service fees (Selling and marketing expenses) 6.6 7.1 Payroll and related expenses and service fees (Administrative and general expenses) 10.0 13.5 Non-executive Directors fees (Administrative and general expenses) 1.1 0.6 The average number of key management personnel during the year was 21 (FY 2020: 23). Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 25 – Financial risk management
The Group operates in the fields of CFDs and share dealing, as well as futures and options on futures. In the field of CFDs, the Group engages
only with individual clients and offers CFDs referenced to shares, indices, commodities, options, ETFs, cryptocurrencies and foreign exchange.
In the field of share dealing, the Group engages only with individual clients and offers a wide range of financial instruments comprised of the
world’s most popular equities, listed on major exchanges worldwide. In the field of futures and options on futures, the Group engages through
a subsidiary in the US which is an FCM that clears and executes futures contracts and options on futures contracts for customers.

The Group’s 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
market conditions and the levels of client activity. The Group utilises market position limits for operational efficiency. Not all net client exposures
are hedged and the Group may have a substantial net position in any of the financial markets in which it offers products. In 2021, the Group
implemented targeted hedging, with a view to reducing market risk. This focused approach continues to be deployed in certain circumstances
going forward, as and when appropriate.

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.

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 being offered in a smaller size and partially could be
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 risk.

The Group has market price risk as a result of its CFDs trading activities on shares, indices, commodities, options, ETFs, cryptocurrencies
and foreign exchange, 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 and management for each financial instrument, and also for groups of financial instruments
where it is considered that their price movements are likely to be positively correlated. The exposures are being reviewed by the Risk &
Regulatory Committee.

Daily profit on closed positions:

US dollars in millions

Highest profit

Highest loss

Average

120120

Plus500 Ltd. 2021 Annual Report

2021

16.0

(3.9)

1.9

2020

76.9

(20.9)

2.4

Plus500 Ltd. 2021 Annual Report

121

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance121 Plus500 Ltd. 2021 Annual Report Note 25 – Financial risk management continued a. Market risk continued 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 US 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 a gain (loss) of: As of 31 December US dollars in millions 2021 2020 EUR (0.1) (0.5) AUD (0.1) (0.9) GBP (0.1) 0.1 ILS (1.0) – The exposure in respect of balances denominated in other currencies is immaterial. b. Credit risk The Group operates a real-time mark-to-market trading platform with customers’ profits and losses being credited and debited automatically to their accounts. Under the Group's policy, customers 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, customer credit risk can arise where there are significant, sudden movements in the market (e.g. 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 represents their maximum exposure to credit risk. The Group has no material financial assets that are past due or impaired as at the reporting dates. As of 31 December 2021 and 2020, counterparties holding the Group’s cash and cash equivalents, credit cards, client funds and deposits, have credit ratings as follows: Credit rating* 2021 2020 AA+ to AA- 21% 27% A+ to A- 73% 46% BBB+ to B+ 2% 25% Remaining counterparties 4% 2% * The financial institutions were rated by the same third party. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 25 – Financial risk management continued
b. Credit risk continued

As of 31 December 2021 the amounts held by the remaining counterparties are held in several banks worldwide. The balance in each of those
banks does not exceed 2% (2020: 1%) 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 2021 was $240.1 million or 22% of the exposure to all banks (2020:
$217.1 million or 20%).

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.

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.

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 to service suppliers is generally 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 (“Pillar 1”) and its own assessment of capital
required to support all material risks throughout the business (“Pillar 2”). The UK Subsidiary manages its regulatory capital through an Internal
Capital Adequacy Assessment Process (known as the ICAAP) in accordance with guidelines and rules implemented by the FCA. Both Pillar 1
and Pillar 2 assessments are compared with total available regulatory capital on a daily basis and monitored by the management of the Group.

As at 31 December 2021 and 2020, the UK Subsidiary had £43.9 million and £41.8 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 (“Pillar 1”) and its own assessment of capital
required to support all material risks throughout the business (“Pillar 2”). The CY Subsidiary manages its regulatory capital through an Internal
Capital Adequacy and Risk Assessment Process (“ICARA”) in accordance with guidelines and rules implemented by 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 2021 and 2020, the regulatory capital of the CY Subsidiary was €90.4 million and
€71.7 million, respectively, which is in excess of both its regulatory capital requirement (Pillar 1) and the internally measured capital requirement
(Pillar 2).

As of the 26 of June 2021, the capital adequacy and overall risk management requirements that applied to the Company, under the Capital
Requirements Regulation & Directive (“CRR & CRDIV”) prudential framework, have been replaced by amended prudential rules. The Internal
Capital Adequacy Assessment Process (“ICAAP”) were replaced by ICARA.

As at 31 December 2021 and 2020, Pillar 1 Capital Adequacy ratio was 174.1% and 111.8% 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.

