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 1
Year ended 31 March 2021
1
Argentex Group PLC issues its Annual Report
for the year ended 31 March 2021.
The period has seen continued robust
financial and operational performance.
This report shows that we make decisions
based on the long-term, sustainable growth
and profitability of the Business.
2
Annual Report 2021 C O N T E N TS
Argentex
Group PLC
Annual Report.
Overview
08 Chairman’s Statement
13 CEO Statement
16 Our Business
18 Our History
20 Executive Team
22 Philosophy, People and Culture
23 The Argentex Collective
Governance
71 Board of Directors
74 Directors’ Report
78 Corporate Governance Report
84 Remuneration Committee Report
90 Nominations Committee Report
92 Audit Committee Report
94
Independent Auditors’ Report
Strategic Report
26 Business Strategy
28 Overview of 2021
32 How We Work
34 Our Products and Online Trading
36 Technology
38 Our Clients
40 Client Case Studies
42 Our Client Proposition
Delivering Value to
43
our Stakeholders
44 How We Win Business
46 2021 Achievements
50 Financial Review
54 Section 172 Statement
60 Sustainability Strategy
62 Risk Management
Financial statements
102 Consolidated Statement
of Profit or Loss
106
103 Consolidated Statement
of Financial Position
105 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
134
136
108
Other information
143 Glossary of Terms
144 Shareholder Enquiries
144 Dividend Dates
144 Annual Shareholder Calendar
145 Company Information
146 Notice of Annual General Meeting
3
w
C O M PA N Y OV E RV I E W
A strong
performance
in line with
expectations.
Our long-term focus and robust business model
remains central at Argentex.
Annual revenue
£28.1m
£8.7m
5.2p/5.9p
Underlying operating profit ¹
EPS (Basic/Underlying) ²
“ Our long-term
vision, strong
culture, robust
risk management
and an unrivalled
understanding of
foreign exchange
markets puts
our clients and
their increasingly
complex needs
front and centre.”
Lord Digby Jones Kb.
Non-Executive Chairman
2022
Outlook
“ With our continued
commitment to a
quality and diverse
client base, robust
business model and
an uncompromising
approach to
compliance, we are
confident about
the forthcoming
12 months.”
Harry Adams
Chief Executive Officer
4
Annual Report 2021
w
New revenue
£7.4m
£7.8m
2.0p
Operating profit
New corporate clients traded
499
1,385
£12.75bn
Total corporate clients traded
Dividend per share
FY 2021 FX turnover 3
¹ Underlying operating profit excludes non-underlying
expenditure and share based payment as shown in the
Consolodated Statements of Profit or Loss
² Note 14 to the Consolidated Financial Statements
3 Includes swaps revenue
5
C H A I R M A N ’S STAT E M E N T
Proven expertise,
delivering on
expectations.
A Testing Year like no other:
Resilience and Continued Delivery
The last year has tested Argentex, just
as it has every business in the world,
in ways it was impossible to foresee.
I am proud to be the Chairman of
a Group whose true resilience and
quality - of its business model, its
client offering and its employees - have
shone through to the benefit of all its
stakeholders.
Since early in 2020 the world has faced
its most severe economic challenge
since the Second World War. Argentex
had to act swiftly to meet this
challenge and to overhaul everything
that was previously part of “business
as usual”.
It has been a privilege to work as a
member of a special team, from Carl,
Harry and the Board of Directors
through to every person at the
Company during this supremely
challenging time. I would like to
thank every single one of them for
their wholehearted commitment to
protecting employee wellbeing and
company operations during this period.
The continued successful delivery
of the Argentex business model is
testament to the strength of the
Business’s inner core: a long-term
vision, strong culture, robust risk
management and an unrivalled
understanding of foreign exchange
markets, with our clients and their
increasingly complex needs front
and centre. Our unswerving focus
on quality in all we do underpins
that resilience. We highlighted that
at the time of the IPO in Summer of
2019 and often against the odds, there
has been not one sign of compromise
since, be it in talent, technology, or
our client base.
Now that the world appears to be
getting slowly back on its feet we can
build on our maintained momentum.
We can use our responses to
everything the last year threw at us
as a springboard for our next phase
of growth, staying true to our long-
term vision.
Lord Digby Jones Kb.
Non-Executive Chairman
8
Annual Report 2021 The continued
successful delivery of
the Argentex business
model is testament
to the strength of the
Business’ inner core.
MARKET BACKDROP
Global foreign exchange markets have
been at the forefront of the commercial
world’s response to the 2020 economic
meltdown. While uncertainties
surrounding the US Election, ongoing
fallout from Brexit and unpredictable
future trading relationships between
large economies were forecast, the
pandemic caused an unprecedented
severe dislocation and readjustment of
international capital flows.
An initial and clear impact was soaring
volatility in FX markets, with rising
unemployment, bleak GDP forecasts
and a consequent and subsequent
de-risking approach resulting in a
migration to safe-haven currencies
such as the US dollar. Understandably,
such uncertainty eventually translated
into trading hesitancy and many
market participants temporarily
delayed their FX trades until the
wider backdrop improved and there
was safer predictability in execution
outcome. Whilst client trading
patterns undoubtedly changed in line
with this dynamic, Argentex’s expert
teams have continued to analyse
market trends and they have ensured
each individual client received bespoke
solutions adapted to a rapidly changing
environment as trading volumes
rebounded healthily.
The team has faced the challenges that
were present in so many businesses.
The safety and wellbeing of our
employees has been our absolute
priority throughout the reporting
period which experienced three
national lockdowns. It was reassuring
to see how quickly and efficiently the
Business implemented working-from-
home policies, developed COVID-
compliant protocols for essential office
attendance and assisted employees
in coping in these tremendously
difficult times whilst always preserving
“business as usual” for our clients.
KEY ACHIEVEMENTS
Our resilient financial performance
has been supported by our move
to new, larger and more efficient
premises with facilities that respect
both the workplace and lifestyle of our
employees. Its capacity futureproofs
our business as our graduate
recruitment programme constantly
grows in delivering new recruits.
Meanwhile, our plans for international
growth have not abated and we
have made as much progress as has
been allowed due to national COVID
restrictions in accessing EU and
Australian markets via Amsterdam
and Sydney. Both jurisdictions offer
Argentex highly regulated markets
where there is latent client demand
for our products and type of service.
Our Amsterdam footprint also
provides Argentex with an ability to
operate cross-border within the EU.
We were delighted that Jo Stent
joined us as Chief Financial Officer
in February. The calibre of such
a hire is testament of our ability
to attract highly credible, deeply
experienced senior talent to help
support and build on our growth
story. She brings a different lens
through which to view the Business
as it grows, given her expertise at
Telus Communications, Deloitte and
most recently at the European Tour
and the Ryder Cup; I look forward to
watching her assist in unlocking the
significant potential value available
to Argentex shareholders.
We have always said, and made a
reality of the fact, that people are
our biggest asset. Nurturing our staff
has always been taken extremely
seriously. Our training programmes
for sales teams, the trading floor
9
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information “ Confidence is
everything in
an economy and
there is much to be
optimistic about
as we all approach
“a new normal.”
- Lord Digby Jones Kb.
Non-Executive Chairman
and operational managers have been
unaffected by the changed working
environment that was forced upon
us. We never stopped investing in our
people throughout a unique difficult
period for the country and all its
businesses, large and small.
It would be remiss not to mention
Carl Jani’s resignation as co-CEO in
June 2021, after the year end. I would
like to thank Carl for his invaluable
contribution to Argentex. The Business
will go from strength to strength as the
management team continues to deliver
long-term value for clients, employees
& shareholders alike.
OUTLOOK
Confidence is everything in an
economy and there is much to be
optimistic about as we all approach
“a new normal”. The key markets in
which Argentex operates are on the
right path for a sustainable recovery
and trading volumes are encouraging.
What matters now is a resumption
of growth on a platform that has
proven its resilience and maintenance
of quality in all aspects of our
business in the most challenging of
years. Our robust financial position,
strengthened team and new premises
all stand your Company in good stead
to capitalise on the post-pandemic
national and global recovery. We
shall be relentless in driving market-
leading outcomes for our clients
and value for our shareholders.
Thank you to our shareholders and
employees alike for your continued
support. But to you all, and above all,
thank you for giving me the privilege
of being your Chairman.
Lord Digby Jones Kb.
Non-Executive Chairman
10
Annual Report 2021
C E O STAT E M E N T
Built on stable,
long-term
foundations.
The last financial year was unprecedented, defined
by the COVID-19 pandemic and subsequent
lockdowns in the UK.
OVERVIEW
Against that extraordinary
landscape, we are proud of how
well the Business has continued to
perform. The resilience and stability
of our business model is testament to
the prudent risk management at the
core of our operations, our balance
sheet strength and the growing high-
quality client book on which the
Business has been established.
A short-term dip in market
confidence had a noticeable impact
on client volumes through the first
half of the financial year. However,
the skill and commitment of our
employees in addition to our clients’
ongoing trust contributed to the
Group delivering the best six months
of client activity on record during
the period. As confidence resumed
and clients returned to the market,
Argentex was a partner of choice for
those prizing consistent and high-
quality outcomes against a testing
and volatile backdrop.
A record number of clients chose
to trade with us as the market
rebounded in Q3 of the financial
year. Our growing reputation and
momentum since the IPO resulted
in the continued acceleration of new
client acquisition; 665 new corporate
clients signed up during the period.
We are pleased that despite clear
challenges, total FX turnover
increased to over £12.75bn, generating
annual revenue of £28.1m. 1,385
corporates traded, 499 having never
traded before, generating £7.4m in
‘new’ revenue, in line with historical
ratios. We are proud to report an
underlying operating profit of £8.7m
and to confirm a final dividend of 2p
per share.
A key differentiator from our peers
continues to be our prudent and
conservative approach to risk
management. The long-term growth
strategy we have followed, and
doubled down on at IPO, contributed
to our success in weathering a period
of extreme market uncertainty.
13
Harry Adams
Chief Executive Officer
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information Argentex remains committed to
prioritising high-quality cash
flow and clients whilst ensuring
sustainable business growth, as
evidenced by continuing immaterial
levels of bad debt through the period.
We are very proud that despite
the clear challenges of the remote
working environment, the spirit,
collegiality and resilience of our team
allowed us to continue providing
excellent outcomes for our clients.
The Business is well positioned to
benefit from future growth trends in
the sector. To reinforce this trajectory,
we continue to invest in our people
and over the last year have made
several strategic hires, most notably of
Jo Stent as Chief Financial Officer.
MARKET BACKDROP
As our Chairman Lord Digby Jones
discussed earlier, COVID-19 prompted
a fundamental shift in international
capital flows during the last financial
year. High volatility combined with
macro-economic concerns resulted
in uncertainty and hesitancy. Despite
this, the on-going vaccine roll out
and gradual return to normality for
many developed countries has led to
an unwinding of investor uncertainty,
with FX flows returning to expected
levels as pent-up demand is unleashed.
INVESTING FOR THE FUTURE
Argentex is well placed to continue
its long-term growth trajectory whilst
capitalising on sector tailwinds
and reaping the benefits as market
activity recovers.
instrumental in the seamless move to
remote working, supporting our ability
to continuously serve our clients whilst
maintaining the highest standards of
service, compliance and governance
from sales, through to order
placement, trade execution, settlement,
reconciliations and reporting.
The safety and wellbeing of our
employees is paramount and feedback
suggests that there is a desire for people
to return to the office. In accordance
with government policy Argentex has
effectively transitioned employees back
to our new headquarters in London.
We have invested significant time and
effort in the design and renovation of
our new premises with a focus on an
environmentally sustainable working
environment that gives us plenty of
room to upscale resources in line with
demand and over an appropriate period.
We have hired 21 new employees,
significantly 12 of these new hires have
joined our top quality, highly motivated
sales team. Our concerted sales push
is reflected in the diversification
of our client base - our top 20
clients contributed just over £11m,
representing 41% of total revenue.
In September we will continue our
graduate programme, attracting
a diverse and driven talent base
to future-proof our proposition.
This process provides a healthy
opportunity to scrutinise Argentex’s
business ethos and values whilst
remaining true to our own beginnings
– entrepreneurial and professional.
Throughout the period many of our
employees worked from home. Our
purpose-built IT infrastructure was
“ A record number of
clients chose to trade
with us as the market
rebounded in Q3 of
the financial year.”
Harry Adams
Chief Executive Officer
14
Annual Report 2021
“ Argentex is very well
positioned to manage the
short-term challenges
that may lie ahead. We
face the future with
confidence and the
outlook for the business
is positive.”
Harry Adams
Chief Executive Officer
TAKING ADVANTAGE OF
GROWTH OPPORTUNITIES
As set out at IPO, we have continued
to pursue and grow our international
presence, focussing on highly
regulated international markets
where the client appetite for our
product base exists. We opened an
office in Amsterdam in March 2020
which has now begun to generate
revenue, despite the challenging
context in which it opened. The
process of obtaining an Australian
licence with the intention of opening
in Sydney continues and we look
forward to providing further updates
in due course.
Argentex remains committed to
aligning our product suite with our
client needs. We scrupulously only
promote products which fit within our
strict risk profile and ones that are
appropriate for our clients and their
own risk parameters.
OUTLOOK
As businesses and society begin
to recover from the pandemic, we
will face a new macro-economic
environment of growth and recovery.
Our industry will continue to develop
and evolve to changing client needs
and Argentex is very well positioned to
manage the short-term challenges that
may lie ahead. We face the future with
confidence and the outlook for the
Business is positive. We have invested
steadily in our teams’ technology
and processes and are well poised for
sustainable growth in accordance with
our strategy.
Uncertainty around the impact
of COVID-19 has not affected the
business model, which does not take
house positions. As our clients look
to navigate the coming months, they
will look to us to provide expert
advice and certainty on how to hedge
their FX risk.
As communicated on 11th June 2021,
my co-founder, Carl Jani, resigned.
Carl had overseen the Group’s growth
story with me from the beginning,
culminating in the successful IPO
in 2019. Going forward, I will take
sole responsibility of an established
management team which has the
depth of experience needed to fulfil
the Group’s growth potential and I am
confident we will continue to deliver
long-term value for employees, clients
and shareholders alike.
Despite the macroeconomic and
geopolitical challenges that appear
to have become a constant backdrop
over the recent years, we have started
the new financial year with good
momentum in terms of both revenue
performance and client quality. The
Group remains resilient and agile.
With its continued commitment
to a quality and diverse client
base, robust business model and
an uncompromising approach to
compliance, we are confident about
the forthcoming 12 months.
Harry Adams
Chief Executive Officer
15
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information
O U R B U S I N E SS
Impact
achieved with
experience
and expertise.
