Argentex Group Annual Report 2020

FY2020 Annual Report · Argentex Group

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A R G E N T E X G R O U P P L C
A N N U A L R E P O R T 2 0 2 0
Year ended 31 March 2020

Argentex Group PLC, issues its first Annual
Report for the 12 months ended 31 March 2020.
The period has seen continued robust financial
and operational performance which maintains
its unbroken track record of delivering profitable
growth since the inception of the business in 2012.

The IPO has had tangible benefits to the Group,
with the increased capital base delivering greater
confidence from institutional counterparties to
offer significantly more competitive terms. This
translates into a direct benefit to clients, as well
as increasing the credibility of the Group within
its target market, one major benefit of which is
demonstrated by the compression of the average
sales cycle from initial contact to first trade.

Significantly, this report shows that we make
decisions based on the long-term, sustainable
growth and profitability of the business.

C O N T E N TS

Argentex
Group PLC
Annual Report.

Overview
08 Chairman’s Statement
13 Co-CEO Statement
17 Our Business
18 Our History
20 Executive Team
22 Philosophy, People and Culture
23 The Argentex Collective

Governance
63 Board of Directors
66 Director’s Report
70 Corporate Governance Report
76 Remuneration Committee Report
80 Audit Committee Report
82

Independent Auditors Report

Strategic Report
27 Business Strategy
32 Overview of 2020
30 How We Work
32 Our Clients
34 Our Client Proposition
36 Technology
37

Delivering Value to
Our Stakeholders

38 Our Products
40 How We Win Business
44 2020 Achievements
45 Achieving growth strategies.
2021 Outlook
47
48 Financial Review
52 Section 172 Statement
55 Corporate Social Responsibility
56 Risk Management

Financial statements
90 Consolidated Statement

of Profit or Loss

91 Consolidated Statement
of Financial Position
93 Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Company Financial Statements
Notes to the Company
Financial Statements

122
124

Other information
131 Glossary of Terms
132 Shareholders Enquiries
132 Dividend Dates
132 Annual Shareholder Calendar
133 Company Information
134 Notice of Annual General Meeting

Annual Report 2020

C O M PA N Y OV E RV I E W

A strong track
record of growth
and profitability.

Since the business was founded in 2012, the Group’s
revenues and profits have increased every financial year.

Revenue has increased 32% from FY 2019

£28.9m
£12.5m
7.1p/8.8p

Underlying operating profit

New revenue

£6.6m
£10.3m
2.0p

Operating profit

New clients FY 2020

380
1,212
£12.1bn

Corporates actively traded

EPS (Basic/Underlying)

Dividend per share

FY 2020 FX turnover

“ The Board remains
committed to
develop best practice
throughout the
business and will
continue to lead the
Group by setting
standards for
behaviours expected by
all staff in their actions
within the business.”

Lord Digby Jones Kb.
Non-Executive Chairman

Corporate Governance

2021
Outlook
“ Argentex has adhered
to their strategy and
surpassed initial
expectations for the
financial year. There is
every confidence that
the Group’s long-term
prospects are on track.”

Sam Williams
Chief Financial Officer

2021 Outlook

Annual Report 2020

C H A I R M A N ’S STAT E M E N T

Proven expertise,
delivering on
expectations.

First and foremost I must start by saying how much of an
honour it is to be Chairman of a business that has grown and
evolved in the way Argentex has since its inception in 2012.

It’s rare to get an opportunity to chair
a company at the start of its journey
as a listed business, but I have also had
the privilege of knowing the three co-
founders, Carl Jani, Harry Adams and
Andrew Egan, and followed them and
the business closely, since they started
out over eight years ago.

A year on from the Group’s successful
debut on AIM, it’s only natural to
reflect on how far the business has
come. It is testament to Carl, Harry
and Andrew’s long-term vision, ability
to attract leading talent, intricate
understanding of the foreign exchange
market and approach to clients that
have enabled them to build the leading
FX platform that Argentex is today.
Their work ethic and sense of fun has
also permeated the culture and makes
the business unique.

Competing in a highly regulated
sector previously dominated by banks,
Argentex’s robust business model
and balance sheet strength is built
around a programme of investment
in technology, compliance and risk
management. This has attracted a high
quality, diversified and loyal customer
base and best in class counterparties

which have supported strong year on
year organic growth since inception.

I’m pleased to say the last twelve
months are no exception and despite
the extreme macro-economic,
geo-political and financial market
conditions and the rapid escalation
of COVID-19 towards the end of the
fiscal year, the excellent ongoing
financial performance further
evidences delivery on the Group’s
steady growth strategy that it
promised its shareholders ahead of
the IPO.

But at Argentex, the vision is always
long-term and the Group’s cash
generative profile and clear strategy
supports the positive long-term
outlook as the Group continues its
trajectory, delivering the trusted
advice and services for its clients,
positive returns for its shareholders
and being an employer of choice in
the FX market.

MARKET BACKDROP
Since our listing in 2019, market and
socio-political conditions have changed
significantly. In that time, the UK
appointed a new Prime Minister,

Listed on the London
Stock Exchange with
an FX turnover last
year of more than
£12bn. (FYE 2020).

experienced a general election and
exited the European Union, with
trade negotiations still ongoing, as
well as experiencing the worst global
pandemic the world has seen since
1919. Despite these events the business
has continued to grow, delivering on
our objectives set out at the IPO and
serving our clients’ complex needs in
turbulent market conditions.

Through this recent spell of
unprecedented change, the safety and
wellbeing of our employees have been
our absolute priority. I am proud of
how quickly and effectively we were
able to implement working from home
policies that have helped employees
cope in these difficult times, while
continuing fully to serve our clients.

The health and economic crisis caused
by the spread of COVID-19 has caused
major disruption in the global economy,
while FX markets have seen a spike in
volatility unseen in recent years. Rising
global unemployment and a risk-off
approach in stock markets has seen
investors flood to safe-haven currencies
such as the US Dollar. Central bank
policies have created a new paradigm in
the currency markets, with exchange
rates moving away from being driven
by fundamental economic indicators
towards stock markets. Our expert
teams continue to analyse market

trends and ensure our client advice is
reflective of rapidly changing foreign
exchange trends.

KEY HIGHLIGHTS
The last twelve months will always
be defined by the Group’s successful
IPO, the benefits of which have
been immediate. Most tangibly, the
proceeds raised from the listing have
enabled Argentex to increase its
trading capacity to meet the growing
needs of clients for its products and
services, whilst improving the terms
of its counterparties. The heightened
visibility and credibility that comes
with being a public company further
solidify Argentex’s position as a trusted
provider, attracting new client interest.
The positive revenue impact is plain to
see from our results.

Whilst the core Spot and Forward
product range denominated by dollar,
sterling and euro continues to be the
bedrock of Argentex’s offering, during
the year the increasing client uptake of
FX Options demonstrates the Group’s
ability to serve the broadening needs of
clients and the gradual move towards a
more diversified revenue stream.

At a time where businesses up
and down the country are seeking
capital injections and reliant on the
government’s furlough scheme during

this challenging period, I am proud that
the business has continued to invest
in people and services during the year
to ensure the benchmark of talent and
the infrastructure and systems in place
evolve in lock step with and contribute
to the strategic momentum. The new,
state-of-the-art headquarters at 25
Argyll Street, announced post year end,
will further support headcount growth
and create a modern ecosystem for
employees and the business to thrive.

Aligned with this expansion and
what the Group said to investors
at IPO, progress has been made in
identifying select jurisdictions where
there is strong demand for Argentex’s
products, a track record of regulation
and importantly an opportunity to
capture market share. On that note,
I’m excited by the opportunities
identified in The Netherlands and
Australia and the potential to replicate
and enhance in those markets, what
the team has built in the UK. As ever,
the strategic approach here will be
gradual and prudent.

SETTING THE INDUSTRY STANDARD
Since Carl, Harry and Andrew founded
the business, they have stuck by a
few core principles that not only
differentiate Argentex, but has helped
the business grow to where it is today.
It is based on an ethos of integrity in

Lord Digby Jones Kb.
Non-Executive Chairman

Annual Report 2020Company OverviewGovernanceStrategic ReportFinancial StatementsOther Informationeverything they do and always putting
clients first. This means governance,
compliance and risk management is
central to the business, evidenced by
the significant investment in systems,
processes and controls over the years.

It is this high benchmark set by the
business that reassures clients and
counterparties alike but has also
attracted a seasoned team of non-
executive directors to Argentex. I am
fortunate to work alongside a highly
experienced Board that brings a depth
of expertise that we believe, coupled
with an industry-leading workforce,
helps separate Argentex from its peers.

People are the Group’s most important
asset and fundamental to the
long-term success of the business.
Supporting and nurturing employees
is an area Argentex takes seriously.
Investment continues to be made in
training programmes throughout the
business to ensure everyone across
the business, whether it be on the
sales desk, trading floor or relationship
managers is given continuous learning
opportunities to progress her or his
careers within the business whilst
protecting the health and wellbeing of
each individual.

OUTLOOK
After a strong start as a listed
company we remain confident of the
Group’s long-term prospects despite
the uncertain macro outlook. Our
strong business model, unwavering
strategy and expertise in a sector that
will continue to be vital for clients, will
help the Group continue to build on its
track record.

The business is steadily building
for the future and the new London
headquarters and office openings
further afield mark the next step in the
journey. We do not take undue risk and
all decisions are made through a long-
term lens, ensuring we grow organically
and sustainably.

I would like to thank all of our
shareholders for their support during
our first year as a public company and
of course to each and every employee
for continuing to drive the business
forward, despite such an unsettling time
brought about by the global pandemic.

It is a privilege to be your Chairman;
thank you.

Lord Digby Jones Kb.
Non-Executive Chairman

“ Argentex has
increased its trading
capacity to meet the
growing needs of
clients for its products
and services, whilst
improving the terms
of its counterparties.”

- Lord Digby Jones Kb.
Non-Executive Chairman

Annual Report 2020C O - C E O STAT E M E N T

Built on stable,
long-term
foundations.

We focus on FX, so the client can focus on the
everyday running of their business.

OVERVIEW
The last financial year marks a
significant milestone in Argentex’s
history. When joining the London
Stock Exchange’s AIM in June 2019, we
had a clear commitment to our growth
strategy and proven business model
and since then, we are proud to have
gone from strength to strength while
considerably increasing the scale and
breadth of our business.

The increased capital strength, more
competitive counterparty terms and
enhanced brand recognition that the
IPO has afforded us, has positioned the
business on firm foundations for our
first year of trading and we’re delighted
with the financial and operational
momentum we have achieved against
an unforgettable 12 months, from a
financial markets perspective.

The total FX turnover increased to over
£12bn, generating revenue of £29m. 1,212
corporates traded, 380 having never
traded before generating £6.6m in ‘new’
revenue – broadly in line with expected
historical ratios. Our focus on serving

a high quality, diverse client base
has continued unabated, as has their
demand for our services. Our client
activity also grew, demonstrating that
our clients use our services for genuine
underlying business needs, particularly
in an uncertain environment.

Our growth trajectory has been
set against some of the most
unprecedented markets recently
recorded and one of the most unusual
periods in our history, and our thoughts
are with all of those impacted by the
COVID-19 pandemic. Our immediate
priority in the face of the pandemic
was to safeguard the health and
wellbeing of our people. It is testament
to their spirit, collegiality and
resilience, combined with our robust
business model, balance sheet strength
and approach to risk mitigation that
clients were able to receive a continuity
of service that they have come to
expect from Argentex, with the entire
business operating effectively within 24
hours of instigating a 100% work from
home policy.

Harry Adams
Co-Chief Executive Officer

Carl Jani
Co-Chief Executive Officer

Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information“ Our focus on serving
a high quality, diverse
client base has
continued unabated,
as has their demand
for our services.”

Carl Jani
Co-Chief Executive Officer

“ Our first year as a
listed business has
been one of continued
momentum and we
have enjoyed doing
exactly what we set
out to do at IPO.”

Harry Adams
Co-Chief Executive Officer

MARKET BACKDROP
In a year that has seen events such
as Brexit, US-China trade wars,
and more recently COVID-19, the
extreme volatility often documented
in the news has been surprisingly
translated into relatively benign
currency crosses to which the Group
are primarily exposed. The occasional
exception (GBP/USD seeing its largest
one-day fall on record to 1.14 most
notable among them) has caused
bouts of flurried activity, however,
the Group has remained calm in the
slipstream of an otherwise
ubiquitous turbulence.

It is true that volatility helps a
broking business, however the
Group’s clients, all have a commercial
need to buy and sell currency – a
manufacturer requiring £10m worth
of components from the US will still
need to purchase £10m of US dollars.

Volatility precipitates an increased
risk in the client’s priorities. The
counter to this is that with a robust
risk framework in place the Group’s
continued growth is dependent more
on the number of active clients it
services, as opposed to relying on
large swings in currency catalysing a
client’s decision to execute a trade.

The Group’s client base remains
diverse, without significant
concentration at sector or client level.
The top 20 clients now account for
over £11m of revenue, but represent
only 41% of total revenue for the
year. So, too have we experienced
diversification in sectors served,
which along with the continued
application of stringent risk policies
sees no excessive exposure to either
one sector, client or trade. Argentex
continues to win the vast majority of
our new business from High Street
Banks that are estimated to have 85%
market share.

INVESTING FOR THE FUTURE
We are well placed to enter our next
phase of growth with the capabilities
and resources essential for our
continued success. In September
this year we will move into our new
offices on Argyll Street in the West
End of London. Our lease was signed
for 12,500ft2 of space in the middle
of the pandemic. Whilst COVID-19
forced us all to work from home very
successfully, Argentex is a business
that thrives on the day to day human
interaction so we have applied a
lot of time and effort to design and
renovate our new premises with
a focus on an environmentally
sustainable work place that gives us
plenty of room to upscale resources
in line with demand and over an
appropriate period.

As well as moving into our new
offices, we have made a number of
significant hires such as our Chief
Compliance Officer to maintain our
robust approach to compliance and
governance. Bolstering our talent
across all areas of the business with
a focus on sales to drive accelerated
future growth, as well as talent to
facilitate HR, ESG and our office
environment, we have sought to
secure a blend of continuity and
additional skills that will help take
Argentex forward.

In September we will continue our
Graduate Programme attracting
a diverse and driven talent base
to future-proof our proposition.
This process has been a healthy
opportunity to scrutinise Argentex’s
business ethos and values whilst
remaining true to our own beginnings
– entrepreneurial yet professional;
creative but efficient. Furthermore,
we have made a commitment to
maintain the engagement of all
our staff in the Group’s operational

performance. Our investor-aligned
LTIP has been designed and
implemented to incentivise and retain
non-founder staff alongside our
Company Share Option Plan (CSOP)
implemented at IPO.

excited about the potential of
these two new locations and we
are confident that in time, they will
sweep up the latent client demand
there and complement our core
proposition in London.

Our bespoke IT infrastructure, built
specifically for the business to our
exact design was instrumental in the
seamless move to remote working, and
remains the lynchpin of our ability to
continue to serve our clients whilst
maintaining high standards of service,
compliance and governance from
sales, through order placement, trade
execution, settlement, reconciliations
and reporting.

With the level of resource already
invested into the business to ensure
the Group can stand tall as an
example of the standards an FX
business should hold itself to, the
Executives are delighted to have
attracted what it believes to be one of
the most impressive Non-Executive
boards on AIM.

We’d like to take this opportunity to
thank our Non-Execs, Lord Jones,
Lena Wilson CBE FRSE, Nigel Railton,
Jonathan Gray and Henry Beckwith
for their invaluable guidance and
support in such unprecedented times
for UK businesses.

TAKING ADVANTAGE OF
GROWTH OPPORTUNITIES
Our strategic growth trajectory has
always factored in prudently entering
highly regulated, international
markets where the client appetite for
our product base exists and timing
makes sense. As part of that, we
opened a sales office in Amsterdam in
March 2020 and we are exploring the
process of obtaining an Australian
licence with the intention of opening
in Sydney in due course. We are

Over the last 12 months we have
continued to monitor the FX
requirements of our existing
and target clients and like the
recent successful introduction
of FX Options, we will evolve our
proposition according to client’s
growing needs. We remain committed
to aligning our product suite with our
clients’ risk mitigation needs, steering
clear of products such as a TARF, that
carries undue risk to the client and in
turn to the Group.

OUTLOOK
Our first year as a listed business has
been one of continued momentum
and we have enjoyed doing exactly
what we set out to do at IPO – the
same, but more of it. Our new
premises, bolstered team, leading
technology and strong capital
position mean we are entering
the new financial year very well
positioned to build upon the
continuous growth delivered to date.

COVID-19 and the subsequent
uncertain economic environment
remains but our past performance
proves that we can deal with long-
term uncertainty and financial
market volatility during a time
when our clients rely on our services
more than ever. On behalf of the
management team we extend our
thanks to new and longer-term
investors, our loyal and growing
client-base and importantly, our
excellent colleagues for their
continued hard work and support.

Annual Report 2020Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information

O U R B U S I N E SS

Impact
achieved with
experience
and expertise.

Argentex delivers tailored foreign exchange advisory
and execution services to a global client base of financial
institutions, corporates and private clients.

The centrepiece of our exceptional
service is our team of experienced
market professionals, from account
management, analysis and trading,
through to settlements and
compliance. Whether our clients’
objectives are short or long-term, our
experienced execution combined with
expert analysis achieves material
impact on both pricing and efficiency
for our clients.

Recognising that clients have wide
ranging levels of experience, resource
and exposure, we have developed a
suite of supplementary facilities to
cater for a broad spectrum of client
profiles. Online capabilities and an
analytical consultancy are part of
our custom-made offering that can be
utilised separately or in conjunction
with our traditional voice broking
services, all of which combine with our
commitment to consistently deliver
excellence with every exchange.

The founder-led, publicly listed
business is headquartered in the heart
of London. Argentex is a profitable,
debt-free, cash-rich business and
operates as a Riskless Principal broker
for non-speculative and commercial

currency transactions. On the 25th
June 2019 the Company listed on the
London Stock Exchange AIM, which
raised net proceeds of £12 million.

The pedigree of asset managers,
pension funds, investment banks
and family offices that have since
invested in Argentex is testament
to the value of our offering and the
strength of our robust governance.
The driving force behind our
approach is that the less time our
clients spend dealing with foreign
exchange, the more time they
have available to spend on other
aspects of their business. Every
client is assigned a dedicated point
of contact who is a professional
financial trader, not a salesperson
or relationship manager.

Our traders all have a minimum
of ten years’ experience and have
actively traded the market through
every extreme in recent history,
ultra-low liquidity environments,
including flash crashes,
sociopolitical shocks, pegging and
de-pegging without warning and
most recently, global pandemics.

On the 25th June 2019 the
Company listed on the
London Stock Exchange
AIM, which raised net
proceeds of £12 million.

Company OverviewGovernanceStrategic ReportFinancial StatementsOther InformationO U R H ISTO RY

Evolution of
Argentex.

Founded in 2012 by
Harry Adams, Carl Jani
and Andrew Egan with
the backing of Sir John
Beckwith’s Pacific
Investments Ltd.

2012

2013

2015

2016

2017

2018

2019

2020

March

January

October

June

January

March

→

API authorisation
approved by FCA

→

First month
revenue in
excess of £100k

→

Move to Old
Bond Street

First month
revenue in
excess of £1m

FCA approves
EMI authorisation

FCA approves
MIFID II Investment
Firm authorisation

First month
revenue in
excess of £3m

First month
revenue in
excess of £5m

First online trade

April

September

November

March

September

June

→

First trade

→

First month
revenue in
excess of £500k

→

Surpassed 20
employees

First month
revenue in
excess of £1.5m

First option
executed

IPO

August

→

First sales
employee

September

Half year revenue
up 42% to £13.8m

→→→→→→→→→→Annual Report 2020Company OverviewGovernanceStrategic ReportFinancial StatementsOther InformationE X E C U T I V E T E A M

Combined
foreign exchange
expertise.

Carl Jani
Co-Chief Executive Officer,
Co-Founder

Harry Adams
Co-Chief Executive Officer,
Co-Founder

Carl is a founding partner of
Argentex. As Co-CEO, Carl together
with Harry is jointly responsible
for the strategic direction of
the business. Carl oversees the
Operational divisions of Argentex,
maintaining the highest level of
compliance, corporate governance
and risk mitigation. He is also
responsible for the innovation,
development and implementation
of the Group’s systems and controls.
During his career in financial
services, Carl has advised some of
the best-known names in the retail,
charity and private equity sectors.

Harry is a founding partner of
Argentex. As Co-CEO, Harry together
with Carl is jointly responsible
for the strategic direction of the
business. Harry oversees the
front office including the business
development and revenue generation
of Argentex. With over 15 years’
experience in the deliverable foreign
exchange market he ensures the
organisation is abreast of technical
and fundamental market changes,
product governance, suitability and
client classification. Harry also sits
on the Advisory Board of a company
that delivers market leading
streaming and live broadcasts.

Sam Williams
Chief Operating Officer,
Chief Financial Officer

Andrew Egan
Managing Director,
Co-Founder

Sam joined Argentex in 2015
splitting his time as CFO and COO.
Being integral to taking the firm
public in 2019, Sam has bolstered
the compliance function allowing
him to spend the majority of
his day in his role as CFO. Sam
qualified as a chartered accountant
at Smith & Williamson LLP where
he was responsible for auditing
and advising financial service
businesses. Sam holds the CISI
Investment Operations Certificate.

Andrew is a founding partner of
Argentex. As Managing Director, he
is directly responsible for the new
business generation of the Group
and oversees the recruitment,
training and targeting of staff at all
levels. Andrew is also responsible
for ensuring that Argentex is well
positioned within the competitor
landscape, updating the Board
of any material changes. Under
Andrew’s leadership and guidance,
a team of directors report into him
who ensure that the customer’s end
to end journey is seamless. Andrew
is FCA qualified holding certificates
from The CISI and has over 15 years’
experience in financial markets.

Annual Report 2020Company OverviewGovernanceStrategic ReportFinancial StatementsOther InformationO U R P H I LOS O P H Y, P E O P L E A N D C U LT U R E

T H E A R G E N T E X C O L L E CT I V E

Unique talents,
backgrounds and
perspectives.

We encourage our workforce to be
entrepreneurial and creative as well as
fostering a transparent culture with
excellent lines of communication.

The Argentex environment allows
talent to flourish and be well rewarded.

We host multiple graduate
programmes recruiting the best talent.
The programme consists of intense
training, skills development and
support to ensure the best outcome
and longevity of our personnel.

We offer a competitive base salary,
uncapped commission, bonuses and
incentives dependant on performance.

We have a robust code of conduct
which our employees are expected
adhere to without exception.

Integrity

Treating our clients fairly is not just an FCA
requirement, it is our core business principle - one
that consistently drives all our daily interactions
and shapes all that we do as a business.

Quality

We are proud to provide superior products and
outstanding service which combined ensures
excellence with every exchange.

Passion

Our people are passionate about providing the
quality of service we demand from ourselves as a
business, and in turn we are passionate about our
people through collaborative working, wellness
programmes and continuous personal development.

Agility

We pride ourselves in being fresh and innovative,
we are proactive and seek opportunity to develop
and adapt.

Dedication

We go above and beyond for our clients, we are
focussed and determined. We go the extra mile.

Annual Report 2020Company OverviewGovernanceStrategic ReportFinancial StatementsOther InformationB U S I N E SS ST R AT E GY

What
we do.

