TIDMIAP
RNS Number : 4451A
ICAP PLC
07 June 2016
ICAP plc (the Company)
The Company announces that it has today issued to shareholders
the Annual Report and financial statements for the year ended 31
March 2016 (the Annual Report), the notice of 2016 annual general
meeting and the form of proxy.
The Annual Report and the notice of 2016 annual general meeting
are available to view or download from the Company's website,
www.icap.com and copies of these documents have been submitted to
the National Storage Mechanism and will shortly be available for
inspection at www.hemscott.com/nsm.do.
Printed copies of the Annual Report and notice of 2016 annual
general meeting will be posted to shareholders who have requested
them later today.
The Company's 2016 annual general meeting will be held at
11.00am on Wednesday 13 July 2016 at the offices of
ICAP plc, 2 Broadgate, London, EC2M 7UR.
The Company announced its full-year results for the year ended
31 March 2016 on 16 May 2016. A condensed set of financial
statements formed part of that announcement and included an
indication of the important events that occurred during the year
together with a responsibility statement regarding the Annual
Report. Certain further information in relation to the Annual
Report is provided in full unedited text as required under the
Disclosure and Transparency Rules in the appendices to this
announcement. This announcement should be read together with the
full-year results announcement.
Contact:
Serra Balls Group Head of Communications, ICAP plc Tel: + 44 20
7050 7103
Alex Dee Head of Investor Relations, ICAP plc Tel: + 44 20 7050
7123
ICAP plc
7 June 2016
S
Appendices:
The following appendices should be read in conjunction with, and
not as a substitute for, reading the full Annual Report for the
year ended 31 March 2016. Note references and definitions in the
text below are as in the Annual Report for the year ended
31 March 2016.
Appendix A: Principal risks
The following table summarises the risks of principal importance
to ICAP over the financial period, our appetite, their drivers and
key mitigating actions. These principal risks are monitored and
assessed throughout the organisation and at the Risk Committee, via
the Group's risk appetite approach.
Additionally, stress testing of the sustainability of ICAP's
business plan is undertaken through the assessment of extreme
impact events/tail-risk events to provide an understanding of those
risks that have the potential to make the business model
unviable.
Importance to
ICAP Key drivers Mitigation
------------------------- --------------------------- ------------------- -------------------
Strategic risk
------------------------------------------------------------------------------------------------
The risk arising To ensure ICAP Regulatory Business
from inappropriate remains competitive landscape case and
strategic decisions in its chosen impacting risk assessment
that fail to reflect strategic markets, our business of significant
the full business identifying and or our customers' business
operating environment, optimising commercial businesses. initiatives.
and/or full impacts opportunities Commercial/market Defined
on execution, or requires ICAP conditions. product,
fail to adequately to assess the Internal country
or timely identify risks, rewards business/operating and customer
changes to the and costs associated model. strategies.
business model. with each. Surveillance
Strategic risks of market,
generally manifest regulatory
over a medium landscape
time frame allowing and customer
corrective proactive demand.
management. Risk scenario
Appetite contingency
ICAP will innovate planning.
and grow through
considered initiatives
and acquisitions
that are scalable,
experience positive
switching/network
effects or show
a competitive
advantage.
------------------------- --------------------------- ------------------- -------------------
Operational risk
------------------------------------------------------------------------------------------------
The risk of loss While ICAP's reputation Internal The Group
resulting from is built on strong business/ maintains
inadequate or failed execution of service, operating an operational
internal processes, ICAP actively model. risk framework,
people and systems, identifies, monitors External with independent
or from external and controls the threats. risk function
events. risk that its Market conditions. oversight.
people, processes Timely escalation
or systems fail and mitigation
leading to a reduction of risk
in the quality events.
of service to Provision
our customers of training
and an increase and guidance.
in our operating Information
costs. security
Operational risks breach monitoring.
could manifest Cyber security
themselves across programme,
any time frame. including
Appetite penetration
ICAP will take testing.
measures to identify Critical
and proportionally technology
manage operational monitoring.
risk to a desired Risk scenario
level through contingency
mitigating systems, planning.
processes and
controls, but
recognises operational
risk is inherent
in its business
activities.
