Annual Report and Financial Statements For ... - CMC Markets · On 15th January 2015 the Swiss...

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CMC Markets plc

133 Houndsditch

London EC3A 7BX

United Kingdom

Tel +44 (0)20 7170 8200

Fax +44 (0)20 7170 8499

Email [email protected]

www.cmcmarketsplc.com

Annual Report and Financial StatementsFor the year ended 31 March 2015

Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Chairman’s statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

CEO report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Strategic report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Business review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Corporate social responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Statement of Directors’ responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Independent auditors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Table of contents1

CMC Markets plc Table of contents

1Netoperatingincomerepresentsrevenuenetofrebatespayabletointroducingpartnerswhoarenotthemselvestradingcounterpartieslessspreadbettinglevies2 ActiveclientsrepresentthoseindividualclientswhohavetradedwithorheldCFDorSpreadbetpositionswithCMCMarketsonatleastoneoccasionduringthefinancialyear

3 TradingrevenuegeneratedfromCFDandSpreadbetactiveclients4 UnderlyingfiguresrepresentEBITDAandPBTbeforeexceptionals5 Valueofclienttradesrepresentsthenotionalvalueoftrades

Highlights

The CMC Markets vision

CMCMarketsisaleadingglobalproviderofonlineretailtrading.

Ourgoalistoprovidethemostsuperiorandunrivalledtradingexperienceforourclients.

0

20

40

60

80

100

120

140

160

Net operating income1 (£m)

2013 2014 2015

107.0122.0

143.6

0

10

20

30

40

50

60

Underlying EBITDA (£m)4

EBITDA (£m)

2013 2014 2015

16.516.5

43.643.651.3

59.7

40,000

45,000

50,000

55,000

60,000

0

500

1,000

1,500

2,000

2,500

3,000

Active clients2

Revenue per active client3

Reven

ue p

er active client (£

)

Act

ive

clie

nts

2013 2014 2015

56,103

48,00650,303

0

500

1,000

1,500

2,000

0

10

20

30

40

50

Value of trades5

Number of trades

Nu

mb

er of trad

es (m)V

alu

e o

f tra

des

(£b

n)

2013 2014 2015

1,287 1,3511,626

Net operating income1

EBITDA

Active clients2 and revenue per active client3

Value of trades5 and number of trades

Annual Report 2015

2

Highlights

1UnderlyingfiguresrepresentEBITDAandPBTbeforeexceptionals

• Ownfundsof£141million;ownfundsgeneratedfromoperationsof£45million

• Regulatorycapitalsolvencyratioof24%(301%pre-CRDIV)

• Fullsegregationofretailclientmoneyinalljurisdictions

• NextGenerationplatformisnowliveinallcountriesofoperation

• Won27awardsgloballyrelatingtotheNextGenerationplatformandclientservice

Summary income statement

£m 2015 2014 Variance Variance %Net operating income 143 .6 122 .0 21 .6 18%Operatingexpenses (92.3) (78.4) (13.9) (18)%

EBITDA 51 .3 43 .6 7 .7 18%

Analysed as:UnderlyingEBITDA 59.7 43.6 16.1 37%Exceptionalitems (8.4) – (8.4) –EBITDA 51 .3 43 .6 7 .7 18%

Depreciationandamortisation (6.9) (10.7) 3.8 36%FinanceCosts (0.9) (0.7) (0.2) (29)%

Profit before tax 43 .5 32 .2 11 .3 35%

Analysed as:UnderlyingProfitbeforetax 51.9 32.2 19.7 61%Exceptionalitems (8.4) – (8.4) –

Profit before tax 43 .5 32 .2 11 .3 35%

-10

0

10

20

30

40

50

60

Underlying profit before tax (£m)1

Profit before tax (£m)

2013 2014 2015

32.232.2

43.551.9

-1.7-1.7

0

5

10

15

20

-2

3

8

13

Dividends paid (£m)

Earnings per share (pence)

Earn

ings p

er share (p

ence)

Div

iden

ds

pai

d (£

m)

2013 2014 2015

12.0

15.9

Profit before tax Dividends paid and earnings per share (pence)

CMC Markets plc

3

Highlights

4

Annual Report 2015Chairman’s statement

Chairman’s statement

IamverypleasedtoreportanothersuccessfulyearfortheGroup,buildingonthestrongperformancewithunderlyingprofitbeforetaxincreasingby61%to£51.9million(£43.5millionafterexceptionals),withthetotaldividendincreasingby33%to£15.9million.

Wecontinuetoinvestinourtradingplatformandclientservice;NextGenerationisanaward-winningplatform,providingclientswiththetoolstotradethefinancialmarketsandmanagetheirrisksaccordingly.Theplatform,combinedwithourfocusonclientserviceisattractingnewclientsacrossallareasoftheGroup,withretailclientnumbersgrowingby11%yearonyear.

TheGrouphasahighlycashgenerativebusinessmodelandiscommittedtoadividendpolicythatprovidesagoodreturnforshareholders,whilstensuringthatcashremainswithintheGrouptomeetitsgrowthaspirationsandinvestmentrequirements.WiththatinmindtheBoardwillmaintainitspolicyofpayingadividendof50%ofpost-taxprofits.

TheGroupoperatesin12locationsgloballyandworkscollaborativelywiththeregulatorsineachofthesejurisdictionstoensurethatitiscompliantatalltimesandseekstoworkwiththoseregulatorstoensurethattheindustryoperatestoahighregulatorystandard.

On1AprilJamesRichardsjoinedtheBoardasaNon-ExecutiveDirector.HejoinedtheBoardhavingoccupiedvariousseniorpositionswithinleadinglawfirmsandhasextensiveexperienceincapitalmarkets.JohnJacksonsteppeddownfromtheBoardon30JuneaftermorethantenyearsofserviceandIwouldliketothankJohnonbehalfoftheBoardforhiscontributiontoCMCMarketsthroughoutthatperiod.Wewishhimwellforthefuture.TheBoardisalsolookingtoaddafurtherNon-ExecutiveDirectorinthecomingsixmonthsandthissearchiswellunderway.

Werecentlycelebratedour25yearanniversaryandthroughoutthattimethebusinesshasalwaysfocusedoninnovationandclientservice.TheGroupisperformingwellinallofitslocationsbutthereremainsignificantopportunitiestogrowinallofthesemarketsaswellasothersthattheGroupisnowtargeting.

ThecontinuingsuccessoftheGrouphasbeenachievedthroughthesupportofourclientsandalsothehardworkofourcolleagues.OnbehalfoftheBoardIwouldliketothankthem.

Simon Waugh Chairman 15July2015

The Group is highly cash generative

and is committed to a dividend

policy that provides a good return

for shareholders.

CMC Markets plc

5

Chairman’s statement

CEO report

Financial performance

TheGroupdemonstratedtherobustnessofitstechnologyfocusedbusinessmodelwithgrowthinunderlyingprofitbeforetaxof61%to£51.9million.Netoperatingincomegrewby18%to£143.6millionwithtotalexpensesexcludingexceptionalitemsincreasingbyamodest2%.Afterexceptionalitems,profitbeforetaxwas£43.5million,a35%improvementonprioryear.

ThebusinesscontinuestobehighlycashgenerativeallowingtheGrouptomaintainitspolicytodistribute50%ofpost-taxprofits.At31March2015ownfundsstoodat£141million,andthecapitalratiowas24%(301%preCRDIV).

WecontinuetofocusonourawardwinningtechnologythroughourNextGenerationplatformasthemaindriverbehindbusinessexpansion,complementedbyourfocusonprovidingexcellentclientservice.NextGenerationmobiletradingnowaccountsforover41%oftotalvalueofclientstrades.Itisnowpossibletoopenandfundyouraccount,tradeover10,000products,accessrealtimenewsandchartsandexecutetradesallfromyourmobilephone.Scalabilitythroughtechnology,particularlymobile,hasbeenoneofthefoundationsofoursuccessoverthelastyearandwebelieveforthefutureaswell.Wehaveinvestedheavilyinourtechnologyoverthelastfiveyears,whichhasdrivenincreasedprofitmarginsandprovidedcontroloverourcostbase.Thishasprovedtobetherightstrategy.

CFD and spread bet regional review

TheUKcontinuestobeourlargestmarketandregionalgrowthopportunitygiventhesizeofthemarketandourhomebase.UKrevenueperclientgrewby33%,whileoverallUKrevenuegrewby46%.OurANZregionalsogrewsignificantly,resultinginrevenuesrisingby24%.

Europeanregionshavebeenequallyresilientduringtheyear,representing33%oftheGroup’srevenue.RestofWorld(SingaporeandCanada)revenuewas13%higherthanprioryear.

Scalability through technology,

particularly mobile, has been one of

the foundations of our success over

the last year and we believe for the

future as well. We have invested

heavily in our technology over the

last five years.

Annual Report 2015

6

CEO report

One off events

On15thJanuary2015theSwissNationalBank(SNB)madetheunprecedenteddecisiontodiscontinueitssupportoftheSwissFranc/Europeg.FollowingthisdecisiontheSwissFrancappreciatedbyover30%inamatterofminutes;amoveofsuchmagnitudeinamajorcurrencyhasnotbeenwitnessedinoverageneration.Unfortunatelygiventhesizeofthemarketgap,someofourclientsfellintodeficitandthisresultedinclientdebtof£4.5million.Debtprovisionsandwrite-offsattheyear-endrelatingtothiseventstoodat£3.8million.

DuringthelastfinancialyeartheGroupreceivedaclaimagainstoneofitssubsidiariesrelatingtolossesonaCFDtradingaccountoveraperiodin2007.AsettlementwasreachedinMarch2015,andincludinglegalcosts,amountedto£4.6million.

Strategy

• Product innovation. Clientfeedbackisthedrivingforcebehindthecontinuedevolutionofourtradingplatform.WeintroducedMorningstarQuantitativeEquityResearchreportsduringtheyear,followedbyGuaranteedStopLossOrdersinMarch2015.TheGrouphasreceived27industryawardsforourproductsandservicesduringthelastyearandover45forthelasttwoyears.

• Mobile innovation. MobilecontinuestotakeagrowingshareofourNextGenerationplatformactivity,representing41%ofthetotalvalueofclienttradesthisfinancialyear(FY14:36%).Thisgrowthissupportedbycontinuousimprovementstoourmobileoffering,includingamajorupgradereleasedinDecember2014.

• Client focus . Ourcommitmenttorewardingandinvestinginourclientsisreflectedthroughtheglobalrolloutofourretailrebateschemewhichhasreturned£7.2milliontoclientsduringtheyear,a133%increaseonFY14.

• Product launch . Laterthisyearweplantolaunchamobilecentricbinariesandoptionsproducttoappealtoawiderretailmarket.

Regulation

TheGroupoperatesinanumberofregulatoryjurisdictionsincludingsupervisionfromtheFinancialConductAuthority(FCA)intheUKandtheAustralianSecuritiesandInvestmentsCommission(ASIC)inAustralia.TheregulatorylandscapeacrossalloftheGroup’sjurisdictionsiscomplexandconstantlychanging.However,wefullysupportastrongregulatoryenvironmentandwehaveinvestedtoensurethattheGroupmaintainsrobustcompliancethroughoutallofitsoperations.

Looking forward

Weremaincommittedtoourambitionofprovidinganunrivalledtradingexperiencetoourclients.HavinginvestedheavilyinourNextGenerationtradingplatform,webelievethatwehaveacompetitiveadvantage,inparticularthroughourmobiletradingapps.Weplantoleverageoffthescalabilitythatourtechnologygivesusthroughincreasedinvestmentindigitalmarketingandmobileclientonboarding.Wealsoplantoimproveourdistributionreachthroughtheopeningofmoreoverseasofficesduringthecomingyearandimproveouronboardingcapabilities.

Inaddition,ourwhitelabel(brandedplatformforintroducedbusiness)offeringwillbereleasedthisyeartocomplementourexistinggreylabel(unbrandedplatformforintroducedbusiness)offering,providinganadditionalchannelthroughwhichtoofferourNextGenerationtradingplatforms.Wewillalsobeexpandingourproductbasebyofferingbinariesandoptionsinsomeregions.ThesearenotexpectedtohaveamaterialimpactonourrevenueinFY16,butwillformanincreasinglyimportantpartofourwiderbusinessofferingintheyearsahead.

FollowingtheSNBdecision(mentionedabove),ourstrongbalancesheetandcapitalratioisattractingnewclientsthatseeusasaflighttosafety,whentheylookformoresecureproviders.

Outlook

ThesestrategiesandinitiativesareexpectedtoimprovetheGroup’sperformanceyearonyearasweincreaseourmarketshare.EarlytradingforFY16isveryencouraging,andsignificantlyupontheprioryear.Iwouldliketotakethisopportunitytothankourclientsfortheirsupportandvaluablefeedback,andourstafffortheirhardworkandcommitment.

IbelievethatthereareveryexcitingtimesaheadforCMCMarkets.

Peter Cruddas Chief Executive Officer 15July2015

CMC Markets plc

7

CEO report

¹AwardedBestOnlineTradingPlatformbySharesMagazinein2014.Awarded‘BestMobileTrading’intheInvestmentTrends2014UKLeveragedTradingReportbasedonhighestusersatisfactionamongspreadbetters,CFDandFXtraders.

Company history

CMCMarketswasfoundedbyPeterCruddasin1989,andsincethenthecompanyhasgrowntobecomeagloballeaderinonlinetrading.TherehavebeennumeroussignificantmilestonesfortheGroupoverthepast25yearsasthecompanyhasexpandedintonewmarketsaroundtheworldandcontinuestochampioninnovationandnewtradingtechnology.

When“CurrencyManagementCorporation”,laterabbreviatedtoCMC,firstbegantradinginLondonin1989asanFXbroker,theofficecontainedonedesk,onetelephoneandonehighlyambitioustraderandentrepreneur.Overthefollowingyearsthecompanygrewrapidly,andin1996itlaunchedtheworld’sfirstonlineretailFXtradingplatform,allowingitsclientstotakeadvantageofmarketspreviouslyonlyaccessibletoinstitutionaltraders.

In2000,CMCMarketsexpandeditsbusinesstobecomeaCFDbroker.In2001thecompanylaunchedanonlinefinancialspreadbettingservice,becomingthefirstspreadbettingcompanytolaunchthedailyRollingCash®Bet.TheinnovativedailyRollingCash®conceptsubsequentlybecameanindustrybenchmark.

In2002,CMCMarketsopeneditsfirstoverseasofficeinSydney,launchingintotheAustralianmarketasanonlineCFDandforeignexchangeprovider.By2007thecompanyhadexpandeditsglobalfootprintwithadditionalofficesinNewZealand,Germany,Canada,SingaporeandSweden,andhadsolda10%equitystaketoGoldmanSachs.Furtherglobalgrowthfollowedoverthenextfewyears,withofficesopenedinNorway,Spain,ItalyandFrance,takingthenumberofofficesaroundtheworldto12.

CMCMarketslauncheditsaward-winning¹NextGenerationplatformin2010andhassincethenrolleditoutacrossalltheregionsinwhichtheGroupoperates,frequentlyaddingnewtools,featuresandenhancements.

In2014theGroupcelebratedits25thanniversaryandreceivedarecordnumberofawardsintheUKinrecognitionofthequalityoftheNextGenerationtradingplatformandassociatedservice.

Annual Report 2015

8

Company history

Company history

CMCMarketsbeginsoperationsintheUK

StartsofferingCFDsintheUK

Opensfirstnon-UKofficeinSydney,Australia

OfficesopenedinBeijingandCanada

SingaporeandSwedenofficesopened; GoldmanSachspurchases10%stake

NextGenerationplatformislaunched;offices openedinItalyandFrance;spreadbetting iPhoneapplaunchedintheUK

SpreadbettingappforAndroidTMlaunched

CMCMarketscelebrates25yearsof beingaworld-leaderinonlinetrading

CMCMarketswinsFinancialServices ProvideroftheYear(SharesMagazine)

CMCMarketswins33industryawardsglobally

OpensNewZealandoffice

CMCMarkets(Australia)startsofferinga stockbrokingservicefollowingtheacquisition

oflocalstockbrokerAndrewWest&Co.

Launchestheworld’sfirstonlineretail FXtradingplatform

LaunchesonlinespreadbettingserviceintheUK

1989

2012

2000

2005

2013

2001

1996

2006

2014

2002

2010

2007

2015

2011

2008

Timeline

CMC Markets plc Company history

9

Strategic report Business review

Our business

CMCMarketsisanonlineretailfinancialservicesbusinessthatprovidesitsclientswithonlineandmobilefinancialspreadbetting(UKandIrelandonly)andcontractfordifference(CFD)tradingplatforms.TheGroupalsohasastockbrokingofferinginAustralia.

Theaward-winningNextGenerationtradingplatformprovidestraderswithaccesstoglobalfinancialmarketsviadesktopcomputerandmobileapps.Clientscantradeonawiderangeofinstrumentsacrossshares,indices,currencypairs,commoditiesandtreasuries.Theplatformprovidesanarrayofadvancedtradingtoolsandmarketcommentarytosupportclients’trading.

CMCMarketscreatespricesonover10,000instrumentswhichclientscantrade.Revenuesaregeneratedthroughtransactionalspreads,financingincome,commissionsandtradingincomearisingfromourclients’tradingactivities.Ourriskmanagementstrategyisbasedonhighly-automatedflowmanagement,dynamicallyhedgingnetclientexposuresandrisk.Thelevelofrevenueisinfluencedbythenumberofclientsactivelytradingandthevalueofthosetrades.

Annual Report 2015Strategic report

10

Our products

CFD

ACFDprovideseconomicbenefitssimilartoaninvestmentinanunderlyingassetwithoutthecostsandlimitationsassociatedwithphysicalownership.ACFDisacash-settledinvestmentinproductswhicharebasedoncurrencies,commodities,treasuries,indicesandshares.ACFDtracksthepricemovementofthechosenproduct,includingdividendonstocks,interestonpositivecarrycurrencypositions,andcoupononinterestbearinginstruments.

ACFDisaleveragedproduct,whichhasthepotentialtomagnifyprofitsaswellaslosses.

The CFD tradeIf you think the market will fall,

you place a sell trade.

You sell 1000 units at the sell price of 98p.

If the market price falls by 10 pence =

£80 profit*

If the market price rises by 10 pence =

£120 loss

Exited at 90

Exited at 110

*When placing a sell trade, you enter the trade using the sell price and exit using the buy price. In the profitable scenario above, you entered the trade at 98p (original sell price) and exited at 90p (new buy price), so the price moved 8p in your favour. Multiply 8p by the number of units bought (1000) to get a profit of £80.

Buy

Sell

Spread

CMC Markets buy price

CMC Markets sell price

SpreadThe spread is 2

Underlying

market price99p

100p

101p

102p

96p

97p

98p

The spread betIf you think the market will rise,

you place a buy trade.

You place a trade with a stake of £5 per point at the buy price of 101.

If the market price rises by 10 points

= £40 profit*

Exited at 109

If the market price falls by 10 points =

£60 loss

Exited at 89

*When placing a buy trade, you enter the trade using the buy price and exit using the sell price. In this profitable scenario above, you entered the trade at 101 (original buy price) and exited at 109 (new sell price), so the price moved 8 points in your favour. 8 points movement at a stake of £5 per point equals a profit of £40.

Buy

Sell

Spread




Underlying

market price100

101

102

103

97

98

99

CMC Markets plc Strategic report

11

Spread betting

Spreadbettingallowsclientstotradeonthepricemovementsoffinancialmarkets,includingcurrencies,commodities,treasuries,indicesandshares.SpreadbettingwithCMCMarketsprovidessimilareconomicbenefitstothoseexperiencedwheninvestinginanunderlyingasset,butwithoutthecostsandlimitationsassociatedwithphysicalownership.Spreadbetsarecash-settledinvestmentsinfinancialproductsthatofferanumberofbenefits,includingdividendonstocks,interestonpositivecarrycurrencypositions,andcoupononinterestbearinginstruments.

SpreadbettinghasmanyofthesamebenefitsasaCFDwithoneimportantdifference;youarebettingaspecificstakesizeperpointmovementofaproductratherthantradingaspecificnumberofsharesorunits.

Ordinarily,profitsfromspreadbettingarefreefromcapitalgainstaxandstampdutyintheUKandIreland,althoughtaxlawsaresubjecttochange.

Example

Ifaclientfeelsthatthepriceofaparticularinstrumentislikelytofall,theycouldplaceasellbetor‘goshort’.Conversely,iftheybelievedthatthepricewillgoup,theycouldplaceabuybet,or‘golong’.Ifthemarketmovedinthedirectiontheypredicted,theywouldmakeaprofit.Ifnot,theywouldmakealoss.

Whenyouspreadbet,youbuyorsellanamountperpointmovement,suchas£5perpoint,whichisknownasyour‘stake’.Foreverypointtheproduct’spricemovesinyourfavour,yougainamultipleofyourstake.Foreverypointthepricemovesagainstyou,youloseamultipleofyourstake.

The CFD tradeIf you think the market will fall,

you place a sell trade.

You sell 1000 units at the sell price of 98p.

If the market price falls by 10 pence =

£80 profit*

If the market price rises by 10 pence =

£120 loss

Exited at 90

Exited at 110

*When placing a sell trade, you enter the trade using the sell price and exit using the buy price. In the profitable scenario above, you entered the trade at 98p (original sell price) and exited at 90p (new buy price), so the price moved 8p in your favour. Multiply 8p by the number of units bought (1000) to get a profit of £80.

Buy

Sell

Spread




Underlying

market price99p

100p

101p

102p

96p

97p

98p

The spread betIf you think the market will rise,

you place a buy trade.

You place a trade with a stake of £5 per point at the buy price of 101.

If the market price rises by 10 points

= £40 profit*

Exited at 109

If the market price falls by 10 points =

£60 loss

Exited at 89

*When placing a buy trade, you enter the trade using the buy price and exit using the sell price. In this profitable scenario above, you entered the trade at 101 (original buy price) and exited at 109 (new sell price), so the price moved 8 points in your favour. 8 points movement at a stake of £5 per point equals a profit of £40.

Buy

Sell

Spread




Underlying

market price100

101

102

103

97

98

99


12

Binaries and Countdowns

Binarieswillbeanewadditiontoourproductrangewheretheclient’sriskandpotentialprofitaredeterminedatthepointoftrade.Clientswillbeofferedtheopportunitytoplaceatradedependingonwhethertheybelieveaparticularmarket’spricewillbeaboveorbelowacertainlevelataspecifictimeinthefuture.Iftheirtradeis“inthemoney”attheendofthespecifiedtimeframe,theywillbecreditedwiththeamountagreedatthepointoftrade;iftheyare“outofthemoney”theywillforfeittheirstake.Clientswillalsohavetheopportunitytocloseabinaryproductpriortothetimeofexpiryastheoddsoftheproductbeingaboveorbelowapre-determinedlevelchangeasthepriceintheunderlyingmarketchanges.Theproductwillbereleasedinlate2015.

InSummer2015CMCMarketswilllaunchCountdowns,aproductwhichallowsclientstoplacefixed-oddstradesoverarangeofshort-termtimeframesfromaslittleas30seconds.Theclientdecidesthetimeframestartingfromtimeoftradeasopposedtoselectingapre-determinedexpirytime.

Stockbroking

CMCMarketsalsooffersAustralianclientstheabilitytobuyandsellASXandAPXlistedequitiesaswellasfunds.ClientshaveaccesstolivemarketdataandresearchfromsomeofAustralia’smostrespectedstockmarketanalysts.DuringtheyearCMCMarketsstartedofferinganmFundssettlementserviceallowingclientsaccesstotheunlistedmanagedfundsspace,andhasalsosupportedseveralfundraisesduringtheyearthroughtheASXon-marketbookbuildingservice.

Our geographical reach

CMCMarketsisaglobalbusinesswithasignificantpresenceinitsmainhubsintheUK,Australia,GermanyandSingapore.Itoperatesacrossfourcontinents,from12officesandwithclientslocatedin70countriesworldwide.

SydneyAuckland

London

Beijing

Stockholm

Singapore

Oslo

TorontoParis

Madrid

FrankfurtMilan


13

1InvestmentTrends2014report

Client service

Ourambitionistodeliveranunparalleledclientexperiencetotheactivetrader.Thiswillhelpmaintainaloyaltradingcommunity,contributingtowardsoptimalreturnsforourshareholdersandincreasinglong-termvalueforthebusiness.

Aswellasofferingcompetitivepricing,productsandtradingcapabilitiesthatweknowourclientswant,wewillcontinuetostrivetoensurethatourclientsseeusasthemosttrustedandrecommendedproviderintheindustrythroughexcellenceinclientservice.

CMCMarketscontinuestoplacetheutmostimportanceonclientserviceandthecontinuousdeliveryoffairoutcomestoourclientsthroughourbehaviour,image,productinnovationandinternalculture.Withthisclient-centricvisionatthecoreofourbusinesswecontinuetostrivetoensurethatCMCMarketswillbecomethebrandofchoiceinallofourglobalmarkets.

Progress

Ourclientsareofferedanexceptionalserviceexperienceandhaveaccesstoamarket-leading,award-winningplatform,designedwithatrader’sneedsinmind,offeringcompetitivespreadsandcosts.Manyofthenewenhancementstoourplatformhavebeendevelopedasaresultoffeedbackgatheredface-to-facefromclientswhoregularlyattendourLondonTraderNetworkeventsandfromthosewhocontributedirectlyviaourFeedbackmodulewithinthetradingplatformorrespondtoourclientsatisfactionsurveys.

WecontinuetofocusonretainingourpremiumclientsandareintheprocessofonboardingourexistingPartnersontotheNextGenerationplatform.IncreasedrecruitmentontoourSalesTradingdeskhasenabledthebusinesstomanageandsupportourtop-tierclientbaseandtoencourageacquisitionofotherlikemindedhighvaluetradersfromourcompetitors.TheintroductionofGuaranteedStopLossOrders,severalthousandnewstocksandthependingreleaseofbinariesandothernewproductsfortheNextGenerationplatformhasencouragedanumberofnewclientstomaketheswitchalready.WinningtheawardforHighestOverallClientSatisfaction1 fromInvestmentTrendscombinedwiththeBestSpreadBettingplatformfromtheADVFNInternationalFinancialAwardsgivesclearconfirmationthatwearedeliveringaservicethatgivesclientsexactlywhattheyneed.

OurTraderDevelopmentProgrammeisnowbetterthanever;offeringawiderangeofin-platform,on-demandeducation,tailoredmarketcommentaryandadvancedtradingtoolstoassistourclientseverystepoftheway.InadditiontoourrangeofweeklyandmonthlywebinarsandseminarshostedbyourteamofmarketanalystsandtheTradingSmartSeries(aseriesofarticlesdesignedtocoverkeytradingconceptsandanalysistechniques),CMCMarketsalsopartneredwithTradeWithPrecision(TWP),ateamofprofessionaltraderswhoseektobroadentheskillsofourclientswithadvancedmarket-focusedtechnicalanalysisworkshops.

AsignificantsuccessstoryinourstockbrokingbusinesswastherevenuecontributionourFrequentTraderProgramhasdelivered.Engineeredtoprovideatailoredbrokingsolutionforthreetypesofstockbrokingtrader-‘Classic’,‘ActiveInvestor’and‘PremiumTrader’.Ittailorstheappropriatetechnicalfeaturesandbest-valuepricingforeachgroup.Bydeliveringapremiumsolutionalongsidelowbrokerageandadvancedfeaturestohighvolumetraders,thisfocusonthepremiumcategoryisperfectlyalignedwiththeoverallGroupstrategyandvalueproposition.Thiswasreinforcedthroughtherecognitionwereceivedduring2015including:

• Forthefifthconsecutiveyear,CMCMarketsStockbrokingsecuredCANSTAR’snationalawardfor‘OutstandingValueOnlineShareTrading’

• Forthesecondyear,wewereawardedCANSTAR’sfivestarratingforeachinvestorcategory(casualinvestor,activeinvestorandtrader)

• InvestmentTrends–productproventobe‘bestinclass’offering

Our strategic objectives


14


15

2March2015UKSurvey3UniqueNextGenerationusers:March2014=27,419;March2015=35,7744UniqueNextGenerationusers:March2014=20,079;March2015=27,5215Accordingtospreadbetters,CFDandFXtraders6Accordingtospreadbetters,CFDandFXtraders7AccordingtospreadbettersandCFDtraders

Product innovation

WecontinuetoinvestinourNextGenerationtechnologyinordertoimproveandenhanceourplatformcapabilitieswhilestreamliningouruserexperienceformoreefficientnavigationaroundourever-expandingfeaturelist.Weconstantlyreviewourcontent,servicesandproductsinordertostandoutfromthecompetitionandwefeelourplatformtechnologyandtradingtoolsprovideuswithasignificantcompetitiveadvantage.

Ourdeepunderstandingofwhatactivetraderswant,combinedwithourregularplatformupgrades,allowsCMCMarketstofocusondeliveringthelatestinnovations.ThisiswhytheNextGenerationplatformhasbecomesopopularwithexistingandnewtraders.InMarch2015asurveyofCMCMarkets’clientsshowed92%2ofrespondentswereeithersatisfiedorverysatisfiedwiththeplatform.

Progress

AkeymilestonewasachievedinSeptember2014whentheNextGenerationtradingplatformwasreleasedtotheCanadianmarket.Thismeantthatallregionsinwhichweoperatenowhaveaccesstoourlateststate-of-the-arttradingtechnology.

ThemajorityofthenewservicesaddedtotheNextGenerationplatformstemdirectlyfromourextensiveengagementwithourclientbaseandincludefeaturessuchasMorningstarQuantitativeEquityResearchreports,GuaranteedStopLossOrders,theabilitytogolongandshortonthesameproductsimultaneouslyandModuleLinking,forfasterplatformnavigation.Wealsoreleasedamajorupgradetoourmobiletradingappsinlate2014thatincludedanall-newdesign,additionaltradingfeaturesandenrichedAndroidtabletsupport.

AmajorhighlightofthepastyearhasbeenthecontinuedgrowthseeninnewusersofourNextGenerationplatform,withmobiletradinggrowthparticularlyimpressive.Generalplatformusagejumpedmorethan30%3fromlastyear,whilemobileusagehasincreasedbymorethan37%4.Thesenumbersjustifythesignificantinvestmentundertakenandweareconfidentourmobilestrategywillcontinuetobeeffectiveandresonatewellwithactivetraders.

AllofthesedevelopmentssawCMCMarketswin27globalawardsincludingBestOnlinePlatformandFinancialServicesProvideroftheYearfromtheSharesAwardsand12awardsfromtheInvestmentTrends2014UKLeveragedTradingReport,whichincludedBestPlatformFeatures5,BestMobileandTabletApp6andBestResearchTools7basedonhighestusersatisfaction.

Technology and operations

TechnologyandoperationshasalwaysbeenakeytothesuccessofCMCMarketsandthishaswonthebusinessoutstandingrecognitionastheleaderinourindustryforinnovationandservice.Ouraimistoprovideourclientswiththeabilitytotakeownershipoftheirpersonalfinancialinvestments.Ourplatformhasbeenbuilttoprovidecompletecontrolandflexibility.Weareinvestingintechnologyandoperationalprocesseswhichwillallowustoexpandwitheaseinthefuture,providingscalability,combinedwithexceptionaldependabilityandspeed,whiledrivingdownmarginalcostsasvolumesgrow.

Progress

Wehaveinvestedandcontinuetoinvestsignificantlyinourtechnologyinfrastructure.Spendonbothplatformscalabilitytosupportbusinessgrowthandplatformresponsivenesstoimproveuserexperiencehavebeenfocuspointsduringtheyear.Thishasresultedincapitalexpenditureof£8.6millioninITinfrastructureandsoftwarelicencesduringFY15.


16

Trading risk management

PartofthesuccessofCMCMarketsisourglobaltradingriskmanagementcapability,dealingwithhighvolumesofsophisticatedmulti-assetretailflowbenefitingfromasignificantproportionofnaturalaggregation.Ourstrongcapitalandliquiditybalancesallowustoretainanelementofnetclientportfoliorisk,transferringtheremainingriskthroughhedgingtoourexternalcounterparties.Thisdeliversahighlyautomatedtransactionalbasedriskmanagementstrategy,allowingthebusinesstodeliverconsistentandsustainablereturnsirrespectiveofunderlyingclientperformanceanddrivinglongtermclientengagement.

Weaspiretobeagloballeaderinprovidingpricing,executionandliquiditytoretailclientsandthisisenabledthroughfullyautomatedexecutionanddynamicriskmanagementwhichisscalablefarbeyondourcurrentlevelsoftradingactivity.ClientsarerequiredtoplacemargininadvanceofenteringintoanytransactionwithCMCMarkets,andpositionsareautomaticallyclosedifthesemarginsaremateriallyeroded.Wehavesignificantexpertiseinretailflowandriskmanagementacrossmulti-assetclassesandwillcontinuetoleadandinnovateasweexpandourproductsandservicesintothefuture.

Riskappetiteiscontrolledviastronggovernanceandrealtimecontrolsandoversight,withintightlydefinedriskparametersapprovedbytheBoard.

Progress

Enhancementstoourtradingtoolsduringtheyearhavefurtherimprovedthereturnsofourhighlyautomatedtransactionalbasedriskmanagementstrategy.Thishasdeliveredimproveddailyaveragerevenueandlowerrevenuevariability.

Financial strength

Weaimtomaintainoursecurecapitalandliquiditystructure,ensuringthatitisappropriateforthefuturegrowthandsuccessofthebusiness.Thisincludesalong-termlevelofcapitaltowithstandthedemandsoffinancialfluctuationsinthemarketsandaccesstoahealthylevelofsurplusliquidresourcesinlinewiththesizeofourbusinessandthegrowthopportunitieswhichexist.

Progress

TheGroupmonitorsitscapitalposition,whichhasincreasedonprioryear,onarealtimebasis(seeFinancialreview,page25).TheGroup’sliquiditypositionhasimprovedduringtheyear(seeFinancialReview,page25)andthenon-utilisationofourcreditfacilityforovertwoyearsdemonstratestherobustliquidityprofileoftheGroup.ThefacilityprovidesadditionalcapacitytosupporttheGroup’sstrategyofmaintainingexcessliquiditytofundbothgrowthandclienttradingpeaks.Thiscommitmenttomaintainingthefacilityisdemonstratedthroughthere-negotiationofpartofthefacilitytoatenureofthreeyears.

People

CMCMarketsiscommittedtorecruiting,developing,retainingandmotivatingexceptionalpeoplewhoaresmart,innovativeanddeterminedtodeliveronourpromisetoourclients.Ourteamhastheknowledgeanddeterminationtomakethishappen.

Progress

CMCMarkets’continuingcommitmenttoourpeopleisdescribedinmoredepthinCorporatesocialresponsibility(page18).


17

1EmployeesoftheGroupasat31March20152DirectreportstoCEOexcludingBoardDirectorsasat31March2015

CMCMarketshasaresponsibilitytomaximiseshareholderreturns,andthisisalignedwithstrivingtoprovideclientswiththebestserviceandplatform,safetyofdepositsandbestexecution.Thisisachievednotonlythroughthecompanyhavingfinancialstrengthbutalsothroughinvestinginouremployeesandwidersocialpractices.

Our people

4741peopleworkfortheGroupgloballyandtheGroupprovidesasafe,challengingandenjoyableplacetowork.ThequalityofourstaffisessentialtothesuccessoftheGroupandcompetitivepackages,includingappropriatebenefitsandpensions,areofferedtoattractandretainthebesttalent.

Diversity

WearecommittedtotheGrouphavingadiverseworkforce,andbelievethatdiversitybringsvaluableexperienceandskillstothebusiness.TheGroupprovidesanumberofapprenticeshippositionsandtrainingtoemployeesthatofferthemtheopportunitytoobtainnewskillsaswellasdevelopexistingskillsets.

Collaboration

Weactivelyencourageouremployeestosuggestandcontributetopioneeringandinnovativeideas,whichisfosteredthroughtheflatorganisationalstructure.TheGroupstronglybelievesthatthecontributionofatalentedandpassionateteamisvitalforthecontinuingsuccessofthecompany.

Equal opportunities

TheGrouphighlyvaluesthedifferencesandcreativitythatadiverseworkforcebringsandiscommittedtorecruiting,developingandretainingaworldclassteamirrespectiveofethnicities,nationalities,sexualorientation,genderidentity,beliefs,religions,cultures,andphysicalabilities.CMCMarketsseekstoestablishaculturethatvaluesmeritocracy,openness,fairnessandtransparency.

CMCMarketsaffirmsthatitwillnottolerateanyformofunlawfulandunfairdiscrimination.Insearchingfortalentthecommitmentisalwaystorecruitthebestfromthebroadestapplicantpool.AllcandidateshavetherighttoexpectthattheywillberespectedandvaluedfortherichnessofideaswhichtheywillbringtotheGroup.

Health and safety

ThehealthandsafetyoftheGroup’semployeesandvisitorsisofprimaryimportance.TheGroupiscommittedtocreatingandmaintainingasafeandhealthyworkingenvironment.Healthandsafetyauditsandriskassessmentsarecarriedoutregularly.

Corporate social responsibility

Total Employed1 Board Senior

Management2

Male 338 Male 5 Male 7 Female 136 Female 0 Female 1


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Clients

Clientsarecriticaltothesuccessofthebusinessandwestrivetodeliverahighqualityandefficientservicetoallofthem.ClientserviceiscentraltoourstrategyandisdescribedinmoredepthintheBusinessReviewonpage10.

TheGroupfullysegregatesallretailclientfundswhetherrequiredbyregulationornot.Allfundsareheldseparatelyindesignatedaccountstoensurethatintheeventofdefault,clientfundsaresafeandcanbequicklyreturnedtoclients.

CFDsandspreadbetsareleveragedproductsandlossescanexceedinitialdeposits.Inordertohelpprotectclientsfromsufferingexcessivelosses,mostclientsareautomaticallyliquidatedoncemarginhasbeenreducedtoagreedlevels.Withintheplatformtherearealsoanumberoftoolsavailabletoclientstoeffectivelymanagetheirrisk.Wealsoofferourclientsarangeofeducationopportunitiesthroughweeklyandmonthlywebinarsandseminars,aswellasourTraderDevelopmentProgrammewhichoffersawiderangeofin-platform,on-demandeducationandtailoredmarketcommentary.

Charitable donations

Duringtheyearended31March2015CMCMarketsdonated£350,000toThePeterCruddasFoundation.ThePeterCruddasFoundation’sstraplineis“HelpingYoungPeopleAchieveMore”.Itsaimsandobjectivesaretobenefitdisadvantagedanddisengagedyoungpeopleinoursocietybyensuringfundingreachesthosemostinneed.Inordertoachievetheseaimsandobjectives,grantsaregiventocharitiesregisteredwiththeCharityCommissionforEnglandandWalesworkingintheirareaofinterest.

Duringtheyearended31March2015grantsweregivento15charities,including:

• Great Ormond Street Children’s Hospital Charitable Trust

TheTickTockClubwassupportedwiththefundingforaPost-AnaestheticCareUnit.Afterasurgicalprocedure,youngpeoplearetakentoafirststagerecoveryareanexttotheoperatingtheatre.Astheybegintowake,thepatientsaremovedtothePost-AnaestheticCareUnit.

Theseunitsareenclosedandincludeen-suitefacilities,andacomfortablechairforaparenttositwiththeirchildastheywakeup.

• University College London Horizons Programme

Thisprogrammeenablesupto100giftedyoungpeoplefromschoolsaroundLondontoparticipate,exploretheirpotential,andopentheirmindstoauniversitycourseaftertheirA-levels.ThishasbeenhugelysuccessfulforthestudentswhoinmostcasesimprovetheirA-levelresultsandthereforeopenupotherpathwaystoeducationandemploymentandisinspirationaltothestudent’sparents/guardians/carerstowitnessthecapabilitiesoftheirchild.

InadditiontothedonationstoThePeterCruddasFoundation,CMCMarkets’staffareencouragedtosupportcharitythrougha“poundforpound”matchingscheme,withCMCMarketsmatchingeverypoundraisedthroughsponsorship.


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1TradingrevenueperactiveCFDandSpreadbetclient2Statutoryprofitbeforetaxasapercentageofnetoperatingincome

Summary

Netoperatingincomegrew£21.6million(18%)to£143.6million,mainlydrivenbyacombinationofincreasedclientactivityandourdynamicriskmanagementstrategy.Thehigherclientactivitywasillustratedthrougha£275billion(20%)increaseinthevalueofclienttradesto£1,626billion,withallmajorregionscontributingpositively.ThisriseinnetoperatingincomecameagainstabackdropofsubduedvolatilityduringthefirsthalfoftheyearfollowedbyariseinactivityfromSeptemberonwards,withincreasesinFXandCommoditiesvolatilityparticularlynotable.Fromavolatilityindex(VIX)perspective,volatilityonamonthlyrollingaveragebasishasremainedbroadlysimilaroverthelasttwoyears,althoughbelowthelong-termaverage;againstthisbackdroptheGrouphasgrownaveragemonthlyrevenueduringthisperiod.

Activeclientnumbersandrevenueperactiveclient(RPC)increasedby2,297(5%)to50,303and£342(14%)to£2,716respectively,thelatterunderliningourcontinuingfocuson,andsuccessin,attractinghighvaluetraders.Lookingatthisfigurebasedonourchannels,ourretailclientbaseincreasedby11%to45,103duringtheyear.Thiswasoffsetbya

reductioninourPartnersclientbaseduetothefocusondeliveringafullNextGenerationsolutionbeforepursuingnewbusinessthroughthischannel.

Retailrebatesincreasedby£3.8million(133%)to£7.2million.Wearecommittedtoourhighvaluetradersandourmonthlyrebatescheme,whichisbasedonthenotionalvaluethatourclientstradeiscentraltothiscommitment.

Totalcostsincreasedby£10.3million(12%)to£100.1million.Onceone-offitemsof£8.4millionareexcluded,costsincreasedby£2.0million(2%).Theincreasewasdrivenbyinvestmentinpersonnelandmarketingactivity,whichwaspartlyoffsetbyloweramortisationcosts.

Underlyingprofitbeforetaxincreasedby£19.7million(61%)to£51.9millionreflectingtheoperationalscalabilityofthebusinessasrevenuegrows.Statutoryprofitbeforetaxalsoincreasedby£11.3million(35%)to£43.5million.

Asaresultofrevenuegrowthandcostcontrol,profitbeforetaxmargin2improved4%,risingfrom26%to30%despitetheimpactof£8.4millionofexceptionalitems.Excludingexceptionalitemsthemarginincreasedto36%.

Net operating income overview

£m 2015 2014CFDandSpreadbet 136.6 114.0Stockbroking(excinterestincome) 5.1 5.5Interestincome 2.1 2.1Otherincome (0.2) 0.4

Net operating income 143 .6 122 .0

Financial review

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CFD and Spread Bet 12 Month Rolling Average Trading Revenue

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KPIs

• Netoperatingincome:up£21.6million(18%)to£143.6million

• Revenueperactiveclient1:up£342(14%)to£2,716

• Activeclients:up2,297(5%)to50,303.Activeretailclientsup4,355(11%)to45,103

• UnderlyingProfitBeforeTax:up£19.7million(61%)to£51.9million

• StatutoryProfitBeforeTax:up£11.3million(35%)to£43.5million

• Basicearningspershare:up3.9pence(46%)to12.4pence

• Ownfundsgeneratedfromoperations:£45.2million


20

1CFDandSpreadbettradingrevenue2ActiveclientnumbersandRPCcomparativeshavebeenre-stated3InvestmentTrends2014report

CFD and spread bet regional performance overview

2015 20142 % changeRevenue1

(£m)

Value of trades

(£bn)

Active Clients

RPC

(£)

Revenue1

(£m)

Value of trades

(£bn)

Active Clients

RPC

(£)

Revenue1

Value of trades

Active Clients

RPC

UK 48.6 548 15,417 3,152 33.4 418 14,054 2,373 46% 31% 10% 33%Europe 45.4 553 20,019 2,269 45.8 532 19,572 2,338 (1)% 4% 2% (3)%ANZ 34.4 453 9,527 3,608 27.6 332 9,076 3,045 24% 37% 5% 19%RestofWorld 8.2 72 5,340 1,535 7.2 69 5,304 1,362 13% 6% 1% 13%

Total 136 .6 1,626 50,303 2,716 114 .0 1,351 48,006 2,374 20% 20% 5% 14%

UK

ThevalueofclienttradesintheUKwas31%aheadoftheprioryearat£548billion(FY14:£418billion),withquarteronquartergrowth.Activeclientnumberswereup10%duringtheyearto15,417(FY14:14,054),whileaveragerevenueperactiveclientincreasedby33%.ThiswasachieveddespitetheannualInvestmentTrendsstudyreleasedinSeptember2014pointingtoa4%declineintheUKspreadbettingmarketfrom93,000to89,000.Clientacquisitionhasimproveddramaticallythroughouttheyearwithnewaccountsupby70%fromtheprioryear,andanincreasingreturnoninvestmentfromhighermarketingexpenditure.Clientqualityandtenurecontinuestoimprove,adirectresultofthestrategytoappealtohighvalueclientsswitchingfromdirectcompetitorsandthesuccessfulrecruitmentofexperiencedsalesspecialists.

Europe

EuropecomprisestheGerman,French,Italian,Spanish,NorwegianandSwedishoffices.ThevalueofclienttradesinEuropewas4%aheadoftheprioryearat£553billion(FY14:£532billion).Theregioncontributed34%ofoverallGroupvalueofclienttradesthroughouttheyear(FY14:39%),withthedeclineinthevalueoftheEuroandeconomicheadwindscontributingtothisdecline.Activeclientnumberswereup2%intheyearat20,019(FY14:19,572).

TherewasastrongperformancefromSpain,withthevalueofclienttrades32%aheadoftheprioryearat£79billion(FY14:£60billion),despitethechallengingeconomiclandscape.WeexpecttoseefurthergrowthacrosstherestofEuropeasmigrationfromourlegacyMarketMakerplatformtotheNextGenerationplatformnearscompletionandweactivelybegintomarketourNextGenerationPartneroffering.

ANZ

OurANZbusiness,whichservicesclientsfromourSydneyandAucklandoffices,grewsignificantlyduringtheyear.ThevalueofclienttradesinANZwas37%aheadoftheprioryearat£453billion(FY14:£332billion).Ourcontinuingfocusonclientactivationandengagement,increasededucationinitiativesandplatformupdateshaveresultedinanincreaseinactiveclientsof5%to9,527andrevenueperactiveclientup19%to£3,608.Theriseinrevenueperclientisevidencethatourfocusonacquiringandsupportingourhighvalueclientbaseissucceeding.Resultsfromanindependentreport3showedthatCMChadthehighestpromptedbrandawarenessinthemarket,andthatCMC’sbrandprofilehasbeenregainingstrengthintheregion.

Rest of World

OurRestofWorldregionconsistsoftheSingaporeandCanadaoffices.Thevalueofclienttradesgrewby6%duringtheyear,revenueby13%andrevenueperactiveclientby13%.Despiteshowinghealthygrowth,ithasnotenjoyedlevelssimilartothosegeneratedbytheUKandANZregions.SingaporeperformancewasmoresubduedinthefirsthalfoftheyearduetohavingmorerelianceonFXtrading,whichwaslowacrosstheindustryduringthisperiod,butrecoveredstronglyinthesecondhalfoftheyear.TheCanadaofficespentmuchoftheyearpreparingforthereleaseoftheNextGenerationplatforminSeptember2014andsincethenhasbeenyieldingencouragingresults.

Stockbroking

TheAustralianstockbrokingbusinessperformedbroadlyinlinewiththeprioryear,withtradingrevenuesof£5.1million(2014:£5.5million)despitearelativelysubduedequitiesmarketinAustraliaandstrongadversecurrencymovements.SimilartotherestofCMC’sbusiness,theyearconsistedoftwodistinctivehalvesintheAustralianequitiesmarket,withsubduedtradingvolumesinthefirsthalfoffsetbyimprovedperformanceinthesecondhalf.


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Non-trading interest income

Thelowinterestrateenvironmenthasmeantthatinterestincomehasremainedstaticat£2.1million(FY14:£2.1million).ThisismainlyearnedthroughoursegregatedclientdepositsinourAustralia,NewZealandandstockbrokingsubsidiaries.

Asset class performance

Theassetclasssplitofrevenueremainsrelativelystableonanannualbasis,withIndicesconstitutingthemajorrevenuecontributor.FXrevenueremainedrobustdespitelowvolatilitylevelsinthefirsthalfoftheyear.TheshareofrevenueprovidedbyCommoditiesincreasedsignificantlyyear-on-yearduetothevolatilityinoilpricesduringthesecondhalfoftheyear.

Expenses

TheGroup’sunderlyingoperatingexpensesincreasedby£5.5million(7%)to£83.9millionwithinvestmentinmarketing(£2.3millionincrease)andstaffcosts(£1.6millionincrease)themaindriversoftherise.Exceptionalcostsconsistof£4.6millionrelatingtothesettlementofanAustralianlitigationcaseandtheassociatedlegalcostsand£3.8millionrelatingtoprovisionsandwrite-offsrelatingtoclientdebtarisingfromtheSNBreleaseoftheSwissFrancpeg.

£m 2015 2014Netstaffcosts 40.7 39.1ITcosts 11.4 11.2Salesandmarketingcosts 13.7 11.4Premisescosts 5.6 5.1Legalandprofessionalfees 2.9 3.4Regulatoryfees 2.1 2.4Other 7.5 5.8

Total operating expenses before exceptional costs 83 .9 78 .4 Exceptionalcosts 8.4 –

Total operating expenses 92 .3 78 .4 Depreciationandamortisation 6.9 10.7Interest 0.9 0.7

Total costs 100 .1 89 .8

Net staff costsincreased£1.6million(4%)to£40.7million,withariseinaverageheadcountfrom450to473beingthemaindriveroftheincrease.Theincreaseinwagesandsalarieswasmorethanoffsetbyareductionincontractorsasweconvertedkeycontractstafftopermanentemployees.Theintroductionofexecutiveandmanagementshareoptionschemesalsocontributedtowardstheriseincosts.

Shares 12%

Indices 48%

Commodities 15%

Treasury 1%

FX 20%

Stockbroking 4%

FY15 Revenue by asset class

Shares 11%

Indices 53%

Commodities 10%

Treasury 0%

FX 21%

Stockbroking 5%

FY14 Revenue by asset class


22

£m 2015 2014Wagesandsalaries 31.1 29.0Performancerelatedpay 6.9 7.1Sharebasedpayments 1.0 –

Total employee costs 39 .0 36 .1 Contractstaffcosts 1.7 3.0

Net staff costs 40 .7 39 .1

IT costs werebroadlyflatontheprioryearat£11.4millionaswecontinuedtofocusoncostefficiencieswhilstalsoinvestingwherenecessary.

Sales and marketing costs increased£2.3million(20%)to£13.7millionduringtheyearaswecontinuetoinvestingrowingourclientbase.ThemainincreasesinexpenditurewereseenintheUK,followedbyANZ.BrandexpenditureinbothoftheseregionsincreasedduringtheyearwithsponsorshipoftheNSWWaratahsinAustraliaandtheSummerofSporteventinLondon.

Premises costs were£0.5million(10%)higherat£5.6million,mainlyduetothedualrunningofourUKdatacentre,partlyoffsetbyreducedcostsfromtheuseoflesscostlyofficesinSydneyandmoreefficientuseofofficespaceinSingapore.

Legal and professional fees decreasedby£0.5million(15%)at£2.9millionduetolowerexpenditureonexternallegaladvice.

Regulatory fees reducedby£0.3million(14%)to£2.1millionduetoareducedFSCSlevyfortheyear.

Other costs increasedby£1.7million(30%)to£7.5million,withthemajorcontributortotherisebeingtheone-offcurrencybenefitsfromclosureoftheJapanofficerecordedinFY14(£2.3millioncredit).

Depreciation and amortisation waslowerby£3.8million(35%)at£6.9millionduetothesignificantlyreducedamortisationoftheNextGenerationplatforminFY15.

Interest costs increasedby£0.2million(£29%)to£0.9millionduetotheincreaseofourbrokerfundinglinefrom£25millionto£40millionaswellasadditionalcostsassociatedwithnewITfinanceleases.Thebrokerfundinglinewasnotutilisedduringthefinancialyear.

Taxation

Theeffectivetaxratefortheyearwas20%(2014:26%).ThemajorityofourprofitsaretaxedintheUKandthemaindriverofthedecreaseintheeffectivetaxratewasareductionintheUKcorporationtaxratefrom23%to21%.

Profit for the year

Theretainedprofitfortheyearof£34.7million(2014:£24.0million)illustratesthesuccessoftheGroup’sfocusonclientservice,anawardwinningplatform,dynamicriskmanagementandastrongcostcontrolenvironment.

Dividend

Dividendsof£12.0millionwerepaidduringtheyear,£6.0millionrelatingtothefinaldividendrelatingtotheprioryearand£6.0millionrelatingtocurrentyear’sperformance.Afurtherinterimdividendof£9.9millionwaspaidinMay2015,resultinginatotaldividendrelatingtoFY15todateof£15.9million(FY14:£12.0million).TheGroupremainscommittedtoadividendpolicyofpaying50%ofpost-taxprofitintheformofdividends.


23

Own funds

TheGroupmonitorsownfundsgeneratedfromoperationsinthemannerexplainedinnote4totheaccounts.Ownfundsgeneratedincludesexcessfundsheldwithbrokers.DuringtheyeartheGroupgenerated£45.2millionfromoperatingactivities,whichcovereddividendrequirementsby2.6times.