Argentex’s projected returns
will be driven by customer
satisfaction and loyalty,
within the context of robust
corporate governance,
risk management and
regulatory compliance.

Argentex operates as a Riskless Principal foreign exchange broker for
non-speculative spot and forward foreign exchange. For Professional
and Eligible Counterparty clients we offer FX options and certain
FX forwards including non-deliverable forwards.

following a rigorous KYC assessment,
the prospects become a client and is
assigned a dedicated dealer whose job
is to develop the relationship from
then on.

Argentex does not speculate and so
revenue is purely derived from the
difference between the rate it buys
and sells currency at, and is therefore
purely transaction-led. This means
that continued, long-term sustainable
growth is dependent on long-term
mutually beneficial relationships
which is why ‘Treating Your Customer
Fairly’ is not just an FCA principle for
us but a core precept of how we deal
with every client.

Each client trade, regardless of
product, is matched at one of the
firm’s institutional counterparties.
Existing institutional counterparty
relationships are held with Barclays
Bank PLC, Macquarie Bank
International, Sucden Financial
Limited, and ED&F Man Capital
Markets Limited.

All trades executed by the firm are
over the counter (OTC), and matched
within seconds. The firm does not
permit speculative trading with
regards to its products, instead
requiring an underlying transactional
need for the currency exchange (for
example payment for goods and
services, conversion of revenue/profits,
balance sheet hedging). This avoids
adverse market moves magnifying
ungainly losses which clients struggle
to service and is a core tenet of the
Group’s risk management policies.

Settlement is made through
segregated accounts, where the client
remits the currency sold and once

cleared, will be paid the currency
bought. All trades are settled under
“safe settlement” conditions, whereby
the firm only pays funds to the order
of a client following receipt of cleared
funds from that client in order to
mitigate credit and settlement risks.

As an Authorised Electronic Money
Institution, any funds received by
Argentex prior to the value date of an
FX trade or held by Argentex post-
trade but not yet paid to the order of
the client are redeemed for Electronic
Money, which is issued to the client
and segregated accordingly. All client
balances are stored electronically on
Argentex’s back office system, and
repayable on demand in accordance
with the Electronic Money Directive.

Direct marketing undertaken by
the firm’s sales team is targeted at
those businesses which it believes
can benefit from those services
and products offered by Argentex.
If a prospect’s interest is piqued
sufficiently to use Argentex,

Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information1+2+3+4+6+7+10+12
1+2+3+5+8+9+11+12

3+4+6+10+17+28+38+41

Growth and
profitability

Number of traded
corporates

Number of
trades (k)

FX turnover (£bn)

3 year CAGR

2020

2019

2016

2014

2015

2018

2013

2017

38.04

28.47

41.05

16.94

10.81

12.12

1,212

28%

34%

9.80

1,141

0.45

3.05

17%

5.84

7.90

5.74

3.41

2.91

350

1.76

898

753

501

1.12

187

7.15

2.36

3.84

28.9

0.67

39%

21.91

13.23

10.66

2017

2013

2018

2015

2014

2016

2019

Revenue (£m)

10+11+9+12+14+17+18+19
1+2+4+7+11+13+21+29
14+25+21+27+26+28+37+48

Average revenue per
traded corporate client (£k)

Average FX turnover per
traded corporate (£m)

2020

2019

2016

2014

2015

2018

2013

2017

23.63

10.58

13.96

18.36

13.56

12.56

13.87

20%

10%

8.40

5.06

9.68

6.68

4.92

5.97

7.34

9.12

7.22

2020

An
Overview.

Built on
a solid
position
“ Our continued, long-
term sustainable
growth is dependent
on long-term
mutually beneficial
relationships.”

Harry Adams
Chief Executive Officer

Whilst the impacts of COVID-19 and central banks’ response
to the crisis are prominent on people’s minds, evolving
geo-political events will also play a role in shaping and
influencing global markets.

COVID-19
COVID-19 has been the worst
pandemic the world has faced since
the Spanish flu in 1919, and while
central banks’ responses have been
robust in supporting global markets,
the avalanche of cheap money has
impacted market fundamentals.
The relationship between economic
fundamentals, such as growth outlook
and interest rates, and exchange
rates dislocated following March’s
market collapse. Instead we are seeing
exchange rates tracking stock market
performance resulting in currencies
that are usually most sensitive to
growth becoming best performers.

US unemployment hit a high of 13.3%
in May, which to put into perspective is
3.4% higher than peak unemployment
in early 2009. While unemployment
figures seem to be declining, recent
increases in the number of COVID-19
cases across the US is a cause of
concern for a second wave which will
undoubtedly impact the US Dollar.
These factors have been offset by the
market’s risk-off approach, which has
seen investors exit stocks which they

deem to be risky and seek a safe-haven
in currencies. Currency strength since
its bottom is less about fundamentals
but more likely a risk recalibration
from investors who found themselves
overweight in equities since central
banks provided unprecedented
support. Other factors impacting
markets include the ongoing Brexit
negotiations which increasingly seem
to be at an impasse and the US-China
trade war, with continued escalation
seemingly strengthening the Dollar
while weakening the Yuan.

KEY ACHIEVEMENTS
Despite 12 months of unpredictable
events, Argentex has achieved
significant results. FX turnover,
revenue, the number of traded
corporates, the total number of trades
and average FX turnover per traded
corporates have all been on an upward
trajectory. We have adhered to what
we set out to achieve surpassing our
goals and objectives from when we
listed last year. These positive trends
are illustrated on the graphs on the
following page.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
H OW W E WO R K

Bespoke,
riskless and
commercial.

approximately 2/3 spot and 1/3
forward contracts by volume, which
due to the wider spreads achieved
in forward contracts translates into
a revenue split of approximately
50/50 by product. Our forward
contract average tenor has remained
steady at less than five months.

Spot, forward
options. Bespoke
hedging strategies.

Argentex executes FX spot, forward
and options contracts on behalf of
its clients.

Revenue from FX options is realised
as cash immediately in the form of
premium. Revenue from spot trades
is realised within two business
days. Forwards attract higher
spreads due to factors such as
increased client credit risk, but the
payoff to higher revenue is having
to wait until the contract is settled
to realise the cash. A blend of spot
and forward contracts is therefore
important for an optimum mix of
revenue generation and cash flow.
Argentex has always been there to
do what a client wants, not try and
fit a square peg into a round hole by
pushing complex hedging strategies
onto clients when not needed. Since
inception this has led to a mix of

Spot vs
Forward

FX Turnover

36%

64%

64+
49+

49%

51%

Revenue

Spot
Forward

Argentex operates
a Riskless Principal
which means that each
client trade is matched
with an identical
trade at one of the
Group’s institutional
counterparties.

Riskless
Principal.

Argentex operates a Riskless
Principal which means that each
client trade is matched with an
identical trade at one of the Group’s
institutional counterparties.

The difference between the rate
we execute at our institutional
counterparty and the rate we pass on
to our client is the only place where
we derive our revenue.

Several layers of systems and controls
exist to ensure that no trades remain
unmatched, and that the parameters
of each trade are correct, including a
four-eyes verification and multiple
reconciliations throughout the day.

This means revenue is transaction-
led only, and Argentex does not
speculate. By not allowing its clients
to speculate this mitigates market
risk to the Group.

Commercial
transactions only,
no leveraged or
margin trading.

Margin trading or spread betting is
extremely risky to capital as it allows
for very large bets to be placed by
putting down comparatively small
deposits – in other terms the trades
are highly leveraged.

Large adverse market moves can
therefore lead to losses building
up extremely quickly (as the trade
goes ‘out of the money’) which the
underlying client may find difficult to
service. If the client defaults, then the
broker has to bear the loss. By never
allowing clients to speculate, this acts
as a self-regulating risk control that
ensures that a solvent client never
builds up out of the money positions
it cannot service due to the fact that
it has a commercial need to settle the
notional value of the trade, not the
fair value of the trade only as it would
with a leveraged speculative position.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information36
51
O U R C L I E N TS

Fostering long-
term client
relationships.

We work consistently with the aim of fostering long-term
client relationships - we know this is paramount to the
success and longevity of our business.

A positive consequence of forging
these long-term relationships are
the referrals and word of mouth
recommendations Argentex regularly
receives both laterally and vertically
through our clients’ supply chains.

We are proud of our high quality
and diverse client base, without
being overly exposed to any single
sector. Our corporate clients come
from multiple industries such as
law, shipping, media as well as
institutional clients from private
equity and insurance to family offices.

Having a diverse client base is not
only key to reducing risk, but it
also makes the group agnostic of
market direction, allowing the
Group to generate revenue in all
market conditions.

For example as sterling
strengthens, the rate becomes
more attractive to importers
and more sterling sellers will
be motivated to trade, whilst a
weakening pound will see an
increase in activity from exporters.

Furthermore, a well-balanced
trade book means a greater volume
of trade can be serviced, as the
Firm is required to place collateral
to support the trades it executes,
but on a net basis – the closer the
volume of buyers and sellers the
less collateral is required, meaning
the firm benefits from a multiplier
effect of being able to use the same
collateral to support multiple
trades in opposite directions.

“ Having a diverse client
base is not only key to
reducing risk, but it
also makes the group
agnostic of market
direction, allowing the
firm to generate revenue
in all market conditions.”

Harry Adams
Co-Chief Executive Officer

Retaining
and growing
the client base

A high service level, trust and
performance are the only way
we can retain and increase our
client base.

1,212 corporates traded in the year
ended March 2020, but the firm
counts several thousand among
its active client base. Not every
client will trade every year –
some may hedge multiple years’
exposures in one go whilst others
may create an SPV with the sole
purpose of transacting a deal (for
example a private equity deal).

A bespoke level of service is
required. Time is spent getting
to know the client’s requirements
and their business objectives.

Our core clients have one thing
in common – they are people that
like speaking to people. Clients
who simply want a price provider
and no relationship are unlikely
to find themselves amongst our
client base and are often better
served by a less sophisticated
retail broker or a high street bank.

Revenue %
per industry
sector

— Regulated Financial Services
— Other Financial Services
— Private Equity Funds
— Regulated Funds / AIFs

— Real Estate Investments32+

Transport & Logistic (3%)

Financial Services (33%)
Other (9%)
Insurance (6%)
Legal and Consultancy (4%)
Pharmaceuticals/Medical
Equipment/Medical
Research (4%)
Technology/IT and
Telecommunication (4%)
Food and Beverages (4%)
Retail/Wholesale (3%)
Mining & Energy (3%)
Sports (3%)
Media & Marketing (3%)
Electronics/Electrical
Components (3%)

Motor/Vehicle/Aerospace (3%)
Holiday and Travel Agency/
Accommodation (3%)
Software Industry (2%)
Private Client (2%)
Property (2%)
Agriculture (2%)
E-commerce (1%)

Architecture/Interior Design/
Home Furnishing (1%)

Hospitality and Events (1%)
Jewellery and Art (1%)
Charity (1%)

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information

9
+
6
+
4
+
4
+
4
+
4
+
3
+
3
+
3
+
3
+
3
+
3
+
3
+
3
+
2
+
2
+
2
+
2
+
1
+
1
+
1
+
1
+
1
+
A

O U R C L I E N T P R O P OS I T I O N

Ways of
doing
business.

“ Our primary goal is risk
mitigation, not trying
to ‘beat the market’.

- Harry Adams, Co-Chief

Executive Officer

Each client is unique, and the reason each chooses Argentex will be too.

Some take comfort from our levels
of regulation and demonstrable
lengths we have gone to in order
to create a safe, compliant dealing
environment bound by strict
governance principles.

Many choose Argentex because of
the flexibility afforded by having
immediate access to their assigned
trader, whilst others appreciate

the analytical and factual approach
of their proactive interactions with
their dedicated dealer.

The one thing our core clients do
have in common is that they like
dealing with people, as do we.

Once a client has been assigned a
dealer, it is their job to work with
that client, on their terms, to identify

and quantify any FX risks inherent in
their business, and present a range of
strategies that will entail at least one
of either a spot, forward or options
trade, that can mitigate those risks to
enable informed decisions.

FX risk is usually simple, in which
case we believe the solution to it
should be too.

Delivered
via multiple
channels

— Traditional voice broking

— Online

— Bloomberg

To benefit
our clients

— Flexibility

— Pricing

— Segregation of sales
and dealing roles

— Dealers’ experience

— Proactivity

— Forecasting accuracy

— Credibility

— Strong capital base

— Founder-led

management team

Full range of
customised FX
capabilities

— Spot Contracts

— Forward Contracts

— Options Contracts

— Bespoke software

platform (investment
to date £4.5m)

— Personalised

hedging strategies

Annual Report 2020T E C H N O LO GY

D E L I V E R I N G VA LU E TO O U R STA K E H O L D E RS

Build and
invest.

“ Over the next few
years we believe that
further investment
in all areas of the
client journey will be
required as we adapt
to an ever-changing
environment.”

- Carl Jani, Co-Chief
Executive Officer

To date we have invested over £4.5 million on coding alone
to ensure that the Argentex CRM and accompanying client
front end software is totally bespoke to us.

The rapid development of our
proprietary systems and tools
has allowed us to remain at the
vanguard of delivering excellence
to those who need it.

Our tech investment has also been
applied to launching our online
trading platform that will allow
clients in different time zones to
execute trades instantly.

The decision to ‘build and invest’
rather than licencing a generic
solution has been instrumental
to Argentex’s robust systems and
controls which has been clearly
demonstrated while weathering
of the COVID-19 pandemic. Not
only did our CRM system come
to the fore when seamlessly
transitioning the Company
from office to remote working it
also tracked and traced client’s
exposure in real time which,
coupled with the Group’s risk
policy, helped avoid bad debts.

Online execution will not
cannibalise our core business
offering but provide a convenient
addition to a growing suite of
products to meet our clients’ needs.

Over the next few years we believe
that further investment in all
areas of the client journey will be
required as we adapt to an ever-
changing environment.

Shareholders

We are committed to achieving
long-term, sustainable growth for
our shareholders and our first year
has proven we can achieve this. We
want to continue to generate revenue
growth, strong operating profit and
sustained shareholder value.

Clients

Our exemplary high service level for
our clients remains at the forefront
of our business. We combine our
talented work force with stringent
processes and technology to ensure
the client is satisfied with us as their
foreign exchange provider.

Employees

We endeavour to create an
environment that fosters talent,
commitment and results. Our team’s
efforts, dedication and successes are
rewarded and celebrated and the
atmosphere is collaborative.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
O U R P R O D U CTS

Assured.
Efficient.
Superior.

“ Our online system
is a constantly
evolving proposition
in response to
client feedback.”

- Carl Jani, Co-Chief
Executive Officer,

ONLINE CAPABILITIES
Designed from an exacting blueprint
with clients’ requirements in mind.
Argentex Online is a powerful online
capability to enable execution from
anywhere in the world whenever the
markets are open. Designed to be used
standalone, or in conjunction with
our traditional voice broking service;
whichever suits your needs.

Our first online trade occurred in
March 2020

TRADITIONAL VOICE BROKING
Complex products, policies and
hedging programmes often conceal
the primary goal which should be
risk mitigation, not profiting from
foreign exchange by trying to ‘beat
the market’. A personal relationship
with a professional trader will add
value as they gain an understanding
of your business. They can provide
timely and relevant information
to assist the client in making more
informed decisions.

Some clients are in regular contact
with their dedicated dealer several
times per week, whilst others prefer
far less frequent contact; sometimes
as little as once a quarter. Most
clients will sit somewhere on
the spectrum between these two
extremes and it is the job of the
assigned trader to establish the best
fit for the client’s needs.

Online
trading
function.

We have developed an online trading function for
our clients who requested this service in addition to
our direct-to-client service. This is a layer of added
convenience for those wanting 24 hour trading and
time critical trades.

for the Group. Rather than setting
these clients to one side the online
functionality provides these
clients a facility where they can
save money every time they trade
at no additional marginal cost, at
the same time avoiding turning
away business based on size alone.

Our core focus will remain the
same, and the addition of the
online dealing capability does not
represent a pivot of the Group’s
strategy into competing in the
micropayments online space
which is already overcrowded.

Our online system has been developed
on the foundations of the very same
FIX engine our own professional
traders use to execute trades, and is
a constantly evolving proposition in
response to client feedback.

Designed to be a value-add to our
existing client base, the online
capability has been implemented
to provide a home to trades for
which our existing client base finds
it too resource-intensive to pick up
the phone and execute a trade - for
example a private equity firm whose
average trade size is tens of millions
of pounds, settling an overseas invoice
for a few thousand pounds.

During a junior salesperson’s early
career at Argentex they may often
come across a business whose FX
exposure falls on the small side of
our target market, where providing
a full-service voice broking facility
would prove too resource intensive

Adding new
capabilities:
Online trading and
reporting portal

Argentex Online

— Fully invested

— 24 hour trading

— Smaller trades, higher margin

— Beneficiary and

payment management

Existing clients

— Smaller trades that slip

through the net

— Time critical trades

— Execution only

New clients

— No need to turn away smaller,
but higher margin business

— Not wasting calls

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationH OW W E W I N N E W B U S I N E SS

People and
performance.

Repeat
business.

The bar chart to the right illustrates
that repeat business is by far the
largest source of any given year’s
revenue, and is the main reason
Argentex was formed to target
corporate, as opposed to private
client business, which makes up
just 2% of the firm’s revenue.

There is a natural attrition that
occurs as a result of human
capital mobility, changes to clients’
business models and exposures, so
it is essential to the Group’s success
that it spends significant time and
resource on training top quality
sales staff to generate new business.
It is the chosen model of the firm to
recruit at a grass roots level, with a
new staff member normally having
little to no sales experience. Our
experience has shown this to be the
most effective way to maintain the
required culture, consistency and
performance underpinned by our
extensive training programme.

New vs repeat
business

Revenue
2020

£6.4m

22+

£22.6m

New
Repeat

2014

£1.5m

£2.4m

£4.9m

£5.6m

£9.6m

2015

2016

2017

2018

2019

2020

£14.5m

£22.6m

High quality and
efficient sales
team contributes
to our growth.

Choosing to recruit and train our
employees from a grass roots level
leads to longer learning curve for a
new recruit, but one that ultimately
pays off for those that remain.

A salesperson will be paid between
10 and 17.5% of the revenue generated
by their clients, for the life of the
client and as long as the salesperson
remains employed. What determines
where their commission percentage
falls are quarterly targets, which are
new-business based.

The chart shows the average discrete
revenue attributed to each of our
sales staff depending on how many
years they have been employed. As
demonstrated by the chart, within
just a few years a salesperson will
earn a commission trail that acts as
its own long-term incentive, whilst
targets keep them motivated to
continue finding new business.

Expected annual
revenue per
years employed

Year 1
£0.07m

Year 2
£0.24m

Year 3

£0.72m

Year 4

Year 5

£1.44m
£2.63m

Year 6

£3.52m

The longer our sales
staff are with us the
better they get at selling.

Year 7

£5.02m

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information2020 AC H I E V E M E N TS

Goals.

Outcomes.

Driving
forward
“ Argentex has
adhered to their
strategy and
surpassed initial
expectations for
the financial year.”

Sam Williams
Chief Financial Officer

Continue to improve productivity

Maintain diverse client base

Increased transaction volumes

Generating revenues from options

Continued investment in people

→

Average daily revenue per sales person continues to increase

10 sales people (from total of 27) now employed three years or more

41% of revenue in FY 2020 generated from top 20 clients (35% in FY 2019)

Revenue from top 20 clients continued to increase (£11.4m vs £7.5m in FY 2019)

Composition of top 20 continues to vary year on year

FX turnover of £12.1bn vs £10.8bn in FY 2019

1,212 trading corporates clients vs 1,141 in FY 2019

Average annual revenue per corporate £23.6k vs £18.4k in FY 2019

Winning back flow lost to banks

Professional and Eligible Counterparty clients only

Currently <6.5% total revenue

10 new sales hires in 2019

Continued zero attrition of key staff

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
2020 AC H I E V E M E N TS

LO O K I N G F O RWA R D

Key events
from the last
12 months.

As established, the last 12 months
were instrumental in building a strong
foundation to set the business up for
longevity and profitability.

To the right, we outline a number of highlights.

March 2019

→

First month
revenue >£3m

June 2019

→

IPO, raising net £12m
for the business

September 2019

→

Half year revenue
up 42% to £13.8m

November 2019

→

Olivia Lang appointed as
Chief Compliance Officer

March 2020

→

First online trade

First month revenue >£5m

Pandemic declared

Achieving
growth
strategies.

1. Expand sales force

→

Increase sales team to 50 people over the course of 3 years

Moving into new office in 2020 to increase capacity

2. Increase productivity

→

Average revenue per sales person increases with tenure

3. Customer acquisition

→

Driven by sales team expansion and increased productivity

4. Targeted revenue

→

Clients generating revenues of £5k to £250k, our sweet
spot and overlooked by larger players

5. Continued focus on client proposition

→

Client service at the forefront of what we do

Bespoke and flexible solutions are our speciality

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information202 1 O U T LO O K

A bespoke
service-led FX
solutions provider.

The board is pleased with the Company’s strong performance. Argentex has
adhered to their strategy and surpassed initial expectations for the financial year.
There is every confidence that the Group’s long-term prospects are on track.

The outlook of the business is
positive. Uncertainty around the
impact of COVID-19 has not affected
the business model, which takes no
market risk or house position. Our
corporate clients continue to seek
certainty so Argentex will endeavour
to provide clients with the knowledge
and analysis to help them.

Brexit earlier in the year and
COVID-19 in the latter part of the
year have created higher degrees
of uncertainty which will, in turn,
provide opportunity in the short term.

Despite the macroeconomic and
geopolitical challenges that appear
to have become a constant backdrop
over the recent past, we have started
the new financial year with good
momentum in terms of both revenue
performance and client quality.
Whilst market volatility is expected
to remain as political tensions at
home and abroad continue, as well
as the uncertainties of COVID-19, we
believe that with our robust business
model and strong team, we are well
positioned for the future.

We now have a Dutch sales office
which is generating clients for the
Group and is set to grow.

Further afield – both geographically
and timewise we have identified
significant opportunity in Australia
and the surrounding regions.

We will soon move into our new
office which is four times the size
of our existing premisis, ready
to accommodate our growing
sales team. As each sales cohort
progresses through their career
they become more proficient at all
aspects of the role, so generating
increased revenue, more efficiently,
in condensed timeframes leading to
exponential growth in sustainable
profitability. It’s a model we have
tried, tested and proven time and
time again and one which we will
continue to repeat time and time
again, playing in the pools of the
world’s most liquid market.

Despite the inevitable global
economic slowdown with likely
outcomes such as unemployment

rising and increased interested
rates, the bench strength of the
business from the board who have
experience navigating the 2008
crisis and the experienced and
capable sales team, we are confident
that we will weather the turbulence
of the next year, as demonstrated
over the last 12 months.

The market volatility and FX
markets are seemingly following a
different trend to equity markets
therefore there is an opportunity
for Argentex to utilise this trend to
the benefit of its clients.

The Group remains resilient, with
the continued diversification of its
client base, a robust business model
and an uncompromising approach
to compliance, we are confident of a
successful forthcoming 12 months.

Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationF I N A N C I A L R E V I E W

Strong financial
track record
of growth.

The financial year ended 31 March 2020 has been a
landmark year in the relatively short history of Argentex.

The Group’s successful admission to AIM in June 2019 is the first step
in a new chapter for Argentex, and these maiden financial statements
demonstrate that the Group has fully committed to the message and
strategic model put to investors.

