We have audited the group and parent company financial statements (the ‘‘financial statements’’) of CMC Markets plc for the year ended 31 March 2012, which comprise the consolidated income statement, the consolidated statement of comprehensive income, the Group and Parent Company balance sheets, the Group and Parent Company statements of changes in equity, the Group and Parent Company cash flow statement, the accounting policies and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’
responsibilities statement set on page 35, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements In our opinion:
> the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 March 2012 and of the Group’s profit and Group’s and Parent Company’s cash flows for the year then ended;
> the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
> the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
> the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
> adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or
> the Company financial statements are not in agreement with the accounting records and returns; or
> certain disclosures of directors’ remuneration specified by law are not made; or
> we have not received all the information and explanations we require for our audit.
Hemione Hudson (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London 28 June 2012
Notes £m £m
Revenue 162.2 160.7
Net interest income 6 1.8 1.0
Total revenue 5 164.0 161.7
Rebates and levies (20.4) (24.8)
Net operating income 5 143.6 136.9
Operating expenses 7 (121.1) (118.2)
EBITDA (1) 22.5 18.7
Depreciation and amortisation (18.6) (28.6)
Impairment of intangible assets - (12.3)
Operating profit/(loss) 3.9 (22.2)
Finance costs 9 (1.2) (1.5)
Profit/(loss) before taxation 10 2.7 (23.7)
Taxation 11 (0.2) 4.3
Profit/(loss) for the year attributable to owners of the Company 2.5 (19.4)
Earnings per share
Basic (p) 12 0.9p (6.9)p
Diluted (p) 12 0.9p (6.9)p
(1) EBITDA represents earnings before interest, tax, depreciation and amortisation and impairment of intangible assets, but includes interest income classified as trading revenue.
As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income. The profit for the year ended 31 March 2012 dealt within the financial statements of the Company was £0.3m (2011: £160.1m loss). The Company had no other comprehensive income.
Consolidated income statement for the year ended 31 March 2012
2012 2011
GROUP
Consolidated statement of comprehensive income for the year ended 31 March 2012
£m £m
Profit/(loss) for the year 2.5 (19.4)
Other comprehensive income:
Loss on net investment hedges net of tax (0.2) (0.9)
Currency translation differences (0.1) 1.4
Other comprehensive (losses)/income for the year (0.3) 0.5 Total comprehensive income/(losses) for the year attributable to owners of the Company 2.2 (18.9)
GROUP 2012 2011
2012 2011 2012 2011 Notes £m £m £m £m
ASSETS
Non-current assets
Intangible assets 13 21.2 31.0 -
-Property, plant and equipment 14 18.4 23.7 -
-Investment in subsidiary undertakings 15 - - 163.7 163.3
Deferred tax assets 23 13.3 11.3 - 0.2
Total non-current assets 52.9 66.0 163.7 163.5
Current assets
Trade and other receivables 16 22.8 28.3 35.9 36.6
Financial assets 17 1.3 11.6
-Current tax recoverable - 0.7
-Amounts due from brokers 47.6 99.3 -
-Cash and cash equivalents 18 52.1 63.6 -
-Total current assets 123.8 203.5 35.9 36.6
Total assets 176.7 269.5 199.6 200.1
LIABILITIES
Current liabilities
Trade and other payables 19 56.0 115.3 38.4 39.4
Financial liabilities 20 2.1 38.7
-Current tax payable 0.6
-Provisions 22 3.0 2.9
-Total current liabilities 61.7 156.9 38.4 39.4
Non-current liabilities
Trade and other payables 19 7.1 6.7 -
-Deferred tax liabilities 23 1.8 0.9 -
-Financial liabilities 20 0.6 1.5
-Total non-current liabilities 9.5 9.1 - -Total liabilities 71.2 166.0 38.4 39.4
EQUITY
Equity attributable to owners of the Company
Share capital 24 70.7 70.7 70.7 70.7
Share premium 24 33.3 33.3 33.3 33.3
Own shares held in trust 25 (2.0) (1.6) -
-Other reserves 27 (46.2) (45.9) -
-Retained earnings 49.7 47.0 57.2 56.7
Total equity 105.5 103.5 161.2 160.7
Total equity and liabilities 176.7 269.5 199.4 200.1
The Financial Statements on pages 43 to 85 were approved and authorised for issue by the Board of Directors on 26 June 2012 and signed on its behalf by:
Peter Cruddas, Chairman Doug Richards, CEO
Own shares
Share Share held in Other Retained Total capital premium trust reserves earnings Equity
£m £m £m £m £m £m
At 1 April 2010 70.7 33.3 (3.1) (46.4) 67.1 121.6
Total comprehensive income/(losses) for the year - - - 0.5 (19.4) (18.9)
Share-based payments - - - - 0.5 0.5
Acquisition of own shares held in trust - - (0.1) - - (0.1)
Disposal of own shares held in trust - - 1.6 - (1.2) 0.4
At 31 March 2011 70.7 33.3 (1.6) (45.9) 47.0 103.5 Total comprehensive income/(losses) for the year - - - (0.3) 2.5 2.2
Share-based payments - - - - 0.2 0.2
Acquisition of own shares held in trust - - (0.4) - - (0.4)
At 31 March 2012 70.7 33.3 (2.0) (46.2) 49.7 105.5
Total equity is attributable to owners of the Company.
Share Share Retained Total capital Premium earnings equity £m £m £m £m
At 1 April 2010 70.7 33.3 216.3 320.3
Total comprehensive expense for the year - - (160.1) (160.1)
Share-based payments - - 0.5 0.5
At 31 March 2011 70.7 33.3 56.7 160.7
Total comprehensive income for the year - - 0.3 0.3
Share-based payments - - 0.2 0.2
At 31 March 2012 70.7 33.3 57.2 161.2 GROUP
COMPANY
2012 2011 2012 2011 Notes £m £m £m £m Cash flows from operating activities
Cash generated from/(used in) operations 29 15.2 21.6 (1.3) (0.9)
Net interest income 1.8 1.0 -
-Tax recovered 0.1 1.3
-Net cash generated from/(used in) operating activities 17.1 23.9 (1.3) (0.9) Cash flows from investing activities
Purchase of property, plant and equipment (1.4) (16.6) -
-Investment in intangible assets (2.4) (20.8) -
-Proceeds from disposal of subsidiary 1.3 0.2 1.3 0.2
Deferred consideration paid - (0.3) - (0.3)
Dividends received - - - 1.0
Net cash (used in)/generated from investment activities (2.5) (37.5) 1.3 0.9 Cash flows from financing activities
Repayment of borrowings (24.1) (0.8) -
-Proceeds from borrowings - 5.9
-Acquisition of own shares held in trust (0.4) (0.1) -
-Proceeds from sale of own shares - 0.4 -
-Finance costs (1.2) (1.5) -
-Net cash from financing activities (25.7) 3.9 - -Net decrease in cash and cash equivalents (11.1) (9.7)
-Cash and cash equivalents at the beginning of the year 63.6 73.4 -
-Effect of foreign exchange rate changes (0.4) (0.1) -
-Cash and cash equivalents at the end of the year 18 52.1 63.6 -
-GROUP COMPANY
1. General information 2. Basis of preparation
3. Summary of significant accounting policies 4. Financial risk management
5. Segmental analysis 6. Net interest income 7. Operating expenses 8. Employee information 9. Finance costs
10. Profit/(loss) before taxation 11. Taxation
12. Earnings per share (EPS) 13. Intangible assets
14. Property, plant and equipment 15. Investment in subsidiary undertakings 16. Trade and other receivables
17. Financial assets
18. Cash and cash equivalents 19. Trade and other payables 20. Financial liabilities
21. Derivative financial instruments 22. Provisions
23. Deferred tax
24. Share capital and premium 25. Own shares held in trust 26. Share-based payment 27. Other reserves
28. Operating lease commitments 29. Cash generated from operations 30. Retirement benefit plans 31. Related party transactions 32. Contingent liabilities 33. Ultimate controlling party
Index to notes