Group Balance Sheet

£m 2015 2014Intangibleassets 3.7 4.1Property,plantandequipment 17.4 13.7Deferredtaxassets 7.5 7.4Total non-current assets 28 .6 25 .2

Tradeandotherreceivables 18.7 19.6Derivativefinancialinstruments 3.3 0.6Amountduefrombrokers 109.8 65.9Cashandcashequivalents 38.6 57.8

Total current assets 170 .4 143 .9

Total assets 199 .0 169 .1

Tradeandotherpayables 38.7 39.7Derivativefinancialinstruments 0.8 2.1Borrowings 1.4 0.6Currenttaxpayable 3.5 1.2Shorttermprovisions 4.4 0.3Totalcurrentliabilities 48.8 43.9

Tradeandotherpayables 3.9 4.4Borrowings 2.5 0.3Deferredtaxliabilities 0.1 0.6Longtermprovisions 1.4 0.3

Totalnon-currentliabilities 7.9 5.6

Totalliabilities 56.7 49.5

Totalequity 142.3 119.6

Total equity and liabilities 199 .0 169 .1

Non-current assets

TheGroupiscommittedtoinvestinginanddevelopingitstradingplatformandthesecostsareexpensedasincurred,withthemajorityofintangibleassetsnowrelatingtothenetbookvalueofsoftwarelicencesratherthannetcapitalisedinternaldevelopmentcosts.Theriseinproperty,plantandequipmentcostsmainlyrelatetoinvestmentinITinfrastructure,whichisregularlyreviewedtoensureitsscaleandresilienceisalignedwithanticipatedgrowthinthebusiness.DuringtheyeartheGroupinvested£8.6millioninITequipmentandlicences(FY14:£1.4million).

Current assets

Trade and other receivables relatemainlytoclientreceivablesrelatingtoStockbrokingpositionsyettosettle,prepayments,amountsduefromoursegregatedclientaccountsonthenextworkingdayandotherclientdebtors.Amount due from brokers relatestocashheldatbrokerseitherforinitialmarginortoreduceinterestpayableontheGroup’soverallhedgeposition.Cash and cash equivalents havereducedsignificantlyduringthecourseoftheyearduetotheGroupactivelyholdingexcessfundsatourbrokersinpreferencetocashatbank.Thishastheeffectofbothreducingfinancingcostswithbrokersandreducingconcentrationrisk.At31March2015theGroupheldanexcessof£57.0millionwithbrokers(31March2014:£22.6million).


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Current liabilities

Trade and other payables consistmainlyofaccrualsanddeferredincome,amountsdueonStockbrokingtradesyettosettle,andamountsduetoclientsinrelationtotitletransferfunds.Current tax payablehasincreasedsignificantlyto£3.5million(FY14:£1.2million)duetotheincreaseinGroupprofits.Theriseinprovisions relatesto£4.2millionpayableasaresultoftheAustralianlitigationsettlement.ThiswaspaidinApril2015.

Non-current liabilities

Trade and other payables relatemainlytothedeferredunwindingofleaseincentivesonourLondonpropertyandtheincreaseinborrowings isduetonewleaseagreementsassociatedwithITequipmentpurchases.

Regulatory capital

Fortheyearunderreview,CMCMarketswassupervisedonaconsolidatedbasisbytheUK’sFinancialConductAuthority(FCA).TheGroupmaintainedasignificantcapitalsurplusovertheregulatoryrequirementatalltimes.

TheGroup’sTier1capitalincreasedduetotheriseinretainedearningsrelatingtoaudited2014profits,aswellaslowerintangibleassetsonthebalancesheet.DeductionfordeferredtaxassetshasbeentakenfromtheTier1capitalthroughaphasedapproachinaccordancewiththeCapitalRequirementsDirectiveIV(CRDIV).

At31March2015thecapitalresourcesrepresented24.1%ofthecapitalresourcesrequirement(31March201418.6%).ThefollowingtablesummarisestheGroup’scapitaladequacypositionattheyearend.TheGroup’sapproachtocapitalmanagementisdescribedinnote4tothefinancialstatements.

Regulatory capital 2015 2014Totalcapitalresources(£m) 114.5 98.4Totalriskexposure(£m) 474.9 528.8Total capital ratio (%) 24 .1% 18 .6%

Note:capitalresourcesarethereportedpositionasat31March2015andthereforeexcludesunauditedreservesandanychangestodeferredtaxassetsresultingfromtheauditprocess

Liquidity

TheGrouphasaccesstothefollowingsourcesofliquiditythatmakeuptotalliquidassets:

• Own funds . TheprimarysourceofliquidityfortheGroup.Itrepresentsthecashthatthebusinesshasgeneratedhistoricallyexcludingallcashheldonbehalfofclients.

• Title transfer client funds (TTCFs) . Thisrepresentsfundsreceivedfromprofessionalclientsandeligiblecounterparties(asdefinedintheFCAHandbook)thatareheldunderaTitleTransferCollateralAgreement(TTCA);ameansbywhichaprofessionalclientoreligiblecounterpartymayagreethatfullownershipofsuchfundsisunconditionallytransferredtotheGroup.TheGroupconsidersthesefundsasanancillarysourceofliquidityandplacesnorelianceonitsstability.

• Committed banking facilities. TheGrouphasacommittedbankingfacilitythatcanbeusedtosupportthehedgingprogrammebymeetingpotentialfluctuationsinthemarginrequirementsofbrokers.Theamountavailable,calculateddaily,dependsoncurrentbrokerandclientmarginpositionsandiscommittedupto£40million(March2014:£25million).

TheGroup’suseofliquidityresourcesconsistof:

• Blocked cash – regulatory purposes . Amountsheldtomeettherequirementsoflocalmarketregulators.

• Blocked cash – operational purposes. Amountsheldatoverseassubsidiariesinexcessoflocalsegregatedclientrequirementstomeetpotentialfutureclientrequirements.

• Internal liquidity buffer. AnamountthatrepresentstheGroup’sliquidityriskappetite.ThisisbasedontheliquidityrequirementsoftheGroupunderanumberofstresstests(conductedaccordingtotheFCA’s‘ILAS’regime)andother‘traditional’liquiditymeasures.


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¹SurplusliquidityisdefinedastheliquidityinexcessoftheGroup’sliquidityriskappetiteandistheGroup’skeyliquiditymeasure.Gross/Netsurplusispre/postthedeductionofbrokermarginrequirements.

• Broker margin requirements . ThetotalGBPequivalentinitialmarginrequiredbyprimebrokerstocovertheGroup’shedgederivativepositions.

At31March2015,theGroupheldcashbalancesof£38.6million(2014:£57.8million).Inaddition,£232.3million(2014:£206.1million)washeldinsegregatedclientmoneyaccountsforclients.ThemovementinGroupcashandcashequivalentsissetoutintheConsolidatedCashFlowStatement.

Ownfundshaveincreasedto£140.6million(2014:£116.5million)withtheoverallnetowncashdecreasingslightlyduetohigheryear-endbrokermarginrequirements.

£m 2015 2014Sources of LiquidityOwnFunds 140.6 116.5TitleTransferFunds 7.8 7.2Committedbankingfacilities 36.8 25.0

Liquid Assets 185 .2 148 .7

Uses of LiquidityBlockedcash–regulatorypurposes (11.6) (7.2)Blockedcash–operationalpurposes (3.3) (2.8)

Available Liquid Assets 170 .3 138 .7

Less:InternalLiquidityBuffer (30.0) (30.0)

Gross Surplus¹ Liquidity 140 .3 108 .7

Less:BrokerMarginRequirements (52.8) (43.3)

Net Surplus¹ Liquidity 87 .5 65 .4

Client money

TotalclientfundsheldbytheGrouponbehalfofitsretailclientswas£233.4millionat31March2015(2014:£206.1million)includingregulatorybuffersheldinclientmoneybankaccountswhererequiredorpermitted.ClientmoneyisheldbytheGroupintrustonbehalfofitsretailclientsandisnotincludedinNetSurplusLiquidity.

Clientfundsrepresentthelatentcapacityforourclientstotradeandofferanunderlyingindicationtothehealthofourclientbase.TheyearonyearincreaseinretailclientmoneybalancesisalignedwiththegrowthinGroupclientnumbers.

Client money governance

TheGroupsegregatesallmoneyheldbyitonbehalfofretailclientsinaccordancewithapplicableclientmoneyregulationsincountriesinwhichitoperatesandinparticulartheCASSrulesoftheUKFinancialConductAuthority(FCA).AllsegregatedclientfundsareheldindedicatedclientmoneybankaccountswithmajorbanksthatmeetstrictinternalcriteriaseparatefromtheGroup’sowncash.

TheGrouphascomprehensiveclientmoneyprocessesandproceduresinplacetoensureclientmoneyisidentifiedandprotectedattheearliestpossiblepointafterreceiptaswellasgovernancestructureswhichensuresuchactivitiesareeffectiveinprovidingthemaximumprotectionforclientmoney.

TheprotectionofclientmoneyisoffundamentalimportancetotheGroupandagovernancestructureisinplacetoensureongoingcomplianceandmaximumprotectionisaffordedtoclientmoney.TheGroup’sgovernancestructureisexplainedfurtheronpages32to39.


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Principal risks and uncertainties

TheGroup’sbusinessactivitiesnaturallyexposeittostrategic,financialandoperationalrisksinherentinthenatureofthebusinessitundertakesandthefinancial,marketandregulatoryenvironmentsinwhichitoperates.TheGrouprecognisestheimportanceofunderstandingandmanagingtheserisksandthatitcannotplaceacaporlimitonalloftheriskstowhichtheGroupisexposed,howevereffectiveriskmanagementensuresthatrisksaremanagedtoanacceptablelevel.

TheBoard,throughitsAuditandRiskCommittee,isultimatelyresponsiblefortheimplementationofanappropriateriskstrategy,whichhasbeenachievedbytheestablishmentofanintegratedRiskManagementFramework.ThemainareascoveredbytheRiskManagementFrameworkare:

• Identification,evaluationandmonitoringoftheprincipleriskstowhichtheGroupisexposed.

• SettingtheRiskAppetiteoftheBoardinordertoachieveitsstrategicobjectives.

• Establishmentandmaintenanceofgovernance,policies,systemsandcontrolstoensuretheGroupisoperatingwithinthestatedRiskAppetite.

TheBoardhasputinplaceagovernancestructurewhichisappropriatefortheoperationsofanonlineretailfinancialservicesgroupandisalignedtothedeliveryoftheGroups’strategicobjectives.Inadditiontheprinciplesofthe“ThreeLinesofDefence”riskmanagementmodel,explainedbelow,havebeenadoptedandarebeingimplementedacrosstheGroup.ThestructureisregularlyreviewedandmonitoredandanychangesaresubjecttoBoardapproval.Furthermore,managementregularlyconsidersupdatestotheprocessesandprocedurestoembedgoodcorporategovernancethroughoutCMCMarkets.

AspartoftheGroupRiskManagementFramework,thebusinessissubjecttoindependentassurancebyexternalandinternalaudit(thirdlineofdefence).Theuseofindependentcompliancemonitoring,riskreviews(secondlineofdefence)andriskandcontrolself-assessments(firstlineofdefence)provideadditionalsupporttotheintegratedassuranceprogrammeandensurethattheGroupiseffectivelyidentifying,managingandreportingitsrisks.FurtherdetailsoftheRiskManagementFrameworkaresetoutonpages28to31.

ThemainrisksassociatedwiththeGroup’sfinancialactivitiesandthekeyoperationalrisksfacedbytheGroupareoutlinedbelowanddetailsoffinancialrisksandtheirmanagementaresetoutinnote4ofthefinancialstatements.

TheBoardhasundertakenanassessmentofthePrincipleRisksandhowtheyaremanagedormitigated.Theseareoutlinedbelowanddetailsoffinancialrisksandtheirmanagementaresetoutinnote4tothefinancialstatements.

FurtherinformationonthestructureandworkingsofBoardandManagementcommitteesisincludedintheCorporateGovernancereportonpage34.

Business FunctionsIdentify,own,assessandmanagerisks.

Design,implementandmonitorsuitablecontrols. IssueManagement.KRIandRiskAppetitereporting.

Board

Inde

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ExecutionofBoard’srisk strategyincludingRiskAppetite.

Risk & Control FunctionsFinance,RiskManagement,Legal,

Compliance,FinancialCrime.Integraterisk managementintodailybusinessactivities, providingguidancetoolsandsupport.


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Category Risk Description Management and Mitigation

Strategic risk Strategic risk TheriskofanadverseimpactresultingfromtheGroup’sstrategicdecision-makingaswellasfailuretoexploitstrengthsortotakeopportunities.Itisariskwhichmaycausedamageorloss,financialorotherwisetotheGroupasawhole.

• StronggovernanceframeworkestablishedincludingthreeindependentNon–ExecutiveDirectorssittingontheBoard

• Robustgovernance,challengeandoversightfromindependentNon-ExecutiveDirectors

• ManagingtheGroupinlinewiththeagreedstrategy,policiesandriskappetite

Financial risks Market risk Marketriskisdefinedastheriskthatthevalueofourresidualportfoliowilldecreaseduetothechangeinmarketriskfactors.Thefourstandardmarketriskfactorsarestockprices,interestrates,foreignexchangerates,andcommodityprices.

TradingriskmanagementmonitorsandmanagestheexposuresitinheritsfromclientsonarealtimebasisandinaccordancewithBoardapprovedappetite.

CMCMarketspredominantlyactsasamarketmakerinlinear,highlyliquidfinancialinstrumentsinwhichitcaneasilyneutraliseallmarketriskexposurethroughitsprimebroker(PB)arrangements.ThissignificantlyreducestheGroup’srevenuesensitivitytoindividualassetclassesandinstruments.

Financialriskmanagementrunsstressscenariosontheresidualportfolio,comprisinganumberofsingleandcombined,companyspecificandmarket-wideeventsinordertoassesspotentialfinancialandcapitaladequacyimpactstoensuretheGroupcanwithstandseveremovesintheriskdriversitisexposedto.

Forfurtherinformationseenote4tothefinancialstatements.

Credit risk Client Credit Risk:Financiallossesmaybeincurredincaseswheretheadversepricemoveexceedsthemarginthataclientholdstomaintaintheirposition,followedbytheclientdefaultingagainsttheircontractualobligationstopaythedeficit.

Counterparty Credit Risk:AFinancialInstitutionfailingtomeetordefaultingontheirobligationsinaccordancewithagreedterms.

Client Credit Risk:TheGroup’smanagementofclientcreditriskissignificantlyaidedbyautomaticliquidationfunctionalitywheremarginlevelsarecontinuouslyreviewedandiftheyfallbelowpreagreedlevelsthepositionsheldontheaccountwillautomaticallybeclosedout.

Other platform functionality mitigates risk further:• Tieredmarginrequiresclientstoholdmorecollateralagainstbiggerorhigherriskpositions.

• Mobilephoneaccessallowingclientstomanagetheirportfoliosonthemove.

• GuaranteedStopLossOrdersallowingaclienttoremovetheirchanceofdebtfromtheirposition(s).

However,aftermitigations,thereisaresidualriskthattheGroupcouldincurlossesrelatingtoclientsmovingintodebitbalancesifthereisamarketgap.

Counterparty Credit Risk:RiskmanagementiscarriedoutbyacentralLiquidityRiskManagement(LRM)teamundertheCounterpartyConcentrationRiskPolicy,approvedbytheboardofDirectors.

Mitigation is achieved by:• Monitoringconcentrationlevelstocounterpartiesandreportingtheseinternally/externallyonamonthly/quarterlybasis.

• MonitoringthecreditratingsandCDSspreadsofcounterpartiesandreportinginternallyonaweeklybasis.

Furtherinformationisavailableinnote4tothefinancialstatements.


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Liquidity risk TheriskthatthereisinsufficientavailableliquiditytomeettheliabilitiesoftheGroupastheyfalldue.

RiskmanagementiscarriedoutbyacentralLiquidityRiskManagement(LRM)teamunderpoliciesapprovedbytheBoardandin-linewiththeFCA’sILASregime.TheGrouputilisesacombinationofliquidityforecastingandstresstestingtoidentifyanypotentialliquidityriskbothduringnormalandstressedconditions.TheforecastingandstresstestingfullyincorporatestheimpactofallliquidityregulationsinforceineachjurisdictionandotherimpedimentstothefreemovementofliquidityaroundtheGroup.

Risk is mitigated by:• Theprovisionoftimelydaily,weeklyandmonthlyliquidityreportingandreal-timebrokermarginrequirementstoenablestrongmanagementandcontrolofliquidityresources.

• A£40millioncommittedbankfacilitytomeetshort-termliquidityobligationstobrokercounterpartiesintheeventthatitdoesnothavesufficientaccesstoitsowncash.

• AformalContingencyFundingPlan(CFP)isinplacethatisdesignedtoaidseniormanagementtoassessandprioritiseactionsinaliquiditystressscenario.

Formoreinformationseenote4tothefinancialstatements.

Operational risks

Business continuity & disaster recovery risk

Theriskthataphysicalbusinesscontinuityeventorsystemfailureresultsinareducedabilityorinabilitytoperformcorebusinessactivitiesorprocesses.

• DedicatedbusinesscontinuityfunctionalsupportwithinOperationalRiskFunction.

• Useofexternalspecialistpremisestoenhanceresilienceintheeventofadisasterrecoveryorbusinesscontinuityrequirement.

• Periodictestingofbusinesscontinuityprocessesanddisasterrecovery.

• Promptresponsetosignificantsystemsfailuresorinterruptions.

Financial crime risk

Theriskofabuseofservicesintheformoffinancialcrimeincludingbutnotlimitedtofraud,bribery,marketabuseandmoneylaundering.

• Adoptionoftheriskbasedapproachtofinancialcrime,includingundertakingformalandregularriskassessmentsacrossglobaloperations.

• Globalreportingproceduresandsurveillanceprocessesinplaceusinglocalcomplianceandlegalexpertise.

• Regularandon-goingtrainingandawarenessprogrammeinplaceforstaffatalllevelsandinalljurisdictions.

• GroupWhistleblowingpolicyprovidesaclearframeworkforescalationofissues.


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Information and data security risk

Theriskofunauthorisedaccesstoorexternaldisclosureofclientorcompanyinformation.

• DedicatedInformationSecurity&DataProtectionresource/expertisewithintheOperationalRiskFunction.

• Technicalandproceduralcontrolsimplementedtominimisetheoccurrenceofinformationsecurityanddataprotectionbreaches.

• Accesstoinformationonlyprovidedona“needtoknow”and“leastprivilege”basisconsistentwiththeuser’sroleandrequiresappropriateauthorisation.

• Keydatalosspreventioninitiativesandregularsystemaccessreviewsimplementedacrossthebusiness.

Technology risk

TheriskofsystemfailuresexposingtheGrouptosignificantcommercial,financial,regulatoryorreputationaldamage.Inaddition,theriskofimpactoncompetitiveadvantagethroughinadequatesystemsdevelopmentand/orimplementationoftheenhancements/upgrades.

• Continuousinvestmentinincreasedfunctionality,capacityandresponsivenessofsystemsandinfrastructure.

• Rigoroussoftwaredesignmethodologies,projectmanagementandtestingregimestominimiseimplementationandoperationalrisks.

• Constantmonitoringofsystemsperformanceandintheeventofanyoperationalissues,changestoprocessesareimplementedtomitigatefutureconcerns.

• OperationoftwodatacentresintheUK.

• Systemsanddatacentresdesignedforhighavailabilityanddataintegrity.

• Continuousserviceavailabletoclientsintheeventofindividualequipmentfailuresormajordisasterrecoveryevents.

People risk Theriskoflossofkeyindividualsandskills,inadequatedevelopment,successionorresourceplanningandinappropriatebehavioursoractions.

• Retentionprogrammesandsuccessionplanninginitiativesinplace.

• Trainingandskillstransferprogrammesbeingundertaken.

• Educationandtraining,performancemanagementandassociatedremunerationpoliciesinplace.

• Recognitionschemeforhighperformingindividuals.


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Regulatory and compliance risk

Theriskofregulatorysanctionorlegalproceedingsasaresultoffailuretocomplywithregulatory,statutoryorfiduciaryrequirementsorasaresultofadefectivetransaction.

• EffectiveComplianceFunction.

• InternalAuditoutsourcedtoathirdpartyprofessionalservicesfirm.

• Effectivecomplianceoversightplanningandimplementation.

• ComprehensivemonitoringprogrammesbyComplianceandInternalaudit.

• Controlsforappointmentandapprovalofstaffholdingacontrolledfunctionandannualdeclarationstoestablishongoingfitnessandpropriety.

• GovernanceandreportingofregulatoryrisksthroughBusinessRiskCommitteeandAuditandRiskCommittee.

• AMLcontrolsforclientduediligenceandsanctionschecking.

Other operational risks

OtheroperationalrisksincludetheGroup’sexposuretolegalandlitigationrisks,thefailureofkeythirdparties,manualerrorsandanyotheractionoroccurrencewhichmayhavefinancialimpactoraffectitsreputationwithclientsandthebusinesscommunity.

• Compliancewithlegalandregulatoryrequirementsincludingrelevantcodesofpractice.

• Earlyengagementwithlegaladvisorsandotherriskmanagers.

• Appropriatelymanagedcomplaintsthathavealegal/litigiousaspect.

• Anearlyassessmentoftheimpactandimplementationofchangesinthelaw.

• Outsourcingonlyemployedwherethereisatacticalgaininresourceorexperience.

• Duediligenceperformedonservicesupplieraheadofoutsourcingbeingagreed.

• Servicelevelagreementsinplaceandregularmonitoringofperformanceundertaken.

Grant Foley GroupDirectorofFinance,RiskandCompliance


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GovernanceThe Board

Simon Waugh (Chairman)

SimonwasGroupDirectorofSales,MarketingandCustomerserviceatCentrica.HeretainedtheseresponsibilitiesforthesevenyearshewaswiththeGroup,andalsoheldtherolesofDeputyCEOofBritishGasandCEOoftheCentricaFinancialServicesCompany.OnleavingCentricaSimonbecameCEOofAWDFinancialServicesGroup,aleadingIFAandconsumerfinancialservicesbusiness.Simon’sfinalseniorexecutivepositionwasintheroleofChairman/CEOoftheNationalApprenticeshipService,leadingthegovernment’sflagshipskillsprogramme,reportingtotheSecretariesofStateforbothEducationandBusiness.SimonisalsoalifefellowofbothTheMarketingSocietyandtheInstituteofDirectMarketing.

John Jackson (Non-Executive Director; resigned 30 June 2015)

JohnjoinedtheCMCMarketsBoardasitsfirstnon-executivedirectorinMay2005,havinghada25yearcareerprincipallyasacorporatelawyeradvisingUK,publicandlargeprivatecompaniesinvarioussectors.DuringhislegalcareerJohnwasapartnerinEnglishandGlobalLawfirms.Johnhasheldanumberofdirectorshipsandconsultancypositionsinbothpublicandprivatecompanies.Johncurrentlyrunshisownadvisorybusinessandisalsoanon-executivedirectorofaUKregulatoryandcompliancecompany.

James Richards (Non-Executive Director; appointed 1 April 2015)

Jamesisapartneratthefinancialserviceslawfirm,DillonEustaceinIreland,wherehehasbeeninthisrolesince2012.PriortothishewasabankingandfinancepartneratTraversSmithLLPfor14years.Havingoccupiedvariousseniorpositionswithinleadinglawfirms,Jameshasextensiveexperienceindebtcapitalmarkets,derivativesandstructuredfinanceworkingwithmajorcorporates,centralbanksandgovernmentalorganisations.

Annual Report 2015Governance

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Peter Cruddas (Chief Executive Officer)

PeterfoundedtheGroupin1989.PriortofoundingtheGroup,PeterwasChiefDealerandGroupTreasuryAdvisoratS.C.F.EquityServices,wherehewasresponsibleforalltheactivitiesofadealingroomwhoseprincipalactivitiesweretradinginfuturesandoptionsincurrencies,preciousmetals,commoditiesandfinancialsandspotforwardsonforeignexchangeandbullion.

Grant Foley (Group Director of Finance, Risk and Compliance)

GrantisaCharteredAccountant(FCA)andhasheldseniorfinancepositionsinFinancialServicesbusinessesforanumberofyears.Thesehaveincluded,Coutts&Co,PrudentialBacheandArbuthnotSecurities.GrantjoinedCMCMarketsinApril2013asGroupHeadofFinanceandwasappointedtotheroleofGroupDirectorofFinance,RiskandComplianceinAugust2013.

David Fineberg (Group Director of Trading)

DavidjoinedCMCMarketsinNovember1997workingonthetradingdeskanddevelopedtheGroup’smultiassetCFDandspreadbetdealingdesk.AsaseniordealerhewasresponsibleformanagingtheUKandUSequitybooks.BetweenApril2007andSeptember2012DavidwasWesternHeadofTrading,coveringallassetclassesfortheWesternregion.InSeptember2012DavidwasappointedtotheroleofGroupHeadofTrading.InJanuary2014DavidwasappointedastheGroupDirectorofTrading.

CMC Markets plc Governance

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TheDirectorsandseniormanagementofCMCMarketsarefullyawareofthebenefitsofrobustandeffectiveCorporateGovernance.Apartfromtheevidentadvantagesthatclarityandaccountabilitybringtomanagement,thevalueitaddstocommercialactivitiesisacknowledged.

TheBoardhasputinplaceagovernancestructurewhichitbelievesisappropriatetotheoperationsofanonlineretailfinancialservicestradinggroupandreflectsthesizeandstageofdevelopmentofthebusiness.CMCMarketsplcisanunlistedpubliccompanyandisnotrequiredtomeettheprovisionsoftheListingRulesoftheUKListingAuthorityortheFinancialReportingCouncil’sUKCorporateGovernanceCode.However,theBoardisawareoftherelevanceoftheseandtheDirectorssupportbestcorporategovernancepracticeanditspracticalapplicationasconsideredsuitablewithregardtotheGroup’soperations.ThestructureisregularlyreviewedandmonitoredbytheBoardforeffectivenessandadaptedasrequiredtofittheneedsoftheGroup’sbusinessesandtheirmanagement.

Theobjectivesofthegovernancestructureare:

• tosatisfytheneedsofthebusinessforproperconsiderationanddecisionmaking;

• toprovideaclearmanagementsupportandmonitoringframeworktoaddvaluetothebusinessandidentifyandcontrolrisks;

• toensuregoodgovernanceprinciplesarefollowedincluding:

• clearremitsanddefinitionsofresponsibility,authority,accountabilityandlinesofreport;

• provisionofappropriatedelegatedauthority;

• aframeworktofacilitateeffectivechecksandbalancesinmanagementandoversightprocesses;

• toallowandencourageeffectiveconstructivechallengeoftheexecutive;and

• toapplybestpracticegovernanceprinciplesappropriatetothebusiness.

ThegovernancestructureisregularlyreviewedforeffectivenessandadaptedasrequiredtofittheneedsoftheGroup’sbusinessesandtheirmanagement.

Corporate governance report

Governance

Risk Management

Oversight

Business Risk

Management

Independent Assurance

Internal Assurance

Group Board

Group Senior Management Team

Client Money Committee

Regional performance Reviews

Group Risk Management

Business Units

Group Audit and Risk Committee

Business Risk Committee

Group Legal Compliance and Financial Crime

Nominations and Remuneration

Committee

Group Internal

AuditExternal

Audit


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TheGroupBoardhasoverallresponsibilityfortheGroup’saffairs.ItcomprisesthreeExecutiveandthreeindependentNon-ExecutiveDirectors.ThecalibreofalltheNon-ExecutiveDirectorsisregardedasmorethancapableofcarryingsufficientweightintheBoard’sdecision-makingandtochallengetheexecutive.TheDirectorsbelievethattheBoardhasabalanceofskills,experienceandservicetoprovideeffectivestrategicleadershipandpropergovernanceoftheCompanyandGroup.TheArticlesofAssociationoftheCompanydonotrequiretheDirectorstoretirebyrotation.