The IPO provided a £12m capital injection to the principal trading
subsidiary of the group, Argentex LLP, with the primary objective of using
the capital to build on the solid growth demonstrated over the history of
the business.

The IPO was strongly supported by existing and new investors, and the
quality of the new shareholder base provides an excellent foundation for life
as a listed business. The primary aim of the IPO was to strengthen the capital
base of the primary trading subsidiary of the group, Argentex LLP. Argentex
LLP was established in 2012 and has experienced a significant rise in revenue
and profitability in the seven years prior to the IPO. Fundamental to that
growth was the level of capital deployed in the LLP, which is a critical element
of the business model. Capital is pledged with the Group’s institutional
counterparties in order to collateralise the Group’s trading portfolio, and as
the Group grows, so does the need for capital. Capital also provides liquidity
buffers to protect against significant market movements happening in a short
space of time, enabling the Group to meet short term obligations as needed.

Of the £14m raised at IPO on the placing of new shares, £12m was successfully
deployed as equity capital in Argentex LLP. As part of the IPO process,
Argentex Group PLC acquired all of the equity of Argentex LLP through
a share for share exchange (involving intermediate holdcos) which has
been accounted for using the principals of merger accounting due to the
transaction falling outside of the scope of IFRS 3 Business Combinations.

Financial
update
“ Revenue growth
continues, due to
strong performance in
both new and repeat
revenues, demonstrating
the strength in
customer acquisition
and customer service.”

Sam Williams
Chief Financial Officer

By using merger accounting, prior year comparatives are
shown as if the group had been in existence prior the IPO,
despite the LLP not having a majority owner for the year
ended 31 March 2019. A reconciliation has been included in
this financial review to provide an alternative comparison
to better measure relative performance across the periods,
and an underlying earnings figure presented in note 13 to the
financial statements to provide comparability.

FINANCIAL PERFORMANCE
Argentex have performed well in FY20, with revenues
increasing 32% from the prior year to £28.9m (2019: £21.9m).
Revenue growth continues due to strong performance
in both new and repeat revenues, demonstrating the
strength in customer acquisition and customer service.
We have seen growth across all categories of client from
institutions, corporate and private clients. Due to the
improved quality of our clients, we can see that our robust
business model is working and growth has been achieved.
Underlying earnings (note 13 to the financial statements)
of £10m represents a growth of 27% from the FY19
underlying earnings.

After factoring in non-recurring costs of the IPO and new
administrative costs for the enlarged listed group, the
Group has retained profits of £7.6 million which be used to
assess the value of the interim dividend relating to the year.

Subsequent to the year end (note 26 to the financial
statements), the LLP has committed to a new premises
following the expiry of its existing lease, which will
increase the IFRS 16 costs, combined with an anticipated
rise in headcount across all departments to enable
the Group to pursue its growth plans. Consequently,
operating leverage is expected to decline modestly in the
short term while the new cost base consolidates and the
additional front office staff are able to make meaningful
contributions to revenues. 2019 Underlying operating
profit does not include the costs of LLP members who,
prior to the IPO had no guaranteed entitlement to
remuneration under the former LLP agreement, instead
receiving pure equity profit shares of Argentex LLP. At
LLP level, as seen in the reconciliation, Distributable
Profits approximate the Group’s operating profit, and have
increased from £7,201k in 2019 to £12,740k in 2020, with
ratios increasing from 33% in 2019 to 45% in 2020.

FINANCIAL POSITION
Argentex continue to believe that cash generation from
its trading portfolio is a key indicator of performance and
adherence to risk appetite framework. At the end of the
financial year, Argentex has cash and cash equivalents of
£49m, an increase of £35m from the prior year. Increases
in cash balances reflect the higher proportion of client
balances held following collection of variation margin,
in addition to the IPO proceeds and routine operating
cashflow generation. Cash generation from the group’s
revenues is a function of i) the composition of revenues
(spot, forward and option revenues) and ii) the average
duration of the FX forwards in the portfolio. Historically,
Argentex generates revenues in a ratio of approximately
50/50 between spot and forward FX contracts (excluding
currency options which are a more recent business line).
While spot FX contracts attract a smaller revenue spread,
the risk profile of a spot FX contract is significantly
reduced, and revenues are realised almost instantly.
As such, having a significant proportion of the firm’s
revenues generated by a product with a minimal working
capital cycle creates a strong positive cash flow for the
business when compared to its operating cost base.

Further to the spot FX cash flows, the average tenor of
and FX forward continues to be less than five months.
When combined with the cash flow profile of the spot
FX contracts, the LLP measures short term cash return
as follows:

2020

£’000

28,986

2019

£’000

21,910

(7,464)

(4,498)

21,522

17,412

Revenues for the
last 12 months (A)

Less

Revenues settling
beyond 3 months

Net short term
cash generation (B)

Short term cash return (B/A)

74%

79%

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
+9+11+12898

74%

2020

2019

2018

1,212

1,141

Number of traded
corporates

Short term cash return

+12+12+122018

Spot/Forward
revenue mix

2020

2019

79%

2019

DIVIDEND
Argentex is committed to its previously communicated
dividend policy, paying out 30% of retained profits for
the year. In accordance with current market practice and
guidance during the COVID-19 disruption, the Group will
be declaring its dividend for the year ended 31 March 2020
as an interim dividend (opposed to a final dividend), of
2p per share. The interim dividend record date will be 14
August 2020 and will be paid on 10 September 2020. The
ex-dividend date is 13 August 2020.

Sam Williams
Chief Financial Officer

PORTFOLIO COMPOSITION
Argentex’s client base, while increasing in number, is
still composed of similar businesses, predominantly
with exposures in the major currencies of sterling, euro
and US dollar. At the year end, over 95% of the Group’s
portfolio was comprised of trades in those currencies.
The Group’s exposure to exotic currencies or currencies
with higher volatility and less liquidity is still limited.

Heightened volatility through March 2020 increased
collateral requirements with the Group’s institutional
counterparties, and consequently the Group called for
variation margin on a number of exposures within its
client portfolio. The Group collected collateral effectively
from its client base through the volatile period and is yet
to experience any material issues over settlement.

KEY PERFORMANCE INDICATORS
The Group measures its performance using the
following Key Performance Indicators:

Revenue (£m)

2020

2019

2018

28.9

21.91

13.23

Underlying Earnings

£10.0m
£7.8m

FY 2020

FY 2019

F I N A N C I A L R E V I E W

Reconciliation from Argentex LLP
to Argentex Group PLC results.

Revenue

Direct costs

Gross Profit

Administrative expenditure

Operating profit

Interest receivable and similar income

Interest payable and similar charges

Profit for the financial year before members’ remuneration and profit shares

Members’ remuneration

2020

£’000

28,986

(409)

2019

£’000

21,911

(392)

28,577

21,519

(10,891)

(10,288)

17,686

11,231

105

(157)

17,634

(108)

11,123

— Allocated to individual members of the LLP under the revised compensation model

(4,894)

— Adjustment for revised compensation model applied retrospectively

(3,922)

Distributable profits after individual LLP members’ compensation

Profit allocated under the previous ownership structure pre-IPO

Dividends declared under the former ownership structure

Post-IPO profits available for distribution to Argentex Group plc
and its subsidiaries

IPO costs

Share based payments

Other administrative costs

Taxation

Retained profit for the period for Argentex Group PLC

12,740

(1,663)

(488)

10,629

(563)

(5)

(291)

(2,128)

7,642

7,201

(4,333)

(2,868)

Note: Following IPO, the self-employed LLP members who are members of the LLP Executive Committee will be remunerated under the Amended and

Restated LLP Agreement by a combination of (i) fixed annual remuneration (ii) participation in revenue commission schemes (iii) annual bonuses and (iv)

other variable compensation based on the LLPs performance. This model has been applied retrospectively to 2019 to present comparative information

consistently in the pro forma.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationST R AT E G I C R E P O RT

Section 172
Statement.

As a board we have always taken decisions for the long term,
and collectively and individually our aim is always to uphold
the highest standards of conduct.

Similarly, we understand that
our business can only grow and
prosper over the long-term if we
understand and respect the view
and needs of our clients, colleagues
and the communities in which we
operate, as well as our suppliers, the
environment and the shareholders
to whom we are accountable.

Meaningful engagement with these
stakeholder groups supports the ethos
of Section 172 of the Companies Act
which set out that Directors should
have regard to stakeholder interests
when discharging their duty to promote
the success of the Company. Details
of the key stakeholder engagement
undertaken at different levels within
Argentex to inform decision-making and
enhance Board understanding are set
out on the following page.

Our 5 Key
Stakeholders
1. Our Customers

2. Our Employees

3. Our Environment
and Communities

4. Our Investors

5. Our Partners

Our
Customers

Our
Employees

Our Environment
and Communities

Our
Investors

Our
Partners

Who / What they are?

Why are they
important to us?

What do they
want from us?

How do we engage
with them?

We are fortunate to have

Our clients are the

They want tailored and

The directors have

a very diverse client base.

reason Argentex has

best in class foreign

implemented a client

Our clients vary from

become what it is.

exchange advisory and

service model designed

institutional, corporate

They form our revenue

execution services that

to provide high levels

and private clients from

and growth.

are safe and reliable.

of service and personal

a variety of industries.

interaction to the

Group’s client base. Our

growing repeat revenues

are testament to our

commitment to our client

focussed operating model.

Anyone who is employed

Our people are our most

Our employees want a

Directors engage

by Argentex.

important asset. They

satisfying career, and a

regularly with staff and

create and maintain

positive and motivating

leadership teams. The

our business, provide

work environment

Directors monitor staff

our customers with

where they can thrive,

appraisals, implement

service they have grown

all underpinned by a

personal development

accustomed to and drive

supportive culture.

plans and have set fair

business development

and growth.

remuneration policies

including health

insurance that includes

mental wellbeing as

well as in-house

fitness facilities.

We are aiming to be a

We are committed to

To aspire to be

The Directors are

more sustainably run

minimising the impact of

responsible members

implementing

business and become

our business operations

of our community as it

employee opportunities

more actively involved

on the environment.

reflects our principle to

for a volunteering

in communities.

As a listed business we

do the right thing. It is

programme to be

feel more than ever

also important to our

introduced in September

how important it is

colleagues, customers

2020, ESG strategy to

to support charitable

and shareholders.

be implemented in

organisations that we

have allegiances to.

September 2020.

Those who own shares

Investors provide capital

Investors want a clearly

The Directors conduct

in Argentex.

to the business, as well

articulated long-term

formal results

as valuable feedback on

strategy together with

presentations every six

our performance and

shorter-term plans and

months. Institutional

strategic position.

effective communication

shareholders meet our

of our progress. We aim

Executive Directors

to grow our share price

regularly. The Directors

and provide sustainable

hold an AGM every year.

dividend income

through a progressive

dividend policy, while

carrying no debts.

Those who have a direct

Their vital contributions

Our partners want us to

The Directors work to

working or contractual

to our business provide

be trustworthy and live

find mutually effective

relationship, or share a

services and advice.

up to our promises.

ways to communicate

mutual interest with us.

and collaborate with each

group. High standards

of health, safety and

security underpin

everything we do.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationC O R P O R AT E S O C I A L R E S P O NS I B I L I T Y

Striving to
become a
sustainably
run business.

We aim to continue to deliver market-leading
growth whilst simultaneously reducing our
impact on the environment and striving to
improve our society.

The remaining equipment and furniture
not moved to the new office will be re-
used or recycled through a third party,
therefore avoiding any landfill.

We are installing in our new office a new
lighting system which is fully LED –
fully commissionable with sensors and
dimmers to maximise energy efficiency.

In addition to this, specialist taps will
be installed which are not only energy
efficient but will result in no bottled
water or single use plastics in the office.

A new energy efficient air-conditioning
system is being installed with heat
recovery and all timber used within the
build is FSC approved.

Our long-term growth aspirations
are synergistic with, not in spite of,
an improvement in staff wellbeing
and the environment, and this is
what drives us forward when looking
at the culture and values that are
synonymous with Argentex. As well
as being a solid, profitable company
we also want our staff wellness
and productivity to be a significant
indicator for success.

We have appointed the ESG
consultant, EcoDesk, to help us define
our low-carbon business strategy.
We understand the need to embed
an ESG strategy that can account for
operational and strategic impacts.

With our office relocation, the business
is reusing as much as reasonably
possible, in fitting with the design of
the new office - desks, IT equipment
and meeting room furniture are being
relocated to the new office.

Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationR I S K M A N AG E M E N T

Framework
and structured
processes.

The Group, as any business operating
in the financial services sector, faces a
number of challenges to its successful
operation and development.

The principal risks and uncertainties facing the
Group are addressed through a risk management
framework that provides a structured process for
identifying, assessing and managing risks associated
with the Group’s business objectives and strategy.

“ Argentex has a
structured process for
identifying, assessing
and managing risks
associated with the
Group’s business
objectives and strategy.”

- Sam Williams,

Chief Financial Officer

Market Risk

DESCRIPTION and potential impact
Market Risk is the risk that the value
of the Firm’s income, liabilities, assets
or costs might vary due to changes in
the value of financial market prices.

MITIGATION
As the Firm acts in a riskless
principal capacity, market risk is
hedged and therefore limited to
the Firm’s own funds in foreign
currency. These currency amounts
are regularly reviewed to ensure no
unnecessary FX exposures are held.
The firm holds no other exposures
which bear market risks.

Operational Risk

DESCRIPTION and potential impact
Operational risk is the risk of loss
resulting from inadequate or failed
internal processes, people and
systems or from external causes.
These failures can be deliberate,
accidental or natural. Roles and
responsibilities are clearly defined
across business and control functions.

MITIGATION
Argentex mitigates operational
risks having established a clear
control framework with supporting
policies, procedures and business
continuity planning alongside on-
going embedding of operational risk
management and processes. Where
the firm is unable to wholly mitigate
a risk (for example cyber threats) it
has taken out extensive insurance
to cover any consequential losses
and ensure that the firm is able to
continue in operation with little to
no financial detriment to itself or
its clients.

Finally, we have chosen only
well-respected partners for
outsourced functions based on the
firm’s outsourcing and due
diligence policies.

The Group benefits from the
fact that trading terms with its
Institutional Counterparties are
generally more favourable than
those offered to its clients, and it
only has to fund its net FX exposure
with its Institutional Counterparties.

Liquidity risk

DESCRIPTION and potential impact
Liquidity risk is the risk that the Firm
has insufficient cash resources to
meets its obligations or can only do so
at an unsustainable cost.

Liquidity risk is primarily driven by:
— a sudden sharp movement in

exchange rates when a currency is
net long/short; or

— an over-extension of hedging

facilities.

If the Group were unable to meet its
financial obligations when due, this
would have a material adverse effect
on its business, results of operations,
financial condition and prospects.

MITIGATION
The firm’s primary intra-day
liquidity requirements are driven
by margin balance requirements
with institutional counterparties.
This margin position is monitored
intra-day, and is subject to frequent
review and stress testing to ensure
the firm has sufficient collateral
pledged to cover its current and
potential obligations in the event of a
significant market movement.

Liquidity for client settlement is
provided in a “safe settlement”
environment, Argentex will never remit
funds to the client prior to receiving
cleared funds in the sell currency.

Credit Risk - clients

DESCRIPTION and potential impact
Credit risk reflects the risk that the
firm is unable to realise the cash value
of its assets or has to pay out an off-
balance sheet liability.

The Group is exposed to credit risk
if a client fails to settle a contract at
maturity or fails to deliver on margin
calls when required. The Group is
therefore exposed to the fair value
movements of the contract from the
day the trade was booked, or since the
date of the last margin call.

MITIGATION
The Group has a credit policy in place
to mitigate any potential losses
arising from a client failing to settle;
in particular:
— assessment of the creditworthiness
of clients, with each client being
provided a credit assessment based
on their specific circumstances;
— where a hedging facility has been
extended, maximum exposure
limits (typically 3-5% of the value
of the contract with a client) before
a margin call will be made;

— timely collection of margin calls or
early settlement of client contracts
to reduce or eliminate credit
exposures;

— regular stress testing of exposures,
both routine and event driven
to provide visibility on potential
future exposures in a range of
market scenarios.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
Credit Risk –
institutional
counterparties

DESCRIPTION and potential impact
Argentex relies on third party
institutions in order to trade and
clear settlement funds through client
accounts. Counterparty Credit risk
reflects the risk that the firm may
incur losses as a result of institutional
counterparty failure.

MITIGATION
To reduce counterparty credit risk to
acceptable levels, Argentex only trades
with institutional counterparties
with robust balance sheets, high
credit ratings (where published) and
sound capital resources (as disclosed
in accordance with the CRR and
CRD IV of Basel III) and monitors
the creditworthiness of institutional
counterparties on an ongoing basis.

At institutional counterparty
level, trade volumes and trading
cash balances are concentrated to
a small selection of institutional
counterparties. A degree of
concentration is necessary for the
Group to command strong pricing
and settlement terms with these
institutions, however the Group
continues to review the composition
of its institutional counterparty base
to ensure that there is sufficient
redundancy in its liquidity offering.

Regulatory and
Compliance Risk

DESCRIPTION and potential impact
Regulatory and Compliance risk is
the current and prospective risk
to earnings or capital arising from
violations of, or non-observance
of, laws, rules and regulations
applicable to the Group. Argentex
LLP is authorised and regulated by
the FCA as (i) an electronic money
institution under the Electronic
Money Regulations 2011 and (ii) for
the provision of investment services
(as an IFPRU Limited License Firm).
Furthermore, the Group must abide
by the AIM rules and other significant
legislation including GDPR.

Consequences of failure to meet
regulatory requirements include
penalties and withdrawal of
permissions, and the dynamic and
evolving nature of financial and
other regulations could lead to
significant expenditure in order to
remain compliant with the evolving
regulatory environment.

MITIGATION
Argentex is committed to upholding the
FCA’s principles for business. The firm
has a governance structure in place that
allows for the identification, control, and
mitigation of material risks resulting
from the operations of the firm.

Argentex hired a new Chief Compliance
Officer, Olivia Lang, in the year to
further enhance the management team.

The group continues to invest internally
in compliance resources, and engage
with RegTech providers to leverage the
rapidly growing solutions which assist
with risk monitoring and mitigation.

The Group utilises external compliance
auditors to review its AML processes
and procedures and provide
recommendations on enhancements to
the existing compliance environment.

Key Personnel

DESCRIPTION and potential impact
The loss of key senior employees
could increase the risk of not winning
repeat work or missing out on
significant new contracts, which could
result in a material adverse effect on
the Group’s financial results.

MITIGATION
Remuneration is reviewed annually
and a large proportion of the Group’s
employees participate in the Group’s
share-based incentive plans. The
Group has a successful track record
of retaining senior employees
and the recruitment of additional
key personnel provide assurance
that there is appropriate breadth
of management and appropriate
span of control. Succession
planning is assessed annually by
the Nomination committee. The
Group has comprehensive keyman
person insurance policy in place. All
key management have entered into
service contracts which provide notice
periods for the Group’s protection.

The Group’s systems and capabilities
as well as the commendable
attitudes of its staff afforded the
Group the agility to continue to
offer minimal disruption to clients
whilst simultaneously ensuring a
safe working environment for those
that would otherwise have to take an
unnecessary level of risk were they
required to travel into the office.

The Group are confident that
any future requirements to enact
restrictions on movement would not
be detrimental to the operations of
the Company.

The Group are acutely aware of the
negative impact COVID-19 is having
on many industry sectors and our
thoughts are with those that are
affected. Robust risk controls, a
diverse, high quality client base and
strength of balance sheet means
management are confident that
Argentex remains well placed to
weather any future pathogen-related
disruptions. The rate of new client
acquisition in addition to an already
well-diversified client base means the
Group remain cautiously optimistic of
meeting all long term growth targets.

IT and System risk

DESCRIPTION and potential impact
The current or prospective risk
to Argentex’s earnings and own
funds arising from inadequate IT,
processing and systems. Total failure
of either the system or its hosting
environment would be detrimental
to both the firm and its clients.

MITIGATION
The firm maintains several DR
options depending on the nature
of the IT failure and expects any
detriment to be minimal due to
the multiple ways of performing
its key functions or execution
and settlement.

The firm maintains robust levels
of insurance to cover losses in such
a scenario should they materialise,
meaning financial impact of the
event should be restricted to costs
for support and remedial works
if needed.

Argentex has implemented a
Business Continuity Policy to
provide guidelines for developing,
maintaining and exercising
Argentex’s Business Continuity
Management (BCM) and IT Disaster
Recovery (DR).

Cyber risk

DESCRIPTION and potential impact
Cyber risk is a continual pervasive
threat which we define as the risk
of losses arising from being targeted
by hackers resulting in significant
disruption to its operations and
ability to service customers.

MITIGATION
The firm works with its key
counterparties who assist in the
processing and storage of relevant
data to ensure the firm is up to
standard on all relevant legislation.

The firm maintains robust levels of
insurance to cover losses in such a
scenario should they materialise,
meaning financial impact of the
event should be restricted to costs for
support and remedial works if needed.

Staff are trained regularly on
password security, fraud, ransomware
and phishing threats, and
management put emphasis on robust
IT and systems to our overall strategy.

COVID-19

DESCRIPTION and potential impact
The risk of COVID-19 is a new risk that
an infectious pandemic (as highlighted
by the recent events at the time of
writing) negatively impacting the
Group either through direct infection
of staff and key stakeholders of the
Group, or indirectly for example
through government directives enacted
in order to contain the spread of the
disease that either force the firm
to enact less than optimal working
conditions (such as work from home) or
a general reduction in client spend due
to economic contraction.

MITIGATION
The Group’s primary responsibility
is to the safety and welfare of its
staff and has established policies and
procedures that the recent lockdown
that begun in late March tested to its
extreme from a standing start.

Annual Report 2020Strategic ReportGovernanceCompany OverviewFinancial StatementsOther InformationG OV E R N A N C E

Board of
Directors.

Lord Digby Jones Kb.
Non-executive Chairman

Carl Jani
Co-Chief Executive Officer,
Co-Founder

Lord Jones spent 20 years
in corporate law before his
appointment as Director General
of the CBI in 2000. In 2007 he
became Minister of State for UK
Trade and Investment, becoming
a life peer but not joining the
party of government. Lord Jones
is Non-Executive Chairman
of Triumph Motorcycles Ltd
& Thatchers Cider Co Ltd and
he works at a senior level with
Cancer & Military charities.

Carl is a founding partner of Argentex.
As Co-CEO, Carl together with Harry
is jointly responsible for the strategic
direction of the business. Carl
oversees the Operational divisions
of Argentex, maintaining the highest
level of compliance, corporate
governance and risk mitigation. He is
also responsible for the innovation,
development and implementation
of the Group’s systems and controls.
During his career in financial services,
Carl has advised some of the best-
known names in the retail, charity and
private equity sectors.

GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationHarry Adams
Co-Chief Executive Officer,
Co-Founder

Sam Williams
Chief Operating Officer, Chief
Financial Officer

Lena Wilson CBE FRSE
Senior Independent Director and
Independent Non-executive Director

Lena brings extensive experience
to Argentex, from an international
career spanning over 60 countries.
She currently serves on the Group
Board of RBS PLC, Intertek Group
PLC, Scottish Power Renewables
Ltd and is Chair of Chiene and Tate
LLP and a Visiting Professor at the
University of Strathclyde Business
School. Lena was Chief Executive of
Scottish Enterprise from November
2009 until October 2017. Prior to
this, Lena was Senior Investment
Advisor to The World Bank.