122122

Plus500 Ltd. 2021 Annual Report

123

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance123 Plus500 Ltd. 2021 Annual Report Note 25 – Financial risk management continued e. Capital Management continued 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 required to support all material risks. The AU Subsidiary manages its capital through its Net Tangible Assets (“NTA”) assessment in accordance with rules and guidelines implemented by ASIC and FMA and Capital Liquidity assessment in accordance with rules and guidelines implemented by FSCA. As at 31 December 2021 and 2020, the AU Subsidiary held NTA of AUD 38.2 million and AUD 33.2 million, respectively, of regulatory capital, which is in excess of its NTA requirements 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 2021 and 2020, the SG Subsidiary held regulated capital of SGD 8.3 million and SGD 7.8 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 2021 and 2020, the IL Subsidiary held regulated capital of $11.2 million and $10.2 million, respectively, of regulatory capital, which is in excess of its ISA requirements. 6) Plus500SEY The SEY Subsidiary is regulated by the FSA. The SEY 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 SEY Subsidiary manages its capital in accordance with rules and guidelines implemented by FSA. 7) Cunningham Commodities Cunningham Commodities is a Futures Commission Merchant (“FCM”) and is registered with CFTC and a member of the NFA. As at 31 December 2021, the Cunningham Commodities Subsidiary had adjusted net capital of $22.0 million, which is in excess of CFTC Regulation 1.17 and the minimum capital requirements of the CME Group Inc. 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 Company operates. Any regulatory actions, tax or legal challenges 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 19) 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 markets 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. Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements continued
Statements continued

Note 25 – Financial risk management continued
g. Fair value estimation continued

Specific valuation techniques used to value financial instruments are based on quoted market prices at the consolidated statement of financial
position date and an additional predetermined amount (trading spread).

Note 26 – Cash generated from operations

US dollars in millions

Cash generated from operating activities

Net income for the year

Adjustments required to reflect the cash flows from operating activities:

Depreciation and amortisation

Amortisation of right of use assets

Lease modification

Liability for share based compensation

Settlement of share based compensation

Equity 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 and others

Increase (decrease) in trade payables due to clients

Increase (decrease) in other payables

Increase (decrease) in service suppliers

Cash generated from operating activities

Year ended 31 December

2021

2020

310.6

500.1

0.7

1.8

(0.2)

6.8

(8.4)

4.9

75.8

0.2

–

(6.2)

4.3

79.7

(16.9)

(0.4)

17.3

(7.3)

383.0

0.6

1.7

–

11.7

(5.2)

1.8

23.2

0.2

0.4

(5.2)

(8.3)

20.9

1.9

0.8

10.4

12.5

25.6

546.6

124124

Plus500 Ltd. 2021 Annual Report

125

Plus500 Ltd. 2021 Annual ReportStrategic ReportFinancial statementsGovernance125 Plus500 Ltd. 2021 Annual Report Note 27 – Subsequent events In January 2022, the Company’s status as a Preferred Technological Enterprise (“PTE”), as accredited by the ITA under the tax regime in Israel, has been extended for the years 2022, 2023, 2024, 2025 and 2026 (see Note 10). In February 2022, the Group obtained an operating licence in Estonia, granted by the Estonian Financial Supervision Authority (“EFSA”). On 15 February 2022, the Company declared a final dividend in an amount of $37.8 million ($0.3777 per share). The dividend record date is 25 February 2022 and it will be paid to the shareholders on 11 July 2022. On 15 February 2022, the Company declared a special dividend in an amount of $22.2 million ($0.2218 per share). The dividend record date is 25 February 2022 and it will be paid to the shareholders on 11 July 2022. On 15 February 2022, the Company declared the adoption of a share buyback programme to buy back an amount of up to $55.0 million of the Company’s ordinary shares, comprised of a regular new share buyback programme in the amount of $25.2 million and a special share buyback programme in the amount of $29.8 million. In March 2022, the Company completed the acquisition of 100% of the issued and outstanding share capital of EZ Invest Securities Co., Ltd., a Type 1 Financial Instruments Business Operator regulated by the Financial Services Agency in Japan. This acquisition was funded from the Company’s existing cash balances, with a non-significant consideration amount. Further information

Advisors

Sponsor and Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY, UK

Independent Auditors
Kesselman & Kesselman, a member
firm of PricewaterhouseCoopers
International Limited
146 Derech Menachem Begin Street
Tel Aviv 6492103,
Israel

Financial PR
MHP Communications
60 Great Portland Street
London W1W 7RT, UK

Legal Advisor (Israel)
Herzog, Fox & Neeman
Herzog Tower
6 Yitzhak Sadeh Street
Tel Aviv 6777504,
Israel

Legal Advisor (United Kingdom)
Bryan Cave Leighton Paisner LLP
Governor’s House
5 Laurence Pountney Hill
London EC4R 0BR, UK

Depositary
Link Market Services Trustees Limited
Central Square
29 Wellington Street
Leeds LS1 4DL, UK

Registrar
Link Market Services Limited
Central Square
29 Wellington Street
Leeds LS1 4DL, UK

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