TheBoardisresponsibleforthemanagementandoversightoftheGroup,settingstrategicaimsanddeterminingpolicy.AnychangestotherolesoftheDirectorsduringtheyearandsincetheyearendaresetoutintheDirectors’Report.TheroleoftheCEOisdefinedinwritingandhasbeenapprovedbytheBoard.TheeffectivenessoftheBoardistheresponsibilityoftheNon-ExecutiveChairman.SupportedbytheExecutiveDirectorsandseniormanagement,theCEOisresponsiblefortheimplementationandexecutionofstrategyandpolicy.TheCEOmanagestheGroup’soperationsonaday-to-daybasisandisinfrequentcontactwiththeExecutiveDirectorsandseniormanagementinadditiontoattendingformalBoardmeetings.KeyperformanceindicatorsareincludedintheperformanceevaluationprocessforCEO,ExecutiveDirectorsandseniormanagementandareusedindeterminingtheirremuneration.

ThestatementregardingtheuseofthegoingconcernbasisforpreparationofthefinancialstatementsisincludedintheDirectors’Reportonpage40.TheStatementofDirectors’Responsibilitiesincludingthedisclosureofinformationtotheauditorscanbefoundonpage42.

TheBoardhasaformalscheduleofmattersspecificallyreservedtoitwhichincludes:

• settingstrategicaims,valuesandstandardstopromotetheGroup’sbestinterests;

• controlandoversightofbusinessmanagement;

• settingriskparametersandfinaloverallriskmanagement;

• ensuringadequatefinancialandhumanresources;

• meetingobligationstoshareholdersandstakeholders;

• providingguidanceanddirectiontosubsidiaries’managements;

• establishment,maintenanceandreviewofeffectivesystemsandcontrolsfor:

• compliancewithapplicablerequirementsofregulatorysystems

• counteringtheriskofuseoftheGrouptofurtherfinancialcrime

• identifying,measuring,managingandcontrollingrisks

• ensuringbusinesscontinuity

• ensuringadequaterecordsaremaintained;

• delegationofauthoritywhereappropriate,receivingreportsandrecommendationsfromBoardCommitteesandmonitoringthedischargeofdelegatedauthorities;and

• thereviewofpolicies,procedures,frameworks,standardsandcontrolsrequiredforbusinessoperations.

AlltheDirectorsregularlyreceivefullandtimelyinformationrequiredtoenablethemtoperformtheirrole.TheBoardheldsevenscheduledmeetingsduringtheyearandalsoheldfourad-hocmeetingswhentherewasbusinesswhichcouldnotwaituntilthenextscheduledmeeting.Boardpapers,whicharedistributedtoalldirectorsinadvanceofeachmeeting,followasetagendaalthoughfurthersubjectsareaddedfordiscussionastheneedarises.InthemonthswhennoBoardmeetingisscheduled,theDirectorsreceiveaBoardpackcontainingupdatedreportsfromeachfunctiontoensureconsistentoversight.InadditiontothescheduledBoardmeetings,Directors’briefingswerealsoheldonparticularissuesrequiringtheirattention.DirectorsreceiveappropriatetrainingonappointmentandasnecessaryduringtheirserviceandalsoreceiveregularbriefingsonproposeddevelopmentsorchangestothelaworregulationsthataffecttheGroup.EachDirectorhasaccesstotheadviceandservicesoftheCompanySecretary.TheDirectorsmaytakeindependentprofessionaladviceattheGroup’sexpenseandDirectorsandOfficersliabilityinsuranceisinplaceaspermittedunderthe2006CompaniesAct.

Board committees

TheBoardAuditandRiskandtheNominationandRemunerationCommitteescarryoutdutiesdelegatedtothembytheBoardandsetoutinwrittentermsofreference.

Board responsibilities


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Sub-board committees

Thecorporategovernancestructurealsoincludessub-boardcommitteeswhichtogetherprovideaframeworktosupportandmonitorthemanagementoftheGroup.

Twosub-boardcommitteesreporttotheAuditandRiskCommitteeandtheBoard,ensuringthattheoversightandchallengeobligationscanmoredirectlybedischarged.

TheBusinessRiskCommitteemonitorstheriskareasofthebusiness,includingfinancialrisk,compliance,financialcrime,andinternalaudit.ThisischairedbytheGroupDirectorofFinance,RiskandCompliancewithseniormanagersandspecialistsattendingforeachfieldtheycover.

TheClientMoneyCommitteeisafundamentalpartoftheGroup’sclientmoneygovernanceandoversightprocedures.ThecommitteeischairedbytheCF10a,anFCA-approvedperson,whoisresponsibleforoverseeingthecontrolsandproceduresinplacetoprotectclientmoney.ThecommitteeiscomprisedofseniormanagementfromacrosstheGroupwhooverseefunctionswhichimpactclientmoney.

TheClientMoneyCommitteeformsakeypartoftheoversightofclientmoneyinadditiontoCompliance,internalauditandPwCasexternalauditors.

Eachofthesub-boardcommitteesoutlinedabovehastermsofreferenceapprovedbytheAuditandRiskCommittee.Meetingsareformallyscheduledatleastonceamonthalthoughshouldaparticularmatterrequireimmediateconsiderationtheycanbeconvenedquicklytodetermineanynecessaryaction.

Inaddition,managementmeetingsareheldonceamonthattendedbyseniormanagersfromeachfunctionacrossthebusinessandchairedbytheCEO.Themeetingsallowforthecommunicationanddiscussionofanybusinessdevelopments,on-goingprojectsandnewissuesthathavearisen.

Risks

Theon-goingprocessofidentifying,assessingandtreatingthesignificantrisksfacingtheGroupiscoordinatedbytheriskfunction.ThisprocesshasbeeninplaceforthefullyearunderreviewandtothedateoftheapprovaloftheAnnualReportandfinancialstatements.TheprincipalrisksanduncertaintiesaffectingtheGroupandtheresponsibilitiesforthemanagementofthekeyrisksaresetoutintheStrategicReportonpages27to31.

Regulation

CMCMarkets’worldwideregulatedentitiesandtherelevantregulatoryauthoritiesaresetoutonpage39.Inordertomeetregulatoryrequirements,theyaremonitoredbyspecialistexecutivesinthefinance,risk,legalandcompliancefunctionsglobally,supportedbythegovernancestructureandprocesses.

Company meetings

TheExecutiveDirectorsandtheChairmenoftheAuditandRiskandNominationandRemunerationCommitteesoftheBoardwillbeavailabletoanswerquestionsatthe2015AGM.Informationonthe2015AGMcanbefoundintheDirectors’Reportonpage40.


36

TheAuditandRiskCommitteecomprisingallindependentNon-ExecutiveDirectors-SimonWaugh(Chairman),JohnJackson(resigned30June2015)andJamesRichards,meetsatleasttwotimesayear.

TheCommitteeholdsstructuredmeetingstwotimesperyearandconsultswithexternalauditors,internalauditors,whereappropriate,andseniormanagement.TheCommitteeusuallyrequeststhatexecutivedirectorsandseniormanagersattendtoprovidereportsforthemeetingsinordertoreinforceastrongcultureofriskmanagementandtokeeptheCommitteeuptodatewitheventsinthebusiness.TheGroupDirectorofFinance,Risk&Complianceattendedallofthisyear’smeetings.

TheCommitteeregularlyreviewsthevarioustypesofriskrelevanttotheCMCGroup(the“Group”)andhasreviewedthekeyrisks(describedonpages27to31)andtheassociatingcontrolsandmitigatingfactors.TheCommitteereceivesreportsandbriefingsfrominternalauditandhasreviewedthelevelofinternalauditresourceprovidedbyGrantThorntonandbelievesthatitisadequateforthesize,structureandbusinessrisksoftheGroup.

TheCommittee’sreviewofthefullyearfinancialstatementsfocussedonthefollowingareasofsignificance:

• ThepresentationoftheclientdebtarisingfromtheSNBeventasanexceptionalcost.

• Thepresentationofthesettlementofalegaldisputeasanexceptionalcost.

ThesewerediscussedandtherewerenosignificantdifferencesbetweentheGroupDirectorofFinance,Risk&Complianceandexternalauditorconclusions.

TheoperationsoftheGrouparehighlyreliantontheGroup’sITsystems.TheCommitteereceivesregularbriefingscoveringvariousaspectsofITandITsecurity.Inthisrapidlymovingarea,thereisinevitablyariskthatasystemsfailureorcyber-attackcouldcausesignificantbusinessdisruption.Significantresourcesarethereforedevotedtothedevelopment,maintenanceandsecurityoftheITsystems.

TheGroup’sinternalcontrolfunctionsinareassuchasFinance,RiskandComplianceareregularlyreviewedbytheCommitteemembers.BriefingsarereceivedonareassuchasTreatingCustomersFairly,FinancialCrime,BusinessContinuityaswellasOperational,FinancialandLiquidityRisk.

TheCommitteehaddiscussionswiththeexternalauditoronauditplanning,fees,accountingpolicies,auditfindingsandinternalcontrol.Theexternalauditorattendedbothofthisyear’sCommitteemeetings.Meetingsarealsoheldwiththeexternalauditorwithoutmanagementpresent.Theeffectivenessoftheauditwasassessedthroughthereviewofauditplans,reportsandconclusionsandthroughdiscussionswithmanagementandtheexternalauditor.TheCommitteewassatisfiedthattheauditwaseffective.

TheCommitteeisresponsibleforrecommendingtheappointment,re-appointmentandremovaloftheexternalauditor.Considerationisgiveneachyeartoanaudittenderprocess,however,atenderwasnotconsiderednecessaryduringthecurrentyear.PricewaterhouseCoopers(“PwC”)hasbeentheGroup’sauditorfor6yearsandtheCommitteeissatisfiedthatPwCcontinuestopossesstheskillsandexperiencerequiredtofulfilitsdutieseffectivelyandefficiently.

PwChavereportedtotheCommitteethat,intheirprofessionaljudgement,theyareindependentwithinthemeaningofregulatoryandprofessionalrequirementsandtheobjectivityoftheauditengagementpartnerandauditstaffisnotimpaired.TheCommitteehasassessedtheindependenceofPwCandconcurswiththisstatement.TheGroup’sexternalauditorisprohibitedfromprovidinganyservicesthatwouldconflictwiththeirstatutoryresponsibilitiesorwhichwouldotherwisecompromisetheirobjectivityorindependence.Duringtheyear,PwC’sauditfeeamountedto£585,000andnon-auditfeeswere£282,000intotal.

TheCommitteehasrevieweditsTermsofReferenceandcomposition,andbelievesthatbothareappropriate.

Simon Waugh Chairman of the Audit & Risk Committee 15July2015

Audit and Risk Committee


37

TheNominationandRemunerationCommitteecomprisingthethreeindependentNon-ExecutiveDirectors(JohnJackson(resignedasChairman30June2015),SimonWaughandJamesRichards(appointedChairman1July2015))meetsatleasttwotimesayear.AttendancemaybeinvitedfromseniorexecutivemanagementandregularattendeesincludetheGroupDirectorofFinance,RiskandCompliance,andtheGroupHeadofHR.ThedutiesofthecommitteearesetoutinwrittentermsofreferenceapprovedbytheBoardwhichinclude:

• theregularreviewofthestructureoftheBoard;toleadtheprocessformakingBoardappointmentsandtoensureplansareinplacefororderlysuccession;

• participationwiththeBoardinitsperiodicreviewoftheperformanceofDirectorsandseniormanagementandtomakerecommendationsarisingfromsuchreview;

• considerationandperiodicrecommendationtotheBoardoftheremunerationpolicy(includingincentiveslinkedtotheCompany’sperformancemeasured,amongstotherthings,byfinancialresultsadjustedforrisks)relatingtotheExecutiveDirectorsandotherseniormanagersthatitisdesignatedtoconsiderandensuringthatsuchpolicyattractsandretainshighcalibreDirectorsandseniormanagement;and

• thereviewofGroupwideannualsalaryarrangements,performancerelatedpayschemesandincentiveplansandtoconsiderandmakerecommendationsinrespectoftheirrationale,structureandaggregatecost.

James Richards Chairman, Nomination and Remuneration Committee. 15July2015

Nomination and Remuneration Committee


38

CMC Markets entity Financial services regulator(s)CMCMarketsUKplc FinancialConductAuthority(FCA),UK

CMCMarketsUKplc–Europeanbranches FCA,UK;and

Italy CMCMarketsUKplcSuccursalediMilano

CommissioneNazionaleperleSocietàelaBorsa(CONSOB),Italy

France CMCMarketsUKplc,France

AutoritédesMarchésFinanciers(AMF);andAutoritédeControlePrudentialetderesolution(ACPR)

Germany NiederlassungFrankfurtamMainderCMCMarketsUKplc

BundesanstaltfürFinanzdienstleistungsaufsicht(BaFin),Germany

Norway CMCMarketsUKplcFilialOslo

Finanstilsynet(TheFinancialSupervisoryAuthorityofNorway)

Spain CMCMarketsUKplc,SucursalenEspaña

ComisiónNacionaldelMercadodeValores(CNMV),Spain

Sweden CMCMarketsUKplcFilialStockholm

Finansinspektionen(FinancialSupervisoryAuthoritySweden)

CMCMarketsUKplc–RepresentativeOffice:

BeijingRepresentativeOfficeofCMCMarketsUKplc ChinaBankingandRegulatoryCommission

CMCSpreadbetplc FCA,UK

CMCMarketsAsiaPacificPtyLtd AustralianSecuritiesandInvestmentsCommission(ASIC)

CMCMarketsPtyLtd ASIC

CMCMarketsStockbrokingLtd ASIC;andAustraliaStockExchange(ASX)

CMCMarketsCanadaInc. (OperatingasMarchesCMCCanadainQuebec)

InvestmentIndustryRegulatoryOrganizationofCanada(IIROC);AutoritédesMarchésFinanciers(AMF)OntarioSecuritiesCommission;andBritishColumbiaSecuritiesCommission

CMCMarketsNZLtd FinancialMarketsAuthority(NewZealand)

CMCMarketsSingaporePteLtd MonetaryAuthorityofSingapore(MAS)

Regulated Entities


39

CMCMarketsplcisincorporatedasapubliclimitedcompanyandisregisteredinEnglandandWaleswiththeregisterednumber05145017.CMCMarketsplc’sregisteredaddressis133Houndsditch,London,EC3A7BX.

TheDirectorspresenttheirreporttogetherwiththeauditedfinancialstatementsofCMCMarketsplcanditssubsidiarycompanies(“theGroup”)fortheyearended31March2015.

Principal activities

CMCMarketsisanonlineretailfinancialservicesbusinessand,throughitsprincipalsubsidiariesandtheirbranchesassetoutintheCorporateGovernanceReportandnote15tothefinancialstatements,providesitsclientstheabilitytotradecontractsfordifference(CFD)orfinancialspreadbettingonarangeofshares,indices,foreigncurrencies,commoditiesandtreasuries.TheGroupalsoprovidesstockbrokingservicesinAustralia.

Strategic report

TheCompaniesAct2006requirestheGrouptoprepareaStrategicreport,whichcommencesatthestartofthisAnnualReportandfinancialstatementsuptopage85.TheStrategicreportincludesinformationabouttheGroup’soperationsandbusinessmodel,reviewofthebusinessthroughouttheyear,anticipatedfuturedevelopments,keyperformanceindicatorsandprincipalrisksanduncertainties.Theuseoffinancialinstrumentsisincludedinthereportandfurthercoveredundernote20totheconsolidatedfinancialstatementsonpage76.TheGroup’svisionistobemarketleaderinglobalonlinemulti-assettrading.Itsstrategicobjectiveistoprovidesuperiorshareholderreturnsthroughtheconsistentandsustainabledeliveryofgrowthinrevenueandimprovementtooperatingmarginsthroughoperationalexcellenceincludingproductinnovation,technologyandservice.ThestrategicobjectivestoachievethisarealsosetoutintheStrategicReport.

Summary of results and dividends

TheresultsforthefinancialyearareshownintheConsolidatedIncomeStatementonpage45.Thedetailsofdividendsaresetoutinnote30.

General

Capital structure

TheCompany’ssharecapitalcomprisesordinarysharesof25penceeachanddeferredsharesof25penceeach.At31March2015therewere280,296,862ordinaryand2,478,086deferredsharesinissue.Eachordinarysharecarriesonevote.Deferredshareshavenovotingrights.

Duringtheyear:

1. undertheCMCMarketsManagementEquityPlan2009(“theMEP”),noordinaryshareswereallocatedtoanyemployeebytheEmployeeBenefitTrust(EBT)duetoexerciseofvestedshareoptions.Similarly,noordinaryshareswereacquiredbytheEBTfromanyemployeewholefttheemployoftheGroup.Duetonotransactionsduringtheyear,1,069,282ordinaryshares(0.38%oftotalissuedordinaryshares)remainretainedbytheEBTatthedateofthisreportandaretreatedasownsharesheldintrustforthefuturebenefitofemployeesofCMCMarketsUKplc;

2. undertheMEP,309,000optionsoverordinarysharesweregrantedwithoutchargetotwoDirectors;

3. 660,735optionspreviouslygrantedundertheMEPlapsedresultingin934,300remainingoutstandingattheyear-end;and

4. 2,315ordinaryshareswereconvertedtodeferredshares.

Atthedateofthisreportanaggregateof934,300optionsoverordinarysharesintheCompanyremainoutstandingsubjecttotherulesoftheMEP.Furtherdetailsoftheauthorisedandissuedcapitalaredisclosedinnote23.

Directors and their responsibilities

DetailsoftheDirectorswhoservedthroughoutorforpartoftheyearanduptothedateofsigningthefinancialstatementsandtheirexecutivepositionsaresetoutbelow.

Peter Cruddas ChiefExecutiveOfficerDavid Fineberg GroupDirectorofTrading

Grant FoleyGroupDirectorofFinance,RiskandCompliance

John Jackson Non-ExecutiveDirector(Resigned30June2015)

James Richards Non-ExecutiveDirector(Appointed01April2015)

Simon Waugh Non-ExecutiveChairman

FurtherinformationontheBoard’sactivities,powersandresponsibilitiesisincludedintheCorporateGovernanceReportonpage34.TheStatementofDirectors’Responsibilitiesiscoveredonpage42.

Corporate governance

TheCompany’sreportoncorporategovernancewhichformspartofthisDirectors’Reportiscoveredonpages32to39.

Directors’ report

Annual Report 2015

40

Directors’ report

Research and development

TheGrouphascontinuedtoinvestsignificantlyinthedevelopmentoftheCFDandspreadbetNextGenerationplatforminadditiontomaintainingexistinginfrastructurewithconsiderableeffortappliedbythetechnicalandsoftwaredevelopmentteams.Littleexpenditureiscapitalisedandisthereforeexpensedwhenitisincurred.£nilofdevelopmentexpenditurehasbeencapitalisedduringtheyear(2014:£nil).

Going concern

HavinggivendueconsiderationtothenatureoftheGroup’sbusiness,theDirectorsconsiderthattheCompanyandtheGrouparegoingconcernsandthefinancialstatementsarepreparedonthatbasis.ThistreatmentreflectsthereasonableexpectationthattheGrouphasadequateresourcestocontinueinbusinessfortheforeseeablefutureandtheconsiderationofthevariousriskssetoutonpages27to31andfinancialrisksdescribedinnote4tothefinancialstatements.

AGM

The2015AnnualGeneralMeetingofCMCMarketsplc(the“2014AGM”)istobeheldat133Houndsditch,London,EC3A7BXat12.00noononWednesday30September2015.TheNoticeofthe2015AGMandrelatedpapersaresenttoshareholdersatleast21cleardaysbeforethemeeting.

ResolutionsareincludedinthenoticeofmeetingtogiveDirectorstheauthorityforthemaximumstatutoryperiodoffiveyearstoallottheunissuedsharesoftheCompanyand,subjecttotheforegoingauthoritybeingprovided,topermittheDirectorstoissuesuchshareswhollyforcashonanonpre-emptivebasis.TheseresolutionsseektorenewsimilarauthoritiesgiventotheDirectorsbyshareholdersatthe2014AnnualGeneralMeeting.

Independent auditors

Aresolutionproposingthere-appointmentofPricewaterhouseCoopersLLPastheCompany’sauditorsandauthorisingtheDirectorstodeterminetheauditors’remunerationwillbeputforwardatthe2015annualgeneralmeeting.

ByorderoftheBoard

Jonathan Bradshaw Company Secretary 15July2015

CMCMarketsplc Registerednumber:05145017

CMC Markets plc

41

Directors’ report

TheDirectorsareresponsibleforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandregulationsandthoseInternationalFinancialReportingStandards(IFRS)asadoptedbytheEuropeanUnion.

UnderCompanylaw,theDirectorsmustnotapprovetheGroupfinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsoftheGroupandtheprofitorlossoftheGroupforthatperiod.TheDirectorsarerequiredtopreparefinancialstatementsforeachfinancialyearwhichpresentfairlythefinancialpositionoftheCompanyandoftheGroupandtheresultsandcashflowsoftheGroupforthatperiod.Inpreparingthefinancialstatements,theDirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;

• makejudgmentsandaccountingestimatesthatarereasonableandprudent;

• statewhetherapplicableIFRSshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;and

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupandtheCompanywillcontinueinbusiness.

TheDirectorsareresponsibleforkeepingproperandadequateaccountingrecordsthataresufficienttoshowandexplaintheCompany’sandtheGroup’stransactionsanddisclosewithreasonableaccuracy,atanytime,thefinancialpositionoftheCompanyandtheGroupandenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandtheGroupandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

TheDirectorsareresponsibleforthemaintenanceandintegrityoftheCompany’swebsite–www.cmcmarketsplc.com.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

Disclosure of information to auditor

Inaccordancewiths418oftheCompaniesAct2006,eachDirectorinofficeatthedateofapprovalofthisreportconfirmsthat:

• tothebestofeachDirector’sknowledgeandbelief,thereisnoinformationrelevanttothepreparationoftheirreportofwhichtheGroup’sauditorsareunaware;and

• eachDirectorhastakenallstepsaDirectormightreasonablybeexpectedtohavetaken,tobeawareofrelevantauditinformationandtoestablishthattheGroup’sauditorsareawareofthatinformation.

Directors’ responsibility statement

EachoftheDirectors,whosenamesandfunctionsarelistedonpages32to33confirmthat,tothebestoftheirknowledge:

• thefinancialstatements,preparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion,giveatrueandfairviewoftheassets,liabilities,financialpositionandprofitfortheCompanyandundertakingsincludedintheconsolidationtakenasawhole;and

• theCompany’sAnnualReportandfinancialstatementsincludeafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheCompanyandtheundertakingsincludedintheconsolidationtakenasawhole,togetherwithadescriptionoftheprincipalrisksanduncertaintiesthatitfaces.

TheDirectorsconsiderthattheAnnualReportandfinancialstatementstakenasawholeisfair,balancedandunderstandableandprovidestheinformationnecessaryforshareholderstoassesstheCompany’sandtheGroup’sperformance,businessmodelandstrategy.TheAnnualReportonpages1to85wasapprovedbytheBoardofDirectorsandauthorisedforissueon15July2015andsignedonbehalfoftheBoardby:

Peter Cruddas Grant Foley Chief Executive Officer Group Director of Finance, Risk and Compliance

Statement of Directors’ responsibilities

Annual Report 2015

42

Statement of Directors’ responsibilities

Report on the financial statements

Our opinion

Inouropinion:

• thefinancialstatements,definedbelow,giveatrueandfairviewofthestateoftheGroup’sandoftheparentcompany’saffairsasat31March2015andoftheGroup’sprofitandtheGroup’scashflowsfortheyearthenended;

• theGroupfinancialstatementshavebeenproperlypreparedinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion;

• theparentcompanyfinancialstatementshavebeenproperlypreparedinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnionandasappliedinaccordancewiththeprovisionsoftheCompaniesAct2006;and

• thefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.

Thisopinionistobereadinthecontextofwhatwesayintheremainderofthisreport.

What we have audited

TheGroupfinancialstatementsandparentcompanyfinancialstatements(the“financialstatements”),whicharepreparedbyCMCMarketsplc,comprise:

• Consolidatedandparentcompanystatementoffinancialpositionasat31March2015;

• Consolidatedincomestatementandstatementofcomprehensiveincomefortheyearthenended;

• Consolidatedstatementofcashflowsfortheyearthenended;

• Consolidatedandparentcompanystatementofchangesinequityfortheyearthenended;and

• thenotestothefinancialstatements,whichincludeasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandIFRSsasadoptedbytheEuropeanUnionand,asregardstheparentcompanyfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompaniesAct2006.

Inapplyingthefinancialreportingframework,thedirectorshavemadeanumberofsubjectivejudgements,forexampleinrespectofsignificantaccountingestimates.Inmakingsuchestimates,theyhavemadeassumptionsandconsideredfutureevents.

What an audit of financial statements involves

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)(“ISAs(UK&Ireland)”).Anauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.

Thisincludesanassessmentof:

• whethertheaccountingpoliciesareappropriatetotheGroup’sandtheparentcompany’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;

• thereasonablenessofsignificantaccountingestimatesmadebythedirectors;and

• theoverallpresentationofthefinancialstatements.

Weprimarilyfocusourworkintheseareasbyassessingthedirectors’judgementsagainstavailableevidence,formingourownjudgements,andevaluatingthedisclosuresinthefinancialstatements.

Wetestandexamineinformation,usingsamplingandotherauditingtechniques,totheextentweconsidernecessarytoprovideareasonablebasisforustodrawconclusions.Weobtainauditevidencethroughtestingtheeffectivenessofcontrols,substantiveproceduresoracombinationofboth.

Inaddition,wereadallthefinancialandnon-financialinformationintheAnnualReporttoidentifymaterialinconsistencieswiththeauditedfinancialstatementsandtoidentifyanyinformationthatisapparentlymateriallyincorrectbasedon,ormateriallyinconsistentwith,theknowledgeacquiredbyusinthecourseofperformingtheaudit.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on other matter prescribed by the Companies

Act 2006

InouropiniontheinformationgivenintheStrategicReportandtheDirectors’Reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.

Independent auditors’ report

CMC Markets plc

43


Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit;or

• adequateaccountingrecordshavenotbeenkeptbytheparentcompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• theparentcompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns.

Wehavenoexceptionstoreportarisingfromthisresponsibility.

Directors’ remuneration

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion,certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade.Wehavenoexceptionstoreportarisingfromthisresponsibility.

Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

AsexplainedmorefullyintheDirectors’ResponsibilitiesStatementsetoutonpage42,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.

OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandISAs(UK&Ireland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’sEthicalStandardsforAuditors.

Thisreport,includingtheopinions,hasbeenpreparedforandonlyforthecompany’smembersasabodyinaccordancewithChapter3ofPart16oftheCompaniesAct2006andfornootherpurpose.Wedonot,ingivingtheseopinions,acceptorassumeresponsibilityforanyotherpurposeortoanyotherpersontowhomthisreportisshownorintowhosehandsitmaycomesavewhereexpresslyagreedbyourpriorconsentinwriting.