Nigel Railton
Independent Non-Executive Director

Henry Beckwith
Non-executive Director

Jonathan Gray
Independent Non-executive Director

Nigel has been the CEO of Camelot
UK Lotteries Ltd since June
2017. Nigel previously served as
Financial & Operations Director
and Finance Director of Camelot
Group PLC. Prior to Camelot, he
served as Senior Management
Accountant of Daewoo Cars Ltd,
beginning his career at British Rail.
Nigel is a Qualified Accountant.

Henry is a director of Pacific
Investments Ltd, the original backers
of Argentex, and leads their financial
services and asset management
division, taking an active role in both
deal origination and management
of the portfolio of companies. He
is a member of both the Chartered
Financial Analyst Institute and the
Society of Technical Analysis.

Jonathan has considerable
financial services experience
having worked in senior roles at
HSBC, UBS and NCB. Jonathan
has substantial public company
experience having worked on
numerous flotations, including
companies such as Property Fund
Management, Cleveland Trust and
CLS Holdings.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationG OV E R N A N C E

Directors’
Report.

The Directors have the pleasure of presenting their report including reports
from the Board Committees and Consolidated Financial Statements for
Argentex Group PLC for the year ended 31 March 2020.

For the purpose of this report, ‘Company’ means Argentex
Group PLC, a public limited company incorporated in
England & Wales with registered number 11965856 with
registered office of 5 Old Bond Street, London, W1S
4PD. References to ”Argentex” and the ‘Group’ mean the
Company and its subsidiaries.

PRINCIPAL ACTIVITY
The principal activity of the Company is that of a holding
company. The principal activities of the main trading
subsidiary undertaking are that of foreign exchange
services, primarily the provision of foreign exchange
execution and advisory services to corporate and
institutional clients.

BUSINESS REVIEW AND RESULTS
The review of the business, operations, principal risks
and outlook are included in the Strategic Report on pages
27 to 59. The Group’s profit after taxation for the year
was £8.1m as set out in the Consolidated Statement of
Profit or Loss on page 90.

DIVIDENDS
In line with the Group’s dividend policy communicated
at the time of the IPO, the Group will be paying 30% of
retained profit after tax, adjusted for any exceptional
items. The dividend relating to 31 March 2020 will be
declared as an interim dividend following the release
of these results, reflecting current market practice.
This is the Group’s first year as a listed business so this
will be the maiden dividend from the listed group. Full
particulars of the dividends are contained within the
Financial Review on page 50.

DIRECTORS
The Directors of the Company who held office during
the year were:
— Carl Jani
— Harry Adams
— Sam Williams
— Lord Digby Jones Kb.
— Lena Wilson CBE FRSE (appointed 5 August 2019)
— Nigel Railton
— Jonathan Gray
— Henry Beckwith

All directors were appointed in June 2019 in advance of
the IPO unless otherwise stated.

Biographies of the directors including their committee
memberships are set out on pages 63 to 65.

DIRECTORS INTERESTS
The remuneration, principal terms of employment
and the interests of the Directors in the Company’s
shares are detailed in the Directors Remuneration
Report on pages 76 to 79. During the period covered
by this report, no Director had a material interest
in a contract to which the Company or any of its
subsidiaries was a party (other that their own service
contract), requiring disclosure under the Companies
Act 2006. There are procedures in place to deal with
any Directors’ conflicts of interest arising under
section 175 of the Companies Act 2006 and such
procedures have operated effectively.

GOING CONCERN
The Directors have assessed the Group’s prospects until
the end of 2021, taking into consideration the current
operating environment, including the impact of the
Government imposed lockdown due to the Coronavirus
pandemic on the FX markets.

The Group has successfully triggered business continuity
provisions in response to Government directives,
ensuring its ability to maintain operations. At the time
of preparation of this report, all staff are successfully
working remotely and have appropriate access to the
Group’s bespoke technology platform that allows them
to connect virtually and continue as normal on existing
engagements and business development activities.

The Directors and management team continue to monitor
the welfare of staff on a daily basis and are providing
them with the support they need to operate effectively
from remote locations.

The Group has developed a set of financial measures
designed to provide flexibility to mitigate the expected
near term operational and financial and longer term
economic impact of the COVID-19 pandemic on the Group.

Whilst these measures may be extended as events unfold,
the Directors of are confident that in context of the
Group’s financial requirements they give flexibility and
sufficient liquidity to the Group to ensure that the Group
can withstand significant shocks and/or extended periods
of market volatility, whilst remaining as a going concern
for the next 12 months from the date of approval of the
Director’s report and financial statements.

DIRECTORS’ INDEMNITY
All Directors and Officers of the Company have the
benefit of the indemnity provision contained in the
Company’s Articles of Association and have received a
deed of indemnity from the Company. The Group also
purchased and maintained throughout the financial year
Directors’ and Officers’ liability insurance in respect of
itself and its Directors and Officers.

POLITICAL DONATIONS
The Group has not made any political donations, and does
not intend to in the future.

SHARE CAPITAL
Argentex Group PLC is a public limited company
incorporated in England and Wales and its shares
are quoted on the AIM market of the London Stock

Exchange PLC. Save as agreed at the Annual General
Meeting of the shareholders, the ordinary shares have
pre-emption rights in respect of any future issues of
ordinary shares to the extent conferred by section 561 of
the Companies Act. Details of the Group’s Share Capital
and changes in the year are set out in note 21 of the
Consolidated Financial Statements.

SUBSTANTIAL SHAREHOLDINGS
At 31 March 2020, the Company had been notified of the
following interests (excluding Directors within the Group)
representing 3% or more of its issued shared capital:

Shareholder

Number of
ordinary shares

% holding

Pacific Investments
Limited

14,195,191

12.54%

Blackrock

6,020,922

5.32%

Premier Miton Investors

3,857,750

3.41%

Gresham House
Asset Management

3,610,000

3.19%

EMPLOYEE INVOLVEMENT
The Group continues to involve its staff in the future
development of the business. Certain employees are
participants in the Group’s CSOP plan which was issued at
IPO, and, subsequent to the year end, the Group issued a
new Long-Term Incentive Plan (“LTIP”) designed to reward,
incentivise and retain key staff and engage employees
with the long-term growth aspirations of the Group.

ENGAGEMENT WITH CUSTOMERS AND SUPPLIERS
Engagement with our stakeholders is very much part
of our ethos. The Board is regularly updated on wider
stakeholder engagement with customers, suppliers and
shareholders’ insights into the issues that matter most to
them and our business.

CORPORATE SOCIAL RESPONSIBILITY
We are committed to minimising the impact our
operations have on the environment, so we have hired an
ESG consultant to help us become more environmentally
aware. Recycling office supplies where possible is already
being undertaken. We do not discriminate against age,
gender, ethnicity, disability or any other criteria. For more
information please see page 55.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationANNUAL GENERAL MEETING
The AGM will take place at 9:30am on Friday 11th
September 2020 at 25 Argyll Street, London, W1 7TU.
The Notice of the AGM and the ordinary and special
resolutions to be put to the meeting are included at the
end of this Annual Report.

FINANCIAL INSTRUMENTS AND RISK
The financial instruments and their associated risks are set
out in note 27 of the Consolidated Financial Statements.

CORPORATE GOVERNANCE
A full review of Corporate Governance appears on pages 70
to 75.

AUDITOR
Nexia Smith and Williamson have confirmed their
willingness to continue in office as auditor in accordance
with section 489 of the Companies Act 2006. The Group is
satisfied that Nexia Smith and Williamson are independent
and there are adequate safeguards in place to safeguard
their objectivity. A resolution to reappoint Nexia Smith
and Williamson as the Company’s auditor will be proposed
at the AGM on Friday 11th September 2020.

DIRECTORS’ STATEMENT AS TO DISCLOSURE OF
INFORMATION TO THE AUDITOR
All the Directors who were members of the Board at the
time of approving the Director’s Report have each taken
all the steps they might reasonably be expected to have
taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of
that information. To the best of each Director’s knowledge
and belief, there is no relevant audit information of which
the Company’s auditor is unaware.

DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.

Company law requires the Directors to prepare financial
statements for each financial year. Under such laws, the
Directors have prepared the Group financial statements
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and
the Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS
101 ‘Reduced Disclosure Framework’, and applicable law).

Under company law, the Directors must not approve
the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs and
profit or loss of the Group and Company for that period.
In preparing the financial statements, the Directors are
required to:
— select suitable accounting policies and then apply

them consistently;

— make judgements and accounting estimates that are

reasonable and prudent;

— state whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements; and

— prepare the financial statements on the going

concern basis unless it is inappropriate to presume
that the Group will continue in business.

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the Group and Company and enable them to ensure
that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the
assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.

The Directors are also responsible for ensuring that they
meet their responsibilities under the AIM Rules.

The Directors are responsible for ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the United Kingdom governing the preparation
and dissemination of financial statements, which
may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website
is the responsibility of the directors. The directors’
responsibility also extends to the ongoing integrity of
the financial statements contained therein.

On behalf of the Board

Sam Williams
Chief Financial Officer
31 July 2020

Annual Report 2020
G OV E R N A N C E

Corporate
Governance
Report.

Dear Shareholder,

The Board of Argentex recognises the importance of good
corporate governance. Best practice is adopted wherever possible
to facilitate robust risk management and the promotion of a strong
governance environment. At IPO, the Quoted Companies Alliance
(“QCA”) Corporate Governance Code (“the Code”) was adopted as the
recognised corporate governance code . The Board has reviewed
the Corporate Governance disclosures set out in the following
pages and believes that the Group complies with the principles and
disclosure requirements of the code in full. This report sets out how
we apply the ten principles of the Code, which we believe creates an
environment geared towards the medium and long-term success of
the Group and ultimately delivering value to shareholders.

A compliance and risk monitoring program is embedded
throughout the Company and provides the Executive Directors
with information on the control and reporting of risks as well the
efffectiveness of risk controls. This information is relayed to the
Board for consideration and review.

The Board remains committed to develop best practice throughout
the business and will continue to lead the business by setting
standards for behaviours expected by all staff in their actions
within the business and in dealing with our external stakeholders.

Lord Digby Jones Kb.
Non-Executive Chairman

The QCA Corporate
Governance Code.

1. Establish a strategy and business model which
promotes long-term value for shareholders.

Strategic Report

2. Seek to understand and meet shareholder

needs and expectations.

Investor / Shareholders

132

Shareholder communications

3. Take into account wider stakeholder and

social responsibilities and their implications
for long-term success.

Section 172 Statement

55 Corporate Social Responsibility

Other Stakeholders

4. Embed effective risk management,

considering both opportunities and threats
throughout the organisation.

Principal Risks & Uncertainties

Internal Controls & Assessments of Business Risk

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information5. Maintain the Board as a well-functioning

balanced team led by the Chair.

Board of Directors

Corporate Governance Statement

6. Ensure that between them the Directors have
the necessary up to date experience, skills
and capabilities.

Board of Directors

Board of Effectiveness

7. Evaluate Board performance based on
clear and relevant objectives, seeking
continuous improvement.

Board of Effectiveness

Remuneration Committee Report

8. Promote a corporate culture that is based on

ethical values and behaviours.

Corporate Governance Statement

Audit Committee Report

Remuneration Committee Report

9. Maintain governance structure and

processes that are fit for purpose and support
good-decision making by the Board.

Clients

Culture

Business Culture, Behaviour & Ethics

Corporate Social Responsibility

10. Communicate how the Company is

governed and is performing by maintaining
a dialogue with shareholders and other
relevant stakeholders

Corporate Governance Statement

GOVERNANCE INTRODUCTION AND THE
BOARD COMPOSITION
The Board is responsible to shareholders for the long-term
success of the business. It is important that the Board
comprises of a mixed skill set, experience and knowledge to
deliver the Strategy of the Group. The Board comprises of
three Executive Directors and five Non-Executives, including
the Chairman. The Board believes that the size, skills sets,
and experience are pertinent to the Argentex Group given its
size, stage of development and opportunities that it faces. All
Board Directors are subject to election at their first Annual
General Meeting and to re-election annually thereafter.

The Board is responsible for the proper management of
the Company by formulating, reviewing and approving
the Company’s strategy, budgets and corporate activity.

All Directors have access to the Company Secretary, Vistra,
who is responsible for ensuring that Board procedures and
applicable rules and regulations are observed.

The Board meets at least six times each year, and
additional meetings are held as required. The Board is the
principal forum for directing the business of the Group.

HOW THE BOARD OPERATES
The Board is responsible for the proper management of
the Group by formulating, reviewing and approving the
Group’s strategy, budgets and corporate actions. Executive
Directors work full time within the Group. Non-Executive
Directors are expected to devout such time as is necessary
for the proper performance of their duties.

In order to achieve its objectives, the Board adopts the ten
principles of the QCA Code.

The Board considers and approves the Group’s dividend
policy, changes in the Group’s capital and financing structure.

The Board is responsible to for:
— The maintenance of a robust system of internal

controls and risk management procedures
— Board appointments and succession planning
— The approval of the Remuneration Policy and remuneration
arrangements for the Directors and other senior managers

— Setting the terms of reference for Board Committees
— The strategy and growth plans of the business
— Structure and Capital
— Risk Management and internal controls
— Contracts
— Commitment to material expenditure
— Shareholder communication
— Corporate Governance

BOARD MEETINGS
The Board met seven times during the year and Non-
Executive Directors communicate directly with Executive
Directors and Senior Management between formal
meetings. The Board operates to an agreed schedule,
covering key matters at regular intervals through the
year. The agenda and papers for the Board are distributed
in advance of each Board meeting.

The roles of the Chair and co-Chief Executives are distinct
with clear division of responsibilities. The Chair’s role is
to ensure good corporate governance. His responsibilities
include leading the Board, ensuring the effectiveness
of the Board in all aspects of its role, setting the Board
agenda, ensuring that all Directors participate fully in
their activities and decision making of the Board and
ensuring communication with shareholders.

Directors are expected to attend all Board meetings, and the
Committee meetings on which they are members. The table
on page 75 outlines the scheduled Board and Committee
meetings with attendance of each Board Member. The
Nomination Committee did not meet during the year.

THE BOARD COMMITTEES
Audit Committee
The Audit Committee is responsible for monitoring
the integrity of the Company’s financial statements,
reviewing significant financial reporting issues, reviewing
the effectiveness of the Company’s internal control and
risk management systems and overseeing the relationship
with the external auditors (including advising on their
appointment, agreeing the scope of the audit and
reviewing the audit findings). The Audit Committee
monitors the need for an internal audit function.

The Audit Committee is comprised of Lena Wilson CBE
FRSE, Jonathan Gray, Henry Beckwith and Nigel Railton
is the Chair. The Audit Committee will meet at least three
times a year at appropriate times in the reporting and audit
cycle and otherwise as required. The Audit Committee will
also meet frequently with the Company’s external auditors.

Remuneration Committee
The Remuneration Committee is responsible for
determining and agreeing with the Board the framework
for the remuneration of executive Directors and other
designated senior executives and, within the terms of
the agreed framework, determining the total individual
remuneration packages of such persons including, where
appropriate, bonuses, incentive payments, share options or
other long-term incentive plans. The remuneration of Non-
Executive Directors will be a matter for the Chairperson

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
and the Executive Directors. No Director will be involved
in any decision as to his or her own remuneration. The
Remuneration Committee is also responsible for issuing
awards of shares and options to purchase Ordinary Shares
under the Company’s proposed share incentive plans.
In exercising this role, the Directors shall have regard to
the recommendations put forward in the QCA Corporate
Governance Code and, where appropriate, the QCA
Remuneration Committee Guide and associated guidance.

The Remuneration Committee is comprised of all of the
Non-Executive Directors and Jonathan Gray is Chair. The
Remuneration Committee will meet at least twice a year
and otherwise as required.

Nominations Committee
The Nominations Committee is responsible for identifying
and nominating members of the Board, recommending
Directors to be appointed to each committee of the Board
and the Chair of each such committee. The Nominations
Committee will also arrange for evaluation of the Board.
The Nominations Committee is comprised of all of the
Non-Executive Directors and Lena Wilson CBE FRSE is
Chair. The Nominations Committee will meet at least twice
a year and otherwise as required.

BOARD EFFECTIVENESS
The Board will review its effectiveness by reference to
financial performance, continuing adherence to risk
and compliance frameworks and the overall growth of
the Group. The Board will take account of the opinions
and insights of its advisers, including NOMAD, auditors,
and legal advisers. The method of assessing Board
effectiveness and performance will also be reviewed on a
regular basis, and recommendations regarding changes
to the composition of the Board will be evaluated fully.
The Chairman will carry out appraisals of the Board, the
Committees and the individual Directors and include a
review of the fees paid to Non-Executive Directors including
the fee for the Chairman. The formal evaluation process
will take place on an annual basis and is supported by
regular communication between the Chairman and the
other Directors to allow any matters to be addressed.

The Board is committed to work in a dynamic, collaborative
and constructive way with different points of view and
knowledge being drawn upon to challenge and review the
business of the Group.

Appraisal of the Chairman will be undertaken annually
by the Nominations Committee Chair, Lena Wilson CBE
FRSE in collaboration with the other executive and Non-
Executive Directors.

The review of fees paid to Non-Executive Directors was
reported to the Board and details are included in the
Remuneration Committee’s Report.

INTERNAL CONTROL AND RISK MANAGEMENT
The Board is ultimately responsible for the Group’s system
of internal control and for reviewing its effectiveness. Such
systems are designed to manage rather than eliminate
risks that may undermine the Group’s strategic objectives
and can only provide reasonable not absolute assurance
against material misstatement of loss.

The Directors believe that the Group has internal control
procedures in place appropriate to the size and nature of
the business.

SHAREHOLDER COMMUNICATIONS
The Board is committed to maintaining communication
with the Company’s shareholders. The principal methods
of communication with private investors remain the Annual
Report and Financial Statements, the Interim Report, the
AGM and the Group’s website (www.argentex.com).

All Directors will normally attend each AGM and
shareholders are given the opportunity to ask questions. In
addition, the co-Chief Executives and Chief Financial Officer
welcome dialogue with individual institutional shareholders
to understand their views and feed these back to the
Board. General presentations are also given to analysts and
investors covering the Annual and Interim Results.

OTHER STAKEHOLDERS
Other key stakeholders aside from shareholders are the
Group’s staff, its corporate clients and its key suppliers.
Delivering client focussed outcomes ensures the long-term
viability of the Argentex business model, and maintaining
client confidence and trust requires full commitment to the
Argentex culture by its staff. The client journey involves
all facets of the Argentex model, from front office client
acquisition and relationship management, through to
payment execution and ongoing compliance undertaken
by the back office. Argentex’s growing client base and ever
growing staff number demonstrate Argentex’s commitment
to the same model that drove the early success of the
business and continues to deliver for the business. The Board
actively encourages and gives opportunities for its staff
to give feedback regardless of seniority or tenure through
regular team meetings and sustaining a flat organisation
where the senior management team are present on the sales
floor daily. Argentex is also committed to using domestic
supply chains where possible, in order to maintain a modest
environmental footprint and have access to domestically
located support, opposed to solutions outsourced overseas.

Attended meeting

Not a committee member

Not a board member at time

Digby, Lord
Jones Kb.

Nigel
Railton

Jonathan
Gray

Lena Wilson
CBE FRSE

Henry
Beckwith

Carl
Jani

Harry
Adams

Sam
Williams

Board Meetings

Chair

Audit Committee

Chair

Remuneration

Chair

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
“ Argentex is committed
to achieving both high
governance standards
and a simple and
effective remuneration
structure.”

- Jonathan Gray, Chair of the
Remuneration Committee

G OV E R N A N C E

Remuneration
Committee
Report.

I am pleased to present the Remuneration Report for the
year ending March 2020 which summarises the work of
the Remuneration Committee, the remuneration policy
and the remuneration paid to the Directors for the year.

As an AIM-quoted company, the information provided is disclosed to
fulfil the requirements of AIM Rule 19. Complying with AIM Rule 26,
Argentex complies with the QCA Corporate Governance Code. Although
the Company is not required to comply with Schedule 8 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008, Argentex is committed to achieving both high governance standards
and a simple and effective remuneration structure.

Argentex was admitted to trading on AIM on 25 June 2019 and prior to this
was a private business.

REMUNERATION COMMITTEE
The Remuneration Committee was constituted at the time of the IPO. The
composition of the committee is shown on page 73 and is made up entirely
of the Group’s Non-Executive Directors. The Committee is responsible for
determining and reviewing the Group’s policy on executive remuneration
and other benefits and terms of employment, including performance
related bonuses and share options. The Committee also determines the
operation of the share option and share incentive schemes established by
the Group, and reviews senior management’s proposals for remuneration
policies affecting all staff.

The Committee has met twice during the year.

REMUNERATION POLICY
The Committee is conscious of the scale and importance of remuneration
in a business of this type. The Group’s policy is to offer competitive
remuneration with the aim of motivating and retaining high quality
executives to support the achievement of the Group’s financial and

non-financial targets and to pay executives fairly. The
Committee considers the appropriate balance between
fixed and variable remuneration as well as ensuring that
the remuneration policy is aligned with the interests of
shareholders.

Each of our Co-CEOs has a significant shareholding and
so their interests are directly aligned with shareholders
as a whole. In view of this, the Co-CEOs do not currently
participate in long-term incentive arrangements. The
committee has retained an independent external consultant
to advise on remuneration matters across the Group.

In the light of the Group’s strong financial performance
during the year detailed earlier in this annual report, the
Remuneration Committee determined to pay bonuses of
£495,000 each to the Co-CEOs and £180,000 to the CFO.

Long term incentive plans
The Committee recognises the importance of ensuring
that senior employees of the Company are effectively
and appropriately incentivised. In order to further
encourage long term alignment of staff with the
interests of shareholders and the strategic objectives of
the Group, the Company operates a UK tax-advantaged
company share option plan (the “CSOP”).

Salaries, fees and benefits
Salaries and cash bonuses for Executive Directors are
determined by the Remuneration Committee and are
reviewed annually, considering individual and Group
performance over the previous twelve months, external
remuneration data from comparable companies and
advice from the external consultant.

From the date of our IPO up to 31 March 2020, our Co-
CEOs received annualised fixed remuneration of £250,000,
comprising an annual fee of £25,000 and annual fixed
profit shares of £225,000. Our CFO received annual fixed
remuneration of £150,000, comprising an annual fee of
£25,000 and annual fixed profit shares of £125,000.

The Executive Directors do not receive any pension or
other benefits.

Fees for Non-Executive Directors are determined by the
Board, having regard to fees paid to Non-Executive Directors
in other UK quoted companies of a similar scale, the time
commitment and responsibilities of the role. The Non-
Executive Directors’ fees are subject to the aggregate limit
set out in the Company’s Articles of Association. The fee for
our Chairman from IPO until 31 March 2020 was £60,000 per
annum and for our non-executive directors was £45,000. Fees
are payable from the date of appointment as a Non-executive
Director, except for Henry Beckwith who has waived his
fee. No options are held by the Non-Executive Directors.
Individuals cannot vote on their own remuneration.

Annual bonus
The Company operates an annual discretionary bonus
plan under which Executive Directors may receive a
bonus based primarily on group financial and operational
performance in the year. Bonuses are payable in cash
following completion of the audit.

The CSOP was granted at IPO to certain senior
employees of the Group. The 311,311 Options
granted under this scheme are intended to meet
the requirements of Schedule 4 to the Income Tax
(Earnings and Pensions) Act 2003 and be qualifying for
capital gains tax treatment for employees.