------------------------- --------------------------- ------------------- -------------------
Liquidity risk
------------------------------------------------------------------------------------------------
Liquidity risk ICAP has short-term Operational Periodic
is the risk that liquidity requirements risk. reviews
the Group or any arising from settlement Credit risk including
of its entities and clearing arrangements, (events). going concern
do not have sufficient in the form of Operating assessments.
liquid resources collateral and / business Use of financial
or are unable to margin requirements model. institutions
deploy such resources for clearing houses for clearing
to meet their actual or financial institutions access.
or potential obligations providing clearing $250 million
in a timely manner access. It is of committed
as they fall due. possible large liquidity
liquidity demands held centrally
may arise on the for same
same or next day, and next
due to reasons day utilisation.
beyond ICAP's Contingency
direct control. funding
The Group ensures arrangements
adequate liquidity and procedures
resources are in place.
maintained to
meet these requirements
in support of
its trading activities.
Longer-term requirements
arise in relation
to the timing
of the Group's
operating cash
inflows against
outflows, principally
for capital expenditure
and dividends.
The Group maintains
a diversified
funding base with
sufficient committed
headroom to forecast
requirements.
Appetite
ICAP will have
sufficient financial
resources to ensure
there is no significant
risk that it is
unable to access
and utilise these
resources to meet
financial obligations
as they fall due.
------------------------- --------------------------- ------------------- -------------------
Reputation risk
------------------------------------------------------------------------------------------------
The risk that the ICAP remains focused Operational Active assessment
Group fails to on maintaining risk. via investor
meet expectations and constantly Regulatory relationship
of stakeholders, strengthening risk - conduct surveys,
is unable to build relationships risk. media surveys
or sustain relationships with shareholders, Strategic and employee
with customers, customers, regulators, risk. statistics.
incurs regulatory lenders, clearing Culture
censure or experiences and settlement and conduct
more costly access providers, market initiatives.
to funding sources. infrastructure
providers and
employees.
Reputation risk
can manifest over
the near term
with long-term
impacts.
Appetite
ICAP will adhere
to its core values
and fulfil its
corporate responsibilities
by ensuring it
acts responsibly,
ethically and
with integrity.
------------------------- --------------------------- ------------------- -------------------
Credit risk
------------------------------------------------------------------------------------------------
The risk of a financial While ICAP enters Market conditions. Counterparty
loss due to the into transactions Counterparty due diligence.
failure of a customer only when executing credit worthiness. Credit assessments
to meet its obligation on behalf of customers, and limits.
to settle outstanding providing customer Risk scenario
amounts. access to clearing, and stress
or provides additional contingency
fee-based services planning.
to customers,
there does exist
short-term credit
exposure prior
to clearing and
settlement, and
outstanding receivables
risk that ICAP
manages.
Appetite
ICAP will engage
only in activities
which it believes
will not result
in loss due to
significant credit
risk.
------------------------- --------------------------- ------------------- -------------------
Legal and regulatory risk
------------------------------------------------------------------------------------------------
Legal risk can ICAP operates Multiple ICAP has
arise from defective in multiple jurisdictions and dynamic internal
transactions, failing and remains focused regulatory legal and
to take appropriate on ensuring it regimes. compliance
measures to protect recognises and Regulatory departments
assets, changes respects the rules risks - which act
in law and/or breach and laws to which conduct as independent
of law or acceptable it is held. ICAP risk. advisory
practice, and claims, also recognises and investigation
resulting in a that the conduct functions
liability or loss of the Group and to enable
to a company(ies) its employees and defend
within the Group. is of paramount the Group's
Regulatory risk importance to strategic
is the risk of its strategic aims. Both
material loss, aims and reputation. legal policies
regulatory sanction, Legal and regulatory and compliance
or reputational risk can manifest risk management
damage arising over the near frameworks
from the failure term and long strengthen
to comply with term. this defence.
relevant regulatory Appetite Advice is
requirements. ICAP will have taken regularly
in place processes, from appropriately
controls and frameworks qualified
to comply with external
legal and regulatory advisors
requirements and and professionals.
will use appropriate Training
external legal is provided
advisors for contentious to staff
matters and litigation. on an ongoing
For the avoidance basis.
of doubt, ICAP Culture
has no appetite and conduct
for material legal initiatives.
or regulatory
breaches.
------------------------- --------------------------- ------------------- -------------------
In addition to the principal risks, the Group also recognises,
and actively manages the following Group risks:
Other Group risks Importance to Key risk Mitigation
ICAP drivers
------------------------ ------------------------ -------------------- -----------------
Cross risk
-------------------------------------------------------------------------------------------
The risk that the In support of ICAP's credit Predictability
Group and its divisions achieving its worthiness. of earnings
fail to maintain commercial targets, Market competition. - discipline
its commercial ICAP works diligently is applied
targets due to with all stakeholders to existing
either internal to identify threats financial
or external factors. and opportunities. performance
Appetite and new
ICAP will monitor business
its internal and proposals.
external environment Maintenance
in order to maintain of ICAP's
stable and robust external
financial performance credit rating.
over the long
term.