Argentex is a leading provider
of foreign exchange services to
financial institutions, corporates and
private clients globally
Robust business model and balance
sheet strength is built around a
programme of investment in technology,
compliance and risk management
— Extensive risk management is at
the heart of the Business and a
key differentiator
— We prioritise stable, long-term
cash generation over short-term
trends, actively turning away
businesses that don’t meet our
strict risk parameters
— We set a very high governance
benchmark within the FX industry,
only trading with best in class
counterparties with robust balance
sheets, high credit ratings and
sound capital resources
— Scalable, proprietary technology
is continually being optimised to
help us develop online capabilities,
structured products and analytical
tools for a growing client base
which will support our long-term
sustainable growth
— Argentex assists a wide range of
institutional customers with FX
transactions related to genuine
underlying business needs, acting
as a (Riskless Principal) broker
for spot and forward FX and
structured derivative contracts
— One of Europe’s largest publicly
traded FX specialists – we
transacted over £12.75bn of
currency in the 12 months ended
31st March 2021. We do not
engage in speculative trades,
offer margin trading, spread
betting or CFDs
— Our high quality and growing
client base is attracted by deep
FX expertise, tight pricing and
transactional efficiency and
robust regulatory compliance
and risk management procedures
— A founder-led business
established in 2011 and
headquartered in London with
operations in Amsterdam;
successful IPO to London’s AIM
market in mid-2019
16
Annual Report 2021 Investment case built around
unrivalled track record of
delivering organic growth whilst
supporting a dividend
— Highly cash generative business
model delivering growth and
income for shareholders
— Robust business model and
strong balance sheet supported
by advanced risk management
systems, meeting the ongoing
requirements of a growing
client base
— Management team’s long-term
approach demonstrated by clear
strategy proven to perform
through market cycles
— Positive long-term prospects
driven by our clients’
requirement to trade for
commercial reasons, irrespective
of market environment
A committed management team
and dedicated experts sit at the
core of the Business
— Our dedicated market experts
are the foundation of Argentex’s
differentiated proposition
— Each dealer is a professional
with an average of 10 years
experience of actively trading
across market cycles
— Our expertise has been
recognised by third parties
globally, regularly appearing in
Bloomberg, rated as the world’s
most accurate forecaster
— We provide a personal client-led
service, improved pricing and
a more efficient execution and
settlement service than banks
and larger broker-dealers
Argentex is a leading
provider of foreign
exchange services to
financial institutions,
corporates and private
clients globally.
17
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information O U R H ISTO RY
Evolution of
Argentex.
2012
2013
2015
2016
2017
March
January
October
June
January
→
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
September
November
March
April
→
First trade
→
First month
revenue in
excess of £500k
→
Surpassed 20
employees
First month
revenue in
excess of £1.5m
August
→
First sales
employee
18
→→→Annual Report 2021 Founded in 2012 by
Harry Adams, Carl Jani
and Andrew Egan with
the backing of Sir John
Beckwith’s Pacific
Investments Ltd.
2018
2019
2020
2021
January
March
March
January
FCA approves
MIFID II Investment
Firm authorisation
First month
revenue in
excess of £3m
First month
revenue in
excess of £5m
First online trade
First month to open
over 100 new accounts
September
June
First option
executed
IPO
September
March
£3m total options
revenue since
inception
Cumulative
revenues
surpass £100m
Opened new HQ
at 25 Argyll Street,
London
September
Half year revenue
up 42% to £13.8m
19
→→→→→→→→→→→Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information E X E C U T I V E T E A M
Combined
foreign exchange
expertise.
Harry Adams
Co-Chief Executive Officer,
Co-Founder
Carl Jani
Co-Chief Executive Officer,
Co-Founder
Harry is a founding partner of
Argentex. As Co-CEO, Harry 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.
On the 11th June 2021 Carl resigned
as Co-CEO. As Co-CEO, Carl
together with Harry was jointly
responsible for the strategic
direction of the Business. Carl
oversaw the Operational divisions
of Argentex, maintaining the
highest level of compliance,
corporate governance and risk
mitigation. He was 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.
20
Annual Report 2021 Jo Stent
Chief Financial Officer
An experienced CFO, Jo has spent
the majority of her 25-year career
in senior finance roles in global,
fast-paced organisations and has
operated in a number of sectors and
geographies. She has a demonstrable
track record in organisational
scaling and international expansion
in addition to building best in class
finance functions. Most recently,
she was CFO at the European Tour
and the Ryder Cup, and prior to that
CFO of Vodafone Americas. She
has also held senior finance roles in
Telus Communications Inc, Deloitte
and Scottish & Newcastle plc. Jo
qualified as a Chartered Accountant
with EY, and is a non-executive
director at UK Coaching.
Andrew Egan
Managing Director,
Co-Founder
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.
21
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information O 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
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.
22
Annual Report 2021 T H E A R G E N T E X C O L L E CT I V E
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 when 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 opportunities to develop
and adapt.
Dedication
We go above and beyond for our clients, we are
focussed and determined. We go the extra mile.
23
Company OverviewGovernanceStrategic ReportFinancial StatementsOther Information B U S I N E SS ST R AT E GY
What
we do.
Our business model, strategic imperatives and our
core fundamentals are unchanged.
Argentex operates as a Riskless
Principal foreign exchange broker
of non-speculative spot and forward
foreign exchange contracts. Our
business model, strategic imperatives
and our core fundamentals are
unchanged. For Professional and
Eligible Counterparty clients we offer
FX options and certain FX Forwards
including non-deliverable forwards.
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
creating significant losses which
clients may struggle to service and
is a core tenet of the Group’s risk
management policies.
NO MARKET RISK
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, Citigroup and Nomura.
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
ZERO SPECULATION
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.
“ 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.”
Harry Adams
Chief Executive Officer
26
Annual Report 2021
TARGETED CORPORATE CLIENT
ACQUISITION MANAGED BY
EXPERIENCED PROFESSIONAL TRADERS
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, following a rigorous KYC
assessment, the prospect becomes
a client and is assigned a dedicated
dealer whose job is to develop the
relationship from then on.
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.
STRICT ADHERENCE TO CLIENT
SAFEGUARDING MONEY PROTOCOLS
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.
27
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information 2021
An
Overview.
The past financial year has been dominated by COVID-19
and its impact on both businesses and people’s lives.
While parts of the world continue to be impacted by the
pandemic, the widespread rollout of vaccines and post-
pandemic recovery continues to be a driving force behind
global markets.
COVID-19
The COVID-19 pandemic posed
unprecedented challenges to
businesses globally. Argentex
weathered three national lockdowns
which forced employees and clients
to quickly adapt to new ways of
working. The Business’s continued
investment into its proprietary
technology enabled employees to
quickly and effectively transition
to a remote working environment,
ensuring their safety while
continuing to serve clients’ needs.
KEY ACHIEVEMENTS
Despite a turbulent year the Business
has proven resilient. Staying close
to our strategy of prudent risk
management and focussing on
high-quality clients has enabled us
to continue to build our platform as
a leading foreign exchange broker.
Throughout the year we experienced
a storing of client trading as market
uncertainty resulted in clients
putting their dealing activities on
hold. However, each client has a
commercial need to mitigate FX risk
inherent in their business, with the
unwinding of client demand resulting
in a significant increase in H2 trading
which for the year led to a FX turnover
of £12.75bn and revenue of £28.1m.
“ The Business has
proven resilient,
staying close to our
strategy of prudent
risk management
and focusing on
high-quality clients.”
Harry Adams
Chief Executive Officer
28
Annual Report 2021
KEY ACHIEVEMENTS (CONTINUED)
Revenue growth was further driven by Argentex’s
continued client acquisition during the period,
testament to the strength and trust clients have in the
business model and our robust risk framework. Despite
a challenging environment we were able to add 665 new
corporate clients over the 12 months, with 499 trading
over the period.
We are acutely aware that the success of the Business
is down to the dedication and commitment of our
employees. The relocation of our London headquarters
to a new state-of-the-art office has given our
employees the opportunity to work collaboratively
and productively while servicing clients’ needs.
We have continued to invest in the Business and
our people over the past year, hiring 12 new revenue
generating employees and 9 support staff.
MACRO-ENVIRONMENT AND IMPACT
Client uncertainty manifests itself in many ways – one
clear example can be seen in the blue chart where the
average number of days between a client signing up
with Argentex and placing their first trade increases.
Clients who have a degree of discretion over the timing
of their trades hold off in times of uncertainty, leaving
only those clients who absolutely must trade to enter
the market, as evidenced by the sharp increase in
average time to first trade coinciding with the start of
the pandemic, in a similar fashion to the fall caused by
the uncertainty following the 2016 Brexit referendum.
Argentex clients have a commercial need to exchange
one currency for another, and clients continued to be
acquired by our sales team at a record pace over the
period, and this is why following a temporary deferral
of client activity we see a sharp increase in number
of new trades as borne out in the orange chart where
pent-up demand begins to unwind.
Average number of days between
account opening and first trade
86
77
74
73
69
78
73
61
66
60
53
45
43
35
H2
H1
2015
H2
H1
2016
H2
H1
2017
H2
H1
2018
H2
H1
2019
H2
H1
2020
H1
H2
2021
Number of new corporate trades
287
233
209
214
189
192
195
178
181
165
142
128
100
83
H1
H2
2015
H2
H1
2016
H2
H1
2017
H2
H1
2018
H2
H1
2019
H1
H2
2020
H2
H1
2021
30
Annual Report 2021 1+2+3+4+6+7+9+11+12
1+2+3+5+8+9+11+12+13
3+4+6+10+17+28+38+41+37
Growth and profitability
Number of traded
corporates
Number of
trades (k)
F I N A N C I A L OV E RV I E W
FX turnover (£bn)
2020
2020
2020
2019
2019
2019
2016
2016
2016
2014
2014
2014
2015
2015
2015
2018
2018
2018
2013
2013
2013
2021
2021
2021
2017
2017
2017
38.04
36.99
28.47
41.05
16.94
1,385
10.81
12.75
12.12
1,212
9.80
1,141
0.45
3.05
5.84
7.90
5.74
3.41
2.91
350
1.76
898
753
501
1.12
187
86
7.15
2.36
3.84
0.67
21.91
13.23
28.10
10.66
28.90
2017
2013
2018
2015
2014
2016
2019
2020
Revenue (£m)
2+4+8+14+22+26+42+56+55
10+11+9+12+14+17+18+19+18
14+25+21+27+26+28+37+48+40
Average revenue per
traded corporate client (£k)
Average FX turnover per
traded corporate (£m)
2020
2020
2019
2019
2016
2016
2014
2014
2015
2015
2018
2018
2013
2013
2021
2021
2021
2017
2017
23.63
10.58
13.96
19.54
18.36
13.56
12.56
13.87
8.40
5.06
9.68
6.68
8.94
4.92
5.97
7.34
9.12
7.22
31
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information H OW W E WO R K
Bespoke, commercial
and riskless principal
broker.
Since inception this has led to a mix
of 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. Tailored
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.
32
Spot vs
Forward
FX Turnover 1
62%
38%
62+
48+
48%
52%
Revenue 1
Spot
Forward
¹ Split in relation to core revenue
streams of spot and forward FX,
excluding FX options revenues.
Annual Report 202138
52
Riskless
Principal.
Argentex operates as a Riskless
Principal broker 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 source of
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 eliminates
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.
Argentex operates as
a Riskless Principal
broker which means
that each client trade
is matched with an
identical trade at one of
the Group’s institutional
counterparties.
33
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information O U R P R O D U CTS A N D O N L I N E T R A D I N G
Assured.
Efficient.
Superior.
“ The primary goal
should be risk
mitigation, not
profiting from foreign
exchange by trying to
‘beat the market’.”
- Harry Adams, Chief
Executive Officer
ONLINE CAPABILITIES
Designed from an exacting blueprint
with clients’ requirements in mind.
Argentex Online is a powerful online
offering 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.
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.
34
Annual Report 2021 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
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
— 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 time on calls
35
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information T E C H N O LO GY
Build and
invest.
Scalable, proprietary technology is continually being
optimised to help us develop online capabilities, structured
products and analytical tools for a growing client base which
will support our long-term sustainable growth.
To date we have invested over
£5million on coding alone to
ensure that the Argentex CRM and
accompanying client front-end
software is custom-built for us and
our clients’ requirements.
Our online trading platform has
been in operation for over a year
and is complementary to our core
business, offering a convenient
addition to a growing suite of
products to meet our clients’ needs.
As stated in last year’s report, we
believe further investment in all
areas of the customer journey will
prove beneficial as we adapt to
an ever-changing environment.
Continually optimising our online
user experience and journey
remains a priority and will remain
so for the foreseeable future.
To build and invest rather than
licence a generic solution has
been instrumental to Argentex’s
robust systems and controls which
has been clearly demonstrated
while weathering the COVID-19
pandemic. Not only did our CRM
system come to the fore when
seamlessly transitioning the
Company from office to remote
working during the three national
lockdowns, it also tracked clients’
exposures in real time which,
coupled with the Group’s risk
procedures, helped avoid bad debts.
“ Continually
optimising our online
user experience and
journey remains a
priority and will
be so for the
foreseeable future.”
- Harry Adams, Chief
Executive Officer
36
Annual Report 2021 O U R C L I E N TS
High quality
and diverse
client base.
“ 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. ”
Harry Adams
Chief Executive Officer
Our aim is to build long-term relationships with our
clients 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.
Fostering client relationships is
paramount to the success and
longevity of our business.
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.
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.
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.
38
Annual Report 2021
Retaining
and growing
the client base
Strong performance, committed
and excellent service and earning
trust are proven to retain and
increase our client base.
1,385 corporates traded in the year
ended March 2021, and the firm
counts several thousand among
its active client base. Not every
client will trade every year – some
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 transaction).
A personalised level of service is
required. Time is spent getting
to know the client’s requirements
and their business objectives.
— Financial Services
— Insurance
— Fund, Fund Managers
Revenue %
per industry
sector
and Trusts
1% of total revenue40+
Consists of individual sectors
each responsible for less than
Financial Services (39.49%)
Legal Services (2.22%)
Other (13.41%)
Food and Beverages (5.03%)
Manufacturing &
Machinery (4.99%)
IT, Technology and
Software (4.40%)
Electrical (4.38%)
Fashion (3.84%)
Medical and
Pharmaceutical (3.77%)
Logistics, Import and
Export (3.48%)
Private Client (2.47%)
Energy (2.14%)
Music and
Entertainment (1.96%)
Agriculture (1.82%)
Media, PR, Events
and Marketing (1.74%)
Household Goods and
Homeware (1.32%)
Film Production and
Animation (1.24%)
Wholesale (1.24%)
Motor, Vehicle, Aerospace
Components (1.06%)
39
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
13
+
6
+
5
+
4
+
4
+
4
+
4
+
3
+
3
+
2
+
2
+
2
+
2
+
2
+
1
+
1
+
1
+
1
+
A
C L I E N T CAS E ST U D I E S
Client
case
studies.
International
Cricketer
Our client plays in the UK and
earns GBP. In addition to this he
has a number of international
contracts which means he earns
in USD and AUD. At Argentex, we
manage the exposure to all the
various currencies to ensure that
his earnings are not impacted by
the fluctuations in the currency
markets. We also assist with the
exchange of delivery of funds to
the UK (in GBP) and Barbados (in
Barbados dollars).
Insurance Broker
Our client is an independent insurance
broker providing international
insurance, operating in Lloyd’s of
London and international markets.
Large balances of foreign currency
receivables can be the source of
significant volatility in the firm’s
P&L on a month-to-month basis as
although not physically exchanged,
the firm reports in GBP and so the
fluctuating foreign currency balances
are revalued into GBP at prevailing
market rates at each month end. In
order to mitigate this risk Argentex
executes a rolling hedge for the firm,
opening and closing forward foreign
exchange contracts each month,
rebasing the contracts to match the
following month’s foreign currency
receivable balance and a net settlement
taking place between Argentex and the
firm depending on market movement
over the course of the contracts.
40
Annual Report 2021 We are proud of our high
quality and diverse client
base without being overly
exposed to any single sector.
Harry Adams
Chief Executive Officer
Technology
Oil and Gas
Institutional
Client
Venture-backed technology
companies frequently raise
capital in, for example, USD via
funding rounds but have major
cost bases in the UK and Europe,
respectively. We help maximise
the value of raised funds versus
the cost base currencies via timely
execution, order targeting and our
in-house specialist market analysis.
Furthermore, we support flexible
risk management hedging solutions,
fixing income to cost base currencies,
and ultimately helping protect the
value of raised capital and income
versus planned future cashflows in
other cost base currencies.
Oil and Gas producers face major
income versus cost FX exposures.
Income principally in USD and, for
example, sterling cost bases in the
UK, such as North Sea producers.
On a fundamental level, we offer
key assistance in timely execution
of income into cost base purchase
currencies, via our market analysis
and target order-based approach.
Moreover, we help formulate flexible
risk management strategies across
Forward Contract and Derivate
Hedging. This can range from
developing an overall group hedging
policy, to offering our expertise in
securing specific sales contracts via
a full suite of hedging products.
Our client is an institutional asset
manager with funds domiciled in
GBP and EUR and investments
across EMEA and the US. Argentex
provides a suite of services both
laterally and vertically through the
asset manager’s supply chain; from
sharp execution of simple spot
deals at fund level when entering
or exiting an investment, rolling
hedges to mitigate fluctuations in an
investment’s value where domiciled
in a different currency to the fund’s
base currency, at management
company level to hedge management
fees paid in foreign currency, and at
individual partner level where carry
is paid in foreign currency.
41
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
O U R C L I E N T P R O P OS I T I O N
Ways of
doing
business.
“The one thing our core
clients do have in common
is that they like dealing
with people, as do we.”
- Harry Adams, 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
and 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 £5m)
— Personalised
hedging strategies
42
Annual Report 2021 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
Shareholders
We are committed to achieving long-
term, sustainable growth for our
shareholders. 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 workforce 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.
43
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information H OW W E W I N N E W B U S I N E SS
Sales and
Performance.
Repeat
business.
The bar chart to the right
illustrates that repeat business is
by far the largest source of revenue
since the Business’ inception. It
is also the main reason Argentex
was formed to target corporate, as
opposed to private client business,
which makes up just 3% of the
firm’s revenue.
There is a natural attrition that
occurs as a result of human
capital mobility, changes to client’s
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 effective way to encourage
the consistency and performance
which is underpinned by our
extensive training programme.
44
New vs repeat
business
Corporate
revenue 2021
£7.4m
26+
£20.7m
New
Repeat
74
2014
£1.5m
2015
2016
2017
2018
2019
£2.4m
£4.9m
£5.6m
£9.6m
£14.5m
2020
2021
£22.6m
£20.7m
Annual Report 2021 Improving
sales efficiency
over time.
We have fostered a high performance
culture through our high rewards
and incentive programme.
Our tried and tested approach
of recruiting and training our
employees from a grass roots level
leads to a longer learning curve for
a recruit, but one that ultimately
pays off for those that remain. Each
recruit is rigorously trained by our
experienced team, including sessions
hosted by the founders.
The rewards for salespeople are
significant. 10-17.5% of the revenue
generated by their client, for the life
of a client (as long as the salesperson
is employed) will be paid. What
determines their commission
percentage is quarterly targets,
which are new-business based.
The figures to the right show
the average sales made per year
of employment.
Sales Team
— Recruited from grass roots
— Trained to sell ‘our way’
— Receive a commission 10-17.5%
— Commission paid for life
of client
— New Business Targets
Dealing Team
— Minimum 10 years experience
— All regulated to give advice
— Receive flat commission of 10%
— Each dealer looks after 200-300
active clients
Sales made by
years employed
Year 1
£0.07m
Year 2
£0.25m
Year 3
£0.71m
Year 4
Year 5
£1.34m
£2.06m
Year 6+
£4.59m
45
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
2021 AC H I E V E M E N TS
Goals.
Continue to improve productivity
Maintain a diverse client base
Generating revenues from options
Continued investment in people
Strong Governance
Driving
forward
“ Argentex is well
placed to continue
its long-term
growth trajectory.”
Harry Adams
Chief Executive Officer
46
Annual Report 2021
Outcomes.
→
→
→
→
→
→
→
→
→
→
→
Delivered on our commitment to growing our team
Further investment in our online client experience
Seamless transition to working-from-home
41% of revenue generated from top 20 clients
Revenue from top 20 clients was £11m
Record number of 100 new corporate clients signed in January 2021
Winning back flow lost to banks
Professional and Eligible Counterparty clients only
Recruitment of a Head of Options in 2021
21 new hires in 2021
New CFO in February 2021
→
Immaterial instance of bad debt
47
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information 2021 AC H I E V E M E N TS
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.
48
May 2020
→
The Amsterdam office
makes it first trade
September 2020
→
→
Argentex moved into its
new HQ at 25 Argyll Street,
12,500sqft of office space in the
heart of London’s West End
Cumulative revenues
surpass £100m
November 2020
→
Total currency sold
surpasses £50bn
December 202o
→
Q3 was our record quarter in
terms of revenue (£8.65m)
February 2021
→
Jo Stent joins as CFO
Annual Report 2021 LO O K I N G F O RWA R D
Achieving
growth
strategies.
1. Expand sales force
→
Increase sales team to 50 people by 2023
2. Increase productivity
→
→
Further investment in to our tech to improve the customer
journey and user experience.
Average revenue per salesperson 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
Customised and flexible solutions are our speciality
49
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information F I N A N C I A L R E V I E W
Year at
a glance.
A robust response to challenging headwinds coupled
with a relentless focus on sustainable growth.
In the most challenging of recent times, Argentex’s long-
term focused, sustainable business model underpinned
its ability to withstand heightened levels of uncertainly
and volatility in the marketplace to deliver revenues
consistent with the prior year. At the same time the Group
maintained its relentless focus on its growth ambitions as
laid out at its IPO in the previous financial year.
Argentex has demonstrated resilience in FY21 and
management has continued to display a robust approach
to risk, a rigorous client acceptance process and deep
experience in the dealing team. These key attributes
coupled with high touch customer service give Argentex an
unrivalled, high quality, low risk offering in the marketplace.
Revenues remained stable in FY21 compared to the prior
year, which up until FY20 represented year-over-year
compound growth rates of 30%. We saw a return to growth
in H2 of FY21, with revenues in the last six months of
the year up 39% compared to the first six months of the
year. The number of corporate clients traded in the year
increased 14% to 1,385, with 27% of revenue representing new
business. In total, 665 new corporate clients were signed up
in FY21, representing an uplift of 40% on the previous year.
Argentex remains firmly committed to its growth ambitions
and a strong balance sheet coupled with a low appetite
for risk afforded the Group the ability to continue with
its operational investment program. In FY21 included
the move to new modern premises with capacity for the
planned increase in headcount across all departments and
a non-contracted option to extend its footprint in the near
future. The program also included continued investment
in the Group’s bespoke curated technology platform which
supports the high touch customer service at the heart of
the Group’s ethos. This has led to a planned short-term
decrease in operating margins, with underlying operating
profit for FY21 of £8.7m in line with expectations. The
increased capacity offered by the new premises will
allow the Business to grow with the addition of new
hires across all departments including sales. In terms of
the corresponding revenue generation associated with
investments made in FY21, on average new sales staff hired
begin to deliver meaningful contributions to revenue
in years 3 and 4 of tenure therefore this, in addition to
the existing sales team increasing their contributions to
revenue in line with tenure, supports the Group’s growth
plans moving forward.
FINANCIAL PERFORMANCE
Argentex delivered a strong performance in FY21 in line
with expectations, with revenues consistent with prior
year at £28.1m (2020: £28.9m). Performance in H1 was
significantly impacted by the onset of the pandemic as
trading was put on hold for many of our clients as they
adjusted to a dramatically different set of circumstances.
In H2 however, Argentex saw a return to growth in
revenues and experienced a record trading quarter between
October and December 2020.
The total number of corporate clients traded in FY21 was
1,385, representing an increase of 14% on the prior year. 499
of these represent new customers, in turn demonstrating
strong customer acquisition. Revenues per customer for the
full year were impacted by reduced trading activity in H1.
50
Annual Report 2021 “ Management has demonstrated
resilience in FY21 and has
continued to display a robust
approach to risk, a rigorous client
acceptance process and deep
experience in the dealing team.”
Jo Stent
Chief Financial Officer
Underlying earnings (note 14 in the financial statements)
of £6.7m in FY21 represents a decrease of £3.3m compared
to prior year. In spite of challenging economic and trading
headwinds in FY21, the Group, in benefiting from a strong
balance sheet, has continued with operational investment
in growth. As indicated in the FY20 annual report, FY21
saw the move to new premises with capacity for planned
increases in headcount across all departments which
combined represents £2.4m or 73% of the £3.3m decrease,
of which £1.1m is related to IFRS 16 accounting charges. In
addition, we continued to invest in technology in support
of our tailored service-led customer-focused offering
which, in line with our accounting policy, is capitalised on
our balance sheet as an intangible asset and amortised
over a three year period. The increase in investment in
technology has led to an increased amortisation charge
of £0.3m year-on-year. Other anticipated increases in
operating cost in the year are as a result of items relating
to the running of a listed business such as broker fees and
other additional governance and reporting-related services.
Underlying earnings of £6.7m take into account
normalisation for non-recurring items of £0.7m which, as
per note 9 of the financial statements, represent set up
costs in the Netherlands, overlap costs relating to the office
move and senior management changes.
After taking into account non-recurring items and the
revised cost base for Argentex, the Group has accumulated
retained earnings of £11.2m which can be used to assess
the value of the proposed final divided relating to this
financial year.
FINANCIAL POSITION
Argentex views its ability to generate cash from its trading
portfolio as a key indicator of performance within an
agreed risk appetite framework. As at 31 March 2021,
Argentex has cash and cash equivalents of £38.4m, a
decrease of £10.8m on prior year. Total cash and cash
equivalents include client balances pertaining to collection
of any collateral and variation margin in addition to routine
operating cash balances. Of the £10.8m decrease in cash,
£3.9m corresponds to our investment in new premises and
continued investment in technology in support of growth
plans. A further £2.3m was returned to shareholders in line
with our dividend policy. The remaining £4.6m relates to
movements in client balances held.
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. To date, Argentex has generated revenues
in a ratio of approximately 50:50 between spot and forward
contracts outside of options revenues. While spot FX
contracts attract a smaller revenue spread, the inherent
risk profile is much reduced and cash is generated almost
immediately. As such, having this proportion of revenues
generated by spot trades with a minimal working capital
cycle creates a strong positive immediate cash flow for the
Business compared to its operating cost base.
Argentex continues to enjoy a high percentage of trades
converting to cash within a short time frame, which is
a result of almost 50% on average of trades being spot
contracts in addition to forward contracts carrying a
relatively short tenor on average. Although FX forward
contracts carry a higher inherent risk than spot contracts,
51
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
the average tenor of a forward contract at Argentex
continues to be less than 5 months. As a result of the blend
between spot FX contracts and the average tenor of FX
forward contracts, Argentex is a highly cash generative
business with much of the portfolio generating cash in less
than 5 months on average. When combined with the cash
flow profile of the spot FX contracts, Argentex measures
short-term cash return as follows:
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)
2021
£m
28.1
2020
£m
28.9
(6.8)
(7.5)
21.3
76%
21.4
74%
PORTFOLIO COMPOSITION
Argentex’s client base continues to grow with an additional
665 new corporate clients signed up in 2021. Even when taking
growth into account however the composition of our client
portfolio remains consistent year-over-year in that it consists
of similar businesses with exposures in the major currencies
of sterling, euro and US dollar. At year end, over 80% if the
Group’s portfolio was comprised of trades in those currencies
and hence the Group’s exposure to exotic currencies or
currencies with higher volatility and less liquidity remains
significantly limited.
Argentex has put in place a low risk approach to managing
collateral requirements with institutional counterparties
to mitigate significant volatility risk which, when coupled
with a selective and robust client acceptance process, has
ensured that Argentex continues to avoid any material
issues over settlement. In addition, as a result of a
conservative approach to risk, Argentex continues to enjoy
immaterial occurrence of bad debt.
Financial
update
“ Argentex’s client base
continues to grow with
an additional 665 new
corporates in 2021.”
Jo Stent
Chief Financial Officer
52
Annual Report 2021
KEY PERFORMANCE INDICATORS
The Group measures its performance using the
following Key Performance Indicators:
28.1
28.9
21.91
Number of traded corporates
2021
2019
2020
Revenue (£m)
+9+11+12+13
+12+12+12+12
13.23
2020
2020
2019
2019
2018
2018
2018
2021
2021
1,385
1,212
1,141
898
49
45
48
48
55
52
52
51
Spot/Forward revenue mix
Underlying Earnings
FY 20211
£6.7m
£10m
£7.8m
FY 20201
FY 2019
¹ Note 14 to the Consolidated Financial Statements
Short-term cash return
76%
74%
79%
2021
2020
2019
DIVIDEND
The Board of Directors is recommending a final dividend for
year ended 31 March 2021 of 2p per share. Subject to approval
at the Annual General Meeting to be held at 2:30pm on the
4 August 2021, the payment will be made on 13 September
2021 to shareholders on the register at 13 August 2021.
Jo Stent
Chief Financial Officer
53
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information
ST 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. Specifically,
each Director confirms that during the
year, they have acted to promote the
long-term success of the Company for
the benefit of shareholders, and in doing
so have given regard to factors (a) to (f) of
s172(1) of the Companies Act 2006, being;
a. The likely consequences of any
decision in the long-term,
b. The interests of the
Company’s employees,
c. The need to foster the company’s
business relationships with
suppliers, customers and others,
d. The impact of the company’s
operations on the community and
the environment,
e. The desirability of the company
maintaining a reputation for high
standards of business conduct, and
f. The need to act fairly as between
members 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.
COVID-19
Throughout the pandemic, there has
been clear and regular communication
with the Board and our employees.
The board has met 8 times this year
and on each occasion COVID-19 has
been an agenda point ensuring the
welfare of our staff and the resilience
of our business. Clear and frequent
communication to our employees has
occurred during the year ended March
31. We have invested in our technology
to ensure working from home was
seamless. We have communicated to
investors through trading statements
and investor presentations. Throughout
the pandemic we have shown high
standards of business best practice.
Our 5 Key
Stakeholders
1. Our Customers
2. Our Employees
3. Our Environment
and Communities
4. Our Investors
5. Our Partners
54
Annual Report 2021 Our
Customers
34
39
46
Our
Employees
09
14
47
49
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.
Our Environment
and Communities
60
Our environment and
Long-term sustainability
Through the ‘Brokering
Our communities value
our local communities
and integrity are
Better Lives’ initiative, we
sustained and long-term
important components
will partner with local
support. This is achieved
of Argentex’s culture.
charities that support
through a combination
We recognise that
the communities in
of continual dialogue,
community engagement
which we operate, and we
financial donations and
is vital to our ability to
also have partnerships
meaningful director
deliver long-term returns
at national and global
engagement.
for our stakeholders.
levels, e.g Planet Mark
Therefore we carefully
and Cool Earth.
consider our impact
on the communities in
which we operate and
on the environment. Our
commitment is embodied
by our ‘Brokering Better
Lives’ initiative.
Our
Investors
43
73
75
82
Our
Partners
60
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
external borrowings.
Those who have a direct
Their vital contributions
Our partners want us to
The Directors work to
working, regulatory or
to our business provide
be trustworthy and live
find mutually effective
contractual relationship,
services, advice or
up to our promises.
ways to communicate
or share a mutual
oversight.
interest with us.
and collaborate with each
group. High standards
of health, safety and
security underpin
everything we do.
55
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information ST R AT E G I C R E P O RT
Key strategic
decisions.
DIVIDEND POLICY
The Board committed to our stated
policy, paying a full dividend based on
the 2020 results in September despite
the market volatility, and declaring a
final dividend for 2021. As a board we
appreciate the value of dividends to
our shareholders who experienced
widespread dividend cancellations
and deferrals through the year.
LTIP
The Board consulted extensively
on the final form of the Group’s
long-term incentive plan. Any staff
incentive plan must strike the
right balance between reward, staff
retention, and value for the existing
shareholders. Any share options
issues in the year were issued at
a premium to the market price of
between 12% and 16%, giving dilution
protection to investors before
employees enjoy participation.
HEADQUARTERS
The Board approved proposals for
the new 10 year lease of a London
headquarters. The specification for the
new premises was carefully designed
to provide a productive workspace
that will also aid recruitment of
high calibre individuals associated
with Argentex. The plans for the
headquarters were created with
employee safety as a priority, as well
as on-premises fitness facilities to
promote health, fitness and wellbeing.
OPERATIONAL RESILIENCE
The Board acted swiftly to enact
remote working protocols for all
employees at the height of the
pandemic. The Board also reviewed
and approved proposals for returning
to work in a COVID safe manner,
implementing strict processes for
employees to return
56
Annual Report 2021 S U STA I N A B I L I T Y ST R AT E GY
Sustainability.
At Argentex, we believe that the right focus on
environmental, social and governance issues through
our sustainability strategy will support continued
success and yield greater business benefits in the
transition towards a sustainable economy.
In addition, we recognise the need to
adapt our corporate strategy and purpose
to include appropriate consideration of
global megatrends such as the climate
emergency and rising inequality that
are rapidly reshaping the context within
which businesses operate today.
During this financial year, we have
commenced consultation both externally
and internally to identify a sustainable
purpose for Argentex. Over the coming
year, we will focus on the development
of our sustainability strategy and
will work towards the alignment and
integration of this strategy across our
business culture and operating model. A
key objective for the coming year will be
to identify our path to net zero.
The development and alignment of our
sustainability strategy will be led from
the top by our Board and our Senior
Independent Director Lena Wilson CBE,
who has longstanding experience in
this area and who has completed the
Cambridge Institute for Sustainability
Leadership programme and is our Board
Sustainability Champion.
Responsibility for the integration and
delivery of our sustainability strategy
is guided by Argentex senior leadership.
Measurable goals will be implemented
to ensure success is achieved, such
as the maintenance of our Planet
Mark certificate and carbon emissions
tracking, charitable hours donated and
our commitment to measuring our
social value. Each staff member will
have a set of objectives in their annual
performance and development reviews
aligned with the sustainability strategy
goals and we will create initiatives
to engage staff at every level to
inspire and lead while setting positive
examples across the industry.
Our work this year on identifying a
sustainable purpose has resulted in the
creation of ‘Brokering Better Lives’, an
initiative designed in consultation with
our employees with our sustainability
strategy in mind which will serve as a
tool to engage all of our colleagues to
collaborate in driving our sustainability
strategy forward in the future.
Our vision
“ Our vision is to
continually build a
trusted business that
improves the quality
of life for all our
employees, clients,
and communities.”
Harry Adams
Chief Executive Officer
60
Annual Report 2021
Brokering
Better Lives
Our People.
Our Clients.
Our Communities.
We empower our people to do
their best by providing a healthy
work culture and tools to build
their skills.
We support our clients by
consistently innovating and
delivering our very best.
We create positive change
through active engagement with
our communities and reducing
our environmental impact.
— Work Culture and Wellbeing
— Customer Experience
— Climate Action
— Ethical Values and Behaviours
— Responsible Investment
— Employee Development
and mentoring
and Products
— Transparent Communications
and Stakeholder Engagement
— Technology, Customer
Security and Innovation
— Thought Leadership and
Financial Education
— Access to the Profession and
Social Mobility
— Charities and Volunteering
— Collaboration and Partnerships
Maintaining wellness
within the Argentex Team.
As part of Argentex’s commitment to our staff work culture and
wellness particularly through the national lockdowns, daily exercise
challenges were set to encourage group participation, promote fitness
and team spirit during a potentially isolating time. The Argentex 20 Day
Wellness Challenge was launched: a series of virtual classes that could
be attended from home. A point system was introduced to encourage
attendance, competition and ultimately improved health and well being.
61
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information R 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 sound
risk management framework that provides a
structured process for identifying, assessing
and managing risks associated with the Group’s
business objectives and strategy.
“ Argentex remains
firmly committed to
pursuing its growth
ambitions while
adopting a balanced
and prudent
approach to risk.”
- Jo Stent,
Chief Financial Officer
62
Annual Report 2021 Market Risk
DESCRIPTION and potential impact
Market Risk is the risk that the value
of the Group’s income, liabilities,
assets or costs may experience
adverse changes due to changes in
the value of financial market prices.
MITIGATION
As Argentex acts in a riskless
principal capacity, market risk is
hedged and therefore limited to
the Group’s own funds in foreign
currency. These currency amounts
are regularly reviewed to ensure no
unnecessary FX exposures are held.
The Group holds no other exposures
which bear market risks.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
COVID-19 and Brexit have caused
significant volatility in financial
markets through the period, and
the Group continues to monitor and
review the impact and potential
threats to the risk environment as
these events continue to unfold.
The Group is satisfied that existing
processes and procedures in place
to monitor these potential threats
are adequate.
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 Group 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 Group is
able to continue in operation with
little to no financial detriment to
itself or its clients.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group has successfully navigated
a significant proportion of the year
in a work-from-home state for all or
most of the employees. Operational
effectiveness and resilience were key
to the sucess and therefore the Group
believes that there is no incremental
residual operational risk.
Liquidity Risk
DESCRIPTION and potential impact
Liquidity risk is the risk that the
Group 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 Group’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 Group 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.
↓ DECREASE IN RESIDUAL RISK
RATIONALE
In this financial year, turbulent
financial markets have placed a
premium on liquidity and short-term
cash availability. The Group continues
to be well capitalised and monitors
liquidity dynamically in response to
the numerous economic events of
the year. To further mitigate the risks
of short-term liquidity stresses, the
Group has renegotiated ISDAs with
key counterparties to reduce the
risk of significant cash consumption
during times of high volatility in
financial markets, supporting a
reduction in residual risk.
Credit Risk –
clients
DESCRIPTION and potential impact
Credit risk reflects the risk that the
Group is unable to realise the cash
value of its assets.
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
63
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information 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.
↑ INCREASE IN RESIDUAL RISK
RATIONALE
The COVID-19 pandemic and
the related economic impact has
undoubtedly placed many businesses
in financial difficulty. The Group
continues to maintain low levels
of bad debt, in line with historic
averages and continues to monitor
all exposures and refresh client
credit profiles regularly. As a matter
of prudence the Group believes that
the significant increase in percieved
market risk means a corresponding
increase in residual risk to the
business albeit the Group has not
experienced any major adverse impact
in year.
64
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 Group 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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group regularly evaluates
its exposures to its banking
counterparties, and is satisfied that
capital and prudential buffers held by
them are sufficient to operate in the
current economic climate, as well as
withstand further shocks.
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 Group
has a governance structure in place that
allows for the identification, control, and
mitigation of material risks resulting
from the operations of the Group.
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.
Annual Report 2021 ↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
UK, EU and global financial regulation
continues to develop, bringing increased
obligations on the Group. The Group
continues to grow its compliance team
and use external advisors to stay ahead
of any impending regulatory change.
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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The board continues to invest in the
strength of the leadership team and
other key personel and is satisfied
that this in addition to ongoing
sucession planning mitigates the risk
of loss of key personel.
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 Group and its clients.
MITIGATION
The Group 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 Group 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).
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group’s transitions between
remote and office working have been
affected with minimal disruption.
Furthermore, the Group’s new
headquarters have facilitated the
streamlining of a number of key
processes and procedures, combined
with adoption of cloud-based
technology for the majority of the
Group’s infrastructure.
65
Strategic ReportGovernanceCompany OverviewFinancial StatementsOther Information Cyber Risk
COVID-19
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.
DESCRIPTION and potential impact
The continuing risk of COVID-19
negatively impacting the Group
either through direct health risks
to staff and key stakeholders of the
Group, or further adverse impact on
the economy.
BOARD APPROVAL
The Strategic Report as set out on
pages 26 to 66 was approved by the
Board of Directors on 30 June 2021
and signed on its behalf by
Jo Stent
Chief Financial Officer
30 June 2021
MITIGATION
The Group works with its key
counterparties who assist in the
processing and storage of relevant
data to ensure the Group is up to
standard on all relevant legislation.
The Group 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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The pervasive threat of cyber
crime remains a high risk and a key
priority of the Business. There
have been no significant
developments in the current year
to elevate the assessment.
MITIGATION
The Group’s primary responsibility
is the safety and welfare of its
staff. The Group has developed its
pandemic response as the threat
evolves, and has robust policies and
procedures that facilitate remote
working and a safe return to work.
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 all staff,
whether working remotely or in the
office when available.
↑ INCREASE IN RESIDUAL RISK
RATIONALE
Argentex is acutely aware of the
ongoing negative impact COVID-19
is having on many industry sectors.
While the UK’s vaccine rollout
offers considerable hope of a
return to normality, the ongoing
global disruption causes the Group
to remain cautious and focus on
strengthening its already robust risk
controls, and continue to prioritise
balance sheet strength.
66
Annual Report 2021
G OV E R N A N C E
Board of
Directors.
Lord Digby Jones Kb.
Non-executive Chairman
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.
Harry Adams
Co-Chief Executive Officer,
Co-Founder
Harry is a founding partner of
Argentex. As Co-CEO, Harry 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.
71
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information Carl Jani
Co-Chief Executive Officer,
Co-Founder
On the 11th June 2021 Carl resigned
as Co-CEO. As Co-CEO, Carl
together with Harry was jointly
responsible for the strategic
direction of the Business. Carl
oversaw the Operational divisions
of Argentex, maintaining the
highest level of compliance,
corporate governance and risk
mitigation. He was 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.
72
Jo Stent
Chief Financial Officer
An experienced CFO, Jo has
spent the majority of her 25-year
career in senior finance roles in
global, fast-paced organisations
and has operated in a number
of sectors and geographies.
She has a demonstrable track
record in organisational scaling
and international expansion in
addition to building best in class
finance functions. Most recently,
she was CFO at the European Tour
and the Ryder Cup, and prior to
that CFO of Vodafone Americas.
She has also held senior finance
roles in Telus Communications Inc,
Deloitte and Scottish & Newcastle
plc. Jo qualified as a Chartered
Accountant with EY, and is a non-
executive director at UK Coaching.
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.
Annual Report 2021 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.
73
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information G 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 2021.
For the purpose of this report, ‘the Company’ means
Argentex Group PLC, a public limited company
incorporated in England & Wales with registered number
11965856 with and with registered office of 25 Argyll
Street, London, W1F 7TU. 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
26 to 66. The Group’s profit after taxation for the year
was £5.9m as set out in the Consolidated Statement of
Profit or Loss on page 102.
DIVIDENDS
In line with the Group’s dividend policy, the directors are
recommending a final dividend of 2p per share, a total
amount of £2,264,150 for the year ended 31st March 2021.
Full particulars of the dividends are contained within the
financial review on page 53.
DIRECTORS
The Directors of the Company who held office
during the year were:
— Carl Jani
— Harry Adams
— Sam Williams (resigned 31 January 2021)
— Jo Stent (appointed 1 February 2021)
— Lord Digby Jones Kb.
— Lena Wilson CBE FRSE
— Nigel Railton
— Jonathan Gray
— Henry Beckwith
Biographies of the directors including their
committee memberships are set out on pages 71 to 73.
DIRECTORS INTERESTS
The remuneration, principal terms of employment
and the interests of the Directors in the Company’s
shares are detailed in the Remuneration Committee
Report on pages 84 to 89. 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 2022, taking into consideration the
74
Annual Report 2021 current operating environment, including the continuing
impact of the Coronavirus pandemic.
The Board of Directors of are confident that in context
of the Group’s financial requirements there is sufficient
flexibility and liquidity 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 twelve 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. 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 22 of the
Consolidated Financial Statements.
EMPLOYEE INVOLVEMENT
The Group continues to involve its staff in the future
development of the Business, and provide working
conditions to engender high performance and certain
employees are participants in the Group’s share plans, which
comprise a CSOP plan which was issued at IPO, and, a 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 fundamental to 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. The Section 172 Statement on pages 54 to
55 provides a comprehensive overview of the Group’s
commitment to stakeholder engagement.
SUSTAINABILITY
We are committed to the Group being a responsible
corporate citizen and in the year ended 31 March 2021
we commenced work on our sustainability strategy
starting with defining our sustainability purpose and the
introduction of the ‘Brokering Better Lives’ initiative as
outlined in pages 60 to 61 in the report.
ANNUAL GENERAL MEETING
The AGM will take place on 4th August 2021 at 2.30pm at
25 Argyll Street, London, W1F 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 26 of the Consolidated Financial Statements.
SUBSTANTIAL SHAREHOLDINGS
At 31 March 2021, the company had been notified of the
following interests (excluding Directors within the Group)
representing 3% or more of its issued shared capital:
CORPORATE GOVERNANCE
A full review of Corporate Governance appears on pages 78
to 83.
Shareholder
Number of
ordinary shares
% holding
Pacific Investments
Limited
Gresham House
Asset Management
14,195,191
12.54%
7,312,597
6.46%
Amati Global Investors
5,982,412
5.28%
AUDITOR
We announced via RNS on 12th April 2021 that the year
ended 31 March 2021 will be the final year that Nexia Smith
and Williamson will be in office as auditor. For the year
ended 31st March 2021, the Group is satisfied that Nexia
Smith and Williamson are independent and there are
adequate safeguards in place to safeguard their objectivity.
The Group has carried out a tender process to propose
a new auditor for the year ending 31 March 2022 and a
resolution to appoint the new auditor will be proposed at
the AGM on 4th August 2021.
75
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information 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.
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 the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
On behalf of the Board
Jo Stent
Chief Financial Officer
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 that law the
Directors have elected to prepare the group and parent
company financial statements in accordance with
international accounting standards in conformity with
the requirements of the Companies Act 2006.
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 international accounting standards in
conformity with the requirements of the Companies
Act 2006 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.
76
Annual Report 2021
G OV E R N A N C E
Corporate
Governance
Report.
Dear Shareholder,
The following chapter details our Corporate Governance Report,
which outlines how the Group’s governance framework supports
and promotes its long-term success, and provides an overview of
the activities of the Board and its Committees during the period
under review.
As an AIM listed business, Argentex’s governance framework is
based on the QCA Corporate Governance Code (the Code). The
Code is publicly available at www.frc.org.uk. Details of how we
have applied the principles of and complied with the provisions
of the Code during 2021 are set out in this report and the
Remuneration Committee Report.
Best practice is adopted wherever possible to facilitate robust
risk management and the promotion of a strong governance
environment. 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.
How we do business has not changed over the last year - 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 as the
effectiveness of risk controls. This information is relayed to the
Board for consideration and review.
The Board remains committed to develop best practices 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 shareholders.
Lord Digby Jones Kb.
Non-Executive Chairman
Lord Digby Jones Kb.
Non-Executive Chairman
78
Annual Report 2021 The QCA Corporate
Governance Code.
1. Establish a strategy and business model which
promotes long-term value for shareholders.
26
Strategic Report
2. Seek to understand and meet shareholder
needs and expectations.
43
144
Investor / Shareholders
Shareholder communications
3. Take into account wider stakeholder and
social responsibilities and their implications
for long-term success.
54
43
Section 172 Statement
60
Sustainability Initiative
Other Stakeholders
4. Embed effective risk management,
considering both opportunities and threats
throughout the organisation.
62
Principal Risks & Uncertainties
80
Internal Controls & Assessments of Business Risk
79
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information 5. Maintain the Board as a well-functioning
balanced team led by the Chair.
71
78
Board of Directors
Corporate Governance Statement
6. Ensure that between them the Directors have
the necessary up to date experience, skills
and capabilities.
71
Board of Directors
82
Board of Effectiveness
7. Evaluate Board performance based on
clear and relevant objectives, seeking
continuous improvement.
82
Board of Effectiveness
84
Remuneration Committee Report
8. Promote a corporate culture that is based on
ethical values and behaviours.
78
Corporate Governance Statement
80
Audit Committee Report
84
Remuneration Committee Report
9. Maintain governance structure and
processes that are fit for purpose and support
good-decision making by the Board.
38
Clients
23
Culture
23
Business Culture, Behaviour & Ethics
60
Sustainability Initiative
10. Communicate how the Company is
governed and is performing by maintaining
a dialogue with shareholders and other
relevant stakeholders
78
Corporate Governance Statement
80
Annual Report 2021 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
two 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.
CHANGES TO THE BOARD
On 20th January, the Board was pleased to announce the
appointment of Jo Stent as Chief Financial Officer with
effect from 1 February 2021. Jo Stent replaced Sam Williams,
who is leaving Argentex to pursue other opportunities.
Carl Jani, Co-CEO, took a leave of absence from the
Business for health reasons on the 20th January. As per the
announcement on the 11 June 2021 Carl Jani stepped down
from his role as Co-CEO.
There were no other changes to the Board.
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 devote 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 eight 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 83 outlines the scheduled Board and Committee
meetings with attendance of each Board Member.
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.
81
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
The Audit Committee is comprised of Lena Wilson CBE
FRSE, Jonathan Gray, Henry Beckwith and Nigel Railton is
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 is a matter for the Chairperson
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.
recommendations regarding changes to the composition
of the Board will be evaluated fully. The Chairman
carries out appraisals of the Board, the Committees and
the individual Directors and includes a review of the
fees paid to Non-Executive Directors including the fee
for the Chairman. The formal evaluation process takes
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 is 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.
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 also arranges 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.
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).
BOARD EFFECTIVENESS
The Board reviews its effectiveness by reference to
financial performance, continuing adherence to risk
and compliance frameworks and the overall growth of
the Group. The Board takes account of the opinions and
insights of its advisers, including NOMAD, auditors, and
legal advisers. The method of assessing Board effectiveness
and performance is also reviewed on a regular basis, and
All Directors will normally attend each AGM and
shareholders are given the opportunity to ask questions. In
addition, the Chief Executive 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.
82
Annual Report 2021
Attended meeting
Absent
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
Jo Stent
Board Meetings
Chair
Audit Committee
Chair
Remuneration
Chair
Nominations
Chair
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.
83
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information 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 2021 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 in this Remuneration
Report is disclosed to fulfil the requirements of AIM Rule 19. By complying
with the requirements of the QCA Corporate Governance Code, Argentex
complies with the requirements of AIM Rule 26. 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 in the previous financial year on
25 June 2019 and prior to this was a private business.
REMUNERATION COMMITTEE
The composition of the committee is shown in the Corporate Governance
Report on pages 78 to 83, 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 three times 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.
“ Argentex is committed
to achieving both high
governance standards
and a simple and
effective remuneration
structure.”
- Jonathan Gray, Chair of the
Remuneration Committee
84
Annual Report 2021
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.
The CSOP was granted at IPO to certain senior employees
of the Group excluding Executive Directors. 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 2020 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 prevailing market price) and are a combination of
UK tax-advantaged company share options and share
options that are not tax-favoured. The awards will vest
in portions of one third on the third, fourth and fifth
anniversaries of grant.
Sam Williams was awarded 452,830 share options as part
of this grant. Upon his departure from the board on 31
January 2021, these options were forfeited in full.
On 25 February 2021, Jo Stent was awarded 452,830
share options under the CSOP, at 135p (representing a
16% premium to the prevailing market price). The share
options are not tax-favoured. Her award has an EPS
growth performance condition attached and will vest at
the same time as the LTIP awards granted on 7 April 2020.
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. The Non-
Executive Directors’ fees are determined by the Board,
subject to the aggregate limit set out in the Company’s
Articles of Association.
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.
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 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.
In the light of the Group’s performance during the year
detailed earlier in this annual report, the Remuneration
Committee determined to pay bonuses of £87,000 to the
CEO and £15,000 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”).
85
GovernanceStrategic 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 2021.
Comparative information (where shown) included
remuneration of the Executive Directors as employees
or members of Argentex LLP, where profit shares were
automatically determined in accordance with proportions of
equity held in the LLP prior to the IPO. 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.
Basic salary/ Fixed
profit shares
Performance related
bonus in respect of FY2021
Other amounts
2020/21 Total
250,000
250,000
125,000
45,000
60,000
-
45,000
45,000
45,000
87,000
-
-
15,000
-
-
-
-
-
-
-
75,000
-
-
-
-
-
-
337,000
250,000
200,000
60,000
60,000
-
45,000
45,000
45,000
31 MARCH 2021
Executive Directors
Harry Adams
Carl Jani
Sam Williams1
Jo Stent2
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
Jonathan Gray
Nigel Railton
Dr Lena Wilson
Notes:
1 To 31 January 2021
2 Appointed 1 February 2021
86
Annual Report 2021 Equity based profit
shares up to the IPO
Basic salary/ Fixed profit
shares since IPO
Performance related bo-
nus in respect of FY2020
2019/20 Total
340,605
340,605
3,710
18,739
248,232
-
-
-
191,346
191,346
152,607
45,923
-
34,442
34,442
29,712
495,000
495,000
180,000
-
-
-
-
-
1,026,951
1,026,951
336,317
64,662
248,232
34,442
34,442
29,712
31 MARCH 2020
Executive Directors1
Harry Adams
Carl Jani
Sam Williams
Non-Executive Directors
Lord Digby Jones1
Henry Beckwith1
Jonathan Gray1
Nigel Railton1
Dr Lena Wilson2
Notes:
Argentex’s IPO was effective 25 June 2019
1 Appointed in June 2019 prior to IPO
2 Appointed on 5 August 2019
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.
Executive Directors
Harry Adams
Carl Jani
Jo Stent
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
Jonathan Gray
Nigel Railton
Dr Lena Wilson
Number of ordinary shares held in
the Company at 31 March 2021
Number of ordinary shares held in
the Company at 31 March 2020
13,749,144
13,749,144
-
396,951
7,425,748
50,000
47,170
-
13,749,144
13,749,144
-
396,951
7,425,748
50,000
47,170
-
87
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information SHARE OPTIONS
The individual interests of the Directors under the
CSOP are as follows:
Date of grant
Number of
CSOP options
Number of
unapproved options
Exercise price
First exercise date 1
Executive Directors
Jo Stent
26 February 2021
0
452,830
£1.35
07 April 2023
Notes:
1 Subject to an EPS growth performance condition.
DIRECTORS’ REMUNERATION FOR THE YEAR
COMMENCING 1 APRIL 2020
Jonathan Gray
Chair of the Remuneration Committee
89
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information G OV E R N A N C E
Nominations
Committee
Report.
As Chair of the Nominations Committee, I am
pleased to present the Nominations Committee
report for the year ended 31 March 2021.
The Nominations Committee has a vital role in ensuring that the Board and
its committees have the right balance of skills and experience and oversees
the Board’s development of succession planning to provide the Company and
shareholders with continuity of talent at senior levels within the company.
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. This enables
the Board and each committee to effectively discharge their duties and
responsibilities in the pursuit of long-term value creation for the
Company’s stakeholders.
COMMITTEE COMPOSITION
The Nominations Committee is comprised of all of the Non-executive
Directors as shown in the Corporate Governance Report on pages 78 to 83.
The Nominations Committee met twice during the year.
KEY RESPONSIBILITIES OF THE COMMITTEE
The full terms of reference for the committee can be found on the Company’s
website at www.argentex.com. The key focus of the committee during the
year included:
— reviewing the structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board and make
recommendations to the Board with regard to any changes;
— giving full consideration to succession planning for directors and other
senior executives taking into account the challenges and opportunities
facing the Company, and the skills and expertise needed on the Board in
the future; and
— keeping under review the leadership needs of the organisation, both
executive and non-executive, with a view to ensuring the continued
ability of the organisation to compete effectively in the marketplace.
Lena Wilson CBE FRSE
Chair of the Nominations
Committee
90
Annual Report 2021 A key focus of the
Committee was the
COVID-19 pandemic,
and Company’s ability to
navigate the challenging
circumstances.
COMMITTEE ACTIVITY
During the year, a key focus of the Committee was the
COVID-19 pandemic, and Company’s ability to navigate the
challenging circumstances. The Committee was involved
in and kept informed of any developments regarding
succession planning in the event of key persons being
taken ill and the Company’s responses to any such events.
The Committee further supported management’s employer
risk assessments and safety protocols for returning to a
COVID-safe working environment as restrictions evolved
through the financial year. The Committee continues to
monitor the impact of the COVID-19 pandemic across all
elements within it terms of reference.
The Committee also reviewed the effectiveness of the
Board by developing a skill matrix, to ensure we had
full coverage of skills and identify any gaps. We did this
by surveying its members with regard to performance
on key themes such as shareholder value, corporate
governance, succession planning, Health and Safety and
CSR. The results of this survey have been presented to the
Board, and this will inform the Board’s strategy and focus
over the coming years to ensure that key priorities are
addressed in a timely and effective manner. In addition to
implementing a skill matrix, the Board also undertook our
annual compliance training, in adherence to best practice.
The Committee plays a key role in all new Board
appointments. During the year, Jo Stent was appointed to
the Board as CFO and we welcome her financial expertise
and global experience to the Board. Her skills will be a major
asset to the Company in its pursuit of long-term growth and
shareholder value creation.
Jo was appointed following a comprehensive evaluation
by the Committee of the skills, knowledge and experience
required to fill the vacancy. The Committee engaged the
services of an external adviser to assist with the search,
and a range of candidates from varying backgrounds
were considered in making the appointment. Prior to
recommendation of the appointment, the Committee
also sought the input of its other advisers including
the Company’s NOMAD to evaluate the outcome of the
Committee’s decision making process.
PRIORITIES FOR 2021/22
The Board will continue to appoint on merit, based on the
skills and experience required for membership of the Board,
while giving consideration to all forms of diversity when the
Committee reviews the Board’s composition.
Lena Wilson CBE FRSE
Chair of the Nominations Committee
91
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information G 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 2021.
The Audit Committee’s key objectives are to ensure
that shareholder interests are protected and that the
Company’s long-term strategy is supported. The Audit
Committee achieves this by 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 composition of the committee is shown in the
Corporate Governance Report on pages 78 to 83. The
committee is comprised of only non-executive directors,
and committee meetings are attended by the Co-CEOs
and the CFO as well as other senior management as
requested. The Committee met five times in the year and
also held meetings with the external Auditors, Nexia
Smith & Williamson. The Committee meets with the
auditor following the finalisation of the annual report
and results independently of management to discuss
any issues arising from the audit. The Chair of the Audit
Committee consults with all committee members prior to
the meeting to ensure all matters arising are raised and
discussed openly.
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:
— Closely monitoring the impact of the COVID-19
pandemic on the Group’s operations and
operational resilience
— Review of the 2020/2021 audit plan
— Reviewing the effectiveness of the external
audit process
— Consideration of significant financial
reporting judgements
— Monitoring the integrity of the financial statements of
the Company and Report
— Going Concern Review
— Review of the risk management and internal
control systems
— Review of the Group’s ICAAP and risk framework
— 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 statements;
— The consistency of, and any changes to, accounting
policies both on a year on year basis and across the
Company and Group;
— The methods used to account for significant
transactions where different approaches are possible;
— Whether the Company has followed appropriate
accounting standards and made appropriate estimates
and judgments, taking into account the views of the
external auditor;
92
Annual Report 2021 — 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).
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 61 to 66 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
re-appointed as auditors to the Company at the Company’s
AGM. The Audit Committee monitors the relationship
to ensure the auditor independence and objectivity
are maintained. The Audit Committee has sought, and
received, the approval of Nexia Smith and Williamson to
extend Guy Swarbreck’s audit tenure beyond the five years
normally permitted by the Financial Reporting Council’s
Ethical Standard (“the Ethical Standard”), in the interests
of safeguarding audit quality following recent changes to
the Group’s CFO and finance team. Following a long and
successful relationship with Nexia Smith and Williamson
(who have audited the Company’s principal trading
subsidiary prior to the Group’s IPO), the committee intends
to conduct an audit tender for the Group for the year ended
31 March 2022. Nexia Smith and Williamson will cease
appointment as auditor upon appointment of a new auditor
at the AGM.
The breakdown of fees between audit and non-audit
function is provided in note 8 of the financial statements.
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.
2021/2022 PRIORITIES
For the year ahead, the Committee will continue to focus on:
1. The continuing impact of COVID-19 and any emerging
risks presented to the Group’s operations
2. Reviewing the Group’s ICAAP and risk frameworks
3. The Group’s international expansion and controls
framework supporting this growth
4. The external audit tender process
5. Consideration of any other 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 2021,
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
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GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
G OV E R N A N C E
Independent
Auditors’
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 2021 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 accounting
standards in conformity with the requirements of the Companies Act 2006. 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 2021 and of the Group’s
profit for the year then ended;
— the Group financial statements have been properly prepared in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006;
— 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.
Report on
the Audit of
the Financial
Statements
94
Annual Report 2021 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 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
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate. Our evaluation of the Directors’ assessment
of the Group’s ability to continue to adopt the going
concern basis of accounting included:
— Reviewing the directors’ assessment and challenging
the assumptions used in the supporting detailed
budgets and forecasts prepared by management for the
period up to 31 December 2022;
— Considering the sensitivity of the assumptions and re-
assessing headroom after sensitivity;
— Considering historical trading performance;
— Considering the group’s funding position
and requirements;
— Reviewing post year end trading performance;
— Reviewing bank statements to monitor the cash
position of the group post year end and obtaining an
understanding of significant expected cash outflows in
the forthcoming 18-month period..
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt
on the Group and parent company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
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.
Revenue
recognition
Description of risk
How the matter was addressed in the audit
The Group earns revenue from broking
deliverable foreign exchange currency
contracts for immediate and forward
delivery and foreign currency exchange
options.
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 of revenue,
including the trade and profit adjusting
amounts. Existence is the risk that trades
did not occur or were misstated.
We reviewed the Group’s revenue
recognition policy as applied to the Group’s
material income streams, with a specific
focus on existence of revenue in the year.
We documented, observed and tested the
design and implementation of key controls
over the accuracy of revenue in the year.
We selected a sample of revenue
transactions and performed testing as
follows:
— We agreed a sample of transactions
from the nominal ledger back to the
trading platform, broker confirmations
and bank statements.
95
GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information
Description of risk
How the matter was addressed in the audit
Revenue
recognition
(contd.)
The Group’s revenue recognition policy is
detailed in note 3.5 to the accounts.
— We also re-calculated the underlying
profit for the sample selected.
— We recalculated the profit adjusting
amounts of year end open positions.
— We agreed a sample of contracts
entered shortly before and after the
year end to ensure only relevant
transactions were included in revenue.
— We also reviewed the reconciliation
between the year end broker
confirmations, the trading platform
and nominal ledger.
OUR APPLICATION OF MATERIALITY
The materiality for the group financial statements as a
whole was set at £562,000. 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 £449,600. This has been
determined by reference to the parent company’s net
assets, as it exists only as a holding company for the
group and carries on no trade in its own right. Materiality
represents 0.4% of the parent company’s net assets as
presented on the face of the parent company Statement
of Financial Position.
Performance materiality for the group financial
statements was set at £449,600, being 80% of group
financial statements materiality, for purposes of
assessing the risks of material misstatement and
determining the nature, timing and extent of further
audit procedures. We have set it at this amount to reduce
to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements
exceeds financial statements materiality. We judged this
level to be appropriate based on our understanding of the
group and its financial statements, as updated by our risk
assessment procedures and our expectation regarding
current period misstatements including considering
experience from previous audits. It was set at 80% to reflect
the fact that few misstatements were expected in the
current period and there is little judgement or estimation in
the financial statements.
Performance materiality for the parent company financial
statements was set at £359,680, being 80% of parent
financial statements materiality, for purposes of assessing
the risks of material misstatement and determining the
nature, timing and extent of further audit procedures. We
have set it at this amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds financial statements
materiality. We judged this level to be appropriate based on
our understanding of the group and its financial statements,
as updated by our risk assessment procedures and our
expectation regarding current period misstatements
including considering experience from previous audits. It
was set at 80% to reflect the fact that few misstatements
were expected in the current period and there is little
judgement or estimation in the financial statements.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The Group consists of the parent entity and three active
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 active
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.
96
Annual Report 2021 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.
OPINIONS 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 in relation to which 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 76, 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.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE
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.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud, is
detailed below:
We obtained a general understanding of the Group’s legal
and regulatory framework through enquiry of management
in respect of their understanding of the relevant laws and
regulations. We obtained an understanding of the entity’s
policies and procedures in relation to compliance with
relevant laws and regulations. We also drew on our existing
understanding of the Group’s industry and regulation.
We understand that the Group complies with requirements
of the framework through:
— The Directors managing and overseeing a compliance
function;
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GovernanceStrategic ReportCompany OverviewFinancial StatementsOther Information — Updating operating procedures, manuals and internal
controls as legal and regulatory requirements change;
— The Executive Directors’ close involvement in the
day-to-day running of the Business, meaning that
any litigation or claims would come to their attention
directly and are considered at Board meetings.
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
30 June 2021
In the context of the audit, we considered those laws and
regulations which determine the form and content of the
financial statements, which are central to the Group’s ability
to conduct its business and where failure to comply could
result in material penalties. We have identified the following
laws and regulations as being of significance in the context
of the Group:
— The Companies Act 2006, international accounting
standards, and FRS 101 in respect of the preparation
and presentation of the financial statements;
— The AIM Rules for Companies; and
— The UK regulatory principles, specifically those
governed by the Financial Conduct Authority (FCA),
including the Client Asset Sourcebook, the Electronic
Money Regulations 2011, and the Markets in Financial
Instruments Directive 2.
To gain evidence about compliance with the significant
laws and regulations above we have reviewed board
meeting minutes, inspected correspondence with the
parent company’s Nominated Adviser and its legal and
compliance advisers, as well as the correspondence with the
FCA relating to the year and obtained written management
representations regarding the adequacy of procedures
in place. We also performed a review of Argentex LLP’s
compliance with the Client Money Rules and its e-money
policies and procedures.
The senior statutory auditor led a discussion with
senior members of the engagement team regarding the
susceptibility of the Group’s financial statements to
material misstatement, including how fraud might occur.
The key areas identified as part of the discussion were
the risk of manipulation of the financial statements
through manual journal entries and incorrect recognition
of revenue. These areas were communicated to the other
members of the engagement team who were not present at
the discussion.
The procedures we carried out to gain evidence in the above
areas included:
— Testing of a sample of revenue transactions to
underlying documentation; and
— Testing of a sample of manual journal entries, selected
through applying specific risk assessments based
on the Group’s processes and controls surrounding
manual journal entries.
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Annual Report 2021
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 2021
Revenue
Cost of sales
Gross profit
Administrative expenses
Underlying operating profit
LLP equity-based remuneration pre-IPO
Non-underlying expenditure
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
102
Notes
6
3.12
9
24
7
12
12
13
14
14
14
14
2021
£m
28.1
(0.5)
27.6
(18.9)
8.7
-
(0.7)
(0.2)
7.8
(0.4)
-
7.4
(1.5)
5.9
-
5.9
5.2p
5.2p
5.9p
5.9p
2020
£m
29.0
(0.4)
28.6
(16.1)
12.5
(1.7)
(0.5)
-
10.3
(0.2)
0.1
10.2
(2.1)
8.1
-
8.1
7.1p
7.1p
8.8p
8.8p
Annual Report 2021 Consolidated Statement
of Financial Position
for the year ended 31 March 2021
Non-current assets
Intangible assets
Property, plant and equipment
Derivative financial assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Derivative financial assets
Total current assets
Current liabilities
Trade and other payables
Derivative financial liabilities
Total current liabilities
Net current assets
Non-current liabilities
Trade and other payables
Derivative financial liabilities
Total non-current liabilities
Net assets
Notes
15
16
17
17
18
17
19
19
20
20
2021
£m
1.7
9.1
4.2
15.0
0.6
38.4
21.0
60.0
(28.5)
(9.3)
(37.8)
22.2
(5.9)
(2.6)
(8.5)
28.7
2020
£m
1.8
0.2
7.2
9.2
0.3
49.2
17.6
67.1
(36.5)
(10.9)
(47.4)
19.7
-
(4.0)
(4.0)
24.9
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Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information F 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 2021
Notes
22
23
24
23
2021
£m
0.1
12.7
0.2
4.5
11.2
28.7
2020
£m
0.1
12.7
-
4.5
7.6
24.9
Equity
Share capital
Share premium account
Share option reserve
Merger reserve
Retained earnings
Total Equity
The financial statements of Argentex Group PLC were approved by the
Board of Directors on 30 June 2021 and were signed on its behalf by:
Harry Adams
Director
Registered number 11965856
104
Annual Report 2021
Consolidated Statement
of Changes in Equity
for the year ended 31 March 2021
Share
capital
Share
premium
LLP
equity
capital
Share
option
reserve
Merger
reserve
Retained
earnings
Total
equity
£m
£m
Balance at 1 April 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
— Issue of share capital
— Cost of issue of equity shares
Balance at 31 March 2020
Comprehensive income
for the year
Profit for the year
Total comprehensive income
for the year
Transactions with owners:
— Dividends paid
— Share based payments
£m
£m
-
-
-
-
-
0.1
-
0.1
-
-
-
-
-
-
-
-
-
14.0
(1.3)
12.7
-
-
-
-
Balance at 31 March 2021
0.1
12.7
£m
3.1
-
-
-
(3.1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.2
0.2
£m
-
8.1
8.1
£m
3.1
8.1
8.1
(0.5)
(0.5)
-
-
-
1.4
14.1
(1.3)
-
-
-
-
4.5
-
-
4.5
7.6
24.9
-
-
-
-
5.9
5.9
(2.3)
-
5.9
5.9
(2.3)
0.2
4.5
11.2
28.7
105
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Consolidated Statement
of Cash Flows
for the year ended 31 March 2021
Profit before taxation
Taxation paid
Net finance expense
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangible assets
Share based payment expense
(Increase)/decrease in receivables
(Decrease)/increase in payables
Increase in derivative financial assets
(Decrease)/increase in derivative financial liabilities
Net cash (used in)/generated from operating activities
Investing activities
Purchase of intangible assets
Purchases of plant and equipment
Share acquisition costs
Net cash generated used in investing activities
Notes
15
16
2021
£m
7.4
(2.1)
0.4
0.2
0.8
1.3
0.2
(0.3)
(8.6)
(0.4)
(3.0)
(4.1)
(1.2)
(2.7)
-
(3.9)
2020
£m
10.2
-
-
0.1
0.2
1.0
-
0.1
16.9
(12.7)
11.2
27.0
(1.1)
(0.1)
(0.1)
(1.3)
106
Annual Report 2021 F I N A N C I A L STAT E M E N TS
Consolidated Statement
of Cash Flows (continued)
for the year ended 31 March 2021
Notes
21
25
11
Financing activities
Payments made in relation to lease liabilities
Proceeds from issue of shares
Short-term loans
Share issuance costs
Dividends paid
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
18
2021
£m
(0.5)
-
-
-
(2.3)
(2.8)
(10.8)
49.2
38.4
2020
£m
(0.4)
14.1
(2.0)
(1.3)
(0.5)
9.9
35.6
13.6
49.2
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Financial 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
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 25 Argyll Street, London, W1F 7TU.
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”).
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 2021 and 31 March 2020 comprise the financial
statements of the Company and its subsidiaries (together, “the Group”).
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 Company has adopted the following amendments to standards which became effective for the annual
reporting period beginning on 1 April 2020. The amendments do not have a significant impact on the Group’s
financial statements.
— Amendments to References to the Conceptual Framework in IFRS Standards
— Amendments to IFRS 3: Definition of a Business
— Amendments to IAS 1 and IAS 8: Definition of Material
— Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform
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.
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 international accounting
standards in conformity with the requirements of the Companies Act 2006.
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 in note 3.6.
3.2. Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future and have assessed the Group’s prospects until the end of 2022, which is
18 months 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.
108
Annual Report 2021
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 26.3 for further disclosures relating to
liquidity risk).
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.
The Board of Directors is confident that in context of the Group’s financial requirements these measures give
sufficient flexibility and 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
Holding company
England
Argentex B.V.
Inactive pending
regulatory authorisation
Netherlands
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
In June 2019, immediately prior to the Company’s admission to AIM, Argentex Group PLC acquired all equity
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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
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 (now Argentex
Foreign Exchange Limited). Argentex LLP, Argentex Capital Limited and Argentex Foreign Exchange Limited
are 100% owned (either directly or indirectly) subsidiaries of Argentex Group PLC and consolidated into these
financial statements.
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.
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).
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.
3.6.1.
Initial recognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.
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
110
Annual Report 2021
reported in the Consolidated Statement of Financial Position.
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.
3.6.3. 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 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.
The Group has not purchased or originated any credit-impaired financial assets.
3.6.6. Classification of financial assets
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 26).
Other financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are
measured at FVTPL (see note 27).
Fair value is determined in the manner described in note 27.
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.
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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.
3.6.9.
Impairment of financial assets
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.
3.6.12. Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is designated as at FVTPL.
Derivative financial liabilities are automatically held 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 27.
3.6.13. Other Financial liabilities
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 and cash equivalents
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.
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Annual Report 2021
3.8. Leases
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 purchase, 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 of use 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.
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.
3.9.
Intangible assets and amortisation
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.
3.10. Property, Plant & Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised
impairment loss.
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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 to five years
Three years
Over the period of the lease
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.
3.12. Underlying operating profit
The Group presents underlying operating profit as an Alternative Performance Measure on the face of the
Consolidated Statement of Comprehensive Income. Underlying operating profit excludes those significant items
of income and expense which, because of the nature and expected infrequency of the events giving rise to them,
merit separate presentation to allow shareholders to better understand the elements of financial performance
in the year so as to facilitate comparison with prior years and to better assess trends in financial performance.
3.13. 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.
3.14. 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.
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Annual Report 2021
3.15. 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.
3.16. 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) at the date of grant.
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.
3.17. 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.
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To assist in making this judgement, the Group undertakes an assessment, at least annually, of the carrying
value of the intangible assets.
(ii) 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 15)
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 26)
Expected credit losses include forward looking estimates which represent management’s best estimate of
the future performance of the Group’s financial assets.
(iii) Share-based payments
In determining the fair value of equity-settled share-based payments and the related charge to the
Consolidated Statement of Profit or Loss, the Group makes assumptions about future events and market
conditions. An estimate must be formed as to the likely number of shares that will vest along with the
fair value of each award granted. The Group uses the Black-Scholes valuation model to determine the
fair value, which is dependent on estimates relating to the Group’s future dividend policy, the timing of
prospective option exercises and the future volatility in the price of the Company’s shares.
5. Segment reporting
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.
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 2021 or 31 March 2020.
6. Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations
Spot and forward foreign exchange contracts
Option premiums
116
2021
£m
27.2
0.9
28.1
2020
£m
27.1
1.9
29.0
Annual Report 2021
To assist in making this judgement, the Group undertakes an assessment, at least annually, of the carrying
7. Operating profit
value of the intangible assets.
Operating profit for the period is stated after charging:
(ii) 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 15)
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.
Depreciation of plant and equipment
Depreciation of Right of Use assets
Amortisation of intangibles
Staff costs (see note 10)
Net foreign exchange losses/(gains)
(ii) Expected credit losses (see note 26)
8. Auditor’s remuneration
Expected credit losses include forward looking estimates which represent management’s best estimate of
the future performance of the Group’s financial assets.
(iii) Share-based payments
In determining the fair value of equity-settled share-based payments and the related charge to the
Consolidated Statement of Profit or Loss, the Group makes assumptions about future events and market
conditions. An estimate must be formed as to the likely number of shares that will vest along with the
fair value of each award granted. The Group uses the Black-Scholes valuation model to determine the
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
— Reporting accountant services
2021
£m
0.2
0.8
1.3
12.6
0.5
2021
£m
0.1
-
2020
£m
0.4
-
1.0
12.6
0.1
2020
£m
0.1
0.1
fair value, which is dependent on estimates relating to the Group’s future dividend policy, the timing of
9. Non-underlying expenditure
prospective option exercises and the future volatility in the price of the Company’s shares.
5. Segment reporting
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 Directors have classified certain costs as non-underlying in accordance with the accounting policy set out in
note 3.12. These costs amount to £0.7m (2020: £0.5m) and for 2021 relate to: i) costs related to moving the Group’s
headquarters which are ineligible for capitalisation; ii) staff costs in relation to Director changes in the Company
and iii) costs related to the creation of and regulatory applications for overseas operations. In 2020, non-underlying
expenditure related to costs associated with the Group’s IPO which were ineligible for capitalisation.
There is no reliance on an individual customer and no customer contributed to more than 10 per cent. of revenues in
10. Staff costs
The average number of employees employed by the Group, including executive and non-executive directors, was:
2021
Number
2020
Number
2021
£m
27.2
0.9
28.1
2020
£m
27.1
1.9
29.0
Directors
LLP members (excl. executive directors)
Sales and dealing
Operations
8
4
37
18
67
8
6
28
12
54
117
the year ended 31 March 2021 or 31 March 2020.
6. Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations
Spot and forward foreign exchange contracts
Option premiums
Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information
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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:
Salaries and LLP members remuneration
2021
£m
7.2
0.9
0.1
0.2
3.2
1.0
12.6
2021
£m
1.0
*Excludes Directors of Argentex Group PLC who are/were also members of Argentex LLP. 2020 figures include
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 LLPs 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 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.
11. Dividends
Amounts recognised as distributions to equity holders:
Dividends declared under the former ownership structure1
Interim dividend declared of 2p per share2
1 paid to former equity holders pre-IPO
2 paid in September 2020
2021
£m
-
2.3
118
2020
£m
5.1
0.7
-
-
4.0
2.8
12.6
2020
£m
2.8
2020
£m
0.5
-
Annual Report 2021
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:
Salaries and LLP members remuneration
11. Dividends
Amounts recognised as distributions to equity holders:
Dividends declared under the former ownership structure1
Interim dividend declared of 2p per share2
1 paid to former equity holders pre-IPO
2 paid in September 2020
2021
£m
7.2
0.9
0.1
0.2
3.2
1.0
12.6
2021
£m
1.0
2021
£m
-
2.3
2020
£m
5.1
0.7
-
-
4.0
2.8
12.6
2020
£m
2.8
2020
£m
0.5
-
12. Finance costs and finance income
Interest on short-term loans
Interest on lease arrangements
Finance Costs
Finance Income
2021
£m
-
0.4
0.4
-
2020
£m
0.2
-
0.2
0.1
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.
*Excludes Directors of Argentex Group PLC who are/were also members of Argentex LLP. 2020 figures include
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 LLPs performance
13. Taxation
Current tax
In respect of the current year
Total tax expense for the year
2021
£m
1.5
1.5
2020
£m
2.1
2.1
Key management are those persons having authority and responsibility for planning, controlling and directing the
Tax has been calculated using an estimated annual effective tax rate of 19% (2020: 19%) on profit before tax.
activities of the Group, or in relation to the Company, 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.
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
Total tax expense for the year
2021
£m
7.4
1.4
-
0.1
1.5
2020
£m
10.2
1.9
0.1
0.1
2.1
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14. Earnings per share
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-
underlying costs as described further in note 3.12. The Group has also excluded 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.
Earnings
Earnings for the purposes of basic and diluted earnings per share
— basic and diluted
Adjustments for:
Non-underlying expenditure
LLP equity-based remuneration pre-IPO
Shared based payments
Tax impact
Underlying earnings (basic and diluted)
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share
Number of dilutive shares under option
Weighted average number of ordinary shares for the purposes of
dilutive earnings per share
Earnings per share
Basic
Diluted
Underlying - Basic
Underlying - Diluted
2021
£m
5.9
0.7
-
0.2
(0.1)
6.7
113.2
0.1
113.3
2021
5.2p
5.2p
5.9p
5.9p
2020
£m
8.1
0.5
1.7
-
(0.3)
10.0
113.2
0.2
113.4
2020
7.1p
7.1p
8.8p
8.8p
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.
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Annual Report 2021
14. Earnings per share
15. 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-
underlying costs as described further in note 3.12. The Group has also excluded 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.
Earnings
Earnings for the purposes of basic and diluted earnings per share
— basic and diluted
Adjustments for:
Non-underlying expenditure
LLP equity-based remuneration pre-IPO
Shared based payments
Tax impact
Underlying earnings (basic and diluted)
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share
Number of dilutive shares under option
Weighted average number of ordinary shares for the purposes of
dilutive earnings per share
Earnings per share
Basic
Diluted
Underlying - Basic
Underlying - Diluted
2021
£m
5.9
0.7
-
0.2
(0.1)
6.7
113.2
0.1
113.3
2021
5.2p
5.2p
5.9p
5.9p
2020
£m
8.1
0.5
1.7
-
(0.3)
10.0
113.2
0.2
113.4
2020
7.1p
7.1p
8.8p
8.8p
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 2019
Additions
At 31 March 2020
Additions
At 31 March 2021
Amortisation
At 1 April 2019
Charge for year
At 31 March 2020
Charge for year
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
Software
development costs
£m
3.4
1.1
4.5
1.2
5.7
1.7
1.0
2.7
1.3
4.0
1.7
1.8
16. Property, plant and equipment
Cost
At 1 April 2019
Additions
At 31 March 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2019
Charge for the year
At 31 March 2020
Charge for the year
Disposals
At 31 March 2021
Leasehold
improvements
Right of use
Asset
Office
equipment
Computer
equipment
Total
£m
0.4
-
0.4
1.7
(0.4)
1.7
0.3
0.1
0.4
0.1
(0.4)
0.1
£m
1.2
-
1.2
7.2
(1.2)
7.2
0.9
0.2
1.1
0.8
(1.2)
0.7
£m
0.2
-
0.2
0.6
(0.2)
0.6
0.2
-
0.2
-
(0.2)
-
£m
0.3
0.1
0.4
0.4
(0.2)
0.6
0.2
0.1
0.3
0.1
(0.2)
0.2
£m
2.1
0.1
2.2
9.9
(2.0)
10.1
1.6
0.4
2.0
1.0
(2.0)
1.0
121
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Net book value
At 31 March 2021
At 31 March 2020
17. Trade and other receivables
1.6
-
6.5
0.1
0.6
-
0.4
0.1
9.1
0.2
Non-Current
Derivative financial assets at fair value (note 26)
Current
Derivative financial assets at fair value (note 26)
Other debtors
Prepayments
Trade and other receivables
2021
£m
4.2
21.0
0.1
0.5
0.6
2020
£m
7.2
17.6
0.1
0.2
17.9
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.
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.
18. Cash and cash equivalents
Cash and cash equivalents
2021
£m
38.4
2020
£m
49.2
Included within cash and cash equivalents are client held funds relating to margins received and client balances
payable (See note 19). 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 of £11.6m (2020: £26.5m). Of this collateral
amount, £0.1m (2020: £1.1m) is not immediately accessible.
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Annual Report 2021
Net book value
At 31 March 2021
At 31 March 2020
17. Trade and other receivables
Derivative financial assets at fair value (note 26)
Derivative financial assets at fair value (note 26)
Non-Current
Current
Other debtors
Prepayments
Trade and other receivables
2021
£m
4.2
21.0
0.1
0.5
0.6
2020
£m
7.2
17.6
0.1
0.2
17.9
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.
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.
18. Cash and cash equivalents
Cash and cash equivalents
2021
£m
38.4
2020
£m
49.2
Included within cash and cash equivalents are client held funds relating to margins received and client balances
payable (See note 19). 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 of £11.6m (2020: £26.5m). Of this collateral
amount, £0.1m (2020: £1.1m) is not immediately accessible.
1.6
-
6.5
0.1
0.6
-
0.4
0.1
9.1
0.2
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.
19. Trade and other payables
Derivative financial liabilities at fair value (note 26)
Amounts payable to clients
Other creditors
Corporation tax
Amounts due to members and former members of Argentex LLP
Accruals
Other taxation and social security
Lease liability (note 21)
Trade and other payables
20. Creditors: amounts falling due after more than one year
Derivative financial liabilities at fair value (note 26)
Provisions
Lease liability (note 20)
Trade and other payables
21. Leases
2021
£m
9.3
18.7
0.7
1.5
3.8
2.3
0.3
1.2
28.5
2021
£m
2.6
0.2
5.7
5.9
2020
£m
10.9
25.5
0.6
2.1
5.3
2.8
0.2
-
36.5
2020
£m
4.0
-
-
-
The Group leases its office space. During the year, the Group’s existing lease on its primary office space concluded,
and the Group entered into a new ten-year lease. As a lessee, the Group has recognised a lease liability representing
the present value of the obligation to make lease payments, and a related right of use (ROU) asset, in accordance
with note 3.8. The rate implicit in the lease is not evident and so the Group’s incremental borrowing rates have been
used. The incremental rate referred to by IFRS 16 indicates the rate of interest that a lessee would have to pay to
borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
the ROU asset in a similar economic environment. Management have assessed the incremental borrowing rate to be
6%. The lease gives rise to a right of use asset (note 16), and a corresponding lease liability. Information about the
lease liability is presented below:
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Lease Liability at 1 April
Additions
Payments made in the year
Unwinding of finance costs
Lease Liability at 31 March
Of which
Current (note 19)
Non-current (note 20)
22. Share Capital
2021
£m
-
7.0
(0.5)
0.4
6.9
1.2
5.7
2020
£m
0.4
(0.4)
-
-
-
-
Allotted and paid up
Ordinary shares
Management shares
Nominal value
At 1 April 2020 and 31 March 2021
No.
113,207,547
No.
23,589,212
£m
0.1
On 19 June 2019, 23,589,212 Management shares were issued with nominal value of £58,974 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.
23. 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.
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).
Share option reserve
The Group operates a share option scheme that is explained in note 24 of these Consolidated Financial
Statements. The Group recognises the services received from eligible scheme participants as charge through the
Consolidated Statement of Profit or Loss, with the corresponding entry credited to the Share option reserve.
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Annual Report 2021
Lease Liability at 1 April
Additions
Payments made in the year
Unwinding of finance costs
Lease Liability at 31 March
Of which
Current (note 19)
Non-current (note 20)
22. Share Capital
Allotted and paid up
Ordinary shares
Management shares
Nominal value
At 1 April 2020 and 31 March 2021
No.
113,207,547
No.
23,589,212
On 19 June 2019, 23,589,212 Management shares were issued with nominal value of £58,974 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.
23. 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
Merger reserve
for using merger relief, no share premiums are recorded.
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).
Share option reserve
The Group operates a share option scheme that is explained in note 24 of these Consolidated Financial
Statements. The Group recognises the services received from eligible scheme participants as charge through the
Consolidated Statement of Profit or Loss, with the corresponding entry credited to the Share option reserve.
2021
£m
-
7.0
(0.5)
0.4
6.9
1.2
5.7
2020
£m
0.4
(0.4)
-
-
-
-
£m
0.1
Retained earnings
Retained earnings are the accumulated undistributed profits of the Group that have been recognised through the
Consolidated Statement of Profit or Loss, less amounts distributed to shareholders.
24. Share based payments
The cost of group share-based employee compensation arrangements, whereby employees receive remuneration in
the form of share options, is recognised as an employee benefit expense in the 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) 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 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 Group issues new shares.
In June 2019, the Company issued 311,311 share options under Part I of 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.
During the year, the Company issued a total of 4,981,130 share options under Parts I, II and III of the company share
option plan (“CSOP”) to participating employees and LLP members. The share options have an exercise price of £1.35,
and vest in tranches three, four and five years after issuance. The fair value of these options at issuance has been
derived using a Black-Scholes model, with expected volatility of 34%, based on derived volatilities of the Company
and the similar listed entities to the Company. The risk free rate at the time of issuance was 0.12% for UK
Government Bonds with a similar term to the vesting period of the CSOP.
The Group has recognised a total expense of £0.2m based on the estimated number of share options expected to vest
across all parts of the CSOP.
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
Movements in the number of outstanding share options during the year and their weighted average exercise prices
are shown in the following table:
2021
2020
Average exercise
price (£)
Number of options
outstanding
Average exercise
price (£)
Number of options
outstanding
At 1 April
Granted
Forfeited
Exercised
31 March
1.06
1.35
1.35
-
1.34
226,408
4,981,13
(452,830)
-
4,754,708
-
1.06
1.06
-
1.06
-
311,311
(84,903)
-
226,408
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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
25. Net Debt Reconciliation
Cash and Cash Equivalents
Lease liabilities – repayable within one year
Lease liabilities – repayable after one year
Net funds
Cash and Cash Equivalents
Total Debt – Fixed Interest Rates
Net funds
2021
£m
38.4
(1.2)
(5.7)
31.5
38.4
(6.9)
31.5
2020
£m
49.2
-
-
49.2
49.2
-
49.2
Cash
Leases due
within 1 year
Leases due
after 1 year
Borrowings
Total
Net funds/(debt) at 1 April 2019
Cashflows
Other non-cash changes
Net funds/(debt) at 31 March 2020
Cashflows
Other non-cash changes
£m
13.6
35.6
-
49.2
(10.8)
-
Net funds/(debt) at 31 March 2021
38.4
£m
(0.3)
0.4
(0.1)
-
0.5
(1.7)
(1.2)
£m
(0.1)
-
0.1
-
-
(5.7)
(5.7)
£m
(2.0)
(2.0)
-
-
-
-
-
£m
11.2
38.0
-
49.2
(10.3)
(7.4)
31.5
26. 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.
26.1. Capital management
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.
26.2. Categories of financial instruments
The Group operates as a deliverable foreign exchange broker therefore financial instruments are significant to
126
Annual Report 2021
25. Net Debt Reconciliation
Cash and Cash Equivalents
Lease liabilities – repayable within one year
Lease liabilities – repayable after one year
Net funds
Net funds
Cash and Cash Equivalents
Total Debt – Fixed Interest Rates
2021
£m
38.4
(1.2)
(5.7)
31.5
38.4
(6.9)
31.5
2020
£m
49.2
-
-
-
49.2
49.2
49.2
£m
11.2
38.0
-
49.2
(10.3)
(7.4)
31.5
Net funds/(debt) at 1 April 2019
Cashflows
Other non-cash changes
Net funds/(debt) at 31 March 2020
Cashflows
Other non-cash changes
£m
13.6
35.6
-
-
49.2
(10.8)
£m
(0.3)
0.4
(0.1)
-
0.5
(1.7)
(1.2)
£m
(0.1)
0.1
-
-
-
(5.7)
(5.7)
£m
(2.0)
(2.0)
-
-
-
-
-
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
26. Financial instruments
foreign exchange risk.
26.1. Capital management
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.
26.2. Categories of financial instruments
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
Other debtors
Derivative financial liabilities
Amounts payable to clients
Other Creditors
Cash
Leases due
within 1 year
Leases due
after 1 year
Borrowings
Total
Amounts due to members and former members of Argentex LLP
Accruals
Provisions
Lease liabilities
2021
£m
25.2
0.1
(11.9)
(18.7)
(0.7)
(3.8)
(2.3)
(0.2)
(6.9)
(32.6)
2020
£m
24.8
0.1
(14.9)
(25.5)
(0.6)
(5.3)
(2.8)
-
-
(34.2)
Net funds/(debt) at 31 March 2021
38.4
Market risk
26.3. 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 for the Group comprises foreign exchange risk and interest rate risk.
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
The Group’s significant cash balances other than those denominated in Pounds sterling are foreign
currency balances held in Euros and US Dollars.
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.
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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
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
2021
£m
0.6
(0.5)
0.3
(0.3)
2020
£m
0.7
(0.6)
0.2
(0.2)
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.
26.4. 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 2021, 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 carrying amount of the respective recognised financial assets as stated in the Consolidated
Statement of Financial Position.
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 26) best represents their
128
Annual Report 2021
respective maximum exposure to credit risk. Note 26.6 details the Group’s credit risk management policies.
(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.
26.5. 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.
26.6. Credit risk management
Note 26.4 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.
Financial assets at balance sheet date by contractual maturity
31 March 2021
0-3 months
3-6 months
6-12 months
1-3 years
Total
Derivative financial assets
Other receivables
Financial assets
£m
10.3
0.1
10.4
£m
4.9
-
4.9
£m
5.8
-
5.8
£m
4.2
-
4.2
£m
25.2
0.1
25.3
31 March 2020
0-3 months
3-6 months
6-12 months
1-3 years
Total
Derivative financial assets
Other receivables
Financial assets
£m
7.1
0.1
7.2
£m
4.8
-
4.8
£m
5.7
-
5.7
£m
7.2
-
7.2
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.
£m
24.8
0.1
24.9
129
Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information
Total
£m
(11.9)
(18.7)
(7.0)
(6.9)
(44.5)
Total
£m
(14.9)
(25.5)
(8.7)
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
Financial liabilities at balance sheet date by contractual maturity
31 March 2021
0-3 months
3-6 months
6-12 months
1-3 years
Derivative financial liabilities
Amounts payable to clients
Other Payables
Lease liabilities
Financial liabilities
£m
(3.7)
(18.7)
(6.8)
(0.1)
(29.3)
£m
(2.6)
-
-
(0.3)
(2.9)
£m
(3.0)
-
-
(0.8)
(3.8)
£m
(2.6)
-
(0.2)
(5.7)
(8.5)
31 March 2020
0-3 months
3-6 months
6-12 months
1-3 years
Derivative financial liabilities
Amounts payable to clients
Other Payables
Financial liabilities
£m
(4.5)
(25.5)
(8.7)
(38.7)
27. Fair value measurements
£m
(3.0)
-
-
£m
(3.4)
-
-
£m
(4.0)
-
-
(3.0)
(3.4)
(4.0)
(49.1)
This note provides information about how the Group determines fair values of various financial assets and
financial liabilities.
27.1. Fair value of the Group ‘s financial assets and financial liabilities that are measured at fair value on a
recurring basis
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 market 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.
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Annual Report 2021
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 26)
2021
2020
Assets
£25.2m;
and
Liabilities
£11.9m
Assets
£24.8m;
and
Liabilities
£14.9m
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.
The fair value of foreign exchange forward
and option contracts is measured using
observable market information provided
by third party market data providers.
27.2. 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.
28. Related party transactions
PUMA Lending Limited provided an occasional short-term liquidity facility to the Group in the form of short-term
loans. £nil was outstanding at 31 March 2021 and 2020. £2m, plus related interest of £0.1m was repaid immediately
following the IPO in the previous financial year. 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 £0.6m (2020: £0.6m) owed to Pacific Investments Management Limited, the former
owner of Argentex Foreign Exchange Limited.
29. Contingent liabilities
As at 31 March 2021 there were no capital commitments or contingent liabilities (2020: none).
30. Controlling party
In the opinion of the Directors there is no ultimate controlling party of Argentex Group PLC.
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F I N A N C I A L STAT E M E N TS
Company Statement
of Financial Position
for the year ended 31 March 2021
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
Notes
6
7
8
9
10
10
10
2021
£m
118.2
118.2
4.8
4.8
(0.8)
(0.8)
122.2
0.1
12.7
0.2
106.0
3.2
122.2
2020
£m
118.0
118.0
0.1
0.1
(0.1)
(0.1)
118.0
0.1
12.7
-
106.0
(0.8)
118.0
Under section s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own
income statement. The profit for the period was £6.3m (2020: loss of £0.8m).
The financial statements of Argentex Group PLC were approved by the Board of Directors on 30 June 2021 and
were signed on its behalf by:
Harry Adams
Director
Registered number 11965856
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Annual Report 2021
Company Statement
of Changes in Equity
for the year ended 31 March 2021
Cost
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
Cost of issue of equity share capital
Balance at 31 March 2020
Total comprehensive income for the year
Transactions with owners:
Dividends paid
Share based payments
Share
capital
Share
premium
£m
£m
Share
option
reserve
£m
Merger
reserve
Retained
earnings
Total
equity
£m
£m
£m
-
-
-
0.1
-
0.1
-
-
-
-
-
-
14.0
(1.3)
12.7
-
-
-
-
-
-
-
-
-
-
-
0.2
-
-
106.0
-
-
(0.8)
(0.8)
(0.8)
-
-
-
(0.8)
106.0
14.1
(1.3)
106.0
(0.8)
118.0
-
-
-
6.3
6.3
(2.3)
-
(2.3)
-
Balance at 31 March 2021
0.1
12.7
0.2
106.0
3.2
122.2
135
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1. Basis of preparation
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 25 Argyll Street, London, W1F TU.
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.
136
Annual Report 2021
2.3. Financial instruments
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.
2.5. 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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Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information
N OT E S TO T H E C O M PA N Y F I N A N C I A L STAT E M E N TS
4. Auditor’s remuneration
The auditor’s remuneration for audit and other services is disclosed in Note 8 to the consolidated financial statements.
5. Directors’ Emoluments
Executive and non-executive directors
Costs for the above persons were:
2021
Number
2020
Number
8
£m
0.3
7
£m
0.2
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. Investment in subsidiaries
Cost
At 26 April 2019
Additions
At 31 March 2020
Additions
At 31 March 2021
£m
-
118.0
118.0
0.2
118.2
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
Holding company
Argentex Foreign Exchange Limited
Holding company
Argentex B.V.
Inactive pending regulatory
authorisation
England
England
Netherlands
All subsidiary undertakings have registered address 25 Argyll Street, London, W1F 7TU (except Argentex B.V., which
has registered office: Atrium Amsterdam WTC, Centre Building, Strawinskylaan 3051, 1077 ZX Amsterdam, The
Netherlands). All subsidiaries are 100% owned either directly or indirectly.
138
Annual Report 2021
7
£m
0.2
£m
-
118.0
118.0
0.2
118.2
4. Auditor’s remuneration
5. Directors’ Emoluments
The auditor’s remuneration for audit and other services is disclosed in Note 8 to the consolidated financial statements.
In the previous financial year, 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.
Executive and non-executive directors
Costs for the above persons were:
8
£m
0.3
Other receivables
Amounts due from group companies
2021
Number
2020
Number
7. Trade and other receivables
2021
£m
0.1
4.7
4.8
2020
£m
0.1
-
0.1
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. Investment in subsidiaries
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.
Cost
At 26 April 2019
Additions
At 31 March 2020
Additions
At 31 March 2021
are as follows:
Directly held
Indirectly held
Argentex LLP
Details of the company’s subsidiaries, which are all included in the consolidated financial statements of the Group,
Name of undertaking
Nature of business
Country of incorporation
Argentex Capital Limited
Foreign exchange broking
England
Argentex Foreign Exchange Limited
Holding company
Argentex B.V.
Inactive pending regulatory
Netherlands
Holding company
authorisation
England
England
All subsidiary undertakings have registered address 25 Argyll Street, London, W1F 7TU (except Argentex B.V., which
has registered office: Atrium Amsterdam WTC, Centre Building, Strawinskylaan 3051, 1077 ZX Amsterdam, The
Netherlands). All subsidiaries are 100% owned either directly or indirectly.
8. Other payables
Amounts owed to group undertakings
2021
£m
0.8
0.8
2020
£m
0.1
0.1
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.
9. Share capital
Allotted and paid up
Ordinary shares of £0.0001 each
Management shares of £0.0025 each
Ordinary
shares
No.
113,207,547
Management
shares
No.
-
-
23,589,212
At 31 March 2020 and 31 March 2021
113,207,547
23,589,212
In the previous financial year, 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.
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 £14.0m before issuance costs. Ordinary Shares have full voting rights and rights to receive dividends and
other distribution of profit.
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Financial StatementsStrategic ReportCompany OverviewGovernanceOther Information
N OT E S TO T H E C O M PA N Y F I N A N C I A L STAT E M E N TS
10. 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.
Share option reserve
The Company operates a share option scheme that is explained in note 24 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. In the previous financial year, 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 £12.0m 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 £106.0m was created on the
issue of 76,410,788 ordinary shares.
Retained earnings
Retained earnings are the accumulated undistributed profits of the Company that have been recognised through the
Statement of Profit or Loss, less amounts distributed to shareholders.
The Directors declared an interim dividend of 2p per ordinary share amounting to £2,264,150.94 which was paid in the year.
140
Annual Report 2021
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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Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statements OT H E R I N F O R M AT I O N
Shareholder
information.
Shareholder enquiries
→
investorrelations@argentex.com
Dividend dates
→
→
4 August 2021 – Final dividend approved
12 August 2021 – Ex-dividend date
Annual shareholder calendar
31 March 2021 – Financial year end
1 July 2021 – Full year results announcement
4 August 2021 – AGM
30 September 2021 – Half year end
→
→
→
→
144
→
→
→
→
→
13 August 2021 – Final dividend record date
13 September 2021 – Final dividend payment date
November 2021 – Half year results announcements
31 March 2022 – Financial year end
Summer 2022 – Full year results announcement
Annual Report 2021 Company
information.
AUDITORS
Nexia Smith and Williamson
25 Moorgate,
London, EC2R 6AY
FINANCIAL PUBLIC RELATIONS
FTI Consulting
200 Aldersgate Street
London, EC1A 4HD
ARGENTEX OFFICE
25 Argyll Street,
London, W1F 7TU
T: +44 (0) 203 772 0300
BANK
Barclays
1 Churchill Place, Canary Wharf,
London, E14 5HP
LEGAL ADVISERS
Gowling WLG (UK) LLP
4 More London Riverside,
London, SE1 2AU
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
ARGENTEX OFFICE
Atrium Amsterdam WTC
Centre Building
Strawinskylaan 3051
1077 ZX Amsterdam
The Netherlands
COMPANY SECRETARY
Vistra Company Secretaries Limited
First Floor, Templeback
10 Temple Back
Bristol, BS1 6FL
This document is also available on the
Company’s website at www.argentex.com
Designed by Everything–Connected
www.e-c.agency
Printed by Elle Media Group
www.ellemediagroup.co.uk
Printed in the UK by Elle Media Group,
an ISO14001:2015 (Environmental
Management) accredited printer.
145
Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statements A 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 the offices of 25 Argyll Street, London, W1F 7TU on 4
August 2021 at 2.30p.m. for the purpose of considering and, if thought fit, passing the
following resolutions (which will be proposed, in the case of resolutions 1 to 13 as ordinary
resolutions and resolutions 14 and 15 as special resolutions):
ORDINARY BUSINESS
Ordinary Resolutions
1. To receive and adopt the Annual Report and Accounts
of the Company for the financial year ended 31 March
2021 together with the Directors’ Report and Auditors’
Report thereon.
7. 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.
2. To approve the Directors’ Remuneration Report for the
8. That Nigel Railton, who retires as a Director in
financial year ended 31 March 2021.
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 Jo Stent, who retires as a Director in accordance
with the Articles and being eligible to do so offers
herself for re-election as a Director, be elected as a
Director of the Company.
6. 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.
146
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 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.
10. To appoint Deloitte LLP 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.
11. To authorise the Directors to determine the
amount of the auditors’ remuneration.
Annual Report 2021 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 8 July 2021) 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 2022 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.
13. That a final dividend of £2,264,150.94/2 pence per Ordinary
Share for the year ended 31 March 2021 be declared.
Special Resolutions
14. That, subject to the passing of resolution no. 13, 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:
(i) to the holders of Ordinary Shares in proportion
(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, 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 8 July 2021), 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 2022 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.
15. 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 8 July 2021;
(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
147
Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statements independent bid for any number of Ordinary
Shares on the trading venue where the purchase is
carried out.
The 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 2022 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
COVID-19
The Board has continued to closely monitor the COVID-19
pandemic and its preference is to welcome shareholders
to this year’s AGM, especially given that Shareholders
were prevented from attending last year. Accordingly,
the holding of the AGM will be kept under review in
line with Public Health England guidance. Based on the
Government’s roadmap for relaxing restrictions on 19 July
2021, it is hoped that there will be no formal restrictions on
attendance by Shareholders. However, we would strongly
encourage Shareholders to submit a proxy vote in advance
of the AGM. Any changes to the arrangements for the
AGM set out above will be communicated to Shareholders
before the AGM through the Company’s website at www.
argentex.com/investor-relations and, where appropriate, by
a regulatory information service announcement.
9 July 2021
Registered Office:
25 Argyll Street,
London, W1F 7TU
United Kingdom
148
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 potential restrictions on attendance
at the AGM, when completing your form of proxy, we
would strongly encourage you to 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
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.
Annual Report 2021 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 and should the
relaxation of COVID-19 restrictions allow.
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 potential restrictions on attendance at the
AGM, when completing your form of proxy, we would
strongly encourage you to reference the ‘Chair of the
AGM’ as your proxy (and do not specifically name any
one individual).
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.
6. Any power of attorney or any other authority under
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.
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.
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
is 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
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Other InformationStrategic ReportCompany OverviewGovernanceFinancial Statements 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 8 July 2021 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 Steve.Leverett@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
Steve.Leverett@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.
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 2 August 2021 (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 2 August 2021
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 8 July 2021, 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 8 July 2021 is 113,207,547.
150
Annual Report 2021 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 2021.
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 71 to 73 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 and 12 – auditor appointment and
remuneration – at every general meeting at which
accounts are presented to shareholders, the Company
is required to appoint an auditor to serve from the end
of the meeting until the next annual general meeting.
Following the Company’s recent audit tender, Deloitte
LLP has been identified as the Company’s preferred
external auditor. Resolution 11 authorises the Company
to appoint Deloitte LLP and, following normal practice,
resolution 12 separately authorises the Directors to
determine their remuneration.
5. Resolution 13 – 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 next annual general meeting of the
Company and 30 September 2022 (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 8 July 2021
(the latest practicable date prior to the publication of
this document)).
6. Resolution 14 – declaration of final dividend – under
the Articles, the Company may by ordinary resolution
declare dividends to be paid to members according to
their respective rights and interests in the profits of
the Company. This final dividend shall be paid on 13
September 2021 to the holders of Ordinary Shares on
the register of members at the close of business on 13
August 2021.
7. Resolution 15 – 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
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 8 July 2021, 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 2022.
8. Resolution 16 – 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 8 July 2021 (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.
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