On 7 April (after the financial year end) the Company
issued a further grant of 4,528,300 share options under
the CSOP to senior employees within the Group.
These options were issued at an exercise price of 135p
(representing a 12% premium to the market price)
and are not tax-favoured options. The awards will
vest in portions of one third on the third, fourth and
fifth anniversaries of grant. They are exercisable in
tranches of one third from the third, fourth and fifth
anniversaries of grant.

Sam Williams was awarded 452,830 share options
as part of this grant. His award has an EPS growth
performance condition attached.

SERVICE CONTRACTS
Executive Directors have contracts of employment that
are subject to notice of six months for both Company
and individual.

Non-Executive Directors are appointed under a letter of
appointment with the Company. Subject to their re-
election by shareholders, the initial term of appointment
for each Non-Executive Director is three years. Non-
Executive appointments are subject to notice of three
months by either Company or individual.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
The committee has retained
the service of an external
consultant to advise on
remuneration matters.

DIRECTORS’ REMUNERATION
This table summarises the gross aggregate remuneration
of the Directors who served during the year to 31 March
2020. Prior to the IPO, none of the Directors held a
statutory directorship within the Group.

Comparative information (where shown) relates to
remuneration of the Executive Directors as employees
or member’s of Argentex LLP, where profit shares were

automatically determined in accordance with proportions
of equity held in the LLP. Following the IPO on 24 June
2019, the Directors no longer have any entitlement to
equity profits arising from Argentex LLP, and are instead
remunerated by reference to: Director’s service agreements,
basic salaries/fixed profit shares from Argentex LLP and
variable performance related bonuses as determined by the
Remuneration Committee.

DIRECTORS SHARE INTERESTS
This table summarises the interests of the
Directors and Non-Executive Directors who
served in the year in the ordinary shares of
the Company.

Comparative information relates to equity interests of the
directors in Argentex LLP, prior to the merger and group
formation further described in the financial statements.

As at 31 March 2020, no director held any interests under
share options arrangements.

Equity based profit
shares pre-IPO

Basic salary/
Fixed profit shares

Performance
related bonus

2019/20
Total

2018/19
Total

Number of ordinary shares held in
the Company at 31 March 2020

LLP equity interests owned
at 31 March 2019

Executive Directors1

Harry Adams

Carl Jani

Sam Williams

Non-Executive Directors

Lord Digby Jones Kb.1

Henry Beckwith1

Jonathan Gray1

Nigel Railton1

Lena Wilson CBE FRSE2

Notes:

Argentex’s IPO was effective 25 June 2019

1 Appointed on in June 2019 prior to IPO

2 Appointed on 5 August 2019

495,000

1,026,951

1,644,387

Harry Adams

Executive Directors

340,605

191,346

495,000

1,026,951

1,644,387

3,710

152,607

180,000

336,317

176,022

Carl Jani

Sam Williams

Non-Executive Directors

18,739

248,232

45,923

34,442

29,712

64,662

26,706

Lord Digby Jones Kb.

248,232

995,621

Henry Beckwith

34,442

29,712

Jonathan Gray

Nigel Railton

Lena Wilson CBE FRSE

Jonathan Gray
Chair of the Remuneration Committee

13,749,144

148,413

396,951

7,425,748

50,000

47,170

18.33%

0.2%

0.99%

10.59%

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationG OV E R N A N C E

Audit
Committee
Report.

On behalf of the Board, I am pleased to present the Audit Committee report for
the year ending 31 March 2020.

The Audit Committee is responsible for monitoring
the integrity of the Company’s financial statements,
reviewing significant financial reporting issues, reviewing
the effectiveness of the Company’s internal control and
risk management systems and overseeing the relationship
with the external auditors (including advising on their
appointment, agreeing the scope of the audit and
reviewing the audit findings). The Audit Committee
monitors the need for an internal audit function.
The composition of the committee is shown on page
73. The Committee met three times in the year and also
held meetings with the external Auditors, Nexia Smith
& Williamson, and will meet with the auditor following
the finalisation of these maiden results independently of
management to discuss any issues arising from the audit.

— Going Concern Review
— Review of the risk management and internal

control systems

— Review of the Group’s ICAAP and risk framework
— Meeting with the external auditor without

management present; and

— Consideration of regulatory developments and

their impact

In performing this work the committee has given
consideration to the following:
— The comprehensive control framework over the
production of the Group’s financial statement;
— The consistency of, and any changes to, accounting
policies both on a year-on-year basis and across the
Company and Group;

The Chair of the Audit Committee consults with all
members prior to the meeting to ensure all matters arising
are raised and discussed openly.

— The methods used to account for significant transactions
where different approaches are possible, particularly the
business combination and basis for consolidation;

The full terms of the Committee comply with the UK’s
QCA Corporate Governance Code and are available on the
Group’s website or from the Company Secretary at the
registered office address.

The main duties the Committee carried out during the
year included:
— Review of the 2019/2020 audit plan and audit

engagement letter

— Reviewing the effectiveness of the external

audit process

— Monitoring the integrity of the financial statements

of the Company and Report

— Whether the Company has followed appropriate

accounting standards and made appropriate estimates
and judgments, taking into account the views of the
external auditor;

— The clarity of the disclosure in the Company’s

financial reports and the context in which statements
are made; and

— All material information presented with the

financial statements, such as the business review
/ operating and financial review and the corporate
governance statement (insofar as it related to the
audit and risk management).

INTERNAL AUDIT
The Group does not currently have an internal audit
function. The committee regularly considers whether
there is a need for an internal audit function and reports
its findings to the Board. The committee and Board do not
believe that there is currently a need for an internal audit
function over and above the existing compliance function
however, this position will continue to be reviewed. The
Committee believes that management is currently able to
derive assurance as to the adequacy and effectiveness of
internal controls and risk management procedures based
on the results of external assurance reports and internal
reports provided to the committee.

2020/2021 PRIORITIES
For the year ahead, the Committee will continue to focus on:
1. Reviewing the Group’s ICAAP and risk frameworks
2. Monitor and mitigate any implications of the COVID-19
pandemic. Adherence to Governmental guidelines,
the health and well-being of Argentex’s employees
whilst achieving growth of the business will be
an important priority for the committee over the
forthcoming 12 months.

3. Consideration of any changes to the regulatory

environment, business practises and the risk profile of
the Group

As a result of the work performed, the Committee has
concluded that the Annual Report for the year ended 2020,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for model and
strategy, and has reported on these finding to the Board.

Nigel Railton
Chair of the Audit Committee

RISK MANAGEMENT AND INTERNAL CONTROLS
The Committee has responsibility for assisting the Board
in maintaining an effective internal control environment.
In order to discharge its responsibilities, it receives reports
on the Group’s compliance and internal control procedures
and systems for managing risks along with the regulatory
environment which governs it.

The Group’s Chief Compliance Officer provides a regular
report to the Committee on the controls framework, along
with any testing and monitoring outcomes, carried out by
the Compliance function. This also covers a regulatory
update on upcoming regulatory changes and the impact of
changes implemented during the year, a summary of other
compliance issues.

Key risks are outlined on pages 56 to 59 in the
Strategic Report.

WHISTLEBLOWING, ANTI-BRIBERY AND FRAUD
PREVENTION

The Group has in place a whistleblowing policy which sets
out the formal process by which an employee of the Group
may raise concerns about possible improprieties in the
financial reporting or any other matters. The Committee
considers that the current policy is operating effectively.

The group has policies and processes in place to combat
the risk of fraud, and clear zero tolerance policies on
bribery and corruption. All employees receive regular
training and testing on these areas and the Committee
consider that the processes are operating effectively.

EXTERNAL AUDITOR
The external Auditor, Nexia Smith and Williamson, were
appointed as auditors to the Company having audited
the principal trading subsidiary in previous years. The
Audit Committee monitors the relationships to ensure
the auditor independence and objectivity are maintained.
The Committee will keep under review the need for
external tender.

The breakdown of fees between audit and non–audit
function is provided in Note 8 of the Consolidated
Financial Statements.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationReport on
the Audit of
the Financial
Statements

G OV E R N A N C E

Independent
Auditor’s
Report.

We have audited the financial statements of Argentex Group
Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for
the year ended 31 March 2020 which comprise the Consolidated
Statement of Profit or Loss and Other Comprehensive
Income, the Consolidated Statement of Financial Position,
the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows, the notes to the group
financial statements, the Company Statement of Financial
Position, the Company Statement of Changes in Equity
and the notes to the parent company financial statements
including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation
of the group financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union. The
financial reporting framework that has been applied in the preparation of the
parent company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).

In our opinion:
— the financial statements give a true and fair view of the state of the group’s
and of the parent company’s affairs as at 31 March 2020 and of the group’s
profit 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 United Kingdom Generally Accepted Accounting Practice; and

— the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006.

BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards

are further described in the Auditor’s responsibilities for
the audit of the financial statements section of our report.
We are independent of the group and parent company in
accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to SME listed entities,
and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following
matters in relation to which the ISAs (UK) require us to
report to you where:
— the directors’ use of the going concern basis of
accounting in the preparation of the financial
statements is not appropriate; or

— the directors have not disclosed in the financial

statements any identified material uncertainties that
may cast significant doubt about the group’s or the
parent company’s ability to continue to adopt the
going concern basis of accounting for a period of at

least twelve months from the date when the financial
statements are authorised for issue.

EMPHASIS OF MATTER – IMPACT OF COVID-19
We draw attention to note 3.2 of the financial statements,
which describes the impact of COVID-19 on the group.
Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS
We identified the key audit matters described below as
those that were of most significance in the audit of the
financial statements of the current period. Key audit
matters include the most significant assessed risks of
material misstatement, including those risks that had the
greatest effect on our overall audit strategy, the allocation
of resources in the audit and the direction of the efforts of
the audit team.

In addressing these matters, we have performed the
procedures below which were designed to address the
matters in the context of the financial statements as a whole,
and in forming our opinion thereon. Consequently, we do
not provide a separate opinion on these individual matters.

Description of risk

How the matter was addressed in the audit

Basis of
consolidation

Immediately prior to its admission on AIM,
the Company acquired the entire equity
interest of Argentex LLP, the Group’s
trading subsidiary, as described in note 3.4.

We reviewed management’s assessment of
the applicability of IFRS 3, as well as its
selection of an accounting policy which is
relevant to the transaction.

Therefore, in preparing the consolidated
financial statements, the Company
was required to determine whether the
acquisition falls within the scope of IFRS 3
Business Combinations. Management have
determined that IFRS 3 was not applicable
to the Group’s transaction and selected an
appropriate accounting policy – merger
accounting - by reference to FRS 102.

Determining that IFRS 3 is not applicable
to the transactions, as well as selecting
an appropriate accounting policy that
is relevant to the transaction required
judgement, therefore this was considered
a key audit matter.

The Group’s basis of consolidation is
detailed in notes 3.3 and 3.4 to the accounts.

We read the underlying agreements
relating to the transaction and we
considered alternative accounting
treatments in order to assess which
accounting policy would reflect the
economic substance of the transaction
more accurately.

We also consulted with internal technical
specialists as part of our review process.

We further tested the application of
merger accounting by reviewing the
consolidation workings prepared by
management and determined that merger
accounting was correctly applied.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
Description of risk

How the matter was addressed in the audit

Revenue
recognition

The Group earns revenue from broking
deliverable foreign exchange currency
contracts for immediate and forward
delivery and foreign currency
exchange options.

We reviewed the Group’s revenue
recognition policy as applied to the Group’s
material income streams, with a specific
focus on existence and accuracy of revenue
in the year.

Revenue is a key performance indicator
for the Group and drives the level of
commissions for sales and front office
staff, as such revenue recognition was
considered a key audit matter.

The risk in the Argentex Group plc
financial statements is the existence and
accuracy of revenue, including the trade
and profit adjusting amounts. Existence
is the risk that trades did not occur or
were misstated, completeness refers
to risk that not all the trades which
occurred during the year were included
in the financial statements.

The Group’s revenue recognition policy is
detailed in note 3.5 to the accounts.

We documented and observed the existence
of controls over the accuracy of revenue in
the year.

We selected a sample of revenue
transactions and performed bi-directional
testing as follows:
— We agreed a sample of transactions
from the nominal ledger back to the
trading platform, broker confirmations
and bank statements. We also re-
calculated the underlying profit for
the sample selected.

— We recalculated the profit adjusting
amounts of year end open positions.

— We further agreed a sample of
transactions from the trading
platform back to the nominal ledger
and agreed the samples to broker
confirmations and bank statements.
— We also reviewed the reconciliation

between the year end broker
confirmations, the trading platform
and nominal ledger.

MATERIALITY
The materiality for the group financial statements as a
whole was set at £579,000. This has been determined with
reference to the benchmark of the group’s revenue, which
we consider to be one of the principal considerations
for members of the parent company in assessing the
performance of the group. Materiality represents 2%
of the group’s revenue as presented on the face of the
Consolidated Statement of Profit or Loss and Other
Comprehensive Income.

The materiality for the parent company financial statements
as a whole was set at £463,000. This has been determined by
reference to the parent company’s net assets, namely 0.4% of
the parent company’s net assets as presented on the face of
the parent company Statement of Financial Position.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The Group consists of the parent entity and three
subsidiaries, all of which were subject to audit procedures
for group reporting purposes. Nexia Smith & Williamson
are the auditors of the parent company and of the
subsidiaries – Argentex Capital Limited, Argentex Foreign
Exchange Limited and Argentex LLP.

The components within the scope of our work covered:
100% of group revenue, 100% of group profit before tax and
100% of group net assets.

OTHER INFORMATION
The other information comprises the information included in
the Annual Report, other than the financial statements and
our auditor’s report thereon. The directors are responsible
for the other information. Our opinion on the financial
statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we
are required to determine whether there is a material
misstatement in the financial statements or a material
misstatement of the other information. If, based on the
work we have performed, we conclude that there is a
material misstatement of this other information, we are
required to report that fact.

We have nothing to report in this regard.

OPINION ON OTHER MATTERS PRESCRIBED BY THE
COMPANIES ACT 2006
In our opinion, based on the work undertaken in the
course of the audit:
— the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and

— the strategic report and the directors’ report have
been prepared in accordance with applicable
legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY
EXCEPTION
In the light of the knowledge and understanding of the
group and the parent company and their environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the
directors’ report.

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
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or

— the parent 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.

RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 68, the directors are responsible
for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and
for such internal control as the directors determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic
alternative but to do so.

Annual Report 2020GovernanceStrategic ReportCompany OverviewFinancial StatementsOther InformationKey audit matters include
the most significant
assessed risks of material
misstatement, including
those risks that had the
greatest effect on our
overall audit strategy, the
allocation of resources
in the audit and the
direction of the efforts of
the audit team.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE GROUP
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the group
financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.

USE OF OUR REPORT
This report is made solely to the parent company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the parent company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the parent
company and the parent company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.

Guy Swarbreck
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants
31 July 2020

GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
F I N A N C I A L STAT E M E N TS

Consolidated Statement of Profit or Loss
and other comprehensive income
for the year ended 31 March 2020

Consolidated Statement
of Financial Position
for the year ended 31 March 2020

Revenue

Cost of sales

Gross profit

Administrative expenses

Underlying operating profit

IPO costs

LLP equity-based remuneration pre-IPO

Share based payments

Operating profit

Finance costs

Finance income

Profit before taxation

Taxation

Profit for the year

Other comprehensive income

Profit for the year and total comprehensive income

Earnings per share

Basic

Diluted

Underlying - Basic

Underlying - Diluted

(16,075,230)

(11,736,436)

12,501,864

(563,171)

9,782,603

(1,662,696)

(7,535,272)

(5,763)

10,270,234

(157,032)

105,343

10,218,545

(2,127,755)

2,247,331

(107,764)

2,139,567

8,090,790

2,139,567

8,090,790

2,139,567

7.1p

8.8p

2.1p

7.8p

Notes

2020

28,986,444

(409,350)

2019

21,910,695

(391,656)

Non-current assets

Intangible assets

Plant and equipment

28,577,094

21,519,039

Trade and other receivables

Total non-current assets

Current assets

Trade and other receivables

Cash and cash equivalents

Notes

2020

1,793,385

211,693

7,225,042

2019

1,756,435

473,406

2,228,663

9,230,120

4,458,504

17,925,854

49,275,808

10,279,640

13,566,063

Total current assets

67,201,662

23,845,703

Current liabilities

Trade and other payables

Total current liabilities

(47,425,671)

(24,684,862)

(47,425,671)

(24,684,862)

Net current assets/(liabilities)

19,775,991

(839,159)

Non-current liabilities

Trade and other payables

(4,024,158)

(547,779)

Total non-current liabilities

(4,024,158)

(547,779)

Net assets

24,981,953

3,071,556

Annual Report 2020Financial StatementsStrategic ReportCompany OverviewGovernanceOther InformationF I N A N C I A L STAT E M E N TS

Consolidated Statement
of Financial Position (continued)
for the year ended 31 March 2020

Consolidated Statement
of Changes in Equity
for the year ended 31 March 2020

Equity

Share capital

LLP equity capital

Share premium account

Share option reserve

Merger reserve

Retained earnings

Total Equity

70,295

12,713,922

5,763

4,549,705

7,642,268

3,071,565

24,981,953

3,071,566

The financial statements of Argentex Group PLC were approved by the
Board of Directors on 31 July 2020 and were signed on its behalf by:

Carl Jani
Director
Registered number 11965856

Ordinary
Share
capital

Share
premium

LLP
equity
capital

Share
option
reserve

Merger
reserve

Retained
earnings

Total
equity

Balance at 1 April 2018

Comprehensive income
for the year

Profit for the year

Total comprehensive income
for the year

Transactions with owners:

— Dividends paid under former

ownership structure

— LLP capital contributions

Balance at 31 March 2019

Comprehensive income
for the year

Profit for the year

Total comprehensive income
for the year

Transactions with owners:

— Dividends paid under former

ownership structure

— Merger reserve arising
on reorganisation

(1)

3,051,565

20,000

3,071,565

(3,071,565)

— Issue of share capital

70,295

13,998,679

— Cost of issue of equity shares

— Share based payments

(1,284,757)

Balance at 31 March 2020

70,295

12,713,922

5,763

728,329

3,779,895

2,139,567

(2,867,896)

20,000

3,071,566

8,090,790

(448,522)

4,549,705

1,478,139

14,068,974

(1,284,757)

5,763

4,549,705

7,642,268

24,981,953

Annual Report 2020Financial StatementsStrategic ReportCompany OverviewGovernanceOther InformationF I N A N C I A L STAT E M E N TS

N OT E S TO T H E C O NS O L I DAT E D F I N A N C I A L STAT E M E N TS

Consolidated Statement
of Cash Flows
for the year ended 31 March 2020

1. General information

Argentex Group PLC (“the Company”) is a public limited company, limited by shares, incorporated and domiciled in
England and Wales. The address of the registered office is 5 Old Bond Street, London, W1S 4PD.

The nature of the Group’s operations and its principal activities are detailed in the Strategic Report.

On 25 June 2019, the Company listed its shares on AIM, the London Stock Exchange’s market for small and medium
size growth companies (“the IPO”).

Notes

2020

2019

The Company is the ultimate parent company into which the results of all subsidiaries are consolidated. The
Consolidated Financial Statements for the years ended 31 March 2020 and 31 March 2019 comprise the financial
statements of the Company and its subsidiaries (together, “the Group”).

Net cash generated from operating activities

27,061,702

3,449,925

Investing activities

Purchase of intangible assets

Purchases of plant and equipment

Share acquisition costs

(1,083,412)

(1,417,090)

(101,323)

(109,290)

(53,069)

The Consolidated Financial Statements are presented in Pounds Sterling (£), which is the currency of the primary
economic environment in which the Group operates.

2. Adoption of new and revised standards

The Group has not prepared Consolidated Financial Statements prior to the IPO and restructure, consequently these
financial statements incorporate all applicable standards without the need for transition or adjustment.

Net cash generated used in investing activities

(1,294,025)

(1,470,159)

No upcoming changes under IFRS are likely to have a material effect on the reported results or financial position.
Management continue to monitor upcoming changes.

Financing activities

Payment of lease liabilities

Proceeds from issue of shares

Share issuance costs

Short term loans

Distributions paid under former ownership structure

Capital contributions by LLP members

Net cash generated/(used in) financing activities

Net increase in cash and cash equivalents

(388,525)

14,061,302

(1,284,757)

(1,997,430)

(310,820)

1,997,430

(448,522)

(2,867,896)

20,000

9,942,068

35,709,745

(1,161,286)

818,480

3. Significant accounting policies

The principal accounting policies are summarised below.

3.1. Basis of preparation

The Consolidated Financial Statements have been prepared in accordance with the IFRSs as adopted by the EU
and interpretations issued by the IFRS Interpretations Committee (IFRS IC).

The principal accounting policies adopted in the preparation of the Consolidated Financial Statements are set
out below. The policies have been consistently applied to all of the years presented, unless otherwise stated.

The Consolidated Financial Statements have been prepared under the historical cost convention, modified by
the measurement at fair value of certain financial assets and liabilities and derivative financial instruments as
stated note 3.6.

Cash and cash equivalents at the beginning of the year

13,566,063

12,747,583

3.2. Going concern

Cash and cash equivalents at the end of the year

49,275,808

13,566,063

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future and for at least one year from the approval date of these Consolidated
Financial Statements. The group’s principal trading subsidiary, Argentex LLP, has been profitable since
inception in 2011, the Group has no external debt, and the LLP continues to generate sufficient cash to support
the activities of the Group. Budgets and cash flow forecasts are prepared to cover a variety of scenarios and are
subsequently reviewed by the Directors to ensure they support the Group’s continuing ability to operate as a
going concern.

Annual Report 2020Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information

N OT E S TO T H E C O NS O L I DAT E D F I N A N C I A L STAT E M E N TS

Sensitivity analysis has been performed in respect of specific scenarios which could negatively impact the
future performance of the Group, including lower levels of revenue, compression in profitability margins,
extensions to the Group’s working capital cycle, and significant increases in volatility requiring further
collateral to be placed with the Group’s institutional counterparties.

In addition, the Directors have also considered mitigating actions such as lower capital expenditure and other
short-term cash management activities within their control (see note 27.3 for further disclosures relating to
liquidity risk).

COVID-19

The Group has successfully triggered business continuity provisions in response to Government directives,
ensuring its ability to maintain operations. Currently, all relevant staff are successfully working remotely
and have full access to the Group’s technology platform that allows them to connect virtually and continue
as normal on existing engagements and business development activities. The Board of Directors and the
management team are monitoring the welfare of staff on a daily basis and are providing them with the
support they need to operate effectively from remote locations.

The Group has developed a set of financial measures designed to flexibly mitigate the expected near term
operational and financial and longer term economic impact of the COVID-19 pandemic on the Group.

Whilst these measures may be extended as events unfold, the Board of Directors is confident that in context of
the Group’s financial requirements they give flexibility and sufficient liquidity to the Group to ensure that the
Group can withstand significant shocks, whilst remaining as a going concern for the next twelve months from
the date of approval of the Directors’ report and financial statements.

For these reasons, the Directors adopt the going concern basis of accounting in preparing these
financial statements.

3.3. Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) prepared to 31 March each year. Control is achieved where the Company is
exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. In assessing control, the Group takes into consideration
the existence and effect of potential voting rights that currently are exercisable or convertible.