------------------------ ------------------------ -------------------- -----------------
Market risk
-------------------------------------------------------------------------------------------
The risk of losses ICAP does not Volume and Monitoring
in on and off-balance actively take complexity and timely
sheet positions market risk. Where of trade mitigation
arising from adverse it does arise booking. of unmatched
movements in market this is due to Market movements positions.
prices. failures in our / liquidity. Exposure
expected business modelling.
processes, systems
or human error.
As such it is
identified and
treated as operational
risk.
Appetite
ICAP will not
engage in proprietary
trading or actively
seek market exposure
and will actively
reduce any incidental
market exposure
resulting from
its activities
as soon as reasonably
practicable.
------------------------ ------------------------ -------------------- -----------------
Financial risk
-------------------------------------------------------------------------------------------
The risk that the Interest rate Market rates. Details
Group is exposed risk from the Trading of the Group's
to significant Group's exposure volume. management
losses due to adverse to rate fluctuations Geographic of interest
movements in interest on cash balances profile. rate and
and exchange rates. and borrowings. Regulatory currency
Currency translation and working risks are
risk arising from capital contained
the conversion requirements. in notes
of foreign currency 9 and 27
results to pound to the financial
sterling for the statements.
preparation of Established
ICAP plc's consolidated Group policies
financial statements. for the
Currency risk management
for the Group's of interest
entities arising rate and
from transactions, currency
assets or liabilities exposures.
denominated in Long-term
a foreign currency debt raised
for an individual with fixed
entity. rates with
Appetite the option
ICAP will manage to swap
its financial to variable
risks in accordance rates.
with approved Quarterly
policies for the review of
Group. currency
exposures
and hedging
levels.
------------------------ ------------------------ -------------------- -----------------
Appendix B: Related party transactions
Group
(a) Exotix Holdings Limited (Exotix)
As part of the disposal of Exotix to IPGL (a company controlled
by Michael Spencer, the Group Chief Executive Officer) in 2007, the
Group loaned employees of Exotix Limited, a subsidiary of Exotix,
GBP1.5m to enable them to purchase a shareholding. The Group
collected revenue of GBP15,225,771 (2014/15 - GBP8,439,804) on
behalf of Exotix. As at 31 March 2016, there was a balance due to
Exotix from the Group of GBP1,473,580 (2014/15 - GBP10,169,250).
The Group holds GBP1.9m (2014/15 - GBP1.9m) as collateral from
Exotix on deposit.
(b) TFS-ICAP LLC, TFS-ICAP Australia, TFS-ICAP Japan, TFS-ICAP
Limited and TFS-ICAP Singapore
The Group invoices and collects revenue on behalf of TFS-ICAP
LLC. As at 31 March 2016 the outstanding balance from all the joint
ventures to the Group was GBP643,290 (2014/15 - GBP533,494 due from
the Group).
(c) BSN Capital Partners Limited (BSN)
The Group provides BSN, an associate undertaking, with office
space and facility services and also has a preferred brokerage
agreement with BSN. As at 31 March 2016 the outstanding balance due
to the Group was GBP1,192,603 (2014/15 - GBP497,824).
(d) CLS Aggregation Services LLC (CLSAS)
The Group recharged CLSAS, an associate company, GBP2,908,277
(2014/15 - GBP4,410,083) as compensation for technical services
during the year. As at 31 March 2016 the total outstanding balance
due to the Group was GBP320,870 (2014/15 - GBP459,588).
Related party transactions are made on an arm's-length
basis.
Company
ICAP plc is the Group's ultimate parent company and is
incorporated and domiciled in the UK.
During the year the Company entered into the following
transactions with subsidiaries:
Year ended Year ended
31 March 2016 31 March 2015
GBPm GBPm
-------------------- -------------- --------------
Management services
expenses - -
-------------------- -------------- --------------
Net interest from
related parties 4.0 3.0
-------------------- -------------- --------------
Amounts owed to the Company from subsidiaries are disclosed in
note 17 and amounts owed by the Company to subsidiaries are
disclosed in note 18.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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