Hemione Hudson (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 15July2015

Annual Report 2015

44


Financial statements

Consolidated income statement

For the year ended 31 March 2015

GROUP Note

2015

£’000

2014 Restated

£’000

Revenue 164,797 140,618

Netinterestincome 6 2,118 2,146

Total revenue 166,915 142,764Rebatesandlevies (23,263) (20,754)

Net operating income 5 143,652 122,010Operatingexpenses 7 (92,312) (78,375)

EBITDA(1) 51,340 43,635

Analysed as:

EBITDA before exceptional costs 59,774 43,635

Exceptionalcosts 7 (8,434) –

EBITDA(1) 51,340 43,635

Depreciationandamortisation (6,934) (10,698)

Operating profit 44,406 32,937

Financecosts 9 (896) (696)

Profit before taxation 10 43,510 32,241

Analysed as:Profit before taxation and exceptional costs 51,944 32,241Exceptionalcosts 7 (8,434) –

Profit before taxation 43,510 32,241

Taxation 11 (8,770) (8,285)

Profit for the year attributable to owners of the Company 34,740 23,956

EarningspershareBasic (p) 12 12 .4p 8 .5p

Diluted(p) 12 12.4p 8.5p

(1) EBITDA represents earnings before interest, tax, depreciation and amortisation and impairment of intangible assets, but includes interest income classified as trading revenue.

AspermittedbySection408oftheCompaniesAct2006,theCompanyhasnotpresenteditsownincomestatementorstatementofcomprehensiveincome.Thelossfortheyearended31March2015dealtwithinthefinancialstatementsoftheCompanywas£11,000(2014:£44,000Profit).TheCompanyhadnoothercomprehensiveincome.

CMC Markets plc Financial statements

45

Consolidated statement of comprehensive income


GROUP

2015

£’000

2014 Restated

£’000Profit for the year 34,740 23,956Other comprehensive income:Items that may be subsequently reclassified to income statementProfitonnetinvestmenthedgesnetoftax 1,063 3,941Profitrecycledfromequitytotheincomestatement – 1,212Currencytranslationdifferences (1,485) (8,183)

Other comprehensive expense for the year (422) (3,030)

Total comprehensive income for the year attributable to owners of the Company 34,318 20,926

Annual Report 2015Financial statements

46

Consolidated and Parent Company statement of financial position

£’000 Note

GROUP COMPANYAs at 31 March As at 1 April

2013 Restated

As at 31 March2015 2014

Restated2015 2014

ASSETSNon-current assetsIntangibleassets 13 3,658 4,091 10,667 – –Property,plantandequipment 14 17,376 13,733 16,114 – –Investmentinsubsidiaryundertakings 15 – – – 162,576 162,576Deferredtaxassets 22 7,552 7,380 13,912 – –

Total non-current assets 28,586 25,204 40,693 162,576 162,576

Current assetsTradeandotherreceivables 16 18,766 19,661 22,456 35,444 36,765Derivativefinancialinstruments 20 3,275 630 594 – –Currenttaxrecoverable – – 448 – –Amountsduefrombrokers 109,794 65,864 48,758 – –Cashandcashequivalents 17 38,611 57,801 49,102 – –

Total current assets 170,446 143,956 121,358 35,444 36,765

Total assets 199,032 169,160 162,051 198,020 199,341

LIABILITIESCurrent liabilitiesTradeandotherpayables 18 38,723 39,657 44,160 54,014 43,728Derivativefinancialinstruments 20 805 2,106 2,192 – –Borrowings 19 1,399 635 1,184 – –Currenttaxpayable 3,507 1,202 – 3 24Shorttermprovisions 21 4,345 328 3,715 – –

Total current liabilities 48,779 43,928 51,251 54,017 43,752

Non-current liabilitiesTradeandotherpayables 18 3,926 4,375 4,376 – –Borrowings 19 2,453 339 974 – –Deferredtaxliabilities 22 128 627 1,146 – –Longtermprovisions 21 1,423 310 50 – –

Total non-current liabilities 7,930 5,651 6,546 – –

Total liabilities 56,709 49,579 57,797 54,017 43,752

EQUITYEquity attributable to owners of the CompanySharecapital 23 70,694 70,694 70,694 70,694 70,694Sharepremium 23 33,362 33,362 33,362 33,362 33,362Ownsharesheldintrust 24 (1,983) (1,983) (2,000) – –Otherreserves 26 (49,969) (49,547) (46,517) – –Retainedearnings 90,219 67,055 48,715 39,947 51,533

Total equity 142,323 119,581 104,254 144,003 155,589

Total equity and liabilities 199,032 169,160 162,051 198,020 199,341

TheFinancialstatementsonpages45to85wereapprovedandauthorisedforissuebytheBoardofDirectorson15July2015andsignedonitsbehalfby:

Peter Cruddas, Chief Executive Officer Grant Foley, Group Director of Finance, Risk and Compliance


47

Consolidated and Parent Company statement of changes in equity


GROUP

Share capital £’000

Share premium

£’000

Own shares held in trust

£’000

Other reserves

£’000

Retained earnings

£’000

Total equity £’000

At 1 April 2013 (As previously reported) 70,694 33,362 (2,000) (46,517) 46,944 102,483Effectofchangesinaccountingpolicies – – – – 1,771 1,771

At 1 April 2013 (Restated) 70,694 33,362 (2,000) (46,517) 48,715 104,254Totalcomprehensiveincomefortheyear – – – (3,030) 23,956 20,926Share-basedpayments – – – – 273 273Dividends – – – – (5,889) (5,889)Disposalofownsharesheldintrust – – 17 – – 17

At 31 March 2014 (Restated) 70,694 33,362 (1,983) (49,547) 67,055 119,581Totalcomprehensiveincomefortheyear – – – (422) 34,740 34,318Share-basedpayments – – – – 374 374Dividends – – – – (11,950) (11,950)

At 31 March 2015 70,694 33,362 (1,983) (49,969) 90,219 142,323

Total equity is attributable to owners of the Company

COMPANY

Share capital £’000

Share premium

£’000

Retained earnings

£’000

Total equity £’000

At 1 April 2013 70,694 33,362 57,277 161,333

Totalcomprehensiveincomefortheyear – – 44 44Share-basedpayments – – 189 189Dividends – – (5,977) (5,977)

At 31 March 2014 70,694 33,362 51,533 155,589Totalcomprehensiveexpensefortheyear – – (10) (10)Share-basedpayments – – 374 374Dividends – – (11,950) (11,950)

At 31 March 2015 70,694 33,362 39,947 144,003


48

Consolidated statement of cash flows


GROUP Note

2015

£’000

2014 Restated

£’000

Cash flows from operating activitiesCashgeneratedfromoperations 28 6,362 19,571Netinterestincome 2,118 2,146Taxpaid (6,471) (1,372)

Net cash generated from operating activities 2,009 20,345

Cash flows from investing activitiesPurchaseofproperty,plantandequipment (8,584) (1,606)Proceedsfromdisposalofproperty,plantandequipment 136 137Investmentinintangibleassets (1,866) (684)Proceedsfromdisposalofintangibles – 65Proceedsfromdisposalofsubsidiary – 127

Net cash used in investment activities (10,314) (1,961)

Cash flows from financing activitiesRepaymentofborrowings (1,524) (1,167)Proceedsfromborrowings 4,402 –Dividendspaid (11,950) (5,889)Financecosts (896) (696)

Net cash used in financing activities (9,968) (7,752)

Net (decrease)/increase in cash and cash equivalents (18,273) 10,632Cashandcashequivalentsatthebeginningoftheyear 57,801 49,102Effectofforeignexchangeratechanges (917) (1,933)

Cash and cash equivalents at the end of the year 17 38,611 57,801

Thecompanyhadnobalanceofcashorcashequivalentsortransactionsinvolvingcashorcashequivalentsduringtheyearthereforenocashflowstatementhasbeenprovided.


49

Index to notes

1 . Generalinformation2 . Basisofpreparation3 . Summaryofsignificantaccountingpolicies4 . Financialriskmanagement5 . Divisionalanalysis6 . Netinterestincome7 . Operatingexpenses8 . Employeeinformation9 . Financecosts10 . Profitbeforetaxation11 . Taxation12 . Earningspershare(EPS)13 . Intangibleassets14 . Property,plantandequipment15 . Investmentinsubsidiaryundertakings16 . Tradeandotherreceivables17 . Cashandcashequivalents18 . Tradeandotherpayables19 . Borrowings20 . Derivativefinancialinstruments21 . Provisions22 . Deferredtax23 . Sharecapitalandpremium24 . Ownsharesheldintrust25 . Share-basedpayment26 . Otherreserves27 . Operatingleasecommitments28 . Cashgeneratedfromoperations29 . Retirementbenefitplans30 . Dividendpershare31 . Relatedpartytransactions32 . Contingentliabilities33 . Ultimatecontrollingparty34 . Impactofadoptingnewaccountingstandardsandre-allocations

Notes to the financial statements


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1. General information

Corporate information

CMCMarketsplc(theCompany)isacompanyincorporatedanddomiciledinEnglandandWalesundertheCompaniesAct2006.ThenatureoftheoperationsandprincipalactivitiesoftheCMCMarketsplcGroup(theGroup)aresetoutinnote5.

Functional and presentation currency

ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(‘thefunctionalcurrency’).TheconsolidatedfinancialstatementsarepresentedinSterling(GBP)whichistheCompany’sfunctionalandtheGroup’spresentationcurrency.Foreignoperationsareincludedinaccordancewiththepoliciessetoutinnote3.

2. Basis of preparation

Basis of accounting

TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)andIFRSInterpretationsCommittee(IFRSIC)asadoptedbytheEuropeanUnionandtheCompaniesAct2006applicabletocompaniesreportingunderIFRS.

Thefinancialinformationhasbeenpreparedunderthehistoricalcostconvention,exceptfortherevaluationofcertainfinancialassetsandfinancialliabilities(includingderivativeinstruments)atfairvaluethroughprofitorloss,andinaccordancewiththegoingconcernbasis.Thefinancialinformationisroundedtothenearestthousands,exceptwhereotherwiseindicated.Theprincipalaccountingpoliciesadoptedinthepreparationofthesefinancialstatementsaresetoutinnote3below.Thesepolicieshavebeenconsistentlyappliedtoallperiodspresented,unlessotherwisestated.

Changes in accounting policy and disclosures

New accounting standards

On1April2014,theGroupimplementedIFRIC21,‘Levies’withretrospectiveeffectfrom1April2013.IFRIC21,‘Levies’,providesguidanceonwhentorecognisealiabilityforalevyimposedbyagovernment,bothforleviesthatareaccountedforinaccordancewithIAS37Provisions,ContingentLiabilitiesandContingentAssetsandthosewherethetimingandamountofthelevyiscertain.

TherearenofurtherIFRSsorIFRICinterpretationsthatareeffectiveforthefirsttimeforthefinancialyearbeginningonorafter1April2014thatwouldbeexpectedtohaveamaterialimpactontheGroup.

AtthedateofauthorisationoftheseFinancialStatements,thefollowingnewStandardsandInterpretationsrelevanttotheGroupwereinissuebutnotyeteffectiveandhavenotbeenappliedtotheseFinancialStatements:

• IFRS9,‘Financialinstruments:classificationandmeasurement’,willreplaceIAS39,‘Financialinstruments:Recognitionandmeasurement.’IFRS9hastwomeasurementcategories:amortisedcostandfairvalue.Allequityinstrumentsaremeasuredatfairvalue.Adebtinstrumentismeasuredatamortisedcostonlyiftheentityisholdingittocollectcontractualcashflowsandthecashflowsrepresentprincipalandinterest.Forliabilities,thestandardretainsmostoftheIAS39requirements.Theseincludeamortised-costaccountingformostfinancialliabilities,withbifurcationofembeddedderivatives.Themainchangeisthat,incaseswherethefairvalueoptionistakenforfinancialliabilities,thepartofafairvaluechangeduetoanentity’sowncreditriskisrecordedinothercomprehensiveincomeratherthantheincomestatement,unlessthiscreatesanaccountingmismatch.TheGroupisyettoassessthefullimpactofIFRS9,butintendstoadopttheStandardnolaterthantheaccountingperiodbeginning1April2018,subjecttoendorsementbytheEU.

• IFRS15,‘Revenuefromcontractswithcustomers’dealswithrevenuerecognitionandestablishesprinciplesforreportingusefulinformationtousersoffinancialstatementsaboutthenature,amount,timinganduncertaintyofrevenueandcashflowsarisingfromanentity’scontractswithcustomers.Revenueisrecognisedwhenacustomerobtainscontrolofagoodorserviceandthushastheabilitytodirecttheuseandobtainthebenefitsfromthegoodorservice.ThestandardreplacesIAS18‘Revenue’andIAS11‘Constructioncontracts’andrelatedinterpretations.TheGroupisyettoassessthefullimpactofIFRS15,butintendstoadopttheStandardnolaterthantheaccountingperiodbeginning1April2017,subjecttoendorsementbytheEU.


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Basis of consolidation

TheconsolidatedfinancialinformationincorporatesthefinancialinformationoftheCompanyanditssubsidiariesmadeupto31Marcheachyear.SubsidiariesareallentitiesoverwhichtheGrouphasthepowertogovernthefinancialandoperatingpolicies,generallydeterminedbytheownershipofmorethan50%ofthevotingrightsofaninvesteeenterprise,soastoobtainbenefitsfromitsactivities.

CMCMarketsplcbecametheultimateholdingcompanyoftheGroupunderagroupreorganisationin2006.ThepoolingofinterestsmethodofaccountingwasappliedtotheGroupreorganisationasitfelloutsidethescopeofIFRS3:Business Combinations.TheDirectorsadoptedthepoolingofinterestsastheybelieveditbestreflectedthetruenatureoftheGroup.Allotherbusinesscombinationshavebeenaccountedforbythepurchasemethodofaccounting.

Underthepurchasemethodofaccounting,theidentifiableassets,liabilitiesandcontingentliabilitiesofasubsidiaryaremeasuredinitiallyattheirfairvaluesatthedateofacquisition,irrespectiveoftheextentofanyminorityinterest.TheresultsofsubsidiariesacquiredordisposedofduringtheyearareincludedintheConsolidatedIncomeStatementfromtheeffectivedateofacquisitionoruptotheeffectivedateofdisposal,asappropriate.Acquisitionrelatedcostsareexpensedasincurred.

Wherenecessary,adjustmentsaremadetothefinancialinformationofsubsidiariestobringtheaccountingpoliciesusedintolinewiththoseadoptedbytheGroup.

Allinter-companytransactions,balancesandunrealisedgainsontransactionsbetweenGroupcompaniesareeliminatedonconsolidation.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.

Use of estimates

ThepreparationoffinancialstatementsinconformitywithIFRSrequirestheuseofcertaincriticalaccountingestimates.ItalsorequiresmanagementtoexerciseitsjudgementintheprocessofapplyingtheCompany’saccountingpolicies.Theareasinvolvingahigherdegreeofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsaresetoutbelow:

Acquisitions

Whenacquiringabusiness,theDirectorshavetomakejudgementsandbestestimatesaboutthefairvalueallocationofthepurchasepriceandassetsandliabilitiesacquired.Wherenecessary,theDirectorswillseekappropriatecompetentandprofessionaladvicebeforemakinganysuchallocations.Therewerenobusinessesacquiredinthecurrentfinancialyear.

Impairment reviews

TheGrouptestsannuallywhethergoodwillandotherintangibleshavesufferedanyimpairmentinaccordancewiththeaccountingpolicyfor“impairmentofassets”describedinnote3.Therecoverableamountsofcash-generatingunits(CGUs)aredeterminedusingvalue-in-usecalculations.Thesecalculationsarebasedonmanagementassumptionsandrequiretheuseofestimates.Detailsoftheimpairmentofintangiblescalculationandassumptionsmadeareprovidedinnote13.

Fair value of derivatives and other financial instruments

DetailsofderivativefinancialinstrumentsheldbytheGroupandtheirvaluationisprovidedinnote4.

Income taxes

TheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingtheworldwideprovisionforincometaxes.Therearetransactionsandcalculationsforwhichtheultimatetaxdeterminationisuncertainduringtheordinarycourseofbusiness.TheGrouprecognisesliabilitiesforanticipatedtaxauditissuesbasedonestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwererecorded,suchdifferenceswillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.


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3. Summary of significant accounting policies

Revenue

RevenuecomprisesthefairvalueoftheconsiderationreceivedfromtheprovisionofonlinefinancialservicesintheordinarycourseoftheGroup’sactivities.Revenueisshownnetofvalueaddedtax,clientrebatesanddiscountsandaftereliminatingsaleswithintheGroup.RevenueisrecognisedwhenitisprobablethateconomicbenefitsassociatedwiththetransactionwillflowtotheGroupandtherevenuecanbereliablymeasured.

TheGroupgeneratesrevenueprincipallyfromflowmanagement,commissionsandfinancingincomeassociatedwithactingasamarketmakertoitsclientstotradecontractsfordifference(CFD)andfinancialspreadbetting.

CFDandspreadbettingrevenuerepresentsprofitsandlosses,includingcommissionsandfinancingincome,fromclienttradingactivityandthetransactionsundertakentohedgetheserevenueflows.Gainsandlossesarisingonthevaluationofopenpositionstofairmarketvaluearerecognisedinrevenue,aswellasthegainsandlossesrealisedonpositionswhichhaveclosed.Revenuefromtheprovisionoffinancialinformationandstockbrokingservicestothirdpartiesisrecognisedatthelateroftherenderingoftheserviceorthepointatwhichtherevenuecanbereliablymeasured.

Revenuealsoincludesinterestreceivableonclients’money,brokertradingdepositsnetofinterestpayabletoclientsandbrokersandclientdormancyfees.Interestrevenueisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheinterestrateapplicable.

Rebates and levies

Revenuerebatespayabletoclientsandintroducingpartners,whoarenotthemselvestradingcounterparties,andspreadbettingleviesarechargedtotheincomestatementwhentheassociatedrevenueisrecognisedandaredisclosedasadeductionfromtotalrevenueinderivingnetoperatingincome.

Divisional reporting

Operatingdivisionsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker.Thechiefoperatingdecision-maker,whoisresponsibleforallocatingresourcesandassessingtheperformanceoftheoperatingdivisions,hasbeenidentifiedastheCMCMarketsBoard.

Share-based payment

TheGroupissuesequity-settledandcash-settledshare-basedpaymentstocertainemployees.

Equity-settledshare-basedpaymentsaremeasuredatfairvalue(excludingtheeffectofnon-market-basedvestingconditions)atdateofgrant.Thefairvaluedeterminedatthegrantdateoftheequity-settledshare-basedpaymentisexpensedonastraight-linebasisoverthevestingperiod,basedontheGroup’sestimateofsharesthatwilleventuallyvest.Ateachbalancesheetdate,theGrouprevisesitsestimateofthenumberofequityinstrumentsexpectedtovestasaresultoftheeffectofnon-market-basedvestingconditions.Theimpactoftherevisionoftheoriginalestimates,ifany,isrecognisedintheincomestatementsuchthatthecumulativeexpensereflectstherevisedestimate,withacorrespondingadjustmenttotheretainedearnings.

Theexpectedlifeusedinthemodelhasbeenadjusted,basedonmanagement’sbestestimate,fortheeffectsofnon-transferability,exerciserestrictionsandbehaviouralconsiderations.

ThegrantbytheCompanyofoptionsoveritsequityinstrumentstotheemployeesofsubsidiaryundertakingsintheGroupistreatedasacapitalcontribution.Thefairvalueofemployeeservicesreceived,measuredbyreferencetothegrantdatefairvalue,isrecognisedoverthevestingperiodasanincreasetoinvestmentinsubsidiaryundertakings,withacorrespondingcredittoequity.

Cash-settledsharebasedpaymentsaremeasuredatexpectedvalueatvestingdateatleastonceperyear,alongwiththelikelihoodofmeetingnon-marketbasedvestingconditionsandthenumberofsharesthatareexpectedtovest.Thecostisrecognisedintheincomestatementwithacorrespondingaccrual.

Retirement benefit costs

PensionschemecontributionstotheGroup’sdefinedcontributionschemesarechargedtotheincomestatementintheperiodtowhichtheyrelate.


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Leases commitments

Leases,wherethelessorretainssubstantiallyalltherisksandbenefitsofownershipoftheasset,areclassifiedasoperatingleases.Therentalspayableunderoperatingleasesarechargedtotheincomestatementonastraight-linebasisovertheleaseterm.BenefitsreceivedandreceivableasanincentivetoenterintoanoperatingleaseareaccountedforinaccordancewithSIC15asleaseincentives.Theseareincludedwithindeferredincomeandamortisedtotheincomestatementsoastospreadthebenefitonastraight-linebasisovertheleaseterm.

WherealeaseholdpropertybecomessurplustotheGroup’sforeseeablebusinessrequirements,provisionismadefortheexpectedfuturenetcostofthepropertytakingaccountofthedurationoftheleaseandanyrecoveryofcostachievablethroughsubletting.

Taxation

Thetaxexpenserepresentsthesumoftaxcurrentlypayableandmovementsindeferredtax.

Thetaxcurrentlypayableisbasedontaxableprofitfortheyear.TaxableprofitdiffersfromprofitbeforetaxasreportedintheConsolidatedIncomeStatementbecauseitexcludesitemsofincomeorexpensethataretaxableordeductibleinotheryearsanditfurtherexcludesitemsthatarenevertaxableordeductible.TheGroup’sliabilityforcurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

Deferredtaxisaccountedforusingthebalancesheetliabilitymethodinrespectoftemporarydifferencesarisingfromdifferencesbetweenthecarryingamountofassetsandliabilitiesinthefinancialinformationandthecorrespondingtaxbasisusedinthecomputationoftaxableprofit.Inprinciple,deferredtaxliabilitiesarerecognisedforalltemporarydifferencesanddeferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichdeductibletemporarydifferencesmaybeutilised.

Suchassetsandliabilitiesarenotrecognisedifthetemporarydifferencearisesfromthegoodwillorfromtheinitialrecognition(otherthaninabusinesscombination)ofotherassetsandliabilitiesinatransaction,whichaffectsneitherthetaxprofitnortheaccountingprofit.

Deferredtaxliabilitiesarerecognisedfortaxabletemporarydifferencesarisingoninvestmentsinsubsidiaries,exceptwheretheGroupisabletocontrolthereversalofthetemporarydifferenceanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.

Thecarryingamountsofdeferredtaxassetsarereviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtaxiscalculatedattheratesthatareexpectedtoapplywhentheassetorliabilityissettled.DeferredtaxischargedorcreditedintheConsolidatedIncomeStatement,exceptwhenitrelatestoitemscreditedorchargeddirectlytoequity,inwhichcasethedeferredtaxisalsodealtwithinequity.DeferredtaxassetsandliabilitiesareoffsetwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupintendstosettleitscurrenttaxassetsandliabilitiesonanetbasis.

Foreign currencies

Transactionsdenominatedincurrencies,otherthanthefunctionalcurrency,arerecordedattheratesofexchangeprevailingonthedateofthetransaction.Ateachbalancesheetdate,monetaryassetsandliabilitiesthataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryassetsandliabilitiescarriedatfairvaluethataredenominatedinforeigncurrencies,aretranslatedattheratesprevailingatthedatewhenthefairvaluewasdetermined.Gainsandlossesarisingonretranslationareincludedintheincomestatementfortheyear,exceptforexchangedifferencesarisingonnon-monetaryassetsandliabilitieswherethechangesinfairvaluearerecogniseddirectlyinequity.

Onconsolidation,theassetsandliabilitiesoftheGroup’soverseasoperationsaretranslatedatexchangeratesprevailingonthebalancesheetdate.Incomeandexpenseitemsaretranslatedattheaverageexchangeratesapplicabletotherelevantperiod.Exchangedifferencesarising,ifany,areclassifiedasequityandtransferredtotheGroup’stranslationreserve.

Suchtranslationdifferencesarerecognisedasincomeorexpenseintheyearinwhichtheoperationisdisposedof.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignentityaretreatedasassetsandliabilitiesoftheforeignentityandtranslatedattheclosingrate.


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Intangible assets

Goodwill

GoodwillrepresentstheexcessofthecostofacquisitionoverthefairvalueoftheGroup’sinterestintheidentifiableassets,liabilitiesandcontingentliabilitiesofasubsidiary,atthedateofacquisition.Goodwillarisingontheacquisitionofsubsidiariesisincludedwithin‘intangibleassets’atcostlessaccumulatedimpairmentlosses.

Goodwillistestedforimpairmentannually.AnyimpairmentisrecognisedimmediatelyintheConsolidatedIncomeStatementandisnotsubsequentlyreversed.Ondisposalofasubsidiary,theattributedamountofgoodwill,whichhasnotbeensubjecttoimpairment,isincludedinthedeterminationoftheprofitorlossondisposal.

Goodwillisallocatedtocash-generatingunitsforpurposesofimpairmenttesting.Theallocationismadetothosecash-generatingunitsorgroupsofcashgeneratingunitsthatareexpectedtobenefitfromthebusinesscombination,identifiedaccordingtobusinesssegment.

Computer software (purchased and developed)

Purchasedsoftwareisrecognisedasanintangibleassetatcostwhenacquired.Costsassociatedwithmaintainingcomputersoftwarearerecognisedasanexpenseasincurred.Costsdirectlyattributabletointernallydevelopedsoftwarearerecognisedasanintangibleassetonlyifallofthefollowingconditionsaremet:

• anassetiscreatedthatcanbeidentified;

• itisprobablethattheassetcreatedwillgeneratefutureeconomicbenefits;

• thedevelopmentcostsoftheassetcanbemeasuredreliably;

• sufficientresourcesareavailabletocompletethedevelopment;and

• itistheGroup’sintentiontocompletetheassetanduseorsellit.

Wheretheaboveconditionsarenotmet,costsareexpensedasincurred.Directlyattributablecoststhatarecapitalisedincludesoftwaredevelopmentemployeecostsandanappropriateportionofrelevantoverheads.Costswhichhavebeenrecognisedasanassetareamortisedonastraightlinebasisovertheirestimatedusefullives.

Trademarks and trading licences

Trademarksandtradinglicencesthatareseparatelyacquiredarecapitalisedatcostandthoseacquiredfromabusinesscombinationarecapitalisedatthefairvalueatthedateofacquisition.Amortisationischargedtotheincomestatementonastraightlinebasisovertheirestimatedusefullives.

Client relationships

Thefairvalueattributabletoclientrelationshipsacquiredthroughabusinesscombinationisincludedasanintangibleassetandamortisedovertheestimatedusefullifeonastraightlinebasis.Thefairvalueofclientrelationsiscalculatedatthedateofacquisitiononthebasisoftheexpectedfuturecashflowstobegeneratedfromthatasset.Separatevaluesarenotattributedtointernallygeneratedclientrelationships.

Followinginitialrecognition,Computersoftware,TrademarksandtradinglicencesandClientrelationshipsarecarriedatcostorinitialfairvaluelessaccumulatedamortisation.AsummaryoftheamortisationpoliciesappliedtotheGroup’sintangibleassetsisasfollows:

Item Amortisation Policy

Computersoftware(purchasedordeveloped) 3yearsorlifeoflicence

Trademarksandtradinglicences 10–20years

Clientrelationships 14years

Usefullivesarealsoexaminedonanannualbasisandadjustments,whereapplicable,aremadeonaprospectivebasis.


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Property, plant and equipment

Property,plantandequipment(PPE)isstatedatcostlessaccumulateddepreciationandanyrecognisedimpairmentloss.Costincludestheoriginalpurchasepriceoftheassetandthecostsattributabletobringingtheassettoitsworkingconditionforitsintendeduse.DepreciationisprovidedonallPPEatratescalculatedtowrite-offthecost,lessestimatedresidualvaluebasedonpricesprevailingatthebalancesheetdate,ofeachassetonastraight-linebasisoveritsexpectedusefullifeasfollows:

Item Depreciation Policy

Furniture,fixturesandequipment 5years

Computerhardware 5years

Theusefullivesandresidualvaluesoftheassetsareassessedannuallyandmaybeadjusteddependingonanumberoffactors.Inreassessingassetlives,factorssuchastechnologicalinnovation,productlifecyclesandmaintenanceprogrammesaretakenintoaccount.Residualvalueassessmentsconsiderissuessuchasfuturemarketconditions,theremaininglifeoftheassetandprojecteddisposalvalues.Considerationisalsogiventotheextentofcurrentprofitsandlossesonthedisposalofsimilarassets.

ThegainorlossarisingonthedisposalorretirementofanassetisdeterminedasthedifferencebetweenthesalesproceedsandthecarryingamountoftheassetandisrecognisedintheConsolidatedIncomestatement.

Investment in subsidiary undertakings

Investmentsinsubsidiariesarestatedatcostlessprovisionforimpairment.

Impairment of assets

Assetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment.Assetssubjecttoamortisationordepreciationarereviewedforimpairmentifeventsorchangesincircumstancesindicatethatthecarryingamountoftheassetmaynotberecoverable.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany).

Therecoverableamountisthehigheroffairvaluelesscosttosellandvalue-in-use.Netrealisablevalueistheestimatedamountatwhichanassetcanbedisposedof,lessanydirectsellingcosts.Value-in-useistheestimateddiscountedfuturecashflowsgeneratedfromtheasset’scontinueduse,includingthosefromitsultimatedisposal.Forthepurposeofassessingvalueinuse,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows.

Totheextentthatthecarryingamountexceedstherecoverableamount,theassetiswrittendowntoitsrecoverableamount.Forassetsotherthangoodwill,whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheassetisincreasedtothelowerofitsoriginalcarryingamountandtherevisedestimateofitsrecoverableamount.

Financial assets

Regularpurchasesandsalesoffinancialassetsarerecognisedonatradedatebasiswherethepurchaseorsaleofanassetisunderacontractwhosetermsrequiredeliveryoftheassetwithinthetimeframeestablishedbythemarketconcerned.FinancialassetsarederecognisedwhentherightstoreceivecashflowsfromtheinvestmentshaveexpiredorhavebeentransferredandtheGrouphastransferredsubstantiallyallrisksandrewardsofownership.

Loans and receivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturitiesgreaterthan12monthsaftertheendofthereportingperiod.Theseareclassifiedasnon-currentassets.Loansandreceivablesarerecognisedinitiallyatcost,beingthefairvalueoftheconsiderationtogetherwithanyassociatedissuecosts.Afterinitialrecognition,loansandreceivablesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.

TheGroup’sloansandreceivablescomprise‘tradeandotherreceivables’(note16),‘amountsduefrombrokers’and‘cashandcashequivalents’(note17)inthestatementoffinancialposition.

Derivative financial instruments

Derivativesareinitiallyrecognisedatfairvalueonthedateaderivativecontractisenteredintoandaresubsequentlyre-measuredattheirfairvalue.Themethodofrecognisingtheresultinggainorlossdependsonwhetherthederivativeisdesignatedasahedginginstrument,andifso,thenatureoftheitembeinghedged.


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TheGroupdocumentsattheinceptionofthetransactiontherelationshipbetweenhedginginstrumentsandhedgeditems,aswellasitsriskmanagementobjectivesandstrategyforundertakingvarioushedgingtransactions.TheGroupalsodocumentsitsassessment,bothathedgeinceptionandonanon-goingbasis,ofwhetherthederivativesthatareusedinhedgingtransactionsarehighlyeffectiveinoffsettingchangesinfairvaluesorcashflowsofhedgeditems.

TheGroupdesignatescertainderivativesaseitherhedgesofrecognisedassetsandliabilitiesthatarehighlyprobableforecasttransactionsorhedgesofforeigncurrencyriskoffirmcommitments(cashflowhedges),orhedgesofnetinvestmentsinforeignoperations.

Hedges of net investments in foreign operations

Hedgesofnetinvestmentsinforeignoperationsareaccountedforsimilarlytocashflowhedges.Anygainorlossonthehedginginstrumentrelatingtotheeffectiveportionofthehedgeisrecognisedinequityinothercomprehensiveincome.Thegainorlossrelatingtotheineffectiveportionisrecognisedimmediatelyintheincomestatement.

Gainsandlossesdeferredintheforeigncurrencytranslationreservearerecognisedintheincomestatementondisposaloftheforeignoperation.

Economic hedges

Economichedgesareheldforthepurposeofmitigatingcurrencyriskrelatingtotransactionalcurrencyflowsarisingfromearningsinforeigncurrenciesbutdonotmeetthecriteriafordesignationaseithercashflowhedgesorhedgesofnetinvestmentsinforeignoperations.Economichedgesaremeasuredatfairvaluewithanyresultinggainsorlossesrecognisedintheincomestatementintheperiodinwhichtheyarise.

Trade receivables

Tradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.

AprovisionforimpairmentoftradereceivablesisestablishedwhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdueaccordingtotheoriginaltermsofthereceivables.Fortradereceivablesrelatingtofinancialinformationandstockbrokingservices,significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganisation,anddefaultordelinquencyinpaymentsareconsideredindicatorsthatthetradereceivableisimpaired.Theamountoftheprovisionisthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterestrate.

Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountofthelossisrecognisedintheincomestatementwithinotheroperatingcosts.Whenatradereceivableisuncollectible,itiswrittenoffagainsttheallowanceaccountfortradereceivables.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainstotheroperatingcostsintheincomestatement.

Amounts due from brokers

Allderivativesusedforhedgingaremargin-traded.Amountsduefrombrokersrepresentfundsplacedwithhedgingcounterparties,aproportionofwhichispostedtomeetbrokermarginrequirements.Assetsorliabilitiesresultingfromprofitsorlossesonopenpositionsarerecognisedseparatelyasderivativefinancialinstruments.

Cash and cash equivalents

Cashandcashequivalentscomprisecurrentaccountbalances,bankdepositsandothershort-termhighlyliquidinvestmentswithmaturitydatesoflessthanthreemonths.

Client money

TheGroupholdsmoneyonbehalfofclientsinaccordancewiththeClientAsset(CASS)rulesoftheFinancialConductAuthorityandotherfinancialmarketsregulatorsinthecountriesinwhichtheGroupoperates.Clientmoniesareclassifiedaseitherclientmoneyorcashandcashequivalentsinaccordancewiththerelevantregulatoryagency’srequirements.Theamountsheldonbehalfofclientsatthebalancesheetdatearestatedinnotes17and18.

Trade payables

Tradepayablesarenotinterest-bearingandarestatedatfairvalueoninitialrecognitionandsubsequentlyatamortisedcost.


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Borrowings

Allloansandborrowingsareinitiallyrecognisedatcost,beingthefairvalueoftheconsiderationreceived,netofissuecostsassociatedwiththeborrowing.Afterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.Amortisedcostiscalculatedbytakingintoaccountanyissuecosts,andanydiscountorpremiumonsettlement.Gainsandlossesarerecognisedintheincomestatementwhentheliabilitiesarederecognisedorimpaired,aswellasthroughtheamortisationprocess.

Provisions

ProvisionsforpropertyandemployeebenefittrustcommitmentsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresultofapasteventwhereitisprobablethattheGroupwillberequiredtosettlethatobligation.ProvisionsaremeasuredattheDirectors’bestestimateoftheexpenditurerequiredtosettletheobligationatthebalancesheetdateandarediscountedtopresentvaluewheretheeffectismaterial.Theincreaseintheprovisionduetotheunwindofthediscounttopresentvalueovertimeisrecognisedasaninterestexpense.

Share capital

Ordinaryanddeferredsharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.

Employee benefit trusts

AssetsheldinemployeebenefittrustsarerecognisedasassetsoftheGroup,untilthesevestunconditionallytoidentifiedemployees.Afullprovisionismadeinrespectofassetsheldbythetrustasthereisanobligationtodistributetheseassetstothebeneficiariesoftheemployeebenefittrust.

TheemployeebenefittrustsownequitysharesintheCompany.TheseinvestmentsintheCompany’sownshares(‘treasuryshares’)areheldatcostandareincludedasadeductionfromequityattributabletotheCompany’sequityownersuntilsuchtimeasthesharesarecancelledortransferred.Wheresuchsharesaresubsequentlytransferred,anyconsiderationreceived,netofanydirectlyattributableincrementaltransactioncostsandtherelatedincometaxeffects,areincludedinequityattributabletotheCompany’sequityowners.

Exceptional items

ExceptionalitemsareeventsortransactionsthatfallwithintheactivitiesoftheGroupandwhichbyvirtueoftheirsizeorincidencehavebeendisclosedinordertoimproveareader’sunderstandingofthefinancialstatements.

4. Financial risk management

TheGroup’sday-to-daybusinessactivitiesnaturallyexposeittostrategic,financial(includingcreditandmarket)andoperationalrisks.TheBoardacceptsthatitcannotplaceacaporlimitonalloftheriskstowhichtheGroupisexposed.However,effectiveriskmanagementensuresthatrisksaremanagedtoanacceptablelevel.TheBoardisultimatelyresponsiblefortheimplementationofanappropriateriskstrategy,definingandcommunicatingtheGroup’sriskappetite,theestablishmentandmaintenanceofeffectivesystemsandcontrols,andcontinuedmonitoringoftheadherencetoGrouppolicies.TheGrouphasadoptedastandardriskprocess,throughafivestepapproachtoriskmanagement:RiskIdentification;RiskAssessment;RiskManagement;RiskReportingandRiskMonitoring.TheapproachtomanagingriskwithinthebusinessisgovernedbytheBoardapprovedRiskAppetiteStatementandRiskManagementFramework.

TheBoardsetsthestrategyandpoliciesformanagingtheserisksanddelegatesthemonitoringandmanagementoftheseriskstovariouscommitteesincludingtheBoard,AuditandRiskCommittee,OperationsandRiskGroupandtheFinancial(Business)RiskGroup.

TheGroup’sInternalCapitalAdequacyAssessmentProcess(ICAAP)ispreparedundertherequirementssetoutinthePrudentialRegulationAuthority(PRA)RulebookinaccordancewithCRDIV1.Akeypurposeofan‘InternalCapitalAdequacyAssessmentProcess’(ICAAP)istoinformafirm’sboardoftheongoingassessmentofthefirm’srisks,howthefirmintendstomitigatethoserisks,andhowmuchcurrentandfuturecapitalisnecessary,havingconsideredpotentialstressesaswellasmitigatingfactors.

Financialrisksarisingfromfinancialinstrumentsarecategorisedintomarket,creditandliquidityriskswhich,togetherwithhowCMCMarketscategorisesandmanagestheserisks,aredescribedbelow.

Market risk

Marketriskisdefinedastheriskthatthevalueofourresidualportfoliowilldecreaseduetothechangeinmarketriskfactors.Thefourstandardmarketriskfactorsarestockprices,interestrates,foreignexchangerates,andcommodityprices.

1TheCapitalRequirementsDirective(2013/36/EU)(CRD)andtheCapitalRequirementsRegulation(575/2013)(CRR),called‘CRDIV’


58

Market price risk

Thisistheriskthatthefairvalueofafinancialinstrumentwillfluctuateduetochangesinmarketpricesotherthanduetocurrencyorinterestraterisk.

Thetradingriskmanagementteaminheritexposurefromclienttradesonallassetclasses,theriskmanagementapproachisprimarilybasedonsegmentingintradayandovernightaggregateexposuresacrosstheentireclientbaseanddetermininghowmuchrisktheGroupwishestoretaininaccordancewithriskappetite.

Mitigation of market price risk

CMCMarketsbenefitsfromanumberoffactorswhichalsoreducethevolatilityofitsrevenueandprotectitfrommarketshocksasfollows:

• Naturalmitigationofconcentration

CMCMarketsactsasamarketmakerinover10,000crossassetinstruments,specificallyequities,indices,commodities,treasuriesandforeignexchangeaswellasforwardsoncommodities,treasuries,equity,indexesandFX.Becauseofthehighlevelofnotionalturnoverthereisahighlevelofinternalcrossingandnaturalhedgingacrossinstrumentsandassetclassestomitigatesignificantsingleinstrumentconcentrationriskwithintheportfolio.

• Easeofhedging

CMCMarketspredominantlyactsasamarketmakerinlinear,highlyliquidfinancialinstrumentsinwhichitcaneasilyneutralisemarketriskexposurethroughitsprimebroker(PB)arrangements.Inordertoavoidover-relianceononearrangementtheGrouphasfivePBrelationships.

• Naturalaggregation

Intheyearending31March2015,CMCMarketstradedwithover50,000clients.ThislargeinternationalclientbasehasadiverserangeoftradingstrategiesresultinginCMCMarketsenjoyingahighdegreeofnaturalhedgingbetweenclients.This‘portfolioeffect’leadstoasignificantreductionintheGroup’snetmarketriskexposure.

Market risk limits

MarketriskpositionsaremanagedinaccordancewithCMCMarkets’RiskAppetiteStatementandGroupMarketRiskManagementFrameworktoensurethattheGrouphassufficientcapitalresourcestosupportthecalculatedMarketRiskCapitalRequirementaswellasstayingwithintheRiskAppetite.TheGroupmanagesthiscrucialcomponentofcapitaladequacywith‘riskzones’–Green,AmberandRed,whichareinternallysetlimits(precludingtheredzonewhichismaximumcapitalusage)designedtomitigatetheriskofbreachingCapitalAdequacyrequirements.TheMarketRiskpolicyrequiresthattheGroup’smarketpriceriskexposure,calculatedundertheFCA’s‘Ownfundsrequirement’(OFR)methodology,shouldnotreachtheredzone,whichissetaccordingtorelevantregulatoryrequirements.ToreducethechancesoftheGroupenteringintotheredzone,theamberzonegivesaverylargebuffer,whichifentered,immediateremedialactionmustbetakentohedgeclientexposureandreducetheGroup’soverallmarketpriceriskexposurebacktothegreenzone.

Overallclientexposurescanvarysignificantlyoverashortperiodoftimeandarehighlydependentonunderlyingmarketconditions.UndertheresidualriskflowmodeltheGroup’sOFRhasfallenagainsttheprioryearendandremainswellwithintheBoard-approvedriskappetite.

GROUP

2015 2014Net

exposure £’000

Gross exposure

£’000

OFR

£’000

Net exposure

£’000

Gross exposure

£’000

OFR

£’000Asset classConsolidatedequities 25,309 69,881 5,707 112,273 157,264 12,871Commodities (15,696) 17,150 2,692 (4,578) 11,862 2,073Treasuries 37,223 42,487 1,656 21,216 21,412 929Foreignexchange 30,802 30,802 2,464 12,877 12,877 1,030Interestraterisk – – 403 – – 373

77,638 160,320 12,922 141,788 203,415 17,276


59

Market price risk – stress testing

GroupFinancialRiskconductsmarketpriceriskstresstestingonadailybasis.Theapproachtothisstresstestingistakingvolatilitystressfactorsandapplyingthemtonetmarketpriceriskexposuresinordertoassessthemarketpriceriskimpact.Volatilitystressesarederivedfromactualmarketpricehistoriesfor12monthsupto31March2015(31March2014forthepreviousfinancialyear).Inordertomakethemodelmorereliable,stressfactorsaredefinedforeachassetclass(consolidatedequities,commodities,treasuriesandforeignexchange).Furthermore,volatilitystressfactorsforconsolidatedequitiesaredefinedperregionandforcommoditiestheyaresplitbetweenoilandother.Goldandsilveraremeasuredseparatelyandaregivenaseparatestressfactor.Volatilitystressfactorsforforeignexchangearesplitbetweenmajorcurrencypairsandallothercurrencypairs.ApplyingregionalaswellasassetclassbasedstressfactorstoexposuresensuresthattheresultsareafairrepresentationofthepotentialmarketpricerisktheGroupfaces.ThesestressfactorsandscenariosareupdatedquarterlybyGroupFinancialRisk.TheGroupalsorunsextremecasestressscenariosonadailybasis,wherethestressfactorsarebrokendownasmentionedabove.

NoneofthestresstestsrunthroughtheyearimpliedanysignificantrisktothecapitaladequacynorongoingtheprofitabilityoftheGroup.

Non trading book interest-rate risk

Interestrateriskarisesfromeitherlessinterestbeingearnedormorebeingpaidoninterestbearingassetsandliabilitiesduetoachangeintherelevantfloatingrate.

InterestrateriskisfeltbytheGroupthroughalimitednumberofchannels,incomeonsegregatedclientandownfundsanddebitsonclientbalancesthatareoverapre-definedthreshold.

Thesensitivityanalysisperformedisbasedonareasonableandpossiblemoveinthefloatingrateby0.5%upwardsand0.25%downwards(FY14:1%movementbothupwardsanddownwards).Thisissummarisedinthetablebelow,andreflectstheGroup’sviewthatinthecurrenteconomicenvironment,interestratevolatilityisunlikelytohaveasignificantimpactontheprofitsoftheGroup.

GROUP

2015 2014

Absolute increase

£’000

Absolute decrease

£’000

Absolute increase

£’000

Absolute decrease

£’000

Impact of0 .50%

change0 .25%

change1 .00%

change1 .00%

changeProfitaftertax 697 (278) 2,110 (835)Equity 697 (278) 2,110 (835)

Non trading book foreign exchange risk

ForeignexchangeriskistheriskthattheGroup’sresultsareimpactedbymovementsinforeignexchangerates.

CMChasforeignexchangeriskintheformoftransactionandtranslationexposure.

Transactionexposureisfromholdingsofcashandothercurrentassetsandliabilitiesinacurrencyotherthanthebasecurrencyoftheentity.ThisriskishedgedeachmonthbytheLiquidityRiskManagementteamaccordingtoapolicybasedonacapandfloormodel,withgains/lossesrecognisedintheincomestatement.Atyearended31March2015therewerenosignificantunhedgedexposures(nonegreaterthan£250,000).Giventheeffectivenessofthehedgingprogram(incomestatementimpactinyearended31March2015:£374,000gain(2014:£308,000loss)),nosensitivityanalysishasbeenperformed.These‘fairvaluehedges’arederivativefinancialinstrumentsandarereportedasdescribedinnote3.

TranslationexposureoccurswhenthenetassetsofanentityaredenominatedinaforeigncurrencyotherthanGBP,whentheconsolidatedstatementoffinancialpositionisprepared.TheGrouphedgesthisexposurebyusing3monthFXforwards.These‘NetInvestmentHedges’arederivativefinancialinstrumentsandarereportedasdescribedinnote3.TheunhedgedportiondoesnotposeasignificantrisktothecapitaladequacyortotheongoingprofitabilityoftheGroup.


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Credit risk

CreditriskistheriskthatthecounterpartytoatransactionwillcausetheGroupfinanciallossbyfailingtodischargeacontractualobligation.BelowarethechannelsofcreditrisktheGroupisexposedthrough:

• Creditinstitution(CI);

• Client.

Credit Institution credit risk

TheGrouphasrelationshipswithanumberofcounterpartiesthatprovideprimebrokerageand/orbankingservices(e.g.cashaccounts,foreignexchangetrading,creditfacilitiesetc.).AllthesemarketcounterpartiescanbedescribedasCreditInstitutions(CIs)asdefinedbyArticle4‘Definitions’intheCRR(‘creditinstitution’isdefinedasanundertakingthebusinessofwhichistotakedepositsorotherrepayablefundsfromthepublicandtograntcreditsforitsownaccount).

CreditInstitutioncreditriskcanthereforebedefinedastheriskthataCIwilldefaultontheircontractualobligationtotheGroupresultinginalosstotheGroup.

Theabovecouldbefeltintwoways:

• ForbothCIsusedasbankandthoseasbrokertheGroupdoesnotreceivethefundstheCIholdsback;

• FortheCIsusedasbroker,thedefaultcausestheneedtorehedgeatadifferentbrokeratadifferentprice.

Mitigation of Credit Institution credit risk

TomitigateoravoidacreditlosstheGroupmaintains,wherepractical,arangeofrelationshipstoreduceover-relianceonasingleCI.

LiquidityRiskManagementmonitorthecreditqualityofallitsCIs,bytrackingthecreditratingsissuedbyMoody’s,Standard&Poor’sandFitchratingagenciesandtheCDS(CreditDefaultSwap)spreadsdeterminedintheCDSmarket.Ratings,ratingoutlooksandCDSspreadsarereportedtoseniormanagementonaweeklybasiswithanychangeshighlighted.

NoquantitativecreditratinglimitsaresetbytheGroupthatCIsmustexceedbecausethechoiceofsuitableCIsisfiniteandthereforesettingminimumratinglimitscouldleadtothepossibilitythatnoCIsareabletomeetthem.Asanalternative,theGroupreviewsnegativeratingactionandlargeCDSspreadwideningtoCIsonacasebycasebasis.However,allCIsareofinvestmentgradequalityandthatnegativeratingactiononCIsratedbelowA3/A-/A-(byMoody’s,S&PandFitchrespectively)wouldbeescalateddirectlytotheGroupDirectorofFinance,RiskandComplianceinthefirstinstancetodecideifanymanagementactionswererequired.PossibleactionsbytheFirmtoreduceexposuretoCIsdependonthenatureoftherelationshipandthepracticalavailabilityofsubstituteCIs.PossibleactionsincludethewithdrawalofcashbalancesfromaCIonadailybasis,switchingaproportionofhedgetradingtoanotherprimebrokerCIorceasingallcommercialactivitywiththeCI.

ThetablesbelowpresentCMCMarkets’exposuretocreditinstitutionsbasedontheirlong-termcreditrating.

GROUP

2015 2014


£’000


£’000


£’000


£’000AA+toAA- 19,216 – 14,950 65,864A+toA- 11,300 73,694 22,291 –BBB+toBBB- 7,067 36,100 20,560 –Unrated 1,028 – – –

38,611 109,794 57,801 65,864

Nocashbalancesordepositswithinstitutionswereconsideredpastduebutnotimpairedorimpaired(2014:£nil).

Client credit risk

TheGroupoperatesareal-timemark-to-marketleveragedtradingfacilitywhereclientsarerequiredtolodgecollateralagainstpositions,anyprofitsandlossesgeneratedbytheclientarecreditedanddebitedautomaticallytotheiraccount.Aswithanyleveragedproductoffering,thereisthepotentialforaclienttolosemorethanthecollaterallodged.


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ClientcounterpartyriskcapitalcomponentcapturestheriskassociatedwithaclientdefaultingontheirobligationsduetotheGroup.AstheGroupdoesnotoffermostofitsretailclientscredittermsandhasarobustliquidationprocess,clientcounterpartycreditriskwillingeneralonlyarisewhenmarketsandinstrumentsgapandthemovementinthevalueofaclientsleveragedportfolioexceedsthevalueofequitythattheclienthasheldattheGroupleavingtheclientaccountindeficit.

Mitigation of client credit risk

• Liquidationprocess

Thisistheprocessofclosingaclient’sopenpositionifthetotalequityisnotenoughtocoverapredefinedpercentageofrequiredmarginfortheportfolioheld.

TheGroupClientLiquidationPolicyclarifiestheGroup’sapproachtoliquidationmanagement,detailingthefullyautomatedliquidationprocessontheGroup’sNextGenerationplatformandthesemi-automatedliquidationordermanagementprocessonMarketmaker.Thispolicyandprocessensureaconsistentandtimelyapproachtotheprocessingofliquidationordersandultimatelyaimstominimiseclientcreditriskexposurethroughprotectingtheclientfrombecomingadebtor.

Pre-emptiveprocessesarealsoinplacewhereaclients’freeequity(totalequitylesstotalmarginrequirement)becomesnegative.Atthispointtheclientisrequestedtodepositadditionalfundsandisrestrictedfromincreasingtheirposition.

• Tieredmargin

TieredmarginwasimplementedinSeptember2013ontheNextGenerationplatform.ItenablestheGrouptosethighermarginrates(thereforerequiringaclienttolodgemorecollateral)againstpositionsthataredeemedtobemoreriskyduetoriskprofile,whichcouldbeduetosizerelativetotheunderlying’sturnover,theappetiteforthebusinessorvolatilityoftheinstrument.

• Positionlimits

PositionlimitscanbeimplementedonaninstrumentandclientlevelontheNextGenerationplatform.TheInstrumentlevelenablestheGrouptocontrolthetotalexposuretheGrouptakesoninasingleinstrument.Ataclientlevelthisensuresthattheclientcanonlyreachapre-definedsizeinandoneinstrument.

Client credit risk stress testing

TheGroupusesthesamevolatilitystressfactorsasforpricerisktoshocktheclientportfolioandassessthetotalequitypostshock.ItisdeemedaprudentapproachasthePCREcalculationsdonotfactorinorgiveanybenefitforthecorrelationsbetweeninstrumentswithinaclient’sportfolioandtreateachpositionseparately,summingthelossesresultingfromtheshocks(nosub-additivity).AlsotheProbabilityofDefaultforregionswherehistoricallytheGrouphashadaverylowdebtrecoveryrateissetat100%(i.e.willnotrecoverthedebt).

NoneofthestresstestsrunthroughtheyearimpliedanysignificantrisktothecapitaladequacynorongoingtheprofitabilityoftheGroup.

Client debt history

Forthefinancialyearto31March2015,newdebtarisingwas£6,597,000(2014:£1,309,000).Thisconstituted4.0%oftotaltradingrevenue(2014:0.9%).TheGroupestablishesspecificprovisionsagainstdebtsduefromclientswheretheGroupdeterminesthatitisprobablethatitwillbeunabletocollectallamountsowedinaccordancewithcontractualtermsoftheclientsagreement.Newdebtprovidedforinthefinancialyearto31March2015amountedto£4,335,000(2014:Releaseofunutilisedprovisions:£235,000),theprovisionrepresenting2.6%oftotaltradingrevenue(2014:provisionrelease0.2%).Baddebtwrittenoffinthefinancialyearto31March2015was£401,000or0.2%ofrevenue(2014:£908,000;0.7%ofrevenue).


62

ThetablebelowdetailsthemovementontheGroupprovisionforimpairmentoftradereceivables:

GROUP2015 £’000

2014 £’000

Openingprovision 1,951 3,094Newdebtprovidedfor 4,335 (235)Debtwrittenoff (401) (908)

Closing provision 5,885 1,951

Debt ageing analysis

GroupCreditControlworksefficientlytominimisetheeffectsofclientdebtsontheCompany’sprofitandloss.Clientdebtsaremanagedveryearlyintheirlifecycleinordertominimisethelikelihoodofthembecomingdoubtfuldebtsorofbeingwrittenoff.Thefollowingtablesetsoutagingofdebtsthatarepastdueandtheprovisionschargedagainstthem:

GROUP

2015 2014

Debt £’000

Provision £’000

Debt £’000

Provision £’000

Lessthanonemonth 118 25 200 8Onetothreemonths 4,362 3,601 48 44Threeto12months 391 387 239 232Over12months 1,872 1,872 1,703 1,667

6,743 5,885 2,190 1,951

Liquidity risk

LiquidityriskistheriskthatthereisinsufficientavailableliquiditytomeettheliabilitiesoftheGroupastheyfalldue.

LiquidityismanagedcentrallyfortheGroupbytheLiquidityRiskManagementteam.Utilisingacombinationofliquidityforecastingandstresstesting(formallydocumentedintheIndividualLiquidityAdequacyAssessment(‘ILAA’))toensurethattheGroupretainsaccesstosufficientliquidityresourcesinbothnormalandstressedconditions.LiquidityforecastingfullyincorporatestheimpactofliquidityregulationsinforceineachjurisdictionandotherimpedimentstothefreemovementofliquidityaroundtheGroup,includingitsownpoliciesonminimumliquiditytoberetainedbytradingentities.

Stresstestingisundertakenonaquarterlybasisuponarangeofindividualandcombined,firm-specificandmarket-wide,shortandlongtermscenariosthatrepresentplausiblebutseverestresseventstoensuretheGrouphasappropriatesourcesofliquidityinplacetomeetsuchevents.

Duetotheriskhedgingstrategyadoptedandthechangeablescaleoftheclienttradingbook,thelargestandmostvariableconsumerofliquidityisbrokercounterpartymarginrequirements.ThecollateralcallsaremetincashfromownfundsbuttoensureliquidityisavailableforextremespikestheGrouphasarrangedacommittedbankfacilityof£40mtomeetshorttermliquidityobligationstobrokercounterpartiesintheeventthatitdoesnothavesufficientaccesstoowncashorfundsfromclientsandtoleaveasufficientliquiditybuffertocopewithastressevent.

TheGroupdoesnotengageinmaturitytransformationaspartofitsunderlyingbusinessandthereforematuritymismatchofassetsandliabilitiesdoesnotrepresentaliquidityrisktotheGroup.


63

Own funds

OwnfundsisakeymeasuretheGroupusestomonitortheoveralllevelofliquidityavailabletotheGroup.ThederivationofOwnfundsisshowninthetablebelow:

GROUP2015 £’000

2014 £’000

Cashandcashequivalents 38,611 57,801Amountduefrombrokers 109,794 65,864

148,405 123,665Less: Titletransferfunds (7,803) (7,218)

Own funds 140,602 116,447

ThefollowingOwnFundsFlowStatementsummarisestheGroup’sgenerationofownfundsduringtheyearandexcludesallcashflowsinrelationtomoniesheldonbehalfofclients.Additionally,amountsduefrombrokershavebeentreatedas‘cashequivalents’andincludedwithin‘ownfunds’inordertoprovideaclearpresentationoftheGroup’scashresources.

GROUP

2015

£’000

2014 Restated

£’000Operating activitiesProfit before tax 43,510 32,241Adjustmentsfor:Financecosts 896 696Depreciationandamortisation 6,934 10,698Othernon-cashadjustments 374 273Gainondisposalofinvestmentinsubsidiaries – (127)Taxpaid (6,471) (1,372)

Own funds generated from operating activities 45,243 42,409

Movement in working capital 111 809

Inflow/(Outflow) from investing activitiesNetPurchaseofproperty,plantandequipmentandintangibleassets (10,314) (2,088)Proceedsfromdisposalofsubsidiary – 127Inflow/(Outflow) from financing activitiesInterestpaid (896) (696)Dividendspaid (11,950) (5,889)OtherInflow/(Outflow)fromfinancingactivities 2,878 (1,167)

Total outflow from investing and financing activities (20,282) (9,713)

Increase in own funds 25,072 33,505Ownfundsatthebeginningoftheyear 116,447 84,875

Effectofforeignexchangeratechanges (917) (1,933)

Own funds at the end of the year 140,602 116,447


64

Maturity analysis

2015

On demand

£’000

Less than three

months £’000

Three months to

one year £’000

After one year

£’000

Total

£’000Financial assetsCash 38,611 – – – 38,611Amountsduefrombrokers 109,794 – – – 109,794Derivativefinancialinstruments – 3,275 – – 3,275Tradeandotherreceivables 15,134 – – – 15,134

163,539 3,275 – – 166,814

Financial liabilitiesTradeandotherpayables 37,415 – – – 37,415Derivativefinancialinstruments – 805 – – 805Borrowings – 5 17 77 99Financeleaseliabilities – 336 1,041 2,376 3,753

37,415 1,146 1,058 2,453 42,072

Net liquidity gap 126,124 2,129 (1,058) (2,453) 124,742

2014 (Restated)

On demand

£’000

Less than three

months £’000

Three months to

one year £’000

After one year

£’000

Total

£’000Financial assetsCash 55,520 2,281 – – 57,801Amountsduefrombrokers 65,864 – – – 65,864Derivativefinancialinstruments – 630 – – 630Tradeandotherreceivables 15,997 – – – 15,997

137,381 2,911 – – 140,292

Financial liabilitiesTradeandotherpayables 39,325 – – – 39,325Derivatives – 2,106 – – 2,106Financeleaseliabilities – 153 482 339 974

39,325 2,259 482 339 42,405

Net liquidity gap 98,056 652 (482) (339) 97,887

Analysis of financial instruments by category

FinancialassetsandliabilitiesasdeterminedbyIAS39,‘FinancialInstruments:RecognitionandMeasurement’,arecategorisedasfollows:

2015

Assets at fair value through profit and loss

£’000

Derivatives held for hedging

£’000


£’000

Total

£’000Financial assetsCashandcashequivalents – – 38,611 38,611Amountsduefrombrokers – – 109,794 109,794Derivativefinancialinstruments 2,982 293 – 3,275Tradeandotherreceivables – – 15,134 15,134

2,982 293 163,539 166,814


65

Liabilities at fair value through profit and loss

£’000


£’000

Financial liabilities at

amortised cost £’000

Total

£’000Financial liabilitiesTradeandotherpayablesexcludingnon-financialliabilities – – 41,790 41,790Derivativefinancialinstruments 624 181 – 805Borrowings – – 99 99Financeleaseliabilities – – 3,753 3,753

624 181 45,642 46,447

2014 (Restated)

Assets at fair value through profit and loss

£’000


£’000


£’000

Total

£’000Financial assetsCashandcashequivalents – – 57,801 57,801Amountsduefrombrokers – – 65,864 65,864Derivativefinancialinstruments 448 182 – 630Tradeandotherreceivables – – 15,997 15,997

448 182 139,662 140,292

Liabilities at fair value through profit and loss

£’000


£’000

Financial liabilities at

amortised cost £’000

Total

£’000Financial liabilitiesTradeandotherpayablesexcludingnon-financialliabilities – – 44,251 44,251Derivativefinancialinstruments 2,066 40 – 2,106Borrowings – – – –Financeleaseliabilities – – 974 974

2,066 40 45,225 47,331

Fair value estimation

TheGroup’sassetsandliabilitiesthataremeasuredatfairvaluearederivativefinancialinstruments.Thetablebelowcategorisesthosefinancialinstrumentsmeasuredatfairvaluebasedonthefollowingfairvaluemeasurementhierarchy:

• Level1–quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

• Level2–inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,eitherdirectly(thatis,asprices)orindirectly(thatis,derivedfromprices);or

• Level3–inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(thatis,unobservableinputs)

GROUP

2015 2014

Level 1 £’000

Level 2 £’000

Level 3 £’000

Total £’000

Level 1 £’000

Level 2 £’000

Level 3 £’000

Total £’000

Derivative financial instrumentsAssets – 3,275 – 3,275 – 630 – 630Liabilities – (805) – (805) – (2,106) – (2,106)

– 2,470 – 2,470 – (1,476) – (1,476)


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Capital management

TheGroup’sobjectivesformanagingcapitalareasfollows:

• tocomplywiththecapitalrequirementssetbythefinancialmarketregulatorstowhichtheGroupissubject;

• toensurethatallGroupentitiesareabletooperateasgoingconcernsandsatisfyanyminimumexternallyimposedcapitalrequirements;and

• toensurethattheGroupmaintainsastrongcapitalbasetosupportthedevelopmentofitsbusiness.

ThecapitalresourcesoftheGroupconsistsofequitybeingsharecapital,sharepremium,otherreservesandretainedearnings,whichat31March2015totalled£142.3m(2014:£119.6m).

CMCMarketsissupervisedonaconsolidatedbasisbytheUK’sFinancialConductAuthority(FCA).

TheGroup’sInternalCapitalAdequacyAssessmentProcess(ICAAP),preparedundertherequirementsoftheFCAandtheCapitalRequirementsDirective,isanon-goingassessmentofCMCMarkets’risksandriskmitigationstrategies,toensurethatadequatecapitalismaintainedagainstrisksthattheGroupwishestotaketoachieveitsbusinessobjectives.

TheoutcomeoftheICAAPispresentedasanInternalCapitalAssessment(ICA)documentcoveringCMCMarkets.TheICAcoversallmaterialriskstodeterminethecapitalrequirementoverathreeyearhorizonandincludesstressedscenariostosatisfyregulatoryrequirements.TheICAisreviewedandapprovedbytheBoardonanannualbasis.

FurtherinformationontheGroup’smanagementofregulatorycapitalisprovidedinthe‘Pillar3Disclosure”report,whichisavailableontheCMCMarketsplcwebsite(www.cmcmarketsplc.com).TheGroup’scountry-by-countryreportingdisclosureisalsoavailableinthesamelocationonthewebsite.

5. Divisional analysis

Division structure

TheGroup’sprincipalbusinessisonlineretailfinancialservicesandprovidesitsclientswiththeabilitytotradecontractsfordifference(CFD)andfinancialspreadbettingonarangeofunderlyingshares,indices,foreigncurrencies,commoditiesandtreasuries.CMCMarketsalsomakestheseservicesavailabletoinstitutionalpartnersthroughwhitelabelandintroducingbrokerarrangements.TheGroupalsoprovidesstockbrokingservicesinAustralia.TheGroup’scorebusinessisgenerallymanagedonageographicalbasisandformanagementpurposes,theGroupisorganisedintofourdivisions:

• UKandIreland;

• Europe;

• AustraliaandNewZealand;and

• RestofWorld(SingaporeandCanada).

Revenuesandcostsareallocatedtothedivisionsthatoriginatedthetransaction.Costsgeneratedcentrallyareallocatedtodivisionsonanequitablebasis,mainlybasedonrevenue,headcountoractiveclientlevels.


67

Division results analysis

2015UK & IE

£’000Europe

£’000ANZ

£’000Rest of World

£’000Central

£’000Total

£’000Divisionnettradingrevenue 48,600 45,429 39,473 8,196 – 141,698Interestincome 359 – 1,601 158 – 2,118

Revenuefromexternalcustomers 48,959 45,429 41,074 8,354 – 143,816Otheroperatingincome 99 (339) 29 47 – (164)

Net operating income 49,058 45,090 41,103 8,401 – 143,652

Division contribution 38,194 34,498 32,631 5,838 (59,821) 51,340 Allocationofcentralincomeandcosts (19,145) (17,440) (17,670) (5,566) 59,821 –Depreciationandamortisation (1,369) (145) (266) (69) (5,085) (6,934)AllocationofcentralD&A (1,476) (1,762) (1,253) (594) 5,085 –

Operating profit 16,204 15,151 13,442 (391) – 44,406

Netfinancecosts – (14) – – (882) (896)Allocationofcentralnetfinancecosts (305) (295) (247) (35) 882 –

Profit before taxation 15,899 14,842 13,195 (426) – 43,510

2014UK & IE

£’000Europe

£’000ANZ

£’000Rest of World

£’000Central

£’000Total

£’000Divisionnettradingrevenue 33,354 45,754 33,128 7,225 – 119,461Interestincome 463 6 1,499 178 – 2,146

Revenuefromexternalcustomers 33,817 45,760 34,627 7,403 – 121,607Otheroperatingincome 391 (167) 119 60 – 403

Net operating income 34,208 45,593 34,746 7,463 – 122,010

Division contribution 26,245 36,593 27,858 4,903 (51,964) 43,635Allocationofcentralincomeandcosts (16,517) (16,068) (13,078) (6,301) 51,964 –Depreciationandamortisation (1,202) (174) (172) (78) (9,072) (10,698)AllocationofcentralD&A (2,407) (3,365) (2,087) (1,213) 9,072 –

Operating profit 6,119 16,986 12,521 (2,689) – 32,937

Netfinancecosts (435) (3) (23) (24) (211) (696)Allocationofcentralnetfinancecosts (67) (81) (52) (11) 211 –

Profit before taxation 5,617 16,902 12,446 (2,724) – 32,241

Themeasurementofnetoperatingincomefordivisionalanalysisisconsistentwiththatintheincomestatement.

TheGroupuses‘EBITDA’toassessthefinancialperformanceofeachdivision.EBITDAcomprisesoperatingprofitfortheyearbeforeinterestexpense,taxation,depreciationofproperty,plantandequipmentandamortisationandimpairmentofintangibles.

6. Net interest income

GROUP

2015

£’000

2014 Restated

£’000Bankinterest 1,984 1,946Interestfromclients 134 200

Total 2,118 2,146

TheGroupearnsinterestincomefromitsowncorporatefundsandfromsegregatedclientfunds.


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7. Operating expenses

GROUP

2015

£’000

2014 Restated

£’000Netstaffcosts(note8) 40,722 39,070ITcosts 11,398 11,168Salesandmarketing 13,652 11,388Premises 5,594 5,104LegalandProfessionalfees 2,925 3,451Regulatoryfees 2,078 2,406Other 7,509 5,788

Total operating expenses before exceptional costs 83,878 78,375Exceptionalcosts 8,434 –

Total operating expenses 92,312 78,375

Exceptional costs

Asaresultoftheirmaterialitythedirectorsdecidedtodisclosecertainamountsseparatelyinordertopresentresultswhicharenotdistortedbysignificantnon-recurringevents.

GROUP2015 £’000

2014 £’000

Litigationsettlementandassociatedcosts 4,584 –Baddebtprovisionsandwriteoffs 3,850 –

Exceptional costs 8,434 –

DuringthelastfinancialyeartheGroupreceivedaclaimagainstoneofitssubsidiariesrelatingtolossesonaCFDtradingaccountoveraperiodin2007.AsettlementwasreachedinMarch2015.Thesettlementandassociatedcostsamountedto£4,584,000duringtheyear.

On15January2015theSNBmadetheunprecedenteddecisiontodiscontinueitssupportoftheSwissFranc/Europeg.FollowingthisdecisiontheSwissFrancappreciatedbyover30percentinamatterofminutes.TheDebtprovisionsandwrite-offsduringtheyearrelatingtothiseventamountedto£3,850,000.

8. Employee information

TheaggregateemploymentcostsofstaffandDirectorswere:

GROUP2015 £’000

2014 £’000

Wagesandsalaries 33,058 30,815Socialsecuritycosts 4,951 4,120Otherpensioncosts 1,031 1,128

Total director and employee costs 39,040 36,063Contractstaffcosts 1,682 3,007

Net staff costs 40,722 39,070

Compensationofkeymanagementpersonnelisdisclosedinnote31.


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ThemonthlyaveragenumberofDirectorsandemployeesoftheGroupduringtheyearissetoutbelow:

GROUP2015

Number2014

NumberBy activity:Keymanagement 5 5Clientacquisitionandmaintenance 213 197ITdevelopmentandsupport 106 99Globalsupportfunctions 133 121

Totaldirectorsandemployees 457 422Contractstaff 16 28

Total staff 473 450

9. Finance costs

GROUP2015 £’000

2014 £’000

Interestonbankborrowings 896 696

10. Profit before taxation

GROUP2015 £’000

2014 £’000

Profit before tax is stated after charging/(crediting):Depreciation 4,697 3,735Amortisationofintangibleassets 2,237 6,963Gainondisposalofsubsidiary – (127)Netforeignexchangegain (608) (1,218)Operatingleaserentals 2,717 2,915Auditors’remunerationforauditandotherservices(seebelow) 867 955

FeespayabletotheCompany’sauditors,PricewaterhouseCoopersLLPwereasfollows:

GROUP2015 £’000

2014 £’000

Audit servicesStatutoryauditofparentandconsolidation 322 296Statutoryauditofsubsidiaries 263 221

585 517

Other servicesTaxservices 245 438Otherservices 37 –

282 438

Total 867 955


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11. Taxation

GROUP2015 £’000

2014 £’000

Analysis of charge for the year:Current taxCurrenttaxonprofitfortheyear 9,165 4,204Adjustmentinrespectofpreviousyears (76) (79)

Total current tax 9,089 4,125

Deferred taxOriginationandreversaloftemporarydifferences (944) 2,769Adjustmentinrespectofpreviousyears 625 817Impactofchangeintaxrate – 574

Total deferred tax (319) 4,160

Tax charge 8,770 8,285

ThetaxfortheyeardiffersfromthestandardrateofUKCorporationTaxof21%(2014:23%).Thedifferencesareexplainedbelow:

GROUP2015 £’000

2014 £’000

Profitbeforetaxation 43,510 32,241Profitmultipliedbythestandardrateofcorp.taxintheUKof21%(2014:23%) 9,137 7,415Adjustmentinrespectofforeigntaxrates 586 82Adjustmentsinrespectofpreviousperiods 549 656Changeintaxrate – 574Effectofresearchanddevelopmenttaxconcession 195 (18)Expensesthatarenotrecognisedfortaxpurposes 230 322Incomenotsubjecttotax (12) (593)Irrecoverableforeigntax (8) 173Movementtoreserves – (323)Recognitionofpreviouslyunrecognisedtaxlosses (1,888) (13)Othertimingdifferences (19) 10

Tax charge 8,770 8,285

Thetaxcrediteddirectlytoequityduringtheyearisasfollows:

GROUP2015 £’000

2014 £’000

Taxonlossonnetinvestmenthedges 664 (750)

12. Earnings per share (EPS)

BasicEPSiscalculatedbydividingtheearningsattributabletotheequityownersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringtheyearexcludingthoseheldinemployeesharetrustswhicharetreatedascancelled.

Fordilutedearningspershare,theweightedaveragenumberofordinarysharesinissue,excludingthoseheldinemployeesharetrusts,isadjustedtoassumeconversionofalldilutivepotentialordinaryshares,whichconsistsofshareoptionsgrantedtoemployeesduringtheyearended31March2015.


71

GROUP

2015 2014 Restated

Earnings

£’000

Shares

£’000

Earnings per share

pence

Earnings

£’000

Shares

£’000

Earnings per share

penceBasic EPSEarningsattributabletoordinaryshareholders 34,740 280,298 12.4 23,956 281,706 8.5Dilutiveeffectofshareoptions – 814 – – 878 –

Diluted EPS 34,740 281,112 12 .4 23,956 282,584 8 .5

Fortheyearto31March2015,814,000potentiallydilutiveordinarysharesinrespectofshareoptionsinissuewereincludedinthecalculationofdilutedEPSforthatyear.Fortheyearto31March2014,878,000potentiallydilutiveordinarysharesinrespectofshareoptionsinissuewereincludedinthecalculationofdilutedEPSforthatyear.

13. Intangible assets

GROUP

Goodwill

£’000

Computer software

£’000

Trademarks and trading

licences £’000

Client relation-

ships £’000

Total

£’000CostAt1April2013 11,500 118,844 3,135 4,628 138,107Additions – 684 – – 684Disposals – (302) – – (302)Foreigncurrencytranslation – (4,767) (144) (707) (5,618)

At31March2014 11,500 114,459 2,991 3,921 132,871Additions – 1,866 – – 1,866Disposals – – (1,600) (900) (2,500)Foreigncurrencytranslation – (1,574) (89) (232) (1,895)

At 31 March 2015 11,500 114,751 1,302 2,789 130,342

Accumulated amortisationAt1April2013 (11,500) (109,986) (2,658) (3,296) (127,440)Chargefortheyear – (6,564) (48) (351) (6,963)Disposals – 237 – – 237Foreigncurrencytranslation – 4,765 112 509 5,386

At31March2014 (11,500) (111,548) (2,594) (3,138) (128,780)Chargefortheyear – (1,866) (46) (325) (2,237)Disposals – – 1,600 900 2,500Foreigncurrencytranslation – 1,573 255 5 1,833

At 31 March 2015 (11,500) (111,841) (785) (2,558) (126,684)

Carrying amountAt 31 March 2015 – 2,910 517 231 3,658

At31March2014 – 2,911 397 783 4,091

At1April2013 – 8,858 477 1,332 10,667

Impairment

Goodwill

Duringtheyearended31March2009,impairmenttestscarriedoutresultedinthecarryingvalueofgoodwillbeingfullywrittendownto£nil.Therehavebeennosubsequentacquisitionsthereforenoadditionalgoodwillhasbeenrecognised.

Other intangibles

Otherintangiblesaretestedforimpairmentifeventsorchangesincircumstancesindicatethatthecarryingamountoftheassetmaynotberecoverable.Therewasnoimpairmentidentifiedintheyearto31March2015.


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14. Property, plant and equipment

GROUP

Furniture, fixtures and equipment

£’000

Computer hardware

£’000

Total

£’000CostAt1April2013 21,603 20,647 42,250Additions 867 739 1,606Disposals (470) (356) (826)Foreigncurrencytranslation (546) (587) (1,133)

At31March2014 21,454 20,443 41,897Additions 1,884 6,700 8,584Disposals (169) (321) (490)Foreigncurrencytranslation (387) (245) (632)

At 31 March 2015 22,782 26,577 49,359

Accumulated depreciationAt1April2013 (10,207) (15,929) (26,136)Chargefortheyear (1,739) (1,996) (3,735)Disposals 407 282 689

Foreigncurrencytranslation 467 551 1,018

At31March2014 (11,072) (17,092) (28,164)Chargefortheyear (2,170) (2,527) (4,697)Disposals 46 308 354Foreigncurrencytranslation 304 220 524

At 31 March 2015 (12,892) (19,091) (31,983)

Carrying amountAt 31 March 2015 9,890 7,486 17,376

At31March2014 10,382 3,351 13,733

At1April2013 11,396 4,718 16,114

At31March2015,theGrouphadnomaterialcapitalcommitmentsinrespectofproperty,plantandequipment(2014:£nil).Thenetbookvalueamountofproperty,plantandequipmentincludes£4,536,000(2014:£1,507,000)inrespectofcomputerhardwareheldunderfinanceleases.

15. Investment in subsidiary undertakings

COMPANY2015 £’000

2014 £’000

At1April 162,576 163,652Capitalreductionrelatingtosharebasedpayments – (1,076)

At 31 March 162,576 162,576

ThecapitalreductionrelatingtosharebasedpaymentsrelatestoshareoptionsgrantedbytheCompanytoemployeesofsubsidiaryundertakingsintheGroup,reducedbydistributionsreceivedfromthosesubsidiariesinrespectofthoseshareoptions.

On24January2011,theCompanysolditswhollyownedsubsidiary,DigitalLookLimitedforaninitialcashconsiderationof£1.4mresultinginagainof£1.0mfortheCompany.ThenetassetsofDigitalLookLimitedondisposalwerezeroresultinginagainof£1.4mfortheGroup.Oftheinitialconsideration,£0.2mwasreceivedby31March2011withtheremainderreceivedinJune2012.Duringtheyearended31March2014afurther£0.1m(2013:£0.1m)wasrecognisedinrelationtopreviouslyunrecogniseddeferredcontingentconsideration.Nofurtheradditionalconsiderationwasrecognisedduringyearended31March2015.


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Subsidiary undertakings

At31March2015,thefollowingcompanieswereCMCMarketsplc’stradingsubsidiaryundertakingsandintermediateholdingcompanies:

Country of incorporation

Principal activities

Held

CMCMarketsUKHoldingsLimited England Holdingcompany DirectlyCMCMarketsUKplc England Onlinetrading IndirectlyInformationInternetLimited England ITdevelopment IndirectlyCMCSpreadbetplc England Financialspreadbetting IndirectlyCMCMarketsDigitalOptionsGmbH Austria ITdevelopment IndirectlyCMCMarketsOverseasHoldingsLimited England Holdingcompany DirectlyCMCMarketsAsiaPacificPtyLimited Australia Onlinetrading IndirectlyCMCMarketsPtyLimited Australia Trainingandeducation IndirectlyCMCMarketsGroupAustraliaPtyLimited Australia Holdingcompany IndirectlyCMCMarketsStockbrokingLimited Australia Stockbroking IndirectlyCMCMarketsStockbrokingNomineesPtyLimited Australia Stockbrokingnominee IndirectlyCMCMarketsStockbrokingNominees(No.2Account)Limited Australia Dormant IndirectlyCMCMarketsCanadaInc. Canada Clientintroducingoffice IndirectlyCMCInternationalFinancialConsulting(Beijing)Co.Limited China Nobusinessactivity IndirectlyCMCMarketsNZLimited NewZealand Onlinetrading IndirectlyRedmonitorGmbH Austria ITdevelopment IndirectlyCMCMarketsSingaporePteLimited Singapore Onlinetrading Indirectly

Allshareholdingsareofordinaryshares.Theissuedsharecapitalofallsubsidiaryundertakingsis100%owned,whichalsorepresentstheproportionofthevotingrightsinthesubsidiaryundertakings.

CMCInternationalFinancialConsulting(Beijing)Co.Limitedwasliquidatedon19May2015.

16. Trade and other receivables

GROUP COMPANY

2015 £’000

2014 £’000

2015 £’000

2014 £’000

Tradereceivables 6,613 2,030 – –Less:provisionforimpairmentoftradereceivables (5,885) (1,951) – –

Tradereceivables–net 728 79 – –AmountsduefromGroupcompanies – – 35,444 36,765Prepaymentsandaccruedincome 3,632 3,664 – –Stockbrokingdebtors 12,690 14,603 – –Otherdebtors 1,716 1,315 – –

Total 18,766 19,661 35,444 36,765

Stockbrokingdebtorsrepresenttheamountreceivableinrespectofequitysecuritytransactionsexecutedonbehalfofclientswithacorrespondingbalanceincludedwithintradeandotherpayables(note18).

17. Cash and cash equivalents

GROUP2015 £’000

2014 £’000

Grosscashandcashequivalents 270,939 263,884Less:Clientmonies (232,328) (206,083)

Own cash and cash equivalents 38,611 57,801

Analysed as:Cashatbank 38,611 55,520Short-termdeposits – 2,281

Cashandcashequivalentscomprisecashatbankandothershort-termhighlyliquidinvestments,withtypicalmaturitiesofthreemonthsorless.Cashatbankearnsinterestatfloatingrates,basedondailybankdepositrates.


74

18. Trade and other payables

GROUP COMPANY

2015

£’000

2014 Restated

£’000

2015

£’000

2014

£’000CurrentTradepayables 240,131 213,301 – –Less:Clientmonies (232,328) (206,083) – –

Tradepayables–net 7,803 7,218 – –AmountowingtoGroupcompanies – – 53,439 43,728Taxandsocialsecurity 859 – – –Stockbrokingcreditors 11,833 14,493 – –Accrualsanddeferredincome 18,228 17,946 576 –

38,723 39,657 54,014 43,728

Non-currentAccrualsanddeferredincome 3,926 4,375 – –

Total 42,649 44,032 54,014 43,728

19. Borrowings

GROUP2015 £’000

2014 £’000

CurrentFinanceleaseliabilities 1,377 635Otherliabilities 22 –

1,399 635

Non-currentFinanceleaseliabilities 2,376 339Otherliabilities 77 –

2,453 339

Total 3,852 974

Finance lease liabilitiesAmountspayableunderfinancelease:Withinoneyear 1,573 709Inthesecondtofifthyearsinclusive 2,538 372Afterfiveyears – –

4,111 1,081Less:futurefinancecharges (358) (107)

Present value of lease obligations 3,753 974

Thepresentvalueoffinanceleaseliabilitiesisrepayableasfollows

Withinoneyear 1,377 635Inthesecondtofifthyearsinclusive 2,376 339Afterfiveyears – –

Present value of lease obligations 3,753 974


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Theweightedaverageinterestratespaidwereasfollows:

GROUP

2015 %

2014 %

Financeleases 6.37% 10.49%

Thefairvalueoffinancialliabilitiesisapproximatetothebookvalueshownabove.Thecarryingamountsofthebankloanandloannotesarebothwhollydenominatedinsterling.

Bank loans

InJune2014,the364dayrevolvingcreditfacilitywasrenewedatalevelof£40mforoneyeartoJune2015.ThiswasrenewedagaininJune2015where£20mhadamaturitydateofJune2016and£20mhadamaturitydateofJune2018.ThisfacilitycanonlybeusedtomeetbrokermarginrequirementsoftheGroup.Therateofinterestpayableonanyloansistheaggregateoftheapplicablemargin,LIBOR,andmandatorycost.

Undrawn borrowing facilities

TheGrouphasanundrawnmulti-currencyoverdraftfacilitywithNatWestBankplcof£7.5m,whichisrepayableondemand.ThefacilityisavailableinSterling,CanadianDollars,Euros,JapaneseYen,SwedishKronor,SwissFrancs,USDollars,AustralianDollarsandHongKongDollars.TheinterestratefortheSterlingoverdraftisNatWestBank’sBaseRateplus2%perannumand,forallothercurrencies,therelevantNatWestBankcurrencylendingrate.

20. Derivative financial instruments

GROUP

2015 2014

Assets £’000

Liabilities £’000

Total £’000

Assets £’000

Liabilities £’000

Total £’000

Held for tradingIndex,CommoditiesandTreasuriesfutures 199 (624) (425) 448 (446) 2Forwardforeignexchangecontracts 2,783 – 2,783 – (1,620) (1,620)Held for hedgingForwardforeignexchangecontracts–economichedges 34 (151) (117) 102 (38) 64Forwardforeignexchangecontracts–netinvestmenthedges 259 (30) 229 80 (2) 78

Total 3,275 (805) 2,470 630 (2,106) (1,476)

Thefairvalueofderivativecontractsisbasedonthemarketpriceofcomparableinstrumentsatthebalancesheetdate.Allderivativefinancialinstrumentshaveamaturitydateoflessthanoneyear.

Held for trading

Asdescribedinnote4,theGroupentersderivativecontractsinordertohedgeitsmarketpriceriskexposurearisingfromclientstradingandspreadbetting.

Held for hedging

TheGroup’sforwardforeignexchangecontractsaredesignatedaseithereconomicornetinvestmenthedges.EconomichedgesareheldforthepurposeofmitigatingcurrencyriskrelatingtotransactionalcurrencyflowsarisingfromearningsinforeigncurrenciesbutdonotmeetthecriteriafordesignationascashflowhedgesinaccordancewiththeGroup’saccountingpolicies(note3).TheGrouphasdesignatedanumberofforeignexchangederivativecontractsashedgesofthenetinvestmentintheGroup’snon-UKsubsidiaries.At31March2015,£2,348,000offairvaluegainswererecordedinotherreserveswithinequity(2014:£3,833,000).

Duringtheyear£374,000ofgains(2014Loss:£308,000)relatingtoeconomichedgeswererecognisedintheincomestatement.

Themaximumexposuretocreditriskatthereportingdateisthefairvalueofthederivativeassetsatthebalancesheetdate.


76

21. Provisions

GROUP

EBT commitments

£’000

Property related

£’000

Other

£’000

Total

£’000At1April2014 177 461 – 638Additionalprovision 3 1,226 4,157 5,386Utilisationofprovision – (198) – (198)Currencytranslation – (60) – (60)

At 31 March 2015 180 1,431 4,157 5,768

Theprovisionrelatingtoemployeebenefittrusts(EBT)representstheobligationtodistributeassetsheldinemployeebenefittruststobeneficiaries.

Thepropertyrelatedprovisionrepresentsdiscountedobligationsunderonerousleasecontractslessanyamountsconsideredrecoverablebymanagement.

Otherprovisionsrelatetolitigationprovisions.

GROUP2015 £’000

2014 £’000

Analysis of total provisionsCurrent 4,345 328Non-current 1,423 310

Total 5,768 638

22. Deferred tax

GROUP COMPANY

2015

£’000

2014 Restated

£’000

2015

£’000

2014

£’000Deferredtaxassetstoberecoveredwithin12months 2,278 1,910 – –Deferredtaxassetstoberecoveredafter12months 5,274 5,470 – –

7,552 7,380 – –

Deferredtaxliabilitiestobesettledwithin12months (108) (607) – –Deferredtaxliabilitiestobesettledafter12months (20) (20) – –

(128) (627) – –

Net deferred tax asset 7,424 6,753 – –

Deferredincometaxesarecalculatedonalltemporarydifferencesundertheliabilitymethodusinganeffectivetaxrateof20%(2014:20%).Thegrossmovementondeferredtaxisasfollows:

GROUP COMPANY

2015

£’000

2014 Restated

£’000

2015

£’000

2014

£’000At1April 6,753 12,759 – –Chargetoincomefortheyear (303) (6,790) – –Credit/(Charge)toequityfortheyear 664 (750) – –Changeintaxrate – 459 – –Foreigncurrencytranslation 310 1,075 – –

At 31 March 7,424 6,753 – –


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ThefollowingtabledetailsthedeferredtaxassetsandliabilitiesrecognisedbytheGroupandmovementsthereonduringtheyear:

GROUP

Tax losses

£’000

Accelerated capital

allowances £’000

Other timing differences

£’000

Total

£’000At1April2013(Restated) 7,977 4,188 594 12,759(Charge)/Credittoincomefortheyear (5,631) (1,648) 489 (6,790)Credittoequityfortheyear – – (750) (750)Changeintaxrate 150 153 156 459Foreigncurrencytranslation 751 119 205 1,075

At31March2014(Restated) 3,247 2,812 694 6,753(Charge)/Credittoincomefortheyear (673) (42) 412 (303)Credittoequityfortheyear – – 664 664Foreigncurrencytranslation 234 25 51 310

At 31 March 2015 2,808 2,795 1,821 7,424

COMPANYTax losses

£’000At1April2013 –

At31March2014 –

At 31 March 2015 –

Therecognitionofdeferredtaxassetsisbaseduponwhetheritismorelikelythannotthatsufficientandsuitabletaxableprofitswillbeavailableinthefutureagainstwhichthereversalofthetemporarydifferencescanbededucted.TherecoverabilityoftheGroup’sdeferredtaxassetinrespectofcarryforwardlossesisbasedonanassessmentofthefuturelevelsoftaxableprofitexpectedtoarisethatcanbeoffsetagainsttheselosses.TheGroup’sexpectationsastotheleveloffuturetaxableprofitstakeintoaccounttheGroup’slongtermfinancialandstrategicplansandanticipatedfuturetaxadjustingitems.InmakingthisassessmentaccountistakenofbusinessplansincludingtheBoardapprovedGroupprofitforecast.

Deferredtaxassetsarerecognisedfortaxlossescarriedforwardtotheextentthattherealisationoftherelatedtaxbenefitthroughfuturetaxableprofitsisprobable.TheGroupdidnotrecognisedeferredtaxassetsof£16.9minrespectoflossesamountingto£56.3m.Inrespectoftheselosses,thereisnotimelimitontheirutilisation.

Thechangeinthemainrateofcorporationtaxfrom23percentto21percentpassedintolegislationinJuly2013andwaseffectivefrom1April2014.AspartoftheFinanceBill2013,itwasannouncedthatthemainrateofcorporationtaxwillreduceto20%from1April2015.ThisratebecamesubstantivelyenactedinJuly2013.Alldeferredtaxbalancesarerecordedat20%,astheywereat31March2014.

23. Share capital and premium

GROUP AND COMPANY2015

Number2014

Number2015 £’000

2014 £’000

AuthorisedOrdinarysharesof25p 400,000,000 400,000,000 100,000 100,000

Allotted, issued and fully paidOrdinarysharesof25p 280,296,862 280,299,177 70,074 70,075Deferredsharesof25p 2,478,086 2,475,771 620 619

Total 282,774,948 282,774,948 70,694 70,694


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Share class rights

TheCompanyhastwoclassesofshares,OrdinaryandDeferred,neitherofwhichcarriesarighttofixedincome.Deferredshareshavenovotingordividendrights.Intheeventofawinding-up,ordinarysharesshallberepaidatnominalvalueplus£0.5meachinprioritytodeferredshares.

GROUP AND COMPANY

Ordinary shares

Number

Deferred shares

Number

Total

NumberAt1April2013 280,397,178 2,377,770 282,774,948Conversionofordinarysharestodeferredshares (98,001) 98,001 –

At31March2014 280,299,177 2,475,771 282,774,948Conversionofordinarysharestodeferredshares (2,315) 2,315 –

At 31 March 2015 280,296,862 2,478,086 282,774,948

GROUP AND COMPANY

Ordinary shares £’000

Deferred shares £’000

Share premium

£’000

Total

£’000At1April2013 70,099 595 33,362 104,056

At31March2014 70,075 619 33,362 104,056

At 31 March 2015 70,074 620 33,362 104,056

Movements in share capital and premium

Duringtheyear2,315(2014:98,001)ordinaryshareswereconvertedtodeferredsharesinaccordancewiththetermsofgranttoemployeeswhohavenowlefttheGroup.

24. Own shares held in trust

GROUP2015

Number2014

Number2015 £’000

2014 £’000

Ordinary shares of 25pAt1April 1,069,282 1,069,282 1,983 1,983

At 31 March 1,069,282 1,069,282 1,983 1,983

ThesharesareheldbytheCMCMarkets2007EmployeeBenefitTrustforthepurposeofencouragingorfacilitatingtheholdingofsharesintheCompanyforthebenefitofemployeesandthetrusteeswillapplythewholeorpartofthetrust’sfundstofacilitatedealinginsharesbysuchbeneficiaries.

25. Share-based payment

Thetotalchargefortheyearrelatingtoemployeeshare-basedpaymentplanswas£1.0m(2014:£nil).A£0.4m(2014:£Nil)chargerelatestoequity-settledshare-basedpaymentsanda£0.6mcharge(2014:£Nil)relatestocash-settledshare-basedpayments.

TheCMCMarketsplcManagementEquityPlan2009(‘2009MEP’)wastheonlyshareschemeavailabletotheGroup’semployeesduringthecurrentyearandnosharesweregiftedtoemployeesduringtheyear.

Share options

Shareoptionsgrantedunderthe2009MEPhavebeenintheformof‘marketperformance’and‘non-marketperformance’basedawards.

MarketperformancebasedoptionsareexercisableatnilcostsubjecttotheGroupachievingcertainmarketvaluationtargetswithindefinedtimescales.Therearenoindividuallybasedperformancecriteriaattachedtotheseawards,otherthancontinuedemploymentwithintheGroup.


79

Non-marketperformancebasedoptionsareexercisableatnilcostsubjecttotheGroupachievingcertainprofittargets.Therearenoindividuallybasedperformancecriteriaattachedtotheseawards,otherthancontinuedemploymentwithintheGroup.

Thefairvalueofnon-marketperformancebasedoptionsgrantedpriorto2013werecalculatedbyreferencetoasharepriceof£0.80andanexpecteddividendyieldof3%,whichresultedinaweightedaveragefairvalueperawardgrantedof£0.77.

Shareoptionsgrantedduring2014hadnoperformanceconditionsattached.Theyareexercisableat£0.40pershareandhavenoindividuallybasedperformancecriteriaattached.ThefairvalueofawardsmadeduringtheyearhasbeencalculatedusingaBlackScholesoptionpricingmodel.Thesignificantinputsintothemodelwerethesharepriceof£1.46atthegrantdate,volatilityof47.6%,andtheannualrisk-freeinterestrateof0.9%,whichresultedinaweightedaveragefairvalueperawardgrantedof£1.082.Volatilitywascalculatedbyreferencetoanumberofcomparablequotedcompanies.

Shareoptionsgrantedduring2015hadnoperformanceconditionsattached.Theyareexercisableat£Nilpershareandhavenoindividuallybasedperformancecriteriaattached.Thefairvalueoftheawardsmadeduringtheyearhasbeencalculatedusingquotedcomparablegroups.Thisresultedinafairvalueperawardgrantedof£1.74.Movementsinthenumberofshareoptionsoutstandingareasfollows:

GROUP2015

Number2014

NumberAt1April 911,035 1,145,867Granted 309,000 562,500Lapsed (285,735) (797,332)

At 31 March 934,300 911,035

Thevestingandexpirydatesofoutstandingoptionsareshownbelow:

Year of grantExercise period commencing

Exercise period ending

2015 Number

2014 Number

2010 30September2014 22December2019 – 285,7352013 2April2014 30September2017 62,800 62,8002014 2October2016 30October2021 562,500 562,5002015 2April2017 30April2022 309,000 –

934,300 911,035

Matched options

Underthetermsofthe2009MEP,certainemployeeswereabletoinvestuptoaspecifiedamounttopurchaseordinarysharesintheCompany(the‘bought’shares)inordertoreceiveafurther1½free‘matched’optionsonthe‘matching’date,being1October2011.TherearenoperformanceconditionsattachedtothematchedoptionsotherthancontinuedemploymentwithintheGroupandownershipoftheboughtshares.Therewerenonewboughtsharesintheyear(2014:Nil)andallmatchedoptionshavenowlapsed.

Therespectivematchedoptionsfortheboughtsharesareasfollows:

GROUP2015

Number2014

NumberAt1April 375,000 375,000Lapsed (375,000) –

At 31 March – 375,000


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26. Other reserves

GROUP

Translation reserve

£’000

Net investment

hedging reserve

£’000

Merger reserve

£’000

Total

£’000At1April2013 13,577 (12,294) (47,800) (46,517)Currencytranslationdifferences (8,183) – – (8,183)Profitonnetinvestmenthedges – 4,997 – 4,997Taxonprofitonnetinvestmenthedges – (1,056) – (1,056)(Losses)/GainsrecycledtoIncomestatement (1,561) 2,773 – 1,212

At31March2014 3,833 (5,580) (47,800) (49,547)Currencytranslationdifferences (1,485) – – (1,485)Profitonnetinvestmenthedges – 399 – 399Taxonprofitonnetinvestmenthedges – 664 – 664

At 31 March 2015 2,348 (4,517) (47,800) (49,969)

Translation reserve

ThetranslationreserveiscomprisedoftranslationdifferencesonforeigncurrencynetinvestmentsheldbytheGroup.

Net investment hedging reserve

Overseasnetinvestmentsarehedgedusingforwardforeignexchangecontracts.Gainsandlossesoninstrumentsusedtohedgetheseoverseasnetinvestmentsareshowninthenetinvestmenthedgingreserve.Theseinstrumentshedgebalancesheettranslationrisk,whichistheriskofchangesinreservesduetofluctuationsincurrencyexchangerates.AllchangesinthefairvalueweretreatedasbeingeffectiveunderIAS39–Financial Instruments: Recognition and Measurement and Eligible Hedged Items.

Merger reserve

Themergerreservearosefollowingacorporaterestructurein2005whenanewholdingcompany,CMCMarketsplc,wascreatedtobringallCMCcompaniesintothesamecorporatestructure.Themergerreserverepresentsthedifferencebetweenthenominalvalueoftheholdingcompany’ssharecapitalandthatoftheacquiredcompanies.

27. Operating lease commitments

GROUP2015 £’000

2014 £’000

Minimumleasepaymentsunderoperatingleasesrecognisedinexpensefortheyear 2,717 2,915

OperatingleasepaymentsrepresentrentalspayablebytheGroupforofficespace.Leasesarenegotiatedforanaveragetermof3.7years(2014:3.7years)andrentalsarefixedforanaverageof2.7years(2014:2.3years).

TheGrouphadoutstandingcommitmentsundernon-cancellableoperatingleasesasfollows:

GROUP2015 £’000

2014 £’000

Withinoneyear 3,134 4,412Withintwotofiveyears 10,043 10,689Afterfiveyears 9,418 11,260

22,595 26,361


81

28. Cash generated from operations

GROUP

2015

£’000

2014 Restated

£’000Cash flows from operating activitiesProfitbeforetaxation 43,510 32,241Adjustmentsfor:Netinterestincome (2,118) (2,146)Financecosts 896 696Depreciation 4,697 3,735Amortisationofintangibleassets 2,237 6,963Gainondisposalofinvestmentinsubsidiaries – (127)Share-basedpayment 374 273Changes in working capital:(Increase)/decreaseintradeandotherreceivables (1,750) 2,759Increaseinamountsduefrombrokers (43,930) (17,106)Decreaseintradeandotherpayables (2,684) (4,590)Increase/(decrease)inprovisions 5,130 (3,127)

Cash generated from operations 6,362 19,571

29. Retirement benefit plans

TheGroupoperatesdefinedcontributionretirementbenefitplansforallqualifyingemployees.TheassetsoftheschemesareheldseparatelyfromthoseoftheGroup,infundsunderthecontroloftrustees.Whereemployeesleavetheschemepriortovestingfullyinthecontributions,thecontributionspayablebytheGrouparereducedbytheamountoftheforfeitedcontributions.Thepensionchargefortheseplansfortheyearwas£1,031,000(2014:£1,128,000).

30. Dividend per share

GROUP and COMPANY2015 £’000

2014 £’000

Declared and paid during the yearsFinalDividendfor2014at2.14ppershare(2013:nil) 5,975 –InterimDividendfor2015at2.14ppershare(2014:2.14p) 5,975 5,977

Total 11,950 5,977

Thefurtherinterimdividendof3.57ppershare,amountingto£9,968,000wasapprovedon29April2015andwaspaidon1May2015.Thisdividendhasnotbeenincludedasaliabilityat31March2015.

31. Related party transactions

Group transactions

TransactionsbetweentheCompanyanditssubsidiaries,whicharerelatedparties,havebeeneliminatedonconsolidationandarenotdisclosedinthissectionofthenote.


82

TransactionsbetweentheGroupanditsotherrelatedpartiesaredisclosedbelow:

Compensation of key management personnel

GROUP2015 £’000

2014 £’000

Keymanagementcompensation:Short-termemployeebenefits 1,338 1,003Post-employmentbenefits 31 9Sharebasedpayments 374 54

1,743 1,066

Remunerationofhighestpaiddirector:Wages,salaries,bonusesandincentivepayments 500 500

KeymanagementcomprisetheBoardofCMCMarketsplconly.

Directors’ transactions

Duringthefinancialyear,£77,261(2014:£97,933)waspaidtoAstreAssociatesLimitedinrespectofnon-executivedirectorfeespayabletoJohnJackson.

Company transactions

TheCompanyenteredintothefollowingtransactionswithotherCMCMarketsGroupentitiesduringtheyear:


2014 £’000

Amountsborrowed 11,406 5,071Rechargeinrespectofshareoptionsissuedtosubsidiary’semployees (374) (189)

TheCompanyhadthefollowingamountsoutstandingwithsubsidiariesatyearend:


2014 £’000

Amountsduefromsubsidiaries 35,444 36,765Amountsduetosubsidiaries 53,439 43,728

AmountsduetoGroupundertakingsareunsecured,interestfreeandrepayableondemand.

32. Contingent liabilities

Guarantee

TheCompanyisajointandseveralguarantortothebankloanfacilitydescribedinnote19.Underthetermsoftheloanagreement,CMCMarketsUKplccandrawdownonthisfacility.

Letters of support

TheCompanyhasissuedlettersofsupporttoseveralofitssubsidiaryundertakingsconfirmingitsintentiontoprovidesuchfinancialsupportasisnecessarytosettlecreditorsastheyfalldueandtobeabletocontinueoperationsonagoingconcernbasis.

33. Ultimate controlling party

TheGroup’sultimatecontrollingpartyisPeterCruddasbyvirtueofhismajorityshareholdinginCMCMarketsplc.


83

34. Impact of adopting new accounting standards and re-allocations

Duringtheyearended31March2015,theGroupadoptedIFRIC21‘Levies’andhasaccordinglyrestatedthepriorperiods.Thetaxchargehasalsobeenrestatedtotakeaccountofthis.Certainprioryearbalanceshavebeenre-allocatedtoreflectcurrentyearpresentation.

ThefollowingtablessetouttheimpactofIFRIC21‘Levies’andre-allocations:

a) Consolidated Income statement

GROUP

2014 Reported

£’000

IFRIC21 Levies £’000

Re-allocation

£’000

2014 Restated

£’000Revenue 142,028 – (1,410) 140,618Netinterestincome 736 – 1,410 2,146

Operatingexpenses (77,801) (574) – (78,375)

Profit/(Loss) before taxation 32,815 (574) – 32,241Taxation (8,452) 167 – (8,285)

Profit/(Loss) for the year attributable to owners of the Company 24,363 (407) – 23,956

b) Consolidated statement of financial position

As at 31 March 2014

GROUP

31 March 2014

Reported £’000

IFRIC21 Levies

£’000

Re-allocation

£’000

31 March 2014

Restated £’000

LIABILITIESCurrent liabilitiesTradeandotherpayables 43,003 (1,727) (1,619) 39,657Derivativefinancialinstruments 487 – 1,619 2,106ShorttermProvisions 638 – (310) 328Non-Current liabilitiesDeferredTaxLiabilities 264 363 – 627LongtermProvisions – – 310 310EQUITYRetained earnings 65,691 1,364 – 67,055

As at 1 April 2013

GROUP

1 April 2013 Reported

£’000


Re-allocation

£’000

1 April 2013 Restated

£’000LIABILITIESCurrent liabilitiesTradeandotherpayables 46,948 (2,301) (487) 44,160Derivativefinancialinstruments 1,705 – 487 2,192ShorttermProvisions 3,765 – (50) 3,715Non-Current liabilitiesDeferredTaxLiabilities 616 530 – 1,146LongtermProvisions – – 50 50EQUITYRetained earnings 46,944 1,771 – 48,715


84

c) Consolidated statement of changes in equity

GROUP

Retained Earnings

£’000At 1 April 2013 (Reported) 46,944Effectofchangesinaccountingpolicies 1,771

At 1 April 2013 (Restated) 48,715Totalcomprehensiveincomefortheyear(Reported) 24,363Effectofchangesinaccountingpolicies (407)

Total comprehensive income for the year (Restated) 23,956

Share-basedpayments 273Dividends (5,889)

At 31 March 2014 (Reported) 65,691Effectofchangesinaccountingpolicies 1,364

At31March2014(Restated) 67,055

d) Consolidated statement of cashflows

GROUP

2014 Reported

£’000


Re-allocation

£’000

2014 Restated

£’000Cashflow from operating activitiesProfitbeforetaxation 32,815 (574) – 32,241Netinterestincome (736) – (1,410) (2,146)Changes in Working Capital(Decrease)/increaseintradeandotherpayables (5,164) 574 – (4,590)Cash generated from operations 20,981 – (1,410) 19,571Netinterestincome 736 – 1,410 2,146Net cash generated from operating activities 20,345 – – 20,345


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Corporate information

UK – Head Office

CMCMarketsplc,CMCMarketsUKplc,CMCSpreadbetplc133HoundsditchLondonEC3A7BXT+44(0)[email protected]

Australia

CMCMarketsAsiaPacificPtyLtdCMCMarketsStockbrokingLimitedLevel13130PittStreetSydneyNSW2000T1300303888T+61(0)[email protected]

Canada

CMCMarketsCanadaInc.Suite1420120AdelaideStreetWestTorontoOntarioM5H1T1T+14166825000Einfo@cmcmarkets.cawww.cmcmarkets.ca

China

CMCMarketsUKplcBeijingRepresentativeOfficeUnit22,Room1901,TowerE2OrientalPlazaNo1EastChangAnAvenueDongChengDistrictBeijing100738T+86(0)[email protected]

France

CMCMarketsUKplc4ièmeétage37AvenuedesChamps-Elysées75008ParisT+33(0)[email protected]

Germany

CMCMarketsNiederlassungFrankfurtamMainderCMCMarketsUKPlcGardenTowerNeueMainzerStraße46-5060311FrankfurtamMainT+49(0)[email protected]

Italy

CMCMarketsUKplcSuccursalediMilanoCorsodiPortaRomana6820122MilanoT+390236009604Einfo@cmcmarkets.itwww.cmcmarkets.it

New Zealand

CMCMarketsNZLimitedLevel25151QueenStreetAucklandT+64(0)[email protected]

Norway

CMCMarketsUKplcFilialOsloFridtjofNansensPlass60160OsloT+4722019702Einfo@cmcmarkets.nowww.cmcmarkets.no

Singapore

CMCMarketsSingaporePteLimited50RafflesPlace#14-06SingaporeLandTowerSingapore048623T18005596000(Local)[email protected]

Spain

CMCMarketsUKplc,SucursalenEspañaCalleMarquésdelDuero,3BajoIzquierda28001MadridT+34911140700Einfo@cmcmarkets.eswww.cmcmarkets.es

Sweden

CMCMarketsUKplcFilialStockholmHamngarten1111147StockholmT+46(0)[email protected]

Annual Report 2015Corporate information

86

Directors

PeterCruddas ChiefExecutiveOfficerGrantFoley GroupDirectorofFinance,RiskandComplianceDavidFineberg GroupDirectorofTradingSimonWaugh Non-ExecutiveChairmanJamesRichards Non-ExecutiveDirector

Company Secretary

JonathanBradshaw

Registered Office

133HoundsditchLondonEC3A7BXTelephone:+44(0)2071708200Fax:+44(0)2071708499Email:[email protected]:www.cmcmarketsplc.com

Registered Number

CMCMarketsplc:05145017RegisteredinEnglandandWales

Independent Auditors

PricewaterhouseCoopersLLP7MoreLondonRiversideLondonSE12RT

Bankers

TheRoyalBankofScotlandplc280BishopsgateLondonEC2M4RB

Apple,iPadandiPhonearetrademarksofAppleInc.,registeredintheUSandothercountries.

CMC Markets plc Corporate information

87

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CMC Markets plc

133 Houndsditch

London EC3A 7BX

United Kingdom

Tel +44 (0)20 7170 8200

Fax +44 (0)20 7170 8499

Email [email protected]

www.cmcmarketsplc.com

Annual Report and Financial StatementsFor the year ended 31 March 2015

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