The Consolidated Financial Statements comprise the Company and the results, cash flows and changes in
equity of the following subsidiary undertakings:

Name of undertaking

Nature of business

Country of incorporation

Argentex LLP

Foreign exchange broking

England

Argentex Capital Limited

Holding company

England

Argentex Foreign Exchange Limited (formerly
Pacific Foreign Exchange Limited)

Holding company

England

All subsidiary undertakings are owned 100% either directly or indirectly.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group.

All intra-group transactions and balances and any unrealised gains and losses arising from intra-group
transactions are eliminated in preparing the Consolidated Financial Statements.

3.4. Accounting for merger on formation of the group

Immediately prior to the Company’s admission to AIM, Argentex Group PLC acquired all equity interests in
Argentex LLP. This was effected through the acquisition of equity interests by a newly formed subsidiary,
Argentex Capital Limited, and the acquisition of Pacific Foreign Exchange Limited (later renamed Argentex
Foreign Exchange Limited). Argentex LLP, Argentex Capital Limited and Argentex Foreign Exchange Limited
are now 100% owned (either directly or indirectly) subsidiaries of Argentex Group PLC and consolidated into
these financial statements.

In preparing these Consolidated Financial Statements, the Company is required to determine whether the
transaction falls within the scope of IFRS 3 Business Combinations in order to determine the appropriate basis
for disclosure. It is the directors’ view that the transaction falls within the scope exclusion of IFRS 3, and as
such an alternative accounting policy must be selected. In the opinion of the directors, there is no other IFRS
that specifically applies to this transaction.

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (paras 10-12) requires the Company to
develop and apply an accounting policy suitable to the transaction, in accordance with the particulars laid out
in the standard. IAS 8 para 12 also states that “In making the judgement described in paragraph 10, management
may also consider the most recent pronouncements of other standard-setting bodies that use a similar conceptual
framework to develop accounting standards, other accounting literature and accepted industry practices…”.

In reviewing the scope of the merger and group formation, the directors have determined the selection of
an accounting policy analogous to that of the UK’s FRS102 section 19 Business Combinations and Goodwill
(merger accounting method) will provide the most relevant, reliable and representative accounting treatment,
which reflects the economic substance of the transaction.

In applying merger accounting when preparing these Consolidated Financial Statements, to the extent
the carrying value of the assets and liabilities acquired under merger accounting is different to the cost of
investment, the difference is recorded in equity within the merger reserve. Under merger accounting the
results of the Group entities are combined from the beginning of the comparative period before the merger
occurred. Comparatives are restated on a combined basis and adjustments made as necessary to achieve
consistency of accounting principles.

3.5. Revenue recognition

Revenue represents the difference between the cost and selling price of currency and is recognised after
receiving the client’s authorisation to undertake a foreign exchange transaction for immediate or forward
delivery. Derivative assets and liabilities are initially measured at fair value at the date the derivative contract
is entered into and are subsequently remeasured to fair value at each financial period end date. The resulting
gain or loss is recognised within Revenue immediately.

The difference between the costs and selling price of currency is recognised as revenue as this reflects the
consideration to which the Group expects to be entitled in exchange for those services.

In relation to currency options, the Group recognises the net option premium receivable as revenue on the
date that the option is executed. (See note 6).

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N OT E S TO T H E C O NS O L I DAT E D F I N A N C I A L STAT E M E N TS

3.6. Financial instruments

The Group operates as a riskless principal deliverable foreign exchange broker therefore financial
instruments are significant to its financial position and performance.

The effective interest rate is the rate that exactly discounts estimated future cash receipts or
payments (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) excluding expected credit losses,
through the expected life of the financial asset or liability.

3.6.1.

Initial recognition

The Group has not purchased or originated any credit-impaired financial assets.

Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.

3.6.6. Classification of financial assets

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss.

3.6.2. Derivative financial instruments

Forward foreign exchange contracts and foreign exchange options are classified as financial assets and
liabilities at FVTPL. Derivative assets and liabilities are initially measured at fair value at the date the
derivative contract is entered into and are subsequently remeasured to fair value at each financial period
end date. The resulting gain or loss is recognised within Revenue immediately. The Group does not apply
hedge accounting.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a
negative fair value is recognised as a financial liability. When there is a legally enforceable right to offset
the recognised amounts and an intention to settle the amounts on a net basis (or realise the asset and
settle the liability immediately), financial assets and liabilities are offset. The net amount only is then
reported in the Consolidated Statement of Financial Position.

Recognised financial assets within the scope of IFRS 9 are required to be classified as subsequently
measured at amortised cost, fair value through other comprehensive income (FVTOCI) or fair value
through profit or loss (FVTPL) on the basis of both the Group’s business model and the contractual
cash flow characteristics of the financial assets.

3.6.7. Financial assets at FVTPL

Forward foreign exchange contracts and foreign exchange options are measured at FVTPL (see note 27).

Other financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI
are measured at FVTPL (see note 28).

Fair value is determined in the manner described in note 28.

3.6.8. Other Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets.

The fair value of forward currency contracts is based on their observable bid and offer prices in the
foreign exchange marketplace requiring no significant adjustment.

3.6.9.

Impairment of financial assets

3.6.3. Foreign exchange gains and losses on derivative financial asset and liabilities

Assets and liabilities are measured at their fair value based on the transaction price agreed with the
customer or counterparty and their observable fair value in the foreign exchange market, and any
assets or liabilities in a foreign currency are revalued at the balance sheet date. Management consider
the potential impact of exchange rate movements on positions held to be immaterial as substantially
all of the Group’s positions are fully hedged with a number of counterparty banks.

3.6.4. Derecognition of derivative financial asset and liabilities

The Group derecognises derivative financial assets and liabilities when they reach maturity and
the contractual cashflows are exchanged between the client and the Group or the Group and the
institutional counterparty. At this point, the assets and liabilities have expired and the obligations of
the Group, the client and the institutional counterparty have been discharged.

3.6.5. Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability or
debt instrument and of allocating interest income over the relevant period.

The Group recognises impairment on an Expected Credit Loss (ECL) basis, using historical and forward
looking information. The only financial assets at amortised cost that this applies to are Other Debtors.

3.6.10. Derecognition of other financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s
carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

3.6.11. Classification of financial liabilities

Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

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3.6.12. Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value with any gains or losses arising on changes in fair
value recognised in profit or loss to the extent that they are not part of a designated hedging relationship.

Fair value is determined in the manner described in note 28.

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate
on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on
a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if
judged to be shorter than the lease term.

The Group presents right to use assets that do not meet the definition of investment property in ‘property,
plant and equipment’ and lease liabilities in ‘Trade and other payables’ in the Consolidated Statement of
Financial Position.

3.6.13. Other Financial liabilities

3.9.

Intangible assets and amortisation

Other financial liabilities are subsequently measured at amortised cost using the effective interest method.

The Group holds amounts payable to customers at amortised cost. These are short term balances that
do not attract interest.

3.6.14. Derecognition of other financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or they expire. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss.

3.7. Cash

For the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents
includes cash on hand or deposits held at call with financial institutions.

Identifiable intangible assets are recognised when the Group controls the asset, it is probable that
future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be
reliably measured.

Software development costs comprise the Group’s bespoke dealing system. Costs that are directly associated
with the production of identifiable and unique dealing system controlled by the Group, and are probable
of producing future economic benefits, are recognised as intangible assets. Direct costs of software
development include employee costs and directly attributable overheads.

Costs are capitalised to the extent that they represent an improvement, enhancement or update to the
intangible asset. Maintenance costs are expensed through the Income Statement.

Amortisation is charged to the income statement over the estimated useful live of three years of the dealing
system from the date developments are available for use, on a straight-line basis.

The amortisation basis adopted reflects the Group’s consumption of the economic benefit from that asset.

3.8. Leases

3.10. Property, Plant & Equipment

At inception of a contract the Group assesses whether a contract is, or contains a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of the
identified asset the Group considers whether:

1. The Group has the right to operate the asset
2. The Group designed the asset in a way that predetermines how and for what purpose it will be used.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the
lease term, with the discount rate determined by reference to the rate inherent in the lease unless this is not
readily determinable, in which case the Group’s incremental borrowing rate on commencement of the lease is
used. It is remeasured when there is a change in future lease payments arising from a change in rate, if there
is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee or
if the Group changes its assessment of whether it will exercise a purchases, extension or termination option.

When the lease liability is remeasured in this way, either a corresponding adjustment is made to the carrying
amount of the right to use the asset and the revised carrying amount is amortised over the remaining
(revised) lease term, or it is recorded in profit and loss if the carrying amount of the right to use assets has
been reduced to zero.

Right of use assets are initially measured at the amount of the lease liability.

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised
impairment loss.

Depreciation is charged so as to write off the cost of assets to their residual values, over their estimated
useful lives, using the straight-line method, on the following bases:

Office equipment

Computer equipment

Leasehold improvements

Right-of-use assets

Three years

Over the period of the lease

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.

3.11. Foreign currencies

Non-derivative monetary assets and liabilities in foreign currencies are translated into sterling at the rates
of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling
at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in
arriving at the operating profit.

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3.12. Employee benefits

(i) Short term benefits

Short term employee benefits including holiday pay and annual bonuses are accrued as services rendered.

(ii) Defined contribution pension plans

The Group operates a defined contribution pension plan for its employees. A defined contribution
plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the
contributions have been paid the Group has no further payment obligations. The contributions are
recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance
sheet. The assets of the plan are held separately from the Group in independently administered funds.

3.13. LLP Members’ remuneration

LLP Members’ remuneration is determined by reference to the nature of the participation of rights of
Members of Argentex LLP, the Group’s main trading subsidiary. It includes both remuneration where there is
a contract of employment and any profits that are automatically divided between members by virtue of the
members’ agreement, to the extent that the Group does not have an unconditional right to avoid payment. To
the extent that these profits remain unpaid at the year end, they are shown as liabilities in the Consolidated
Statement of Financial Position. Prior to the IPO, corporate and individual members of the LLP participated
in the profits of the LLP through both income interests and residual profit sharing arrangements following
the allocation of all income interests. After the IPO, no individual member of the LLP has any equity interest
or rights to divisions of profits other than their individual income interests, and all equity profit shares are
now allocated to the intermediate subsidiaries of the Group in accordance with their equity interests.

3.14. LLP Members’ interests

LLP equity capital is only repaid to outgoing members in accordance with the provision in the Members’ Deed
where the Group has both sufficient capital for FCA regulatory requirements, and the capital is replaced by
new capital contributions from existing or new members. As such it is accounted for as equity.

Other amounts due to Members classified as a liability relate to undistributed profits and Members’
taxation reserves.

3.15. Share based payments

The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the
form of share options, is recognised as an employee benefit expense in the Consolidated Statement of Profit or Loss.
Where the entity settling the share options differs from the entity receiving the benefit of the share options (in the
form of employee services), the entity’s separate financial statements reflect the substance of the arrangement.

The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair
value (excluding the effect of non market-based vesting conditions, if present) at the date of grant. At the end
of each reporting period the assumptions underlying the number of awards expected to vest are adjusted for
the effects of non market-based vesting conditions to reflect the conditions prevailing at that date. The impact
of any revisions to the original estimates is recognised in the Consolidated Statement of Profit or Loss, with a
corresponding adjustment to equity. Fair value is measured by the use of a Black-Scholes option pricing model.

When share options are exercised, the Company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium.

3.16. Taxation

The tax expense represents the sum of the tax currently payable and any deferred tax.

Tax currently payable is based on taxable profit for the year. Taxable profit may differ from net profit as
reported in the Consolidated Statement of Profit or Loss as it may exclude items of income or expense that
are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted at the date of the Consolidated Statement of Financial Position.

4. Critical accounting judgements and key sources of estimation uncertainty

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.

4.1. Accounting judgements

(i) Capitalisation of costs to intangible assets

The extent to which costs should be capitalised to intangible assets. The group capitalise costs as
intangible assets if they have a value that will benefit the performance of the Group over future periods.
To assist in making this judgement, the group undertake an assessment, at least annually, of the carrying
value of the intangible assets.

(ii) Impairment of non-financial assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance
sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss
as described below.

An asset is impaired where there is objective evidence that, as a result of one or more events that
occurred after initial recognition, the estimated recoverable value of the asset has been reduced.

(iii) Basis for consolidation and application of IFRS 3 - Business combinations

Management’s judgement of the most appropriate policy for recognising the merger and group formation
and basis for consolidation has been documented in note 3.4.

4.2. Key sources of estimation uncertainty

(i) Useful economic life of intangible assets (see note 14)

Technology within the financial services sector is in a perpetual state of development and evolution,
providing uncertainty over the useful economic life of the group’s bespoke dealing system.

(ii) Expected credit losses (see note 27)

Expected credit losses include forward looking estimates which represent management’s best estimate of
the future performance of the group’s financial assets.

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5. Segment reporting

9. Staff costs

The Directors consider that the Group consists of a single operating segment (being Argentex LLP’s foreign currency
dealing business) and that it operates in a market that is not bound by geographical constraints.

The average number of employees employed by the Group, including executive and non-executive directors, was:

There is no reliance on an individual customer and no customer contributed to more than 10 per cent. of revenues in
the year ended 31 March 2020 or 31 March 2019.

6. Revenue

An analysis of the Group’s revenue is as follows:

Continuing operations

Spot and forward foreign exchange contracts

Option premiums

7. Operating profit

Operating profit for the period is stated after charging/(crediting):

Depreciation of plant and equipment

Amortisation of intangibles

Staff costs (see note 9)

Net foreign exchange losses/(gains)

8. Auditor’s remuneration

2020

27,120,119

1,866,325

28,986,444

2020

363,063

1,046,462

12,606,175

66,060

Fees payable to the Company’s auditor for the audit of the parent company annual financial statements

Fees payable to the Company’s auditor and its associates for other
services to the Group:

— The audit of financial statements of the Company and subsidiaries

— Audit-related assurance services

— Tax compliance services

— Reporting accountant services

2020

82,218

4,680

18,000

135,000

2019

21,669,277

241,418

21,910,695

2019

422,136

778,710

14,874,461

(152,057)

2019

48,900

4,548

116,400

Directors

LLP members (excl. executive directors)

Sales and dealing

Operations

Staff costs for the above persons were:

Wages and salaries

Social security costs

Pension costs

Share based payments

LLP members’ remuneration*

Directors remuneration

Directors’ remuneration

Directors’ remuneration comprised:

2020

Number

2019

Number

2020

2019

5,118,905

5,060,769

657,861

45,490

5,763

3,976,447

2,801,709

12,606,175

2020

672,575

37,898

4,616,097

4,487,122

14,874,461

2019

Salaries and LLP members remuneration

2,801,709

4,487,123

*Excludes Directors of Argentex Group PLC who are/were also members of Argentex LLP. Includes former
members of Argentex LLP who are no longer members after IPO.

Prior to IPO, profits from Argentex LLP were distributed according to individual equity holdings in the LLP. Following
Admission, the self-employed LLP members who are members of the LLP Executive Committee will be remunerated
under the Amended and Restated LLP Agreement by a combination of (i) fixed annual remuneration (ii) participation in
revenue commission schemes (iii) annual bonuses and (iv) other variable compensation based on the LLP’s performance.

Key management are those persons having authority and responsibility for planning, controlling and directing the
activities of the Group, or in relation to the Company, the activities of the Company. In the opinion of the Board,
the Group and Company’s key management are the directors of Argentex Group PLC. Information regarding their
compensation is provided in the Remuneration Committee report.

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10. Dividends

12. Taxation

Amounts recognised as distributions to equity holders:

Dividends declared under the former ownership structure

2020

448,552

2019

2,867,896

Prior to the IPO and change in ownership, the former owners of Argentex Foreign Exchange Limited declared
dividends amounting to £448,552 (2019: 2,867,896) which are included in the Consolidated Statement of Changes
in Equity.

11. Finance costs and finance income

Interest on short term loans

Bank interest payable

Interest on lease arrangements

Finance Costs

Finance Income

2020

133,362

12,423

11,247

157,032

2019

78,998

28,766

107,764

105,343

Total interest income for financial assets that are not at fair value through profit or loss is equal to the amount
of bank interest receivable disclosed as finance income above.

Total interest expense for financial liabilities that are not at fair value through profit or loss is equal to the
amount of interest payable disclosed above.

Current tax

In respect of the current year

Total tax expense for the year

2020

2,127,755

2019

Tax has been calculated using an estimated annual effective tax rate of 19% (2019: 19%) on profit before tax.

The difference between the total tax expense shown above and the amount calculated by applying the standard rate
of UK corporation tax to the profit before tax is as follows:

Profit before taxation

Tax on profit on ordinary activities at standard UK corporation tax
rate of 19%

Effects of:

Disallowable management expenses

Other amounts charged

Group relief gifted by former group members

2020

10,218,545

1,941,524

105,695

80,536

2019

2,139,567

406,518

(406,518)

Total tax expense for the year

2,127,755

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13. Earnings per share

14. Intangible fixed assets

The Group calculates basic earnings to be net profit attributable to equity shareholders for the period. The Group
also calculates an underlying earnings figure, which excludes the effects of share based payments, and non-recurring
costs including costs associated with the IPO and profits earned and fully distributed to former equity holders prior
to the IPO. A tax adjustment is also reflected to include a representative tax figure for profits which would have
consequently incurred a corporation tax charge. Comparative figures for weighted average number of ordinary
shares represents the number of shares in issue immediately prior to the IPO, as if they had been in issue for the
entire comparative period.

Earnings

Earnings for the purposes of basic and diluted earnings per share
(being net profit attributable to equity shareholders)

— basic and diluted

Adjustments for:

IPO costs

LLP equity-based remuneration pre-IPO

Shared based payments

Tax impact

— underlying earnings (basic and diluted)

Number of shares

2020

2019

8,090,790

2,139,567

563,171

1,662,696

5,763

(317,007)

10,005,413

7,535,272

(1,838,220)

7,836,619

Weighted average number of ordinary shares for the purposes of
basic earnings per share

113,207,547

100,000,000

Number of dilutive shares under option

Weighted average number of ordinary shares for the purposes of
dilutive earnings per share

226,408

113,433,955

100,000,000

Earnings per share from discontinued operations

Basic

Diluted

Underlying - Basic

Underlying - Diluted

7.1p

8.8p

2.1p

7.8p

The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of
which arise from share options. A calculation is performed to determine the number of share options that are
potentially dilutive based on the number of shares that could have been acquired at fair value, considering the
monetary value of the subscription rights attached to outstanding share options.

Cost

At 1 April 2018

Additions

At 31 March 2019

Additions

At 31 March 2020

Amortisation

At 1 April 2018

Additions

At 31 March 2019

Additions

At 31 March 2020

Net book value

At 31 March 2020

At 31 March 2019

Software
development costs

2,026,993

1,417,090

3,444,083

1,083,412

4,527,495

908,938

778,710

1,687,648

1,046,462

2,734,110

1,793,385

1,756,435

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15. Property, plant and equipment

Cost

Leasehold
improvements

Right of use
Asset

Office
equipment

Computer
equipment

At 1 April 2018

Additions

At 31 March 2019

Additions

At 31 March 2020

Depreciation

At 1 April 2018

Charge for the year

At 31 March 2019

Charge for the year

At 31 March 2020

Net book value

At 31 March 2020

At 31 March 2019

351,700

1,173,525

351,700

1,173,525

351,700

1,173,525

178,692

74,228

252,920

74,227

327,147

645,425

234,711

880,136

234,949

241,813

1,212

243,025

3,030

246,055

204,170

37,033

241,203

1,917

Total

267,684

2,034,722

51,857

319,541

98,293

417,834

163,962

76,164

240,126

51,943

53,069

2,087,791

101,323

2,189,114

1,192,249

422,136

1,614,385

363,063

1,115,085

243,120

292,069

1,977,421

24,553

98,780

58,440

293,389

2,935

1,822

125,765

79,415

211,693

473,406

16. Trade and other receivables

Non-Current

Derivative financial assets at fair value (note 27)

Current

Derivative financial assets at fair value (note 27)

Other debtors

Prepayments

2020

7,225,042

17,633,046

90,880

201,928

2019

2,228,663

9,927,443

49,698

302,499

The Group writes off receivables when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or when the receivables are over two years past due, whichever occurs earlier.

17. Cash and cash equivalents

Short term bank deposits

2020

49,275,808

2019

13,566,063

Included within cash and cash equivalents are client held funds relating to margins received and client balances
payable (See note 18). Client balances held as electronic money in accordance with the Electronic Money Regulations
2011 are held in accounts segregated from the firm’s own bank accounts in authorised credit institutions. Cash
includes cash held as collateral with banking and brokerage counterparties for which the Group does not have
immediate access of 2020 £1,140,267 (2019: £345,542).

The directors consider that the carrying amount of these assets is a reasonable approximation of their fair value.
Cash is held at authorised credit institutions and non-bank financial institutions with robust credit ratings (where
published) and sound regulatory capital resources.

18. Trade and other payables

Trade creditors

Amounts payable to clients

Other creditors

Short term loans

Corporation tax

Amounts due to members and former members of Argentex LLP

Accruals

Other taxation and social security

Derivative financial liabilities at fair value (note 27)

Lease liability (note 20)

2020

1,574

25,524,595

625,861

2,127,756

5,315,499

2,785,250

190,711

10,854,425

2019

8,581,414

2,996,368

1,997,430

5,379,898

2,120,097

189,331

3,120,364

299,960

47,425,671

24,684,862

The short term loan was from PUMA Lending Limited (see related party note 29) and attracted an interest rate of 15%. The
loan was repayable on demand and had no conversion rights. The loan and interest were repaid in full during the year.

The Group always measures the loss allowance for other receivables at an amount equal to 12 month ECL. If there is
a significant increase in credit risk, credit losses are recognised on the lifetime ECL basis. The expected credit losses
on other receivables are estimated using a provision matrix by reference to past default experience of the debtor and
an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general
economic conditions of the industry in which the debtors operate and an assessment of both the current as well as
the forecast direction of conditions at the reporting date.

Derivative financial liabilities at fair value (note 27)

Lease liability (note 20)

17,925,854

10,279,640

19. Creditors: amounts falling due after more than one year

110

2020

4,024,158

2019

470,461

77,318

547,779

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20. Leases

The Group leases its office space. The group entered into a five-year lease in July 2015 with no break or extension
clauses. The annual lease payments are £310,820. The lease gives rise to a right-of-use asset (note 15), and a
corresponding lease liability. Information about the lease liability is presented below:

20.1. Lease Liabilities

Lease Liability at 31 March 2019

Payments made under lease terms

Unwinding of finance costs

Lease Liability at 31 March 2020

21. Share Capital

Allotted and paid up

Merger reserve
The merger reserve represents the difference between carrying value of the assets and liabilities acquired under
merger accounting to the cost of investment (the fair value).

Retained earnings
Retained earnings are the accumulated undistributed profits of the Group that have been recognised through the
Consolidated Statement of Profit or Loss.

23. Share based payments

On 19 June 2019, the Company issued 311,311 share options under an approved company share option plan (“CSOP”)
to participating employees. The share options have an exercise price of £1.06, being the IPO issue price, and vest
three years after issuance. The fair value of these options at issuance has been derived using a Black-Scholes model,
with expected volatility of 30%, based on derived volatilities of the AIM index and the similar listed entities to the
Company. The risk free rate at the time of issuance was 0.54% for UK Government Bonds with a similar term to the
vesting period of the CSOP.

For the period from issuance to the year end, the Group have recognised an expense of £5,763 based on the estimated
number of share options expected to vest.

2020

377,278

(388,525)

11,247

Ordinary
shares

Management
shares

Nominal
value

Subsequent to the year end, the Group issued a further 4,528,300 unapproved share options (see note 26).

At 1 April 2018 and 31 March 2019

No.

Ordinary shares of £0.0001 each issued during the year

113,207,547

No.

Management shares issued of £0.0025 each issued
during the year

23,589,212

11,321

58,973

At 31 March 2020

113,207,547

23,589,212

70,294

On 19 June 2019, 23,589,212 Management shares were issued with nominal value of £58,973 to establish the
minimum allotted share capital for a public limited company. So long as there are shares of any other class is
issue, Management shares have no voting rights or rights to receive dividends or other distributions of profit.

On 25 June 2019, 113,207,547 Ordinary shares of £0.0001 each were issued for trading on AIM at a price of 106p per
share. 100,000,000 shares were issued to the former owners of Argentex LLP as part of the Group formation
outlined in note 3.4. Subsequently, the Company issued 13,207,547 at 106p per share, generating share premium of
£13,988,679 before issuance costs.

22. Reserves

Details of the movements in reserves are set out in the Consolidated Statement of Changes in Equity. A
description of each reserve is set out below.

Share premium
The share premium account is used to record the aggregate amount or value of premiums paid in excess of the
nominal value of share capital issued, less deductions for issuance costs. Where an equity issuance is accounted
for using merger relief, no share premiums are recorded.

24. Net cash generated from operating activities

Profit after taxation

Net finance expense

Depreciation of property, plant and equipment

Depreciation of right of use assets

Amortisation of intangible assets

Share based payment expense

Decrease in receivables

2020

2019

8,090,790

2,139,567

11,247

128,087

234,949

1,046,462

5,763

59,389

107,764

187,425

234,711

778,710

1,971,381

Increase/(decrease) in payables

(Decrease)/increase in derivative financial assets

Increase/(decrease) in derivative financial liabilities

LLP members remuneration

18,969,951

(12,701,982)

11,287,758

6,557,493

(1,049,722)

903,933

(4,816,642)

8,983,247

Drawings and distributions to LLP members and former members

(6,628,205)

(5,990,449)

Net cash generated from operating activities

27,061,702

3,449,925

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25. Net Debt Reconciliation

27.1. Capital management

Cash and Cash Equivalents

Borrowings – repayable within one year

Borrowings – repayable after one year

2020

49,275,808

2019

13,566,063

(2,297,390)

(77,318)

The Group manages its capital to ensure that entities in the Group will be able to continue as going
concerns while maximising the return. Capital is repayable in accordance with the terms set out in the
partnership agreement. Management regularly review the adequacy of the Group’s capital. The level of
capital is in excess of the capital requirement set by the Financial Conduct Authority.

27.2. Categories of financial instruments

Net funds

49,275,808

11,191,355

Cash and Cash Equivalents

Total Debt – Fixed Interest Rates

Net funds

49,275,808

11,191,355

(2,374,708)

49,275,808

11,191,355

Cash

Finance
leases due
within 1 year

Finance
leases due
after 1 year

Net funds/(debt) at 1 April 2018

12,747,583

(282,650)

(377,278)

Borrowings

Total

12,087,655

The Group operates as a deliverable foreign exchange broker therefore financial instruments are significant
to its financial position and performance. Where the partnership enters into a foreign exchange contract
for a client, a matching deal is immediately executed with one of the Group’s institutional counterparties.

The table below sets out the Group ‘s financial instruments by class.

Derivative financial assets

2020

24,858,088

2019

12,156,106

Other debtors

90,880

49,698

Cashflows

818,480

310,820

(1,997,430)

(868,130)

Derivative financial liabilities

(14,878,583)

(3,590,825)

Other non-cash changes

(328,130)

299,960

(28,170)

Net funds/(debt) at 31 March 2019

13,566,063

(299,960)

(77,318)

(1,997,430)

11,191,355

Cashflows

Other non-cash changes

35,709,745

388,525

(88,565)

77,318

1,997,430

38,095,700

Net funds/(debt) at 31 March 2020

49,275,808

(11,247)

49,275,808

26. Subsequent events

On 7 April 2020, the Company awarded options over a total of 4,528,300 new ordinary shares in an unapproved option
scheme. The share options all have an exercise price of 135p, representing a 12.0% premium to the closing mid-
market price of 120.5p on 6 April 2020, the day before the awards were made. To provide long-term alignment with
shareholders, the awards will vest in portions of one third on the third, fourth and fifth anniversaries of grant.

On 7 May 2020, the Group entered into a new operating lease for a new London headquarters. Following the end
of the rent free period, the Group will be committed to rent payments of £912,270 per annum excluding VAT for the
remainder of the lease. The full term of the lease is ten years with an option to break at five years.

27. Financial instruments

The Directors have performed an assessment of the risks affecting the Group through its use of financial
instruments and believe the principal risks to be: capital risk; credit risk; market risk, including interest rate risk and
foreign exchange risk.

Trade creditors

Amounts payable to clients

Other Creditors

Short term loans

Amounts due to members and former members of Argentex LLP

Accruals

Lease liabilities

(1,574)

(25,524,595)

(8,581,414)

(625,861)

(5,315,499)

(2,785,250)

(1,997,430)

(5,379,898)

(2,120,097)

(377,278)

(34,252,779)

(21,152,525)

27.3. Financial risk management objectives

The Group’s principal risk management objective is to avoid financial loss and manage the Group’s working
capital requirements to continue in operations.

Market risk

Market risk for the Group comprises foreign exchange risk and interest rate risk.

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Foreign exchange risk is mitigated through the matching of foreign currency assets and liabilities between
clients and institutional counterparties which move in parity. The Group maintains non-sterling currency
balances with institutional counterparties only to the extent necessary meet its immediate obligations
with those institutional counterparties.

Foreign exchange risk - sensitivity analysis

27.4. Overview of the group’s exposure to credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. As at 31 March 2020, the Group’s maximum exposure to credit risk without taking
into account any collateral held or other credit enhancements, which will cause a financial loss to the Group
due to failure to discharge an obligation by the counterparties arises from:

The Group’s significant cash balances other than those denominated in Pounds sterling are foreign
currency balances held in Euros and US Dollars.

— the carrying amount of the respective recognised financial assets as stated in the Consolidated

Statement of Financial Position.

The table below shows the impact on the Group’s operating profit of a 10% change in the exchange rate of
euros and US Dollars against pounds sterling.

The tables below detail the credit quality of the group’s financial assets and other items, as well as the group’s
maximum exposure to credit risk by credit risk rating grades:

At 31 March

10% weakening in the GBP/EUR exchange rate

10% strengthening in the GBP/EUR exchange rate

10% weakening in the GBP/USD exchange rate

10% strengthening in the GBP/USD exchange rate

2020

683,091

(620,992)

189,637

(172,397)

2019

263,765

(215,808)

220,961

(180,786)

Interest rate risk affects the Group to the extent that forward foreign exchange contracts and foreign
exchange options have an implied interest rate adjustment factored into their price, which is subject to
volatility. This risk is mitigated in the same way as foreign currency risk. The Group’s short term loan had
fixed rate of interest, limiting any exposure to interest rate risk. This loan was fully repaid during the year.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group has extensive controls to ensure that is has sufficient cash or working capital to meet the cash
requirements of the Group in order to mitigate this risk. The Group monitors its liquidity requirement
daily, and the Group stress tests its liquidity position to review the sufficiency of its liquidity in stressed
market scenarios. It is management’s responsibility to set appropriate limits to the liquidity risk appetite of
the Group, as well as ensuring that a robust system of internal controls is implemented and enforced (see
the Group’s going concern policy in note 3.2).

Credit risk

The failure of a client to settle a contracted trade carries the risk of loss equal to the prevailing fair value of
the trade. Argentex employs rigorous procedures and ongoing monitoring to ensure that client risk
exposures fit within the Group’s risk appetite.

Management review financial and regulatory disclosures of the Group’s institutional counterparties to
ensure its cash balances and derivative assets are maintained with creditworthy financial institutions. The
Group does not have any significant concentration of exposures within its client base. At institutional
counterparty level, trade volumes and trading cash balances are concentrated to a small selection of
institutional counterparties. A degree of concentration is necessary for the Group to command strong
pricing and settlement terms with these institutions and is not considered a material risk to the Group.

(i) For Other debtors, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance

at lifetime ECL as the balances are not material.

The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime ECL if
the credit risk on that financial instrument has increased significantly since initial recognition. In the opinion
of the Directors, the carrying amount of the Group’s financial assets best represents the maximum exposure.

The carrying amount of the Group’s financial assets at FVTPL as disclosed in (note 27) best represents their
respective maximum exposure to credit risk. Note 27.6 details the Group’s credit risk management policies

27.5. Counterparty risk

Argentex relies on third party institutions in order to trade and clear settlement funds through client
accounts. To reduce counterparty credit risk to acceptable levels, Argentex only trades with institutional
counterparties with robust balance sheets, high credit ratings and sound capital resources (as disclosed
in accordance with the CRR and CRD IV of Basel III) and monitors the creditworthiness of institutional
counterparties on an ongoing basis. It is the opinion of the business that the Group’s financial backing,
turnover, systems and controls and quality of clients sets the business at the higher end of the spectrum of
foreign exchange brokers in the UK. The Group’s business continuity procedures have established trading
and settlement lines with several institutional counterparties which means that the withdrawal of services
from a banking provider will have a negligible effect on the business.

27.6. Credit risk management

Note 27.4 details the Group’s maximum exposure to credit risk and the measurement bases used to determine
expected credit losses.

The Group undertakes continuous robust credit analysis before setting and varying trading limits and
accepting trades from each client. All open positions are monitored automatically in real time and if deemed
necessary collateral (in the form of cash deposits) is taken from clients to mitigate the Group’s exposure to
credit risk.

The table below sets out the profile of the Group ‘s open financial assets. Management are satisfied that the
assets are of a high quality, none are past due and that no impairments are required.

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Financial assets at balance sheet date by contractual maturity

28. Fair value measurements

31 March 2020

0-3 months

3-6 months

6-12 months

1-3 years

Total

This note provides information about how the Group determines fair values of various financial assets and
financial liabilities.

Derivative financial assets

7,054,433

4,765,693

5,812,920

7,225,042

24,858,088

28.1. Fair value of the Group ‘s financial assets and financial liabilities that are measured at fair value on a

Other receivables

90,880

recurring basis

Financial assets

7,145,313

4,765,693

5,812,920

7,225,042

24,948,968

31 March 2019

0-3 months

3-6 months

6-12 months

1-3 years

Total

Derivative financial assets

5,334,490

1,789,612

2,803,341

2,228,663

12,156,106

Other receivables

49,698

Financial assets

5,384,188

1,789,612

2,803,341

2,228,663

12,205,804

The following table details the profile of the Group’s financial liabilities. The amounts are based on the
undiscounted cash flows based on the earliest date on which the Group can be required to pay.

Financial liabilities at balance sheet date by contractual maturity

31 March 2020

0-3 months

3-6 months

6-12 months

1-3 years

Total

Derivative financial liabilities

(4,539,428)

(2,952,373)

(3,362,624)

(4,024,158)

(14,878,583)

Customer balances

Other Payables

(25,524,595)

(8,728,184)

(25,524,595)

(8,728,184)

Financial liabilities

(38,792,207)

(2,952,373)

(3,362,624)

(4,024,158)

(49,131,362)

31 March 2019

0-3 months

3-6 months

6-12 months

1-3 years

Total

Derivative financial liabilities

(1,268,203)

(1,076,094)

(776,067)

(470,461)

(3,590,825)

Customer balances

(8,581,414)

Lease payments

Short term loans

Other Payables

(72,826)

(73,924)

(153,210)

(77,318)

(377,278)

(1,997,430)

(10,496,363)

(1,997,430)

(10,496,363)

Financial liabilities

(22,416,236)

(1,150,018)

(929,277)

(547,779)

(25,043,310)

Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each
reporting period. The following table gives information about how the fair values of these financial assets and
financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

There were no transfers between levels 1, 2 and 3 during the year. The Group’s policy is to recognise transfers
into and transfers out of fair value hierarchy levels as at the end of the reporting period.

Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at
the end of the reporting period. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an active is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.

Financial assets/
financial liabilities

Fair value as at

Fair value
hierarchy

Valuation technique(s) and key input(s)

Foreign exchange
forward and option
contracts (note 27)

2020

2019

Assets
£24,858,088;
and
Liabilities
£14,878,583

Assets
£12,156,106;
and
Liabilities
£3,590,825

Level 2

The price that would be received to sell
an asset or paid to transfer a liability in
an orderly transaction between market
participants at the measurement date.

Estimated based on forward exchange rates
(from observable forward exchange rates
at the end of the reporting period) and
contract forward rates.

28.2. Fair value of financial assets and financial liabilities that are not measured at fair value

The partners consider that the carrying amounts of financial assets and financial liabilities recognised in the
financial statements approximately at their fair values

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29. Related party transactions

PUMA Lending Limited provided an occasional short term liquidity facility to the Group in the form of short term
loans (see note 18). £1,997,430 was outstanding at 31 March 2019. This amount, plus related interest of £133,361 was
repaid immediately following the IPO, and the balance is £nil at 31 March 2020. The relationship of PUMA Lending
Limited to the Group is that PUMA Lending Limited shares common control with Pacific Investments Management
Limited, the former owner of Argentex Foreign Exchange Limited.

Included in other creditors is £625,861 owed to Pacific Investments Management Limited, the former owner of
Argentex Foreign Exchange Limited.

30. Contingent liabilities

As at 31 March 2020 there were no capital commitments or contingent liabilities (2019: none).

31. Controlling party

In the opinion of the directors there is no ultimate controlling party of Argentex Group PLC.

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Company Statement
of Financial Position
for the period ended 31 March 2020

Company Statement
of Changes in Equity
for the period ended 31 March 2020

Notes

31 March 2020

Cost

Share
capital

Share
premium

Share
option
reserve

Merger
reserve

Retained
earnings

Total
equity

Balance at 26 April 2019

Loss for the year

Total comprehensive income for the year

Merger reserve arising on reorganisation

Transactions with owners:

Issue of share capital

70,294

13,998,679

Cost of issue of equity share capital

Share based payments

(1,284,757)

5,763

(821,269)

105,992,359

14,068,973

(1,284,757)

(5,763)

Balance at 31 March 2020

70,294

12,713,922

5,763

105,992,359

(821,269)

117,961,069

Non-current assets

Investment in subsidiaries

Total non-current assets

Current assets

Trade and other receivables

Total current assets

Current liabilities

Other payables

Total current liabilities

Net assets

Equity

Share capital

Share premium

Share option reserve

Merger reserve

Retained earnings

118,005,763

61,332

(106,026)

117,961,069

70,294

12,713,922

5,763

105,992,359

(821,269)

117,961,069

Under section s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own
income statement. The loss for the period to 31 March 2020 was £821,269.

The financial statements of Argentex Group PLC were approved by the Board of Directors on 31 July 2020 and
were signed on its behalf by:

Carl Jani
Director
Registered number 11965856

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1. Basis of preparation

2.3. Financial instruments

The nature of the Company’s operations and its principal activities are detailed in the Strategic Report.

The Company meets the definition of a qualifying entity under Financial Reporting Standard (“FRS”) 100. The
financial statements of Argentex Group PLC have been prepared in accordance with Financial Reporting Standard
101, ‘Reduced Disclosure Framework’ (FRS 101) as issued by the Financial Reporting Council and the Companies Act
2006 as applicable to companies using FRS 101.

The financial statements have been prepared on a going concern basis and under the historical cost convention.
The financial statements are presented in pounds sterling (£), which is the currency of the primary economic
environment in which the Company operates.

Disclosure exemptions adopted
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial
statements, in accordance with FRS 101:

— Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and weighted average
exercise prices of share options, and how the fair value of goods or services received was determined).

— IFRS 7, ‘Financial instruments: Disclosures’.
— Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used for

fair value measurement of assets and liabilities).

— The following paragraphs of IAS 1, ‘Presentation of financial statements’:

— 10(d) (statement of cash flows);
— 16 (statement of compliance with all IFRS);
— 111 (statement of cash flows information); and
— 134–136 (capital management disclosures).

— IAS 7, ‘Statement of cash flows’.
— Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).
— The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions entered into

between two or more members of a group.

2. Significant accounting policies

The principal accounting policies are summarised below.

2.1. Going concern

The Company’s going concern policy is consistent with the policy adopted by the group, as disclosed in note 3.2
of the Consolidated Financial Statements

2.2.

Investments in subsidiary undertakings

Unlisted investments in subsidiary undertakings are stated at cost (being their fair value at acquisition) less
any provisions for impairment. A review for impairment is carried out if events or changes in circumstances
indicate that the carrying amount may not be recoverable, in which case an impairment provision is
recognised and charged to the Statement of Profit or Loss. To the extent applicable, balances in the Merger
Reserve will be recycled into Retained Earnings to correspond with any impairment charge.

The Company enters into basic financial instruments transactions that result in the recognition of financial
assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third
parties, loans to related parties and investments in non-puttable ordinary shares.

The Company’s financial assets are initially recognised at fair value, and subsequently carried at amortised cost.
The objective of the Company’s financial assets is to hold the asset in order to collect contractual cash flows
(those cash flows being solely the payments of the principal and interest). Financial assets are subsequently
assessed for credit risk, by reference to the stage of performance in accordance with IFRS 9. Impairment
provisions on receivables from group undertakings are based on a forward-looking expected credit loss (ECL)
model. The methodology used to determine the amounts of the provision is based on whether there has been
a significant increase in credit risk since initial recognition of the financial asset. Where the credit risk has
not increased significantly since initial recognition, a twelve-month ECL is recognised. Where credit risk has
increased significantly, a lifetime ECL is recognised.

Financial liabilities and equity instruments issued by the Company are classified in accordance with the
substance of contractual arrangements entered into and the definitions of a financial liability and equity
instrument. Trade payables and other short-term monetary liabilities are initially measured at fair value and
subsequently carried at amortised cost. An equity instrument is any contract that evidences a residual interest
in the assets of the entity after deducting all its liabilities. Equity instruments issued by the Company are
recorded at the proceeds received, net of direct issue costs.

2.4. Foreign currency

Non-derivative monetary assets and liabilities in foreign currencies are translated into sterling at the rates of
exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the
rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving
at operating profit.

Taxation

The tax expense represents the sum of the tax currently payable and any deferred tax.

Tax currently payable is based on taxable profit for the year. Taxable profit may differ from net profit as
reported in the Statement of Profit or Loss as it may excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the
date of the Statement of Financial Position.

3. Critical accounting estimates and judgements

The preparation of the financial statements in conformity with the generally accepted accounting practices requires
management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as
the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and
expenses during the reporting period.

(i) Carrying value of investments in subsidiaries

The carrying value of investments in subsidiaries are initially recorded at cost (being the fair value at acquisition) and
subsequently measured at cost less provision for impairment. The directors have reviewed all forecast and budgetary
information available to them and have deemed there to be no objective evidence for impairment.

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4. Auditor’s remuneration

7. Investment in subsidiaries

The auditors’ remuneration for audit and other services is disclosed in Note 8 to the Consolidated Financial Statements.

Cost

5. Directors’ Emoluments

Executive and non-executive directors

Costs for the above persons were:

Wages and salaries

Social security costs

2020

Number

200,542

21,517

222,059

Disclosures in the Company financial statements reflect costs to the Company only. The Remuneration Committee
report contains relevant information on directors’ remuneration for the Group.

6. Taxation

Current tax

In respect of the current year

Total tax expense for the year

2020

Tax has been calculated using an estimated annual effective tax rate of 19% on profit before tax.

The difference between the total tax expense shown above and the amount calculated by applying the standard
rate of UK corporation tax to the profit before tax is as follows:

2020

Loss before taxation

Tax on loss on ordinary activities at standard UK corporation tax rate of 19%

Effects of:

Expenses not allowable for taxation

Group relief surrendered

Total tax charge/(credit) for the period

(821,269)

156,695

(105,695)

(50,346)

At 26 April 2019

Additions

At 31 March 2020

2020

118,005,763

Details of the Company’s subsidiaries, which are all included in the Consolidated Financial Statements of the Group,
are as follows:

Name of undertaking

Nature of business

Country of incorporation

Directly held

Argentex Capital Limited

Foreign exchange broking

England

Indirectly held

Argentex LLP

Argentex Foreign Exchange Limited
(formerly Pacific Foreign Exchange Limited)

Holding company

England

All subsidiary undertakings have registered address 5 Old Bond Street, London, W1S 4PD. All subsidiaries are 100%
owned either directly or indirectly.

On 24 June 2019, the Company acquired the entire issued share capital of Argentex Capital Limited via a share-for-
share exchange. Subsequent to the acquisition, the Company invested a further £12,000,000 in the form of new
shares in Argentex Capital, which was then used to increase the equity capital of Argentex LLP, a subsidiary of
Argentex Capital Limited. The share-for-share exchange qualified for merger relief in accordance with the
Companies Act 2006, and a merger reserve of £105,992,359 was created on the issue of 76,410,788 ordinary shares.

8. Trade and other receivables

Other receivables

2020

61,332

The directors consider that the carrying amount of trade and other receivables is a reasonable approximation of
their fair value. All trade and other receivables amounts are short-term.

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9. Other payables

Amounts owed to group undertakings

Other tax and social security payable

Accruals and deferred income

2020

88,004

8,536

9,486

106,026

Share option reserve
The Company operates a share option scheme that is explained in note 23 of the Consolidated Financial Statements.
The Company is the settling entity of the share based payment scheme, and recognises the services received as an
increase in investments in subsidiary undertakings, with the corresponding entry credited to the Share option reserve.

Merger reserve
The merger reserve represents the difference between the cost of the investment (being the fair value at acquisition)
and the nominal value of shares being issued.

Retained earnings
Retained earnings are the accumulated undistributed profits of the Company that have been recognised through the
Statement of Profit or Loss.

The directors consider that the carrying amount of trade and other payables is a reasonable approximation of their
fair value. Amounts owed to group undertakings are unsecured, interest free, and repayable on demand.’ All trade
and other payables amounts are short-term.

The Directors propose that an dividend of 2p per ordinary share amounting to £2,264,150.94 will be paid on 10
September 2020 to all shareholders on the register of members on 14 August 2020. This has not been included as a
liability in these Financial Statements in accordance with IAS 10 ‘Event after the reporting period’.

10. Share capital

Allotted and paid up

Ordinary
shares

No.

Ordinary shares of £0.0001 each issued during the year

113,207,547

Management
shares

No.

Management shares issued of £0.0025 each issued
during the year

23,589,212

Nominal
value

11,321

58,973

Prior to the payment of a dividend, the Directors will be required to form a reasonable judgment as to the amount
of the distributable profits of the Company which will be assessed by reference to interim accounts of the Company
prepared after the reporting date.

On 24 June 2019, the Company acquired the entire issued share capital of Argentex Capital Limited via a share-
for-share exchange. Subsequent to the acquisition, the Company invested a further £12,000,000 in the form of
new shares in Argentex Capital, which was then used to increase the equity capital of Argentex LLP, a subsidiary
of Argentex Capital Limited. The share-for-share exchange qualified for merger relief in accordance with the
Companies Act 2006, and a merger reserve of £105,992,359 was created on the issue of 76,410,788 ordinary shares.

At 31 March 2020

113,207,547

23,589,212

70,294

11. Subsequent events

On 7 June 2019, 23,589,212 Management shares were issued with nominal value of £58,973 to establish the minimum
allotted share capital for a public limited company. So long as there are shares of any other class is issue,
Management shares have no voting rights or rights to receive dividends or other distributions of profit.

On 25 June 2019, 113,207,547 Ordinary shares of £0.0001 each were issued for trading on AIM at a price of 106p per
share. 100,000,000 shares were issued to the former owners of Argentex LLP as part of the business combination
outlined in the Consolidated Financial Statements. Subsequently, the Company issued 13,207,547 at 106p per share,
generating share premium of £13,988,679 before issuance costs. Ordinary Shares have full voting rights and rights to
receive dividends and other distribution of profit.

Reserves

Details of the movements in reserves are set out in the Statement of Changes in Equity. A description of each
reserve is set out below.

Share premium
The share premium account is used to record the aggregate amount or value of premiums paid less issuance costs
when the Company’s shares are issued at a premium.

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Annual Report 2020Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information

OT H E R I N F O R M AT I O N

Glossary
of Terms.

‘The Company’, ‘The Firm’ and ‘Argentex’ are used interchangeably to
represent the consolidated group ‘Argentex Group PLC’ which trades on
the London Stock Exchange’s AIM market.

OTC – Over the counter. A transaction agreed directly
between two parties without the use of a central
clearing house or exchange.

Forward – An FX trade which fixes the exchange rate on a
set amount of currency, and is expected to be settled more
than two business days following agreement of the trade.

Riskless Principal – The type of firm Argentex is,
where each individual client trade is matched with
a corresponding trade with one of the institutional
counterparties available to the Company.

Spread – the difference between the exchange rate
Argentex achieves in its trade with its institutional
counterparty and the rate it passes on to its client.

Directors – individuals which hold either executive or
non-executive office in Argentex Group PLC.

Revenue – The sum total in pounds sterling of all profits
made through spread during the financial period.

FX Turnover – The notional value of currencies bought
or sold with Argentex by its clients, expressed in pounds
sterling.

IPO – Initial public offering of shares in Argentex
Group PLC, which began trading on the London Stock
Exchange’s AIM on the 25th June 2019.

Spot – An FX trade between two parties, who exchange
currencies two business days following the agreement
of the trade.

Options – structured financial derivatives, used by a
subsection of Argentex’s clients for hedging rates on a
known amount of currency on a specified date in the
future. Used instead of a forward contract, an options
contract may provide the potential for achieving a rate
better than that available in a standard forward contract.

LTIP – Long-term incentive plan, where the interests of key
staff are further aligned with that of investors through an
opportunity for equity ownership over a five year period.

FCA – The Financial Conduct Authority, the regulatory
body which authorises Argentex to perform specific
functions such as issuing Electronic Money, making
remittances and buying and selling of options for its
clients, amongst others.

CAGR – Compound annual growth rate.

Year end / Period end – 31st March.

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Shareholder
information.

Shareholder enquiries

→

investorrelations@argentex.com

Dividend dates

→

31 July 2020 – Interim dividend declared

13 August 2020 – Ex-dividend date

Annual shareholder calendar

31 March 2020 – Financial year end

3 August 2020 – Full year results announcement

11 September 2020 – AGM

30 September 2020 – Half year end

→

132

→

Company
information.

AUDITORS
Nexia Smith and Williamson
25 Moorgate,
London, EC2R 6AY

FINANCIAL PUBLIC RELATIONS
FTI Consulting
200 Aldersgate Street
London, EC1A 4HD

BANK
Barclays
1 Churchill Place, Canary Wharf,
London, E14 5HP

LEGAL ADVISERS
Gowling WLG (UK) LLP
4 More London Riverside,
London, SE1 2AU

ARGENTEX OFFICE
5 Old Bond Street,
London, W1S 4PD
T: +44 (0) 203 772 0300

NEW ADDRESS FROM
SEPTEMBER 2020
25 Argyll Street,
London, W1F 7TU
T: +44 (0) 203 772 0300

BROKERS
Numis Securities Limited
The London Stock Exchange Building,
10 Paternoster Square,
London, EC4M 7LT

REGISTRAR
Computershare Investor Services PLC
The Pavilions, Bridgwater Road,
Bristol BS13 8AE

14 August 2020 – Interim dividend record date

10 September 2020 – Interim dividend payment date

COMPANY SECRETARY
Vistra Company Secretaries Limited
First Floor, Templeback
10 Temple Back
Bristol, BS1 6FL

November 2020 – Half year results announcements

31 March 2021 – Financial year end

Summer 2021 – Full year results announcement

This document is also available on the
Company’s website at www.argentex.com

Printed by Elle Media Group
www.ellemediagroup.co.uk

Printed in the UK by Elle Media Group,
an ISO14001:2015 (Environmental
Management) accredited printer.

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Annual Report 2020Other InformationStrategic ReportCompany OverviewGovernanceFinancial StatementsA N N UA L G E N E R A L M E E T I N G

Notice of Annual
General Meeting.

Notice is hereby given that the annual general meeting (“AGM”) of Argentex Group
PLC (the “Company”) will be held at 25 Argyll Street, London, W1F 7TU on 11 September
2020 at 9:30am for the purpose of considering and, if thought fit, passing the following
resolutions (which will be proposed, in the case of resolutions 1 to 12 as ordinary
resolutions and resolutions 13 and 14 as special resolutions):

so offers himself for re-election as a Director, be
elected as a Director of the Company.

7. That Henry Beckwith, who retires as a Director in
accordance with the Articles and being eligible to
do so offers himself for re-election as a Director, be
elected as a Director of the Company.

8. That Jonathan Gray, who retires as a Director in

accordance with the Articles and being eligible to
do so offers himself for re-election as a Director, be
elected as a Director of the Company.

9. That Nigel Railton, who retires as a Director in

accordance with the Articles and being eligible to
do so offers himself for re-election as a Director, be
elected as a Director of the Company.

10. That Lena Wilson CBE FRSE, who retires as a

Director in accordance with Articles and being
eligible to do so offers herself for election as a
Director, be re-elected as a Director of the Company.

ORDINARY BUSINESS

Ordinary Resolutions

1. To receive and adopt the Annual Report and Accounts
of the Company for the financial year ended 31 March
2020 together with the Directors’ Report and Auditors’
Report thereon.

2. To approve the Directors’ Remuneration Report for

the financial year ended 31 March 2020.

3. That Lord Digby Jones Kb., who retires as a Director in

accordance with the Articles of Association (the “Articles”)
and being eligible to do so offers himself for re-election as
a Director, be elected as a Director of the Company.

4. That Harry Adams, who retires as a Director in

accordance with the Articles and being eligible to
do so offers himself for re-election as a Director, be
elected as a Director of the Company.

5. That Carl Jani, who retires as a Director in accordance
with the Articles and being eligible to do so offers
himself for re-election as a Director, be elected as a
Director of the Company.

6. That Sam Williams, who retires as a Director in

accordance with the Articles and being eligible to do

SPECIAL BUSINESS

Ordinary Resolution

12. That the Directors be and are hereby generally and

unconditionally authorised pursuant to section 551 of the
Companies Act 2006 (the “Act”) to exercise all powers of
the Company to allot shares in the Company and to grant
rights to subscribe for or convert any security into shares
in the Company up to an aggregate maximum nominal
amount of £1,132.08 (equating to 11,320,754 ordinary shares
of £0.0001 each (“Ordinary Shares”) and representing
approximately 10 per cent. of the ordinary share capital
of the Company as at 30 July 2020) provided that this
authority shall expire (unless renewed, varied or revoked
by the Company in general meeting) on the earlier of the
conclusion of the next annual general meeting of the
Company and 30 September 2021 save that the Company
shall be entitled to make, prior to the expiry of such
authority, any offer or agreement which would or might
require shares to be allotted or rights to subscribe for
or convert any security into shares to be granted after
the expiry of such authority and the Directors may
allot shares or grant rights to subscribe for or convert
securities into shares in pursuance of such offer or
agreement as if the authority conferred hereby had not
expired. The authority granted by this resolution shall
replace all existing authorities to allot any shares in the
Company and to grant rights to subscribe for or convert
any security into shares in the Company previously
granted to the Directors pursuant to section 551 of the Act.

Special Resolutions

13. That, subject to the passing of resolution no. 12, the

Directors be and are hereby empowered pursuant to
sections 570 and 573 of the Act to allot equity securities
(as defined in section 560 of the Act) for cash either
pursuant to the authority conferred by resolution
no. 12 above or by way of sale of treasury shares as if
section 561(1) of the Act did not apply to such allotment,
provided that this power shall be limited to:

(a). the allotment of equity securities in connection with
an offer of, or invitation to apply for, equity securities:

but subject to such exclusions or other
arrangements as the Directors may deem
necessary or expedient in relation to treasury
shares, fractional entitlements, record dates, legal
or practical problems in or under the laws of any
territory or the requirements of any regulatory
body or stock exchange; and

(b). the allotment (otherwise than pursuant to paragraph
(a)) and/or transfer of equity securities up to an
aggregate nominal amount of £1,132.08 (equating
to 11,320,754 Ordinary Shares and representing
approximately 10 per cent. of the Ordinary Share
capital of the Company as at 30 July 2020),

provided that this authority shall expire (unless renewed,
varied or revoked by the Company in general meeting) on
the earlier of the conclusion of the next annual general
meeting of the Company and 30 September 2021 save that
the Company shall be entitled to make, prior to the expiry
of such authority, offers or arrangements which would
or might require equity securities to be allotted and/or
transferred after such expiry, and the Directors may allot
and/or transfer equity securities in pursuance of any
such offer or agreement as if the power conferred by this
resolution had not expired. The authority granted by this
resolution shall replace all existing authorities previously
granted to the Directors to allot equity securities for cash
or by way of a sale of treasury shares as if section 561(1) of
the Act did not apply.

14. That the Company be authorised generally and

unconditionally, in accordance with section 701 of the Act,
to make market purchases (within the meaning of section
693(4) of the Act) of Ordinary Shares provided that:

(a). the maximum number of Ordinary Shares that
may be purchased is 16,969,811, representing
approximately 14.99 per cent. of the issued ordinary
share capital of the Company as at 30 July 2020;

(b). the minimum price which may be paid for an

Ordinary Share is £0.0001; and

(c). the maximum price which may be paid for an

Ordinary Share is the higher of: (i) five per cent.
above the average of the mid-market value of the
Ordinary Shares for the five business days before
the purchase is made; and (ii) the higher of the
last independent trade and the highest current
independent bid for any number of Ordinary
Shares on the trading venue where the purchase is
carried out.

11. To re-appoint Nexia Smith & Williamson Audit

(i) to the holders of Ordinary Shares in proportion

Limited as auditors of the Company to hold office
from the conclusion of this meeting until the
conclusion of the next annual general meeting of
the Company at which the Company’s accounts are
laid and to authorise the Directors to determine the
amount of the auditors’ remuneration.

(as nearly as may be practicable) to their
respective holdings; and

(ii) to holders of other equity securities as

required by the rights of those securities or as
the Directors otherwise consider necessary,

134

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Annual Report 2020Other InformationStrategic ReportCompany OverviewGovernanceFinancial StatementsThe authority conferred by this resolution will expire on
the earlier of the conclusion of the next annual general
meeting of the Company and 30 September 2021 save that
the Company may, before the expiry of the authority
granted by this resolution, enter into a contract to
purchase Ordinary Shares which will or may be executed
wholly or partly after the expiry of such authority.

By order of the Board of Directors

Vistra Company Secretaries Limited
Company Secretary of Argentex Group PLC

31 July 2020

Registered Office:
5 Old Bond Street
London, W1S 4PD
United Kingdom

COVID-19
In accordance with current government instructions
and guidance regarding COVID-19 and the restrictions on
social contact, public gathering and non-essential travel,
regrettably, shareholders will not be able to attend the
AGM in person. The format of the meeting will be purely
functional, comprising only the formal votes without
any business update. Shareholders are therefore strongly
encouraged to vote on all of the resolutions online or by
appointing the Chair of the AGM as a proxy in advance
of the meeting (appointing the Chair of the AGM as
your proxy, rather than another named person, ensures
your vote will be counted in the meeting). We will make
arrangements to ensure that the legal requirements to
hold the meeting can be satisfied.

The COVID-19 situation is constantly evolving and the
UK Government may change current restrictions or
implement further measures relating to the holding of
general meetings during the affected period. Accordingly,
unless there is any material change in circumstance which
causes the Company to notify of changed arrangements
(which it will do so via a regulatory information service),
any shareholder (other than those whose attendance is
required to form a quorum) who attempts to attend the
AGM in person will be refused admission. The Company’s
physical attendance at the AGM will be limited to satisfy
the requirements for a quorum.

We strongly urge you to follow government instructions in
respect of the evolving situation regarding COVID-19 and
the restrictions on social contact, public gatherings and
non-essential travel.

NOTES:

Proxies

1. A member is entitled to appoint a proxy to exercise

all or any of the member’s rights to attend, speak and
vote at the AGM. A proxy need not be a member of
the Company. Due to restrictions on attendance at the
AGM, when completing your form of proxy, please only
reference the ‘Chair of the AGM’ as your proxy (and do
not specifically name any one individual).

2. You can vote either:

(a). by logging on to www.investorcentre.co.uk/eproxy

and following the instructions; You will be asked
to enter a Control Number, Shareholder Reference
Number (SRN) and PIN, all of which can be found
on the hard-copy form of proxy.

(b). whilst shareholders are being encouraged to

6. Any power of attorney or any other authority under

appoint their proxy and submit their votes online,
a hard copy form of proxy is enclosed with this
notice. Forms of proxy may also be obtained
on request from the registrars, Computershare
Investor Services PLC by sending a request to
The Pavilions, Bridgwater Road, Bristol BS99 6ZY
or by telephone 0370 707 1384. Call outside the
United Kingdom will be charged at the applicable
international rate. Lines are open between 08.30 –
17.30, Monday to Friday excluding public holidays in
England and Wales; or

(c). in the case of CREST members, by utilising the

CREST electronic proxy appointment services in
accordance with the procedures set out below.

which your form of proxy is signed (or a duly certified
copy of such power or authority) must be returned to
the registered office with your form of proxy.

7. CREST members who wish to appoint a proxy

or proxies through the CREST electronic proxy
appointment service may do so for the AGM and
any adjournment(s) thereof by using the procedures
described in the CREST Manual (available via
www.euroclear.com). CREST Personal Members or
other CREST sponsored members, and those CREST
members who have appointed a voting service
provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the
appropriate action on their behalf.

3. In order to be valid any form of proxy or other

instrument appointing a proxy must be returned duly
completed by no later than 48 hours before the time of
the Annual General Meeting (excluding nonworking
days). The form of proxy must be received by
Computershare Investor Services PLC at The Pavilions,
Bridgwater Road, Bristol, BS99 6ZY (only if posting a
hard copy form). Submission of a proxy appointment
will not preclude a member from attending and voting at
the AGM should they wish to do so. However, as per the
above note, any shareholder that attempts to physically
attend the AGM will be refused admission in order to
comply with government instructions and guidance.

4. While a shareholder may ordinarily appoint more than
one proxy in relation to the AGM provided that each
proxy is appointed to exercise the rights attached to
a different share or shares held by that shareholder,
due to restrictions on attendance at the AGM, when
completing your form of proxy, please only reference
the ‘Chair of the AGM’ as your proxy (and do no
specifically name any one individual).

8. In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be
properly authenticated in accordance with Euroclear’s
specifications and must contain the information
required for such instructions, as described in the
CREST Manual. The message, regardless of whether
it constitutes the appointment of a proxy or an
amendment to the instruction given to a previously
appointed proxy must, in order to be valid, be
transmitted so as to be received by the Company’s
agent ID (3RA50) by the latest time(s) for receipt of
proxy appointments specified in this notice of AGM.
For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied
to the message by the CREST Applications Host)
from which the Company’s agent is able to retrieve
the message by enquiry to CREST in the manner
prescribed by CREST. After this time any change of
instructions to proxies appointed through CREST
should be communicated to the appointee through
other means.

5. To direct your Chair as proxy on how to vote on the
resolutions, mark the appropriate box on your form
of proxy with an ‘X’. To abstain from voting on a
resolution, select the relevant “Vote withheld” box. A
vote withheld is not a vote in law, which means that
the vote will not be counted in the calculation of votes
for or against the resolution. If no voting indication
is given, your Chair, as your proxy will vote or abstain
from voting at his or her discretion. Your proxy (the
Chair) will vote (or abstain from voting) as he or she
thinks fit in relation to any other matter which is put
before the AGM.

9. CREST members and, where applicable, their CREST

sponsors or voting service provider(s) should note that
Euroclear does not make available special procedures
in CREST for any particular messages. Normal system
timings and limitations will therefore apply in relation
to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member
or sponsored member or has appointed a voting
service provider(s), to procure that his or her CREST
sponsor or voting service provider(s) take(s)) such
action as shall be necessary to ensure that a message

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Annual Report 2020Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statementsis transmitted by means of the CREST system by any
particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting
service provider(s) are referred, in particular, to those
sections of the CREST Manual concerning practical
limitations of the CREST system and timings.

10. The Company may treat as invalid a CREST Proxy

Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.

Thresholds and entitlement to vote

11. To be passed, ordinary resolutions require a majority in
favour of the votes cast and special resolutions require
a majority of not less than 75% of members who vote in
person or by proxy at the meeting. On a show of hands
every shareholder who is present in person (or being
a company is present by a representative not himself,
a shareholder) and who is allowed to vote at a general
meeting shall have one vote. Upon a poll every member
holding Ordinary Shares who is present in person or by
proxy (or being a company is represented) shall have
one vote for every Ordinary Share of which he is the
registered holder.

12. The Company, pursuant to Regulation 41 of the

Uncertificated Securities Regulations 2001 (as amended),
specifies that only those members registered in the
Register of Members of the Company at the close
of business on 9 September 2020 (or if the AGM is
adjourned, members entered on the Register of Members
of the Company no later than 48 hours before the time
fixed for the adjourned AGM) shall be entitled to attend,
speak and vote at the AGM in respect of the number of
Ordinary Shares registered in his or her name at that
time. Changes to entries on the Register of Members of
the Company after the close of business on 9 September
2020 shall be disregarded in determining the rights of
any person to attend, speak or vote at the AGM.

13. In the case of joint holders, where more than one of
the joint holders purports to appoint a proxy, only
the appointment submitted by the most senior holder
will be accepted. Seniority is determined by the order
in which the names of the joint holders appear in the
Company’s Register of Members in respect of the joint
holding (the first named being the most senior).

14. A corporation which is a member can appoint one or
more corporate representatives who may exercise,
on its behalf, all its powers as a member provided
that no more than one corporate representative
exercises powers over the same share. However,
due to restrictions on attendance at the AGM, when
completing your form of proxy, please only reference
the ‘Chair of the AGM’ as your proxy (and do not
specifically name any individual).

15. As at 30 July 2020, being the latest practicable date
before the publication of this notice of AGM, the
Company’s issued share capital consisted of 113,207,547
Ordinary Shares each carrying one vote. Therefore, the
total voting rights in the Company as at 30 July 2020 is
113,207,547.

Miscellaneous

16. Copies of the Directors’ service contracts and letters of

appointment are available for inspection at the registered
office of the Company during normal business hours
from 31 July 2020 and will be available for inspection
at the place where the meeting is being held from 15
minutes prior to and during the meeting. However, due
to restrictions on non-essential travel, please email the
Company Secretary at Carmen.Stevens@vistra.com
should you wish to inspect the same.

17. Members who have general queries about the Annual
General Meeting should email the Company Secretary
at Carmen.Stevens@vistra.com.

18. Please note that the Company takes all reasonable
precautions to ensure no viruses are present in
any electronic communication it sends out but the
Company cannot accept responsibility for loss or
damage arising from the opening or use of any email or
attachments from the Company and recommend that
the shareholders subject all messages to virus checking
procedures prior to use. Any electronic communication
received by the Company that is found to contain any
virus will not be accepted.

to holders of other equity securities if required by the
rights of those Ordinary Shares; or (b) as the Directors
otherwise consider necessary, or otherwise up to an
aggregate nominal amount of £1,132.08 (representing
11,320,754 Ordinary Shares). This aggregate nominal
amount represents ten per cent. of the issued ordinary
share capital of the Company (excluding treasury
shares) as at 30 July 2020, the latest practicable date
before the publication of this notice of AGM. This
authority will expire at the conclusion of the next
AGM of the Company or, if earlier, at the close of
business on 30 September 2021.

7. Resolution 14 – market purchases – the Directors are

requesting authority for the Company to make market
purchases of Ordinary Shares up to a maximum
nominal amount of £1,696.98 (representing 14.99 per
cent. of the issued Ordinary Share capital of the
Company as at 30 July 2020 (the latest practicable date
prior to the publication of this document)). There is no
present intention to exercise such general authority.
Any repurchase of Ordinary Shares will be made
subject to the Act and within guidelines established
from time to time by the Directors (which will take
into account the income and cash flow requirements
of the Company) and will be at the absolute discretion
of the Directors, and not at the option of shareholders.
Subject to shareholder authority for the proposed
repurchases, general purchases of the Ordinary Shares
in issue will only be made through the market. Such
purchases may only be made provided the price to be
paid is not more than the higher of: (i) five per cent.
above the average of the middle market quotations for
the Ordinary Shares for the five Business Days before
the purchase is made; or (ii) the higher of the price of
the last independent trade and the highest current
independent bid at the time of purchase.

Explanation of certain resolutions

1. Resolution 1 – the Directors are required to present the
accounts, Directors’ report and auditor’s report to the
meeting. These are contained in the Company’s Annual
Report and Financial Statements 2020.

2. Resolution 2 – the Directors’ are required to approve
the Remuneration Report for the financial year.

3. Resolutions 3 to 10 – retirement by rotation – in

accordance with good corporate governance, each
Director shall retire and submit themselves for re-
election by Shareholders at each AGM.

Biographies of each of the Directors are provided on
pages 63 to 65 of the Annual Report and Accounts and
are also available from the Company’s website
www.argentex.com. The Board unanimously
recommends the re-appointment and appointment
(as the case may be) of each of the Directors.

4. Resolution 11 – auditor re-appointment and

remuneration – at each meeting at which the
Company’s accounts are presented to its shareholders,
the Company is required to appoint an auditor to serve
until the next such meeting and seek Shareholder
consent for the Directors to set the remuneration of
the auditors.

5. Resolution 12 – general authority to allot – this

resolution, to be proposed as an ordinary resolution,
relates to the grant to the Directors of authority to
allot unissued Ordinary Shares until the earlier of the
conclusion of the annual general meeting to be held
in 2021 and 30 September 2021 (being six months after
the financial year end of the Company), unless the
authority is renewed or revoked prior to such time. This
authority is limited to a maximum of nominal amount
of £ £1,132.08 (representing ten per cent. of the issued
Ordinary Share capital of the Company as at 30 July
2020 (the latest practicable date prior to the publication
of this document)).

6. Resolution 13 – disapplication of statutory pre-emption
rights – the passing of these resolutions would allow
Directors to allot Ordinary Shares (or sell any Ordinary
Shares which the Company may purchase and hold in
treasury) without first offering them to existing holders
in proportion to their existing holdings. The authority
set out in resolution 13 is limited to (a) allotments or
sales in connection with pre-emptive offers and offers

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Annual Report 2020Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statements
A R G E N T E X . C O M