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 2
Year ended 31 March 2022
New cover to go here
1
Argentex Group PLC issues its Annual Report
for the year ended 31 March 2022.
The period has seen continued strong
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 2022 C O N T E N TS
Argentex
Group PLC
Annual Report.
Group Overview
08 Chairman’s Statement
13 CEO Statement
18 Our Business
22 Our History
24 Executive Team
26 Philosophy, People and Culture
27 The Argentex Collective
Governance
77 Board of Directors
80 Directors’ Report
84 Corporate Governance Report
90 Remuneration Committee Report
96 Nominations Committee Report
98 Audit & Risk Committee Report
101 Independent Auditors’ Report
Strategic Report
30 Business Strategy
34 Overview of 2022
38 How We Work
40 Our Products and Online Trading
42 Technology
44 Our Clients
46 Client Case Studies
48 Our Client Proposition
49 How We Win Business
50 2022 Achievements
56 Financial Review
60 Section 172 Statement
64 Sustainability Strategy
70 Risk Management
Financial statements
110 Consolidated Statement
of Profit or Loss
114
111 Consolidated Statement
of Financial Position
113 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
142
144
116
Other information
151 Glossary of Terms
152 Shareholder Enquiries
152 Dividend Dates
152 Annual Shareholder Calendar
153 Company Information
154 Notice of Annual General Meeting
3
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G R O U P OV E RV I E W
Financial
highlights.
Our long-term focus and agile business model
remains central at Argentex.
Annual revenue
£34.5m
£11.0m
6.6p/7.0p
Adjusted operating profit ¹
EPS (Basic/Adjusted) ²
“ Argentex embodies an
active, measured and
long term approach
to growth.”
Lord Digby Jones Kb.
Non-executive Chairman
2023
Outlook
“ We have clear
ambitions to continue
to grow our top-line
and continuously
attract market-leading
talent, supporting our
overall performance
despite an uncertain
market backdrop. ”
Harry Adams
Chief Executive Officer
4
Annual Report 2022
w
Revenue from new clients
£8.0m
£10.4m
1.25p
Operating profit
New corporate clients traded
528
1,624
2.0p
Total corporate clients traded
Final dividend per share
Total dividend per share
¹ Adjusted operating profit excludes non-adjusted
expenditure and share-based payments as shown in the
Consolidated Statement of Comprehensive Income
² Note 13 to the Consolidated Financial Statements
5
C H A I R M A N ’S STAT E M E N T
A
transformational
year.
As societies have emerged from the Covid-19
pandemic, businesses are at a point of introspection.
Good businesses will reflect on
the learnings of the last two years
and turn them into opportunities
when embarking on the next phase
of growth.
I am proud to be the Chairman of a
business which embodies this active,
measured and long-term approach to
growth. With an eye on continually
building a sustainable future, the
business has used the last financial
year to evolve further, invest in its
teams, technology and breadth of
client offering to strengthen its
market position and ensure continued
resilience and outperformance
amid changeable and unpredictable
macroeconomic conditions.
It has always been a privilege to work
with Harry Adams, the leadership
team and the Board of Directors. This
year has been no different, indeed
more so, as they have steered the
business through a significant period
of uncertainty, preserving company
operations, supporting employee
wellbeing and constantly innovating
the service delivered to its clients.
This has been made possible by
the oversight of a strengthened
Argentex leadership team. Jo Stent’s
appointment as Chief Financial
Officer and David Christie joining
as Chief Operating Officer over
the period are testament to the
company’s unwavering focus on
talent as a means for optimising the
market position we occupy.
Despite continued volatility, we
have emerged from the recent
period strongly, with an enhanced
and increasingly efficient service
offering. Ultimately, this means
the business is well-positioned to
capitalise on the opportunities that
new markets present.
Argentex has worked hard at
creating stronger foundations and
a refined strategic plan to prioritise
profitable growth, and I am
confident it will unlock a significant
untapped market opportunity
– with people, technology and
internationalisation at its core.
Lord Digby Jones Kb.
Non-Executive Chairman
8
Annual Report 2022 " The future of our industry is
embedded in technologically
enabled products."
MARKET BACKDROP
As the clouds of the pandemic lift,
we face fresh challenges in our
response to the tragic ongoing
war and humanitarian crisis in
Ukraine. Despite now carrying no
corporate exposure to Russia and
no client exposure in the region, the
swift steps taken to exit all Rouble
currency before the invasion reflects
our unrelenting approach to risk
management and a quality over
quantity approach to relationships.
It is undeniable that this volatile
geopolitical picture, compounded by
significant macro-economic pressures
felt globally as the cost-of-living
soars for many, will impact market
and business sentiment over the next
12 months. Global businesses will
face long-term economic challenges
as a result of the conflict and the
rising inflationary environment,
but whatever winds of challenge or
opportunity blow, Argentex is well set
to face them.
While the near-term outlook remains
unclear, we are confident in the
ability of our proven business model
to continue navigating a changeable
business environment, while meeting
the expectations of our valued clients
and shareholders.
KEY ACHIEVEMENTS
Our strong financial performance
is supported by a three-pronged
strategic approach to our activity,
embedded in people, technology
and internationalisation. Although
the global economy has faced
unprecedented challenges in
recent years, our business has not
stood still. The continued targeted
investment across these three
areas is translating into positive
operational and financial momentum
across the business.
We remain committed to opening
new offices in key international
locations. Our office in the
Netherlands is already showing
strong performance, driven by an
expert team and a local market
ripe with opportunity. I am also
pleased to report that our new office
in Australia is following in similar
footsteps, with regulatory approvals
at an advanced stage and teams
onboarded. Client-led expansion into
new, highly regulated international
markets remains a pillar of our
growth strategy looking forward.
Our investment in people continues
to gather pace. The quality of the
individuals running Argentex,
and those delivering the market-
leading service we are known for,
is fundamental to our ability to
remain resilient and continue driving
shareholder value. We were delighted
to welcome the team back to the safe
working environment of the office
after a prolonged period of remote
working and are encouraged by the
continued high standard of delivery
as a result.
The future of our industry is
embedded in technologically enabled
products - a truly sustainable
business needs to have an ability to
provide a 24/7, ‘always-on’ service
for clients, wherever they are based.
Over the period, we have focused
on creating a leading technology
platform that meets the increasingly
complex needs of clients in a user-
friendly product and high quality
service that is underpinned by the
face-to-face relationships for which
we are known. We understand the
need to enhance our traditional
broking offering, transitioning
towards a technology-enabled
service provider. We are excited
about the optionality, efficiency
and scalability this will bring to the
business, including our ability to
efficiently cross-sell services as we
internationalise our offering.
9
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information OUTLOOK
Flexibility and confidence have
been two of the most crucial
characteristics of businesses
that have navigated and emerged
successfully from recent operational
challenges, defined by the ongoing
impact of the Covid-19 pandemic.
While the global economy faces
uncertain times ahead, I strongly
believe the Company is well
positioned to embark on its next
evolutionary phase of growth.
Through our targeted investment
we have built a stronger platform,
based on greater efficiency and
a broader service offering both
geographically and operationally.
I would like to thank all of our
shareholders, clients and fantastic
employees for their continued
support that is instrumental in
driving our business forward. As
democratic capitalism weathers
the global assaults of the crisis in
supply chains, significantly higher
inflation than for decades and the
enduring fall-out from the war in
Ukraine, your Company is set fair
to succeed and deliver for all its
many stakeholders.
“ Our strong financial
performance is
supported by a
three-pronged
strategic approach
to our activity,
embedded in people,
technology and
internationalisation.”
Lord Digby Jones Kb.
Non-Executive Chairman
Lord Digby Jones Kb.
Non-Executive Chairman
10
Annual Report 2022
NEW COLOURWAY?
C E O STAT E M E N T
A year of
substantial
progress.
OVERVIEW
The twelve months to 31 March
2022 constituted a defining and
strategically significant period for
Argentex. Despite the continued
macro-economic uncertainty, the
Company has delivered further
double-digit revenue and profit
growth, underpinned by our proven
business model, best-in-class client
service, balance sheet strength and
measured approach to risk.
When I became sole CEO in July
2021, I sought to undertake a top to
bottom review of the business. It was
important to reflect on and evolve
our strategy, taking action in areas we
could influence to ensure we are well
positioned, not only to deliver against
our growth targets, but also optimise
our service offering and capitalise
on the ever-changing B2B financial
services market.
In the period, I am pleased to say, we
have delivered further progress against
our long-term strategic initiatives and
growth in our client base which has
contributed to the Group’s revenue of
£34.5 million for the 12 months to 31
March 2022, representing growth of
23% year-on-year (2021: £28.1 million).
This continued momentum delivered
adjusted operating profit of £11.0m, up
26% year-on-year (2021: £8.7m) and a
statutory operating profit of £10.4m
(2021: £7.8m). The Board is pleased to
announce a final dividend of 1.25p per
share bringing the total for FY22 to 2.0p
per share, flat on 2021.
I would like to thank the whole team
at Argentex for their hard work
and continued commitment which
has given us a strong foundation to
embark on the next chapter of our
growth story. We continue to invest
to drive efficiencies and bring new
opportunities, both domestically and
abroad. In addition, our commitment
to bringing improved expertise and
experience into our business, supported
by a newly refined strategy, means we
remain well positioned to deliver value
for all stakeholders in the years to come.
MARKET BACKDROP
Over the last financial year, companies
around the globe have taken steps to
return to normal life, post-pandemic.
As confidence has returned, the global
economy has shown signs of recovery.
We have observed a progressive uptick
in business sentiment and activity,
driven by a recovery following the
post-COVID unlocking of the global
economy, and consequently we are
experiencing further demand for
our services.
13
Harry Adams
Chief Executive Officer
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information However, trading conditions in the
second half of the financial year have
been more volatile as central banks
grappled with sustained inflationary
pressures, compounded by growing
geopolitical tensions and Russia’s
invasion of Ukraine. Our service-led
offering and approach to market risk –
a key differentiator that has served us
well since inception – has once again
positioned the Company strongly in
challenging markets. Our policy of
matching every trade with a blue-chip
institutional counterparty continues
to be effective in eliminating residual
proprietary market risk.
Volatility does, however, present
opportunities for our clients. It has
led to them not only trading more
frequently with higher notional
values, but also hedging for a longer
tenor. These themes have allowed
the Company to grow its breadth
and depth of customer relationships
that will be further enhanced by our
evolving service offering, with notable
new launches due in the current
financial year. In addition, as interest
rates rise, we expect that this trend
will continue into FY23 and beyond.
Although volatility can be beneficial,
it is our high levels of customer
service and ability to meet client
needs in any market environment
that defines Argentex.
We recognise that our industry does
not stand still, which is why we are
continuing to invest in our people,
global reach and technological
capabilities. As a result, we are more
agile in our ability to deliver for
clients and their changing needs and
requirements, irrespective of the
trading environment.
The opportunity in the $6.6tn a day
global foreign exchange market
is vast. Our specialist, high touch,
personalised service and superior
pricing enables us to continue
accumulating market share from
incumbent banks, which account
for 85% of the cross-border market.
We continue to position ourselves
to attract new clients in need of
specialist, often sophisticated,
commercial FX services.
FINANCIAL AND STRATEGIC PROGRESS
Our performance has been driven
by our commitment to providing
high-quality outcomes for our clients.
Businesses across all sectors continue
to identify Argentex as a trusted
partner for their trading requirements
against a dynamic market backdrop. As
companies are rebuilding confidence
in the post-Covid era, a record 528 new
clients traded with the Group this year
(2021: 499). The launch of our new online
platform in H2 led to a record number
of clients trading online during the
period and we expect this demand to
continue. On pages 44-45 we illustrate
our client mix across industries, which
showcases the high-quality and diverse
nature of our book with revenue
concentration further reducing, as our
top 20 clients now make up 36% of total
revenue (2021: 41%).
In order to maximise the significant
market opportunity ahead, we have
evolved our strategy around three
growth pillars: people, technology
and international expansion. We are
confident these long-term focus areas
will deliver deeper and more sustainable
growth into the future as our client
demand broadens, and we make strides
towards becoming a technology-enabled
financial services provider with foreign
exchange at its core.
We have made good progress with
each pillar:
— The strategic investment in
strengthening our team at all levels
continued during the year. Not only
have we attracted senior leaders
in finance, operations, compliance
and risk to broaden our expertise
and help drive our new strategy
“ The twelve months to 31
March 2022 constituted
a defining and
strategically significant
period for Argentex.”
14
Annual Report 2022 forward, we expect our front office
capability to grow over the medium
term, such that we are expanding
the footprint of our London
office. We have also fulfilled our
commitment to building out our
trading, execution and relationship
management teams, recruiting 19
new hires across the Group with 4
in the Netherlands. We continue to
optimise the service we provide
to clients.
— The momentum behind the
broadening of the Group’s
geographic reach continues to
build as we seek to unlock new
markets and revenue sources
in highly regulated geographies
where there is latent demand
for our products and services.
The business in the Netherlands
is trading well and in line with
expectations, just 24 months
since inception. We have also
onboarded a management team in
Australia and, once the customary
regulatory approvals have been
obtained, expect to begin trading
during the first half of FY23.
— In February 2022 we launched our
online platform enhancements.
We are now poised to add
future products which will
further enhance our customers’
experience. In addition, our
structured solutions product –
catering for clients with more
complex needs – continues to
grow and is now responsible for
3% of total revenue (2021: 1%).
The Board’s decision to accelerate
investment in our platform
should allow for a more agile and
efficient business, able to take on
smaller clients and take a greater
share of client wallets over time.
CHANGE IN ACCOUNTING
PERIOD END
Historically, the Group has
experienced its most active quarter
in the final quarter of its financial
year, i.e. for the quarter ending on
31 March, and therefore our results
have always been strongly weighted
towards the second half of the
financial year. The Board believes
that the Group would benefit from
a change of financial year to 31
December which would address this
imbalance. The Board therefore
announces its intention to change
the Group’s financial year end from
31 March to 31 December. Argentex
therefore intends to present its next
unaudited interim results for the 6
months ended 30 September 2022 in
November 2022 and its next audited
final results for the 9 months ended
31 December 2022 no later than
April 2023. From the beginning of
calendar year 2023, interim and final
results will then be prepared for the
6 month period to 30 June and 12
month period to 31 December.
PRIORITY GROWTH AREAS
Investment in people
Investment in our people has
always been central to our success.
We remain committed to ensuring
our sales team has the resources
to unlock opportunities, while
simultaneously bolstering our senior
management and operational teams
to promote sustainable growth.
The period has been the first full
financial year since Jo Stent, Chief
Financial Officer, joined the Company
(February 2021). Her experience has
helped rebuild the finance function,
while also innovating the ways in
which we drive shareholder value.
More recently, the Group has made
two further significant leadership
team hires with David Christie
joining as Chief Operating Officer
(March 2022), and David Winney as
Global Chief Compliance and Risk
Officer (April 2022).
As our client-led expansion continues,
driven by the aforementioned sales
team hires, we have reorganised our
internal sales team structure to a pod
“ Despite the continued
macro-economic
uncertainty, the Company
has delivered further
double-digit revenue and
profit growth.”
15
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information model, which drives accountability
and performance transparency while
also supporting clear progression
across the team. To provide the
infrastructure for this front office
expansion, the Company is expecting
to increase its footprint at our office
in London.
We continue to attract high-quality,
experienced individuals and we are
proud that our graduate scheme
continues to be effective in helping us
identify and channel early-stage talent
into our business. We are passionate
about investing in the next generation
of financial services professionals, as
part of our commitment to fostering
organic growth and nurturing the
future leaders of Argentex.
International expansion
We have continued to pursue
opportunities in new markets as we
transform Argentex from a single-
product, single-office business into a
multi-product, global business. Over
the period, this internationalisation
has been bolstered particularly by
the establishment of on-the-ground
presence in our chosen global markets.
I’m delighted that this strategy is
starting to bear fruit and contribute to
Group revenue.
The Amsterdam office, the EU
headquarters of Argentex, continues
to grow in line with expectations. The
team has delivered positive half-on-
half revenue growth since inception
in January 2020, helped by a doubling
of front-office staff to 8. We look
forward to seeing the momentum
behind the office and client growth
build over time.
Furthermore, the Company's planned
entry into the Australian market in
FY23 and near-term commencement of
trading is at an advanced stage, with
key hires onboarded and customary
regulatory approvals being sought. This
remains a key objective in maximising
growth opportunities outside our core
UK and European markets.
Evolving our technology
Industry dynamics shift in alignment
with client needs. Therefore,
the strategic importance of a
complementary tech-enabled service
that gives clients optionality, flexibility
and drives efficiency has grown. Over
the period, Argentex has launched
an enhanced online platform with
a refreshed interface and intuitive
navigation – the beginnings of a new,
forward-looking technology strategy.
It will enable our clients to tailor the
service levels they require as well as
increasing functionality and driving
real time engagement.
This optimised platform will be
supported by a mobile responsive
interface, providing further flexibility
to the Group's client base and enabling
us to take a greater share of client
wallet. It will also seek to capture
new customers and gain further
international reach.
The platform has been rolled out to a
subset of existing Argentex customers,
with positive feedback and results.
We’re proud that our technology
enhancements have helped us deliver
a record month for the business in
March 2022, with 391 trades completed
(March 2021: 123 trades). We look
forward to making the new trading and
client service platform available to all
customers in the current financial year.
The Company is now accelerating its
investment in its proprietary platform
and in-house capability. I expect this
investment to increase efficiency of
onboarding and monitoring of client
activity and trends. It is also likely to be
recognised in our financial results over
the shorter term, with a positive return
on investment over the medium term as
volume of trades and revenues increase.
“ We are embracing the
digital revolution and the
transformative effect it
is having on the financial
services industry.”
16
Annual Report 2022 “ We are strongly
capitalised with
sufficient financial
flexibility to support
us as we pursue our
growth ambitions
and continue to build
market share.”
The end-to-end review of our entire
business that was undertaken this
year has shone a spotlight on where
opportunities exist for us to scale
up our activity, and consequently,
our ambitions for Argentex. We are
strongly capitalised with sufficient
financial flexibility to support us as
we pursue our growth ambitions and
continue to build market share in this
very large and exciting sector.
The combination of the above
initiatives are expected to generate
a strong return on investment in the
medium term through growth in
revenues, boost in profitability and
improvement in earnings quality.
I would like to thank our employees,
business partners and shareholders
for their continued support. I look
forward to sharing more updates with
you in the coming period.
Harry Adams
Chief Executive Officer
This recent phase of investment
constitutes the first in a planned suite
of proprietary tech-enabled product
enhancements. It is a sure step
forward in the Company's journey
towards becoming a technology-
led financial services provider,
with improved client accessibility,
experience and scope to broaden
our product offer. The continued
digitisation of the platform will
support the Group's aims to create a
more efficient and scalable platform
with diversified revenues to help drive
profitable growth.
SUSTAINABILITY STRATEGY
We are committed to putting the
right focus on environment, social
and governance issues to support our
growth and yield greater business
benefits. Our sustainability strategy
is centred around three key pillars:
People, Partners and the Planet, more
on which is explained on pages 64-67.
We have outlined our intentions and
look forward to reporting on progress
against our goals in the months and
years ahead.
OUTLOOK
Argentex is a growing company in
a dynamic industry. We have clear
ambitions to continue to grow our top-
line and continuously attract market-
leading talent, supporting our overall
performance despite an uncertain
market backdrop.
We are embracing the digital
revolution and the transformative
effect it is having on the financial
services industry. By continuing to
invest in our technology to ensure
our capabilities meet the increasingly
digitalised requirements of our
stakeholders, we’re confident we will
continue to deliver value to our clients
and shareholders.
17
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information
O U R B U S I N E SS
How we
create impact
at Argentex.
Argentex is a leading provider
of foreign exchange services to
financial institutions, corporates and
private clients globally
Agile business model and balance
sheet strength is built around a
programme of investment in technology,
compliance and risk management
— A balanced approach to risk is at
the heart of the Group
— 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, forward and structured
solutions FX contracts
— One of Europe’s largest publicly
traded FX specialists. Clients
between £1m - £500m annual
FX flows
— 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 2012 and
headquartered in London with
operations in Amsterdam and
Australia; successful IPO to
London’s AIM market in mid-2019
18
Annual Report 2022 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
— Agile 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
A founder-led business
established in 2012
and headquartered in
London with operations
in Amsterdam and
Australia; successful
IPO to London’s AIM
market in mid-2019.
19
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information O U R B U S I N E SS
Value
Proposition.
Argentex delivers
value to clients,
colleagues and
shareholders.
Our client centric strategy and
culture enables us to build long
term relationships and address the
structural growth opportunities.
Continued investment and innovation
into our proprietary technology
ensures we enhance our proposition,
service and client engagement, which
drives long-term sustainable growth.
20
Annual Report 2022 Agile
business model
and balance sheet
strength is built
around a programme of
continued investment
in people and
technology
Argentex is a leading
provider of FX services
with a strong growth
track record since
inception in 2012
Profitable and highly
cash generative delivery
growth and income for
shareholders
Delivering
value to clients,
colleagues and
shareholders
Low risk, with a robust
compliance culture
Proven growth
trajectory oriented with
attractive dividend policy
Significant
addressable
market: FX trading is
in excess of £6.6trn* a
day worldwide. 85% is
underserved through
high street banks
Diverse and high
quality client base of
financial institutions,
corporates and HNWI
* Bank of International Settlements - Triennial FX Survey
21
Group 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
22
→→→Annual Report 2022 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
2022
January
March
March
January
February
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
→
→
Australian
management
hired
Online platform
enhancements
released
September
First option
executed
June
IPO
September
March
£3m total
options revenue
since inception
September
Half year
revenue up
42% to £13.8m
Cumulative
revenues
surpass £100m
Opened new
HQ at 25 Argyll
Street, London
September
Record H1
performance.
Revenue £15.7m
- up 33%
23
→→→→→→→→→→→→Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information E X E C U T I V E T E A M
Combined
foreign exchange
expertise.
Harry Adams
Chief Executive Officer,
Co-Founder
Jo Stent
Chief Financial Officer
Harry is a founding partner
of Argentex. As CEO, Harry is
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.
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.
24
Annual Report 2022 Andrew Egan
Chief Commercial Officer,
Co-Founder
Andrew is a founding partner of
Argentex. As Chief Commercial
Officer, 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 professionally
qualified holding certificates from
The CISI and has over 15 years’
experience in financial markets.
David Christie
Chief Operating Officer
David joins Argentex with over 25
years' experience in technology
in financial services, with over 15
years’ experience in the FX and
international payments space where
he was formerly COO of XE (formerly
HIFX) and Ria Financial one of the
largest NBFI cross border companies
globally. He currently sits on the
board of VitessePSP, a successful
payments start-up in the insurance
sector and Bleckwen, an AI software
risk company where he was formerly
CEO. At Argentex, David is responsible
for the technology and settlements/
operations teams. He is leading
the strategic change agenda and its
execution as the business transitions
from a single office, single product to a
multi office, multi product.
25
Group 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 to
adhere to without exception.
26
Annual Report 2022 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.
27
Group OverviewGovernanceStrategic ReportFinancial StatementsOther Information B U S I N E SS ST R AT E GY
What
we do.
Our business is evolving but our strategic imperatives
and our core fundamentals are unchanged.
Argentex operates as a Riskless
Principal foreign exchange broker
of non-speculative spot, forward
and structured solutions FX
contracts. Our business model,
strategic imperatives and our core
fundamentals are unchanged.
For Professional and Eligible
Counterparty clients we offer FX
structured solutions and certain
FX Forwards.
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
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.
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 operates
as a Riskless
Principal foreign
exchange broker
of non-speculative
spot, forward and
structured solutions
FX contracts.”
Harry Adams
Chief Executive Officer
30
Annual Report 2022
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 trades
are settled under “safe settlement”
conditions, whereby the firm only
pays funds to the order of a client
upon receipt of cleared funds from
that client, mitigating credit and
settlement risks.
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.
STRICT ADHERENCE TO CLIENT
SAFEGUARDING PROTOCOLS
All client balances are stored
electronically on Argentex’s back
office system, and repayable on
demand. Argentex operates a robust
reconciliation process to safeguard
its clients’ funds in accordance
with industry best practice and
the Electronic Money Directive.
Settlement is made through specially
designated, segregated accounts held
with leading credit institutions.
31
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information B U S I N E SS ST R AT E GY
Stakeholder
engagement
and value
creation.
Operational resilience and
focus drives value.
Our client focused
strategy and culture
enables us to build long-
term relationships and
address the structural
growth opportunities
that exist. Continued
investment in our people,
technology and innovation
ensures we can enhance
our proposition, service
and client engagement,
which drives long-term
sustainable growth.
32
Inputs
+
Growth
+
GROWTH IN CLIENTS: We have
a market leading, high touch,
client focus service facilitated
by a scalable online platform.
Through a combination of
investment and application of
our core values, we continually
improve the client experience,
attracting new clients and
retaining our existing client base.
GROWTH IN SERVICES: We have
a regular dialogue with our
clients so we can understand
and respond to their needs
along with those of our wider
addressable market. This
helps focus our reinvestment
and allocation of resources to
improve existing and develop
new services, which makes us an
even more integral part of our
client’s daily financial role.
PEOPLE: Our people are at the
core of our business, ensuring we
deliver on our core values. Aside
from developing their knowledge
and expertise they implement our
strategy and deliver our products
and services. 2022 has seen some
significant hires with new roles
created in HR and Technology.
David Christie has joined as COO
and significant investment in
support functions has also been
made to prepare for scaling the
business across new product
launches and geographies.
TECHNOLOGY: Our platform uses our
own proprietary systems, allowing us
to develop our products and services
in an agile, secure and efficient way.
We embrace technology and actively
push innovation to improve the client
experience now and in the future
through improved architecture and
intuitive navigation.
We invest to ensure our systems are
safe and secure giving confidence to
our clients.
Annual Report 2022 Economics
=
Value Creation
By placing clients at our core, continuing our
investment and adherence to our company
values, we will enable further growth. This will
deliver long-term value creation, not only for our
clients but for all of our stakeholders.
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.
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.
REVENUE: 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.
COSTS: Operating as a Riskless
Principal foreign exchange broker
of non-speclative spot, forward and
structured solutions FX contracts.
From our revenues, we fund the
administration of the platform,
our proposition and the business
as a whole. Key to our strategy is
the reinvestment into people and
technology ensuring that we are
always improving and evolving
the service and maintaining our
competitive advantage.
PROFITS AND DIVIDENDS:
Our revenue and scalability deliver
profits which quickly convert into
cash. After ensuring we maintain
a surplus of capital over and above
our regulatory requirement, we
can then pay dividends to our
shareholders. Our dividend policy
is shown on Page 62.
33
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information 2022
An
Overview.
Against an uncertain and volatile geopolitical backdrop, the
Group continued to maintain its prudent approach to risk
management, focusing on the quality and diversification of its
book, remaining debt free, cash generative and profitable. 2022
we reset the business, evolved the strategy and invigorated the
growth potential of the Group. The momentum behind those
long-term initiatives is starting to bear fruit, as reflected in our
strong financial performance.
Our targeted investment in a high quality team has enabled us to continue
servicing clients with the high standards they expect, throughout the
year. Corporate clients trading in the year totalled 1,624 (2021: 1,385) with
528 new corporate clients trading over the period (2021:499). This growth
in client base has been approached prudently with a careful take on
procedures as we pursue responsible and sustainable business growth
underpinned by the conservative approach to risk management which
resonates through the business. We continue to enjoy very low levels of
client default. Argentex weathered the previously prolonged downturn in
market activity and subsequently seized upon a clear market opportunity
as trading volumes return.
UKRAINE / RUSSIAN CONFLICT
The Group has no direct currency exposure to the Russian Rouble and
continues to closely monitor the wider potential impacts of the Ukraine /
Russian crisis.
“ Our targeted
investment in a
high quality team
has enabled us to
continue servicing
clients with the
high standards
they expect.”
Harry Adams
Chief Executive Officer
34
Annual Report 2022
KEY ACHIEVEMENTS
Shaping the growth strategy and building on the existing
foundations laid since IPO, the Group has continued to
invest to ensure it develops to meet its client needs and
drive shareholder value. Revenue grew to £34.5 million for
the 12 months to 31 March 2022, representing growth of 23%
year-on-year (2021: £28.1 million). This growth was driven
by the Group's targeted investment in strengthening its
team, broadening its geographic reach, and taking more
market share. In addition, the Group has invested to evolve
its technology proposition to drive efficiencies and meet
the growing demand from new and existing clients for its
growing list of products and services.
INTERNATIONAL GROWTH: As the market outlook
continues to improve and we meet growing client demand
through investment in our people and technology, we are
progressing with our plans to evolve our strategy and
operations to take advantage of the significant growth
opportunities and emerging trends that lie ahead in the
UK and in selected geographies.
The Group's newly formed Dutch office, which is the
European hub of Argentex, continues to progress in line
with expectations, delivering positive half on half
revenue growth during the period, helped by a doubling
of front-office headcount, which underpins its growing
strategic importance.
Furthermore, the Company's planned entry into the
Australian market through a Sydney office in the current
financial year to 31 March 2022 is at an advanced stage
and remains a key objective in maximising growth
opportunities outside its core UK market. Management
positions have been hired.
TECHNOLOGY: As part of its commitment to continually
deliver the best outcomes and experience for clients,
Argentex has launched a new technology-enabled
trading and client service platform as part of a new
technology strategy.
Further enhancing the in-person service-led approach
which the Group has championed, the client platform
has been significantly optimised to improve the usability
and customer experience online. It will enable our
clients to tailor the service levels they require as well as
increasing functionality and driving real time engagement.
This optimised platform will be supported by a mobile
responsive interface, providing further flexibility to the
Group's client base and enable the Group to take a greater
share of client wallet. It will seek to capture new customers,
drive basket size and gain further international reach.
The platform has been rolled out to a subset of existing
Argentex customers, with positive feedback and results. In
2022 we had 3010 trades vs. 766 in 2021, uplift of 293%. In the
current financial year, the new trading and client service
platform will be made available to all customers.
After our recent phase of investment, this is the first in a
planned suite of proprietary tech-enabled products and a
step forward in the Company's journey towards becoming
a technology-enabled financial services provider, with
improved client accessibility, experience and scope to
broaden our product offer. The continued digitisation of
the platform will support the Group's aims to create a more
efficient and scalable platform with diversified revenues to
help drive profitable growth.
INVESTMENT IN PEOPLE: The Group appointed David
Christie as Chief Operating Officer to join the executive
(non-Board) leadership team.
35
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information Number of new corporate trades
311
287
271
233
209
212
189
192
195
181
178
165
H1
H2
H2
H1
H1
H2
2017
2018
2019
H1
H2
2020
H1
H2
H1
H2
2021
2022
David Christie joins Argentex with over 25 years'
experience in technology in financial services, with over
15 years' experience in the FX and international payments.
David oversees the technology and settlements/operations
teams. He also leads the various projects which will enable
Argentex to transition from single office, single product to
multi office, multi product.
In addition, Argentex continues to invest in talent across
the Group, having made 31 hires in the reported period
bringing total current Group headcount surpassing 100.
In addition to 19 front office hires, it has increased bench
strength across the support functions in order to enable
the business to scale efficiently and maintain a balanced
approach to risk management.
MACRO-ENVIRONMENT AND IMPACT
Like all businesses, in the last few years Argentex has been
faced with navigating the various challenges presented by
the Covid-19 pandemic and, before that, the UK’s exit from
the European Union. While both issues are now widely
seen to be woven into the fabric of companies’ daily life,
it would be remiss to ignore their residual impact on the
broader macroeconomic environment. When combined
with tensions resulting from the conflict in Ukraine, rising
inflation and the increasing cost of living, the economic
outlook remains uncertain.
The Company is confident in a sustained return to growth,
as is evidenced in this report. At its core is an unwavering,
long-term strategic focus on technology, people and
international expansion; we look forward to continually
evolving our proposition, products and footprint to meet
the needs of a growing client base, and transforming the
way they interact with Argentex. This underpins the
positive long-term outlook for the business.
36
Annual Report 2022 8+9+11+12+13+16
+26+28+37+48+40+41
Average revenue per
traded corporate client (£k)
Number of traded
corporates
2020
2020
2022
2022
2019
2019
2018
2018
2021
2021
2017
2017
20.23
23.63
13.96
19.54
18.36
13.56
1,385
1,624
1,212
1,141
898
37
F I N A N C I A L OV E RV I E W
Growth and profitability
13.2
28.1
10.7
21.9
34.5
29.0
2017
2021
2018
2019
2022
2020
Revenue (£m)
22+26+42+58+56+70 753
17+28+38+41+37+50
Number of
trades (k)
2020
2022
2019
2018
2021
2017
50.50
38.04
36.99
28.47
41.05
16.94
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information H OW W E WO R K
Customised,
commercial and riskless
principal broker.
Spot, forward and
structured solutions
FX contracts. Tailored
hedging strategies.
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. The last 12 months
has seen the introduction of our
structured solutions offering which
now accounts for 3% of our revenue.
Argentex executes FX spot, forward
and structured solutions contracts
on behalf of its clients.
Revenue from FX structured
solutions 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 meet the
clients needs and avoid confusing
matters with unecessary strategies.
Spot vs
Forward
Revenue
3%
48%
48+
49%
Spot
Forward
Structured Solutions
38
Note: Spot, Forward and Structured Solutions
revenue excludes swaps
Annual Report 202249
+
3
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.
The last 12 months has
seen the introduction
of our structured
solutions offering
which now accounts for
3% of our revenue.
39
Strategic ReportGovernanceGroup 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
Our suite
of services.
ONLINE CAPABILITIES
2022 was a year of planning and
investment. Our online platform
optimisations are the first in a
planned suite of proprietary tech-
enabled products and a step forward
in the Company's journey towards
becoming a technology led financial
service provider, with improved client
accessibility, experience and scope to
broaden our product offer.
“ Our online platform
optimisations are
the first in a planned
suite of proprietary
tech-enabled
products and a
step forward in the
Company's journey
towards becoming
a technology led
financial service
provider.”
David Christie
Chief Operating Officer
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.
40
Annual Report 2022
Online
trading
function.
Industry dynamics shift in alignment with client
needs. Therefore, the strategic importance of a
complementary tech-enabled service that gives
clients optionality, flexibility and drives efficiency
has grown. Over the period, Argentex has launched
an enhanced online platform with a refreshed
interface and intuitive navigation – the beginnings
of a new, forward-looking technology strategy. It
will enable our clients to tailor the service levels
they require as well as increasing functionality and
driving real time engagement.
This optimised platform will be
supported by a mobile responsive
interface, providing further flexibility
to the Group's client base and
enabling us to take a greater share
of client wallet. It will also seek to
capture new customers and gain
further international reach.
The Company is now accelerating
its investment in its proprietary
platform and in-house capability.
enhancements. It is a sure step
forward in the Company's journey
towards becoming a technology-
led financial services provider,
with improved client accessibility,
experience and scope to broaden
our product offer. The continued
digitisation of the platform will
support the Group's aims to create a
more efficient and scalable platform
with diversified revenues to help
drive profitable growth.
This recent phase of investment
constitutes the first in a planned suite
of proprietary tech-enabled product
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
41
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information T E C H N O LO GY
Poised for scale
after significant
investment.
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
£6million on coding alone to
ensure that the Argentex CRM and
accompanying client front-end
software is custom-built for us and
our clients’ requirements.
To build and invest rather than
licence a generic solution has been
instrumental to Argentex’s reliable
systems and controls.
Our online trading platform has
been in operation for over two
years and is complementary
to our core business, offering a
convenient addition to a growing
suite of products to meet our
clients’ needs. In February 2022,
further enhancements were
released and experienced by 30
beta clients with valuable and
positive feedback. Since then,
adoption has accelerated swiftly.
Our intention is for all our online
users to be migrated and for
further enhancements to be made
in the future. This is the first in a
planned suite of proprietory tech-
lead products to be released.
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.
“ Continually
optimising our
online user
experience and
journey remains
a priority and will
remain so for the
foreseeable future.”
David Christie
Chief Operating Officer
42
Annual Report 2022
O U R C L I E N TS
High quality
and diverse
client base.
We are proud of our high quality and diverse client base
without being overly exposed to any single sector
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.
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.
Fostering client relationships is
paramount to the success and
longevity of our business.
Our corporate clients come from
multiple industries such as
manufacturing, food & beverage and
electrical as well as institutional
clients from private equity and
insurance to family offices.
Top 20 clients
5.5
4.0
2.61
2.37
2.34
1.83
1.78
36%
of total revenue
1.49
1.45
1.39
1.37
1.31
1.29
1.10
1.02
0.99
0.98
0.93
0.92
0.90
1
0
t
n
e
i
l
C
2
0
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l
C
3
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C
4
0
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n
e
i
l
C
5
0
t
n
e
i
l
C
6
0
t
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e
i
l
C
7
0
t
n
e
i
l
C
8
0
t
n
e
i
l
C
9
0
t
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e
i
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C
0
1
t
n
e
i
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C
1
1
t
n
e
i
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2
1
t
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e
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3
1
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“ Fostering client
relationships is
paramount to
the success and
longevity of our
business.”
Harry Adams
Chief Executive Officer
44
Annual Report 2022
Retaining
and growing
the client base
Committed, excellent service and
strong performance have granted
us the trust of our clients, which
have contributed to our growing
client base.
1,624 corporates traded in the year
ended March 2022, 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 customised 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 revenue37+
Consists of individual sectors
each responsible for less than
Financial Services (36.73%)
Other (17.05%)
Food and Beverages (5.29%)
Manufacturing &
Machinery (4.67%)
Electrical (4.22%)
IT, Technology and
Software (4.14%)
Household Goods and
Homeware (3.64%)
Logistics, Import and
Export (3.05%)
Agriculture (2.96%)
Medical and
Pharmaceutical (2.82%)
Media, PR, Events
and Marketing (2.69%)
Wholesale (2.36%)
Private Client (2.23%)
Fashion (2.01%)
Film Production and
Animation (1.94%)
Energy (1.46%)
Motor, Vehicle, Aerospace
Components (1.18%)
Music and
Entertainment (1.04%)
Legal Services (0.50%)
45
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information
17
+
5
+
5
+
4
+
4
+
4
+
3
+
3
+
3
+
3
+
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.
Manufacturing
and Machinery
Medical and
Pharma
Our clients in the manufacturing
and machinery sector have both
import and export currency
risk. Clients who manufacturer
goods in the UK and export to
customers in the EU, USA and
Asia have continuing receipts in
Euros and US Dollars which need
to be repatriated into GBP. Firstly,
we offer timely execution via our
team of dedicated dealers who will
provide in-depth market analysis to
help the timing of trades. Secondly,
we have a suite of forward and
structured products that help our
clients achieve their budgeted rates
to protect their profit margins
across the year.
Argentex assist and manage this
segment based on client's needs. In its
simplest format our clients may look
to use the Argentex facility to gain
access to a more efficient spot rate
than they would otherwise achieve
using their Banking provider. This,
coupled with the zero wire fee, makes
us an attractive proposition for clients
importing goods or raw materials from
overseas territories. Should the client
wish, they may also then investigate
and proceed with either using forward
contracts or derivative instruments
to manage the exchange rate risk for
future imports. For exporters within
this segment they may use the facility
to convert revenues generated overseas
back though into their base currency
via spot trades.
46
Annual Report 2022 “ Our client mix spreads
across many industries
which showcases the
high quality and diverse
nature of our book.”
Harry Adams
Chief Executive Officer
Electronic
retailer
Food and
beverage
Footballers
Our client specialises in
E-commerce offering high-end
technology and photography
products. They use Argentex
to provide best execution on
Scandinavian currency pairs
when selling products to their
Scandinavian clients and converting
their funds back to their operating
currency which is in GBP.
Argentex provide charting, price
alerts and forward facilities
to give them the flexibility to
budget for their incoming funds.
Ultimately letting the business
focus on its core business whilst
letting Argentex find a streamlined
and cost-effective solution that
compliments their business and its
future cash flow expectations.
Our client operates a large-scale
confectionary and patisserie business
selling directly into independent retail
chains and the wholesale market
globally. By owning several brand
names around the world, revenue
is generated in multiple currencies
that need to be repatriated into their
operating currency in EUR. Argentex
maximises the value of their foreign
income by targeting significant prices
in the market, bespoke analysis to
assist with timing as well as a full
online suite to allow for instant
market execution. Moreover, Argentex
hedge out a portion of the business’
exposure with forward contracts,
allowing the client to concentrate
on its day-to-day strategies and
budgeting, without the fear of being
exposed on the fluctuations of the
foreign exchange market.
One of our clients is an English
Premier League footballer with
a loan transfer to the German
Bundesliga. The English team
pays the player’s contract weekly
in Pounds; however, the German
club pays the loan player’s contract
contribution in Euros. Whilst
this is regularly seen as a minor
administrative point, it has a major
hidden impact on the value of the
player’s earnings. Argentex works
alongside players and the player
care teams to inform them of the
importance of foreign exchange on
salaries. Secondly, we assist players
with the execution of their foreign
currencies and ensure that their
hard-earned money is not lost as
a result of poor exchange rates or
overall lack of management.
47
Strategic ReportGovernanceGroup 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.
“ FX risk is usually simple, in
which case we believe the
solution to it should be too.”
Jo Stent
Chief Financial Officer
Every client is different, 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.
Full range of
customised FX
capabilities
— Spot Contracts
— Forward Contracts
— Structured Solutions
Contracts
— Personalised
hedging strategies
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
48
Annual Report 2022
H OW W E W I N N E W B U S I N E SS
Sales and
Performance.
Repeat
business.
New vs repeat
business
Corporate
revenue 2022
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.
2017
2018
2019
2020
2021
2022
£5.6m
£9.6m
£14.5m
£8.0m
27+
£26.5m
73
New
Repeat
£22.6m
£20.7m
£26.5m
Sales Team
Dealing Team
— Recruited from grass roots
— Minimum 10 years experience
— Trained to sell ‘our way’
— All regulated to give advice
— Receive a commission 10-17.5%
— Receive flat commission of 10%
— Commission paid for life
— Each dealer looks after 200-300
of client
active clients
— New Business Targets
49
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information 2022 AC H I E V E M E N TS
Goals.
Driving
forward
“ We continually
focus on our goals
and delivering
successful
outcomes”
Harry Adams
Chief Executive Officer
Continue to improve productivity
Maintain a diverse client base
Generating revenues from options
Continued investment in people
Strong Governance
50
Annual Report 2022
Outcomes.
→
→
→
→
→
→
→
→
→
→
→
→
→
Delivered on our commitment to growing our team - our sales team now exceeds 50
Further investment in our online client experience - significant investment to
optimise our online solutions and create a seemless experience for our clients
36% of revenue generated from top 20 clients
Revenue from top 20 clients was £12.4m
Winning back flow lost to banks
Professional and Eligible Counterparty clients only
Recruitment of a Head of Options in 2022
Options contribute 3% of revenue
31 new hires in 2022
New COO in March 2022
Immaterial instance of bad debt
Financial sustainabilty
Effective response to macro environmental changes
51
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information 2022 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.
52
July 2021
→
Rigorous stragetic review
across all areas of the
business undertaken
September 2021
→
Record H1 performance -
revenue £15.7m - up 33%
February 2022
→
→
Australian management hired
Online platform
enhancements released
→
30 client beta test
March 2022
→
→
David Christie is
appointed COO
Sustainability
strategy defined
and approved
Annual Report 2022 LO O K I N G F O RWA R D
Achieving
growth
strategies.
1. Expand sales force
→
→
Goal achieved for sales team of 50 people one year ahead of plan
Investment in growth of Sales Team continues
2. Increase productivity
→
Further investment in our tech to create efficiencies during
our customer journey and user experience.
3. Customer acquisition
→
→
Driven by sales team expansion and increased productivity
Driven by our advancements in technology, therefore offering
a number of new products and convenience for our clients
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
53
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information 54
Annual Report 2022 F I N A N C I A L R E V I E W
Year at
a glance.
Achieving impressive growth during
a year of transition
The 12 months to 31 March 2022 represented a pivotal year for
Argentex. As referenced on page 13, Harry Adams appointment
as sole CEO in July 2021 initiated an end to end review of the
Group’s operations, resulting in an evolved strategy supported
by three key growth pillars: people, technology and international
expansion. Although these growth pillars are consistent with
prior years, the redefined strategy identified an opportunity
for technology to play a greater role in the delivery of our high
touch customer service offering and enhance the Group’s ability
to prosper in the years ahead. This meant an increase in the
Group’s investment in software development (FY22: £1.7m, FY21:
£1.2m), including an upgrade to the online platform. In addition,
investment in people continued not only in the front office but
in technology and operations, including at the senior executive
level with the appointment of David Christie as COO.
At the same time, the Group delivered year on year revenue
growth of 23%, adding 528 new traded corporates in the year
(FY21 499) with 23% of revenue represented by new business.
Adjusted operating margins improved modestly to 31.9% (FY21
30.9%), delivering an increase in earnings per share of 1.4p
(operating margin was 30.1% (FY21: 27.8%)). The Group’s robust
approach to risk remains unchanged, which is demonstrably
reflected in the consistently low instances of client default.
FINANCIAL PERFORMANCE
In FY22, revenues increased by 23% to £34.5m (2021: £28.1m). As has
been the case in the past, revenue tends to be weighted towards
the second half of the year with H2 revenues contributing 54% of
total annual revenues. H1 delivered a higher year on year growth
in percentage terms compared to H2, (H1 33%, H2 15%) however
this was driven by the impact of the pandemic on H1 FY21 in
particular, where the Group witnessed a significant slow-down
Jo Stent
Chief Financial Officer
56
Annual Report 2022 “ Argentex views its ability
to generate cash from its
trading portfolio as a key
indicator of performance
within an agreed risk
appetite framework.”
Jo Stent
Chief Financial Officer
in trading volumes as many customers adjusted to a
markedly different set of macro factors. The total number
of corporate clients traded in FY22 was 1624, representing
an increase of 17% on the prior year. 528 of these
represent new customers, in turn demonstrating strong
customer acquisition.
Earnings (note 13 in the financial statements) of £7.4m in
FY22 represents an increase of £1.5m or 25% versus FY21
(FY21 £5.9m). This increase in earnings coupled with the
Group’s strong balance sheet has enabled the continued
investment in growth in line with the now evolved
strategy across people, technology and international
expansion. Overall, administrative expenses increased by
£4.0m compared to FY21. This is primarily driven by the
investment in people. Average headcount grew from 67
in FY21 to 86 in FY22 including directors, with headcount
at 31 March 2022 surpassing 100. The front office: back
office split remained broadly consistent year on year.
We expanded international teams including 4 new hires
in Holland across the year and the appointment of the
management team in Australia in February 2022. In
addition, we increased our investment in technology to
£1.7m in FY22 (FY21 £1.2m) in support of our service-led
customer offering. Our investment in technology, in line
with our accounting policy, is capitalised on our balance
sheet as an intangible asset and amortised over a three
year period.
Operating profit increased 33% to £10.4m (FY21: £7.8m).
Adjusted operating profit of £11m (FY21: £8.7m) excludes
£0.6m (FY21: £0.9m) of one-off items that do not form part
of ongoing operating costs. In line with our accounting
policy as stated on page 122, these are made up of legal
and other set up costs for overseas subsidiaries as well as
restructuring costs.
Net earnings in FY22 were £7.4m, representing a year over
year increase of £1.5m (FY21 : £5.9m) resulting in a 1.4p
increase in earnings per share to 6.6p.
FINANCIAL POSITION
Argentex views its ability to generate cash from its
trading portfolio is a key indicator of performance within
an agreed risk appetite framework. As at 31 March 2022,
Argentex has cash and cash equivalents of £37.9m, an
increase of £11.1m 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. Further, cash and
cash equivalents does not include collateral placed with
financial counterparties which is a change from historical
practice. Historically, this has been included in cash and
cash equivalents but disclosed specifically in the financial
statements disclosure notes, and in FY22 any collateral
placed with financial counterparties is now classified as
£7.2m in other assets (FY21:£11.6m).
The Group generated £17.2m in cash from operating
activities in FY22 (FY21 £10.8m). Of this amount, £6.2m
relates to an increase in client balances held, as shown
in payables in note 18 of the financial statements. Of
the remaining £11m in cash generated from operating
activities, £1.7m was used to invest in technology including
an enhanced online platform and a further £3.1m was
returned to shareholders in the form of a dividend.
57
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information
Cash generation from the Group’s revenues is a function
of i) the composition of revenues (spot, forward and
option and swap 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 and
swap 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 outside of
option and swap trades being spot contracts in addition
to forward contracts carrying a relatively short tenor on
average. Over 75% of revenue converts to cash within 6
months. Excluding swap revenue, 85% of revenue converts
to cash within 3 months which is consistent with prior
years as follows:
PORTFOLIO COMPOSITION
Argentex’s client base continues to grow with an increase
in corporate clients traded in the year to 1,624 (FY21: 1,385),
and 528 of these corporate clients traded representing new
business. 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. In line with prior year, as at the year-end
over 80% of 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. Further,
client concentration has declined year on year with 36%
of revenue represented by the top twenty customers, a
reduction to the prior year (FY21 41%).
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.
CASH CONVERSION
Revenues for the last 12 months
Revenues for the last 12 months (swap adjusted S/A) (A)
Less
Revenues settling beyond 3 months S/A
Net short-term cash generation (B)
Short-term cash return (B/A)
58
2022
£m
34.5
31.5
4.6
26.9
85%
2021
£m
28.1
27.2
3.1
24.1
88%
2020
£m
29.0
27.6
4.0
23.6
86%
2019
£m
21.9
20.5
2.4
18.1
88%
Annual Report 2022
KEY PERFORMANCE INDICATORS
The Group measures its performance using the
following Key Performance Indicators:
34.5
28.1
29.0
2021
2019
2022
2020
21.9
Revenue (£m)
+9+11+12+13+16
+12+12+12+12+12
Spot/Forward revenue mix
*Structured solutions revenue
13.2
2020
2020
2022
2022
2019
2019
2018
2018
2018
2021
2021
1,385
1,624
1,212
1,141
898
49
49
45
48
48
48
55
52
52
51
3*
Number of traded corporates
Earnings/ Adjusted Earnings
FY 20221
£7.4m/ £7.9m
£5.9m/ £6.7m
FY 20211
£8.1m/ £10m
FY 2020
¹ Note 13 to the Consolidated Financial Statements
Short-term cash return (Net of swaps)
85%
88%
86%
88%
2022
2021
2020
2019
CHANGE IN FINANICAL REPORTING PERIOD
In line with the Group’s transition to a global financial
solutions provider, the financial reporting timetable will
move to a calendar year with the first new reporting period
ending 31 December 2022.
DIVIDEND
Argentex is pleased to declare a final dividend for the year
ended 31 March 2022 of 1.25p per share. The final dividend
record date will be 26th August 2022 and will be paid on 26th
September 2022. The ex-dividend date is 25th August 2022.
Together with the interim dividend paid on 7th January 2022
of 0.75p per share, this brings the total amount of dividend
payable for the year to 2p per share, in line with prior years.
Jo Stent
Chief Financial Officer
59
Strategic ReportGovernanceGroup 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
As the pandemic has eased over the
past year, the Board has continued
its regular communication with our
employees. Employee wellbeing and
satisfaction has been a priority as
staff return to the workplace. The
Board has frequently addressed covid
secure measures throughout the year
and placed an additional focus on our
approach to sustainability. The Board
approved our sustainability policy
during the year ended 31 March 2022.
Investments in technology have allowed
for a flexible approach to working
patterns. We have communicated to
investors through trading statements
and investor presentations. We continue
to maintain a high standard of business
best practices.
Our 5 Key
Stakeholders
1. Our Customers
2. Our Employees
3. Our Environment
and Communities
4. Our Investors
5. Our Partners
60
Annual Report 2022 Our
Customers
21
44
45 46
47
48
Our
Employees
15
26
27
32
49
51
Who / What they are?
Why are they
important to us?
What do they
want from us?
How do we engage
with them?
We have a very diverse
Our clients are the
They want tailored and
The Directors have
client base. Our clients
reason Argentex has
best in class foreign
implemented a client
vary from institutional,
become what it is.
exchange advisory and
service model designed
corporate and private
They form our revenue
execution services that
to provide high levels
clients from a variety of
and growth.
are safe and reliable.
of service and personal
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
In addition there is
remuneration policies
and growth.
a need to act fairly
including health
between members of the
insurance that includes
Company and a desire
mental wellbeing as
for high standards of
well as in-house
business conduct.
fitness facilities.
Our Environment
and Communities
64
Our environment and
Long Term sustainability
Our environment and
Through our key
our local communities
and integrity are
communities want from
pillars of Planet,
important components of
us a commitment to
People and Partners we
the Argentex culture. We
putting the right focus
have partnered with
recognise that community
on the environment,
organisations such
engagement is vital to
social and governance.
as Earthly and Social
our ability to deliver
long term-term returns
for our stakeholders.
Therefore we carefully
consider our impact
on the communities in
which we operate and on
the environment. Our
commitment is embodied
by our Sustainability
Strategy.
Mobility Foundation as
well as implement grass
roots led initiatives such
as meat free Mondays.
Such partnerships
develop long term
support to communities
at both a national and
global level.
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.
61
Our
Investors
21
33
81
84
Our
Partners
67
Strategic ReportGovernanceGroup 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 2021 results in September despite
the market volatility, and declaring
a final dividend for 2022. 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 the interests of
both employees and investors as
key stakeholders of the business.
Consideration was given to ensuring
appropriate reward that acts as
an incentive and encourages staff
retention whilst sustaining 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.
APPOINTMENT OF CHIEF
OPERATING OFFICER
The Board approved the
recommendation of the
appointment of David Christie as
COO. David has a clear remit to
deliver on product developments
across the Group and drive the
investment in support functions
that are key to ensuring the delivery
of high levels of execution services
to the Group’s client base. As a Board
we are keen to sustain close working
relationships and open dialogue
with suppliers who contribute to
business operations. The decision to
appoint for the role of COO is key to
ensuring this approach underscores
the Group’s business strategy.
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. In
addition we made swift steps to exit
all Rouble currency before Russia's
invasion into Ukraine.
62
Annual Report 2022 S U STA I N A B I L I T Y ST R AT E GY
At Argentex,
sustainability is
a strategic long-
term driver.
We are committed to putting the right focus on
sustainability, encompassing environmental, social
and governance (ESG) issues to support our growth
and yield greater business benefits by transitioning
towards a sustainable business model.
Last year, we commenced consultation to identify key elements to develop
our sustainability strategy. This financial year, we have evolved our thinking
and identified three key pillars to underpin this sustainability strategy.
The Three Pillars:
People.
Partner.
Planet.
We believe that a
focus on diversity,
inclusion and
belonging enhances
our business
performance and
support a balanced
approach to risk.
Our impact goes
beyond our direct
actions and choices,
and our sustainability
strategy must extend
across the entire
value chain to include
customers, suppliers
and investors.
Our approach to
Planet is a two-fold
initiative: 1) measuring
our operational
footprint and making
improvements 2)
Partnering with relevant
organisations to amplify
our impact while
ensuring our ability to
measure improvements
over time.
Our vision
“ This financial year,
we have evolved
our thinking and
identified three key
pillars to underpin our
sustainability strategy.”
Lena Wilson CBE FRSE
Board Sustainability Champion
64
Annual Report 2022
People.
BELONGING STRATEGY
A sense of belonging is central to
the journey of our people, and to our
ability to remain competitive when
retaining and attracting the best
talent. Developing a truly inclusive
workforce calls for an organization
to evaluate its practices, people, and
take concerted, meaningful and
intentional action for positive change.
We are committed to building on
what already makes Argentex a
great place to work and staff input is
invaluable. This year we undertook
an anonymous survey on Diversity
and Socio-economic Status to gather
data and understand our makeup. We
are really proud that our organisation
is made up of 14 different ethnicity
groups and 7 different religious
beliefs. Using the results of the
survey we intend to identify a set
of inititives to promote a culture of
inclusion and belonging at Argentex.
Argentex will continue to work
hard and engage our employees
to continuously evaluate how
we operate, to understand what
we can do better. The purpose of
these initiatives is to make positive
changes, give every Argentex
employee a voice, and develop a full
belonging strategy.
SUPPORTING A CULTURE OF WELLNESS
WITHIN THE ARGENTEX TEAM
With our commitment to our staff
work culture and wellness, this year
we launched the Argentex Fitness
Challenge 2022: a four-week challenge
that promotes fitness, competition, and
team building.
ARGENTEX ACADEMY
The financial services industry is
often perceived as notoriously
inaccessible to those from lower
socioeconomic backgrounds and for
many young people, embarking on
a career within the industry, it can
appear unattainable.
Argentex recognises and understands
the challenges surrounding enhancing
diversity within financial services. We
are well-positioned to support a change
in this narrative by encouraging and
supporting talented and ambitious
students from diverse backgrounds to
choose a career at Argentex.
In support of our focus on diversity,
inclusion and belonging, we have
partnered with the Social Mobility
Foundation (SMF). They support over
2000 high-achieving young individuals
and their aim is to make practical
improvements in social mobility
for young people from low-income
backgrounds through SMF’s Aspiring
Professional Programme (APP), their
Social Mobility Index, their advocacy
and their campaigning arm, the
Department of Opportunities (DO) to
help us deliver on this core objective.
This partnership with SMF marks
the start of our Argentex Academy
program launching summer of 2022.
65
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information Partner.
We recognise that for us to fully
determine our path to net-zero, we
need to understand and evaluate our
impact across our value chain and be
able to measure the indirect impact
of doing business. Going forward, we
will set our annual targets and work
with partners in our value chain who
align with and contribute positively
towards a path of net-zero. Initial
consultation has commenced and
detailed planning is set to take place
in the upcoming financial year.
Planet.
Argentex will continue to determine
and measure our operational carbon
footprint by maintaining our Planet
Mark certification.
We have chosen to partner with
organisations in a meaningful way
to create lasting and positive change
beyond our direct operational
footprint and our chosen focus in
this area is the replenishment of
biodiversity loss, said to be one of
the most significant potential risks
to the global economy. To this end
we have identified Earthly as an
appropriate partner. This partnership
aligns our objective of replenishing
biodiversity loss by supporting the
conservation program in the Kasigau
Corridor, Kenya. For every trade
a customer places with Argentex,
we pledge to plant a tree in the
Kasigau Corridor in support of the
programme and its objectives.
Kasigau Corridor programme
is a Reducing Emission from
Deforestation and forest degradation
(REDD+) project based in Rukinga,
Kenya. This project protects over
200,000 hectares of dryland Acacia-
Commiphora Forest home to more
than 20 species of bats, over 50
species of large mammals, including
lions and over 300 species of birds.
In addition, this project supports the UN Sustainable Development goals as
noted in the table below.
PLANET MARK
Planet Mark has helped Argentex
measure and determine our direct
operational carbon footprint impact
allowing us to maintain our Planet
Mark Certification.
EARTHLY
Earthly is a platform that
showcases high integrity nature-
based solution that removes carbon,
restore biodiversity and support
frontline communities.
Argentex has identified Earthly as
an appropriate partner in support
of our wider objective to replenish
biodiversity loss.
67
Strategic ReportGovernanceGroup 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.
“ Operational
resilience and
a sound risk
framework have
always been integral
to the running of
Argentex.”
Jo Stent
Chief Financial Officer
70
Annual Report 2022
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
Significant increased volatility in
financial markets in the period
caused by the extended impact of
Covid-19, Brexit and, most recently,
Russia's invasion of Ukraine, has
meant the Group's monitoring and
review of the impact and potential
threats to the risk environment have
evolved accordingly 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 successfully navigated
a significant proportion of the
year in a work-from-home state
for all or most of the employees,
with operational effectiveness and
resilience key to the sucess of this
way of working. In addition, over
the period the Group has invested in
all core support functions including
finance, HR and technology with
a view to promoting a best in class
approach to processes and controls
across the enterprise. The Group
therefore believes that there is no
incremental residual operational
risk. Operational effectiveness and
resilience were key to the success
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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group continues to be well
capitalised and monitors liquidity
dynamically in response to the
numerous macro economic events
of the year. The Group sucessfully
renegotiated ISDA agreements with
institutional counter parties in the
prior financial year and continues
to opperate under this reduced risk
model. As a result, the Group believes
there is no incremental residual
liquidity risk.
71
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information the economic impact of the pandemic
on business is still unfolding, and
therefore the Group will continue to
monitor accordingly. Undoubtedly
the wider global economic impact of
Russia’s invasion of Ukraine would
have the potential to further increase
residual credit risk as businesses face
increased volatility and uncertainty.
Although the Group has no direct
exposure to the Russian Rouble,
it continues to monitor credit
worthiness of new and existing
clients on a case by case basis and has
not experienced any undue adverse
impact in the current financial year
with bad debt in line with historically
low averages. On this basis, the
Group believes there is no increase to
residual credit risk for clients.
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.
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 leading counterparties
such as fully regulated international
banks 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
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
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
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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group recognised an increase in
residual client related credit risk in
the prior financial year as a result of
the economic impact of the Covid 19
pandemic. Undoubtedly the extent of
72
Annual Report 2022 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.
↔ 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 uses 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 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 personnel and is satisfied
that this in addition to ongoing
sucession planning mitigates the risk
of loss of key personnel.
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 or a hybrid
model have been implemented with
minimal disruption over the last two
financial years. Further, the majority
of the Group’s infrastructure utilises
cloud – based infrastructure thereby
mitigating residual risk.
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 business
continuity and operational resilience
arrangements which are periodically
tested and enhanced as required as
our products and services expands.
These include relevant policies,
processes, training, infrastructure,
governance and tools to ensure the
business can recover from a range of
business interruption scenarios.
The Group maintains robust levels
of insurance to cover losses in such
Cyber Risk
DESCRIPTION and potential impact
Cyber risk is a continual pervasive
threat which we define as the risk
of losses arising from being targeted
by hackers resulting in significant
disruption to its operations and
ability to service customers.
MITIGATION
The Group maintains and continues
to enhance its information security
management framework which are
systemically tested against evolving
threat vectors as they develop
and continually enhanced as our
products and services expand. These
include relevant policies, tools and
processes and employee training on
security and fraud related matters
like phishing and ransomware,
which are then periodically tested by
external third parties.
73
Strategic ReportGovernanceGroup OverviewFinancial StatementsOther Information 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.
↔ NO CHANGE IN RESIDUAL RISK
RATIONALE
The Group continues to monitor the
ongoing impact of Covid 19 across
many industry sectors as the impact
of the vaccination program has led
to a return to a version of normality.
The Group continues to be focused
on robust financial controls and
maintaining balance sheet strength
and as such believes there is no
increased residual risk in the period
as a result of the ongoing impact of
Covid 19.
BOARD APPROVAL
The Strategic Report as set out on
pages 30 to 75 was approved by the
Board of Directors on 5 July 2022 and
signed on its behalf by
Jo Stent
Chief Financial Officer
July 2022
Additionally all systems are
patched, secured and penetration/
vulnerability tested regularly to
ensure they are secure and robust
to maintain confidentiality, integrity
and availability of our services and
business assets. Additionally we
monitor the web and dark web for any
threats and have appropriate incident
management and expertise in place to
react to any threat as they may emerge.
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. There have been
no significant developments in the
current year to elevate the assessment.
COVID-19
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.
MITIGATION
The Group’s primary responsibility
is the safety and welfare of its
staff. The Group has developed
74
Annual Report 2022
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
Chief Executive Officer,
Co-Founder
Harry is a founding partner
of Argentex. As CEO, Harry is
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.
77
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview Nigel Railton
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.
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 NatWest Group, and is Chair
of Picton Property Income Ltd and
Chair of AGS Airports Ltd. She is also
a member of the UK Prime Minister's
Business Council for 2022 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.
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.
78
Annual Report 2022 Henry Beckwith
Non-executive Director
Jonathan Gray
Independent Non-executive Director
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.
79
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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 2022.
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.
Full particulars of the dividends are contained within
the Financial Review on page 56.
DIRECTORS
The Directors of the Company who held office during
the year were:
PRINCIPLE ACTIVITY
The principle activity of the Company is that of a holding
company. The principle 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
30 to 74. The Group’s profit after taxation for the year
was £7.4m as set out in the Consolidated Statement of
Profit or Loss on page 110.
DIVIDENDS
During the year, the Group declared and paid a final
dividend for FY21 of 2.0p per share, totalling £2.3m paid
in September 2021. In January 2022, the group paid an
interim dividend of 0.75p per share totalling £0.8m based
on the results for the H1 ended 30 September 2021. For the
year ended 31 March 2022, the directors are declaring a
final dividend of 1.25p per share, totalling £1.5m.
— Harry Adams
— Carl Jani (Resigned 11th June 2021)
— Jo Stent
— 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 77 to 79.
DIRECTORS INTERESTS
The remuneration, principal terms of employment
and the interests of the Directors in the Company’s
shares are detailed in the Directors Remuneration
Report on pages 90 to 95. 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 than 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.
80
Annual Report 2022 GOING CONCERN
The Directors have assessed the Group’s prospects
until the end of 2022, taking into consideration the
current operating environment, including the impact of
Coronavirus pandemic and the Ukraine conflict on the FX
markets.
The board of directors of are confident that in context of
the Group’s financial requirements they give flexibility
and sufficient liquidity to the Group to ensure that the
Group can withstand significant shocks and/or extended
periods of market volatility, whilst remaining as a going
concern for the next 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 20 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.
SUBSTANTIAL SHAREHOLDINGS
At 31 March 2022, the company had been notified of the
following interests (excluding Directors within the Group)
representing 3% or more of its issued shared capital:
Shareholder
Number of
ordinary shares
% holding
Pacific Investments
Limited
Gresham House
Asset Management
AXA Framlington
Investment Managers
15,442,694
13.64%
8,315,855
7.35%
4,350,000
3.84%
Fidelity International
4,011,760
3.54%
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 60 to
61 provides a comprehensive overview of the Group’s
commitment to stakeholder engagement.
CORPORATE SOCIAL RESPONSIBILITY
We are committed to minimising the impact our operations
have on the environment, so we have hired an ESG
consultant to help us become more environmentally
aware. Recycling office supplies where possible is already
being undertaken. We do not discriminate against age,
gender, ethnicity, disability or any other criteria. For more
information please see pages 64 to 67.
ANNUAL GENERAL MEETING
The AGM will take place on 22nd August at Gowling WLG,
4 More London Riverside, London SE1 2AU. 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 23 of the Consolidated Financial Statements.
CORPORATE GOVERNANCE
A full review of Corporate Governance appears on pages 84
to 109.
81
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview AUDITOR
Deloitte, which was appointed on the 4th August 2021
have confirmed their willingness to continue in office as
auditor in accordance with section 489 of the Companies
Act 2006. The Group is satisfied that Deloitte are
independent and there are adequate safeguards in place
to safeguard their objectivity. A resolution to reappoint
Deloitte as the Company’s auditor will be proposed at the
AGM on 22nd August.
disclose with reasonable accuracy at any time the
financial position of the Group and Company and enable
them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are also responsible for ensuring that they
meet their responsibilities under the AIM Rules.
The Directors are responsible for ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the United Kingdom governing the preparation
and dissemination of financial statements, which
may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website
is the responsibility of the directors. The directors’
responsibility also extends to the ongoing integrity of
the financial statements contained therein.
On behalf of the Board
Jo Stent
Chief Financial Officer
DIRECTORS’ STATEMENT AS TO DISCLOSURE OF
INFORMATION TO THE AUDITOR
All the Directors who were members of the Board at
the time of approving the Director’s Report have each
taken all the steps they might reasonably be expected
to have taken to make themselves aware of any relevant
audit information and to establish that the auditor is
aware of that information. To the best of each Director’s
knowledge and belief, there is no relevant audit
information of which the Company’s auditor is unaware.
DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under such laws, the
Directors have prepared the Group financial statements
in accordance with international 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 applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements; and
— prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group and Company’s transactions and
82
Annual Report 2022
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. This is
responsible for promoting the sustainable success of the Group and
generating value for the Company’s shareholders over the long-
term, 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 2022 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
84
Annual Report 2022 The QCA Corporate
Governance Code.
1. Establish a strategy and business model which
promotes long-term value for shareholders.
30
Strategic Report
2. Seek to understand and meet shareholder
needs and expectations.
33
Investor / Shareholders
152
Shareholder communications
3. Take into account wider stakeholder and
social responsibilities and their implications
for long-term success.
60
Section 172 Statement
64
Sustainability Initiative
33
Other Stakeholders
4. Embed effective risk management,
considering both opportunities and threats
throughout the organisation.
70
70
Principal Risks & Uncertainties
Internal Controls & Assessments of Business Risk
85
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 5. Maintain the Board as a well-functioning
balanced team led by the Chair.
77
84
Board of Directors
Corporate Governance Statement
6. Ensure that between them the Directors have
the necessary up to date experience, skills
and capabilities.
77
Board of Directors
88
Board of Effectiveness
7. Evaluate Board performance based on
clear and relevant objectives, seeking
continuous improvement.
88
Board of Effectiveness
90
Remuneration Committee Report
8. Promote a corporate culture that is based
on ethical values and behaviours.
84
Corporate Governance Statement
98
Audit and Risk Committee Report
64
Sustainability Strategy
90
Remuneration Committee Report
96
Nomination Report
27
Argentex Collective
9. Maintain governance structure and
processes that are fit for purpose and support
good-decision making by the Board.
44
Clients
26
Culture
26
Business Culture, Behaviour & Ethics
64
Sustainability Strategy
10. Communicate how the Company is
governed and is performing by maintaining
a dialogue with shareholders and other
relevant stakeholders
84
Corporate Governance Statement
86
Annual Report 2022 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,
Alethia McDonald, 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
Carl Jani resigned as Co-CEO 11th June 2021.
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.
— 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 six 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 Chief Executive 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 89 outlines the scheduled Board and Committee
meetings with attendance of each Board Member.
THE BOARD COMMITTEES
Audit and Risk Committee
The Audit and Risk 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 and Risk Committee monitors the need for an
internal audit function.
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
The Audit and Risk Committee is comprised of Lena
Wilson CBE FRSE, Jonathan Gray, Henry Beckwith and
Nigel Railton is Chair. The Audit and Risk Committee will
meet at least three times a year at appropriate times in
the reporting and audit cycle and otherwise as required.
The Audit and Risk Committee will also meet frequently
with the Company’s external auditors.
87
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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.
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.
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 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.
The Directors believe that the Group has internal control
procedures in place appropriate to the size and nature of
the Business.
SHAREHOLDER COMMUNICATIONS
The Board is committed to maintaining communication
with the Company’s shareholders. The principal methods
of communication with private investors remain the Annual
Report and Financial Statements, the Interim Report, the
AGM and the Group’s website (www.argentex.com).
All Directors will normally attend each AGM and
shareholders are given the opportunity to ask questions. In
addition, the 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.
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
88
Annual Report 2022 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 Beck-
with
Harry Adams
Jo Stent
Board Meetings
Chair
Audit Committee
Chair
Remuneration
Chair
Nominations
Chair
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.
89
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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 2022 which summarises the work of
the Remuneration Committee, the remuneration policy
and the remuneration paid to the Directors for the year.
As an AIM-quoted company, the information provided is disclosed to
fulfil the requirements of AIM Rule 19. Complying with AIM Rule 26,
Argentex complies with the QCA Corporate Governance Code. Although
the Company is not required to comply with Schedule 8 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008, Argentex is committed to achieving both high governance standards
and a simple and effective remuneration structure.
Argentex was admitted to trading on AIM on 25 June 2019 and prior to this
was a private business.
REMUNERATION COMMITTEE
The composition of the committee is shown on page 89 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
Johnathan Gray
Chair of the Remuneration
Committee
90
Annual Report 2022 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.
Our CEO has a significant shareholding and so his interests
are directly aligned with shareholders as a whole. In view of
this, the CEOs does not currently participate in long-term
incentive arrangements. The committee has retained an
independent external consultant to advise on remuneration
matters across the Group.
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 £67,500
per annum and for our non-executive directors was
£50,000 per annum. 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.
This has been an exciting year of growth for the Group.
Consequently, the Remuneration Committee has
determined to award bonuses to the Executive Directors
as set out in the table below.
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”).
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.
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 a combination of UK tax-advantaged
company share options and share options that 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.
91
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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 2022.
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 FY2022
Other amounts
2021/22 Total
350,000
56,426
270,000
67,500
50,000
50,000
50,000
50,000
280,000
160,000
-
-
-
-
-
-
113,890
-
-
-
-
-
-
630,000
170,316
430,000
67,500
50,000
50,000
50,000
50,000
31 MARCH 2022
Executive Directors
Harry Adams
Carl Jani1
Jo Stent
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
Jonathan Gray
Nigel Railton
Dr Lena Wilson
Notes:
1 To July 2021
92
Annual Report 2022 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 the 31st January 2021
2 Appointed on 1 February 2021
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
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 2022
Number of ordinary shares held in
the Company at 31 March 2021
13,882,894
-
37,500
434,451
7,675,247
75,000
84,670
12,500
13,749,144
13,749,144
-
396,951
7,425,748
50,000
47,170
-
93
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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.
Jonathan Gray
Chair of the Remuneration Committee
June 2022
95
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview
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 2022.
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 on page 89. 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 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
96
Annual Report 2022 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 illness
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.
During the year a key focus of the Committee was the
annual review of Board effectiveness. The Committee
also reviewed and updated the Board Skills Matrix
implemented in the previous year, the results of which
showed that the Board has the necessary depth and
breadth of skills required to effectively discharge its
duties. This year’s effectiveness review was carried
out internally and led by the Committee Chair. Key
outcomes were positive with the Board wishing to
focus more on shareholder engagement, competitive
landscape and innovation; and environmental, social
and corporate governance (ESG) and all three have
already been addressed in deeper Board discussions
as well as during the annual strategy session. The
Committee will in the coming year, turn its attention
to the implementation of a robust succession plan that
considers contingency, medium-term and long-term
implications of board composition. Given the sector
in which Argentex operates, the Board also undertook
comprehensive annual compliance training.
The Committee plays a key role in all new Board and
Executive Leadership appointments. During the year,
David Christie was appointed as COO and we welcome his
financial expertise and global experience to the Board. His
skills are major asset to Argentex as we pursue sustainable
long-term growth and shareholder value creation.
David 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 2022/23
The Nominations Committee will continue to oversee the
effectiveness of the Board and ensure that appointments
are based on merit, considering fully the skills and
experience required, as well as the benefits gained from all
forms of diversity in future Board composition.
Lena Wilson CBE FRSE
Chair of the Nominations Committee
97
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview G OV E R N A N C E
Audit and Risk
Committee
Report.
On behalf of the Board, I am pleased to present
the Audit and Risk Committee report for the
year ending 31 March 2022.
The Audit and Risk Committee’s key objectives are to ensure that
shareholder interests are protected and that the Company’s long-term
strategy is supported. The Audit and Risk 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 on page 89. The committee
is comprised of only non-executive directors, and committee
meetings are attended by the CEO and the CFO as well as other
senior management as requested. The Committee met five times in
the year and also held meetings with both the previous and newly
appointed external Auditors, Deloitte LLP. 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 and Risk Committee consults with all
committee members prior to the meeting to ensure all matters arising
are raised and discussed openly.
As the Company’s risk profile increases as a result of overseas
diversification and increased payment activities, the Audit Committee’s
responsibility to oversee risk management has been formalised by
reforming the Audit Committee to the Audit and Risk Committee as of 14
March 2022.
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.
Nigel Railton
Independent Non-Executive
Director
98
Annual Report 2022 The main duties the Committee carried out during the year
included:
— Review of the 2021/2022 audit plan and audit
engagement letter
— The tender and appointment of a new external auditor
— 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;
— Key audit matters identified by the external auditor
relating to financial controls, IT Controls, governance
and risk;
— Whether the Company has followed appropriate
accounting standards and made appropriate estimates
and judgments, taking into account the views of the
external auditor;
— Appropriate structures for the comprehensive
monitoring and oversight of operational and enterprise
risk; 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, as appointed in April
2022, will provide 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.
The Company has grown to sufficient scale and complexity
to require a separate risk committee at management
level which reports directly to the newly expanded Audit
and Risk Committee on a quarterly basis. The objective
of the risk committee is to assist in the oversight of the
effectiveness of the enterprise-wide risk management
framework. The Committee achieves this through a
strategy of identification and review of key group risks
with relevant mitigation measures implemented
where appropriate.
Key risks are outlined on pages 71 in the Strategic Report.
99
GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 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, Deloitte LLP, were appointed
as auditors to the Company at the Company’s AGM
on 4 August 2021. The Audit Committee monitors the
relationship to ensure the auditor independence and
objectivity are maintained.
The breakdown of fees between audit and non – audit
function is provided in Note 7 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 agree that
the Company has now grown to a level that necessitates
the provision of an internal audit function over and above
the existing compliance function. The Committee will
outsource the internal audit to a third-party provider in the
upcoming year with a view to a more integrated approach
in the long-term. In the interim, management will continue
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.
2022/2023 PRIORITIES
For the year ahead, the Committee will continue to focus on:
1. Any emerging risks presented to the Group’s operations
such as cyber security and key financial controls
2. Reviewing the Group’s ICAAP and risk frameworks
3. The Group’s international expansion and controls
framework supporting this growth
4. The outsourced internal audit tender process and
appointment
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 2022,
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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Annual Report 2022
G OV E R N A N C E
Independent
Auditors’
Report.
1. In our opinion:
— the financial statements of Argentex Group plc (the ‘parent
company’) and its subsidiaries (the ‘group’) give a true and fair view
of the state of the group’s and of the parent company’s affairs as at
31 March 2022 and of the group’s profit for the year then ended;
— the group financial statements have been properly prepared in
accordance with United Kingdom adopted international
accounting standards;
— the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101
“Reduced Disclosure Framework”; and
— the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
— the consolidated statement of profit or loss and other comprehensive
income;
— the consolidated and parent company statements of financial
position;
— the consolidated and parent company statements of changes
in equity;
— the consolidated statement of cash flows;
— the related consolidated notes 1 to 28; and
— the related parent company notes 1 to 11.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law, United
Kingdom adopted international accounting standards. 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).
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GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview 2. 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 the parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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.
3. Summary of our audit approach
Key audit matters The key audit matters that we identified in the current year were:
— Revenue recognition; and
— Presentation of derivative assets and liabilities.
Materiality
Scoping
First year audit
transition
The materiality that we used for the group financial statements was £517,000 which was
determined on the basis of 1.5% of revenue.
Our audit was scoped by obtaining an understanding of the group and its environment, key
processes and controls over financial reporting, and assessing risks of material misstatement
at a group level. Our audit scope covers 100% of the group’s revenue, 100% of the group’s profit
before tax and 100% of the group’s total assets.
This is the first year we have been appointed as auditors to the group. From the date of our
appointment we undertook a number of procedures to prepare for the audit. This included
meeting regularly with group leadership to understand the business and the environment in
which it operates. Additionally, we reviewed the working papers of the former auditor to gain an
understanding of their audit risk assessment and audit procedures performed for the purposes
of issuing their audit opinion.
Significant
changes in our
approach
We identified the presentation of derivative assets and liabilties as a key audit matter in the
current year, following management’s reassessment of the classification and presentation of
derivative financial assets and liabilities in the current year.
4. 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 and parent company’s ability to continue to adopt the going
concern basis of accounting included:
— Assessing management’s financial projections and evaluating key assumptions and their projected impact on
capital and liquidity;
— reading correspondence with regulators to understand the group’s capital and liquidity requirements;
— assessing the historical accuracy of forecasts prepared by management; and
— evaluating the adequacy of the disclosures made in the financial statements in view of the requirements of
IFRSs.
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's and parent company’s ability
102
Annual Report 2022
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.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
5.1. Revenue recognition
Refer to the summary of significant accounting policies on page 118 and note 5 on page 125.
Key audit matter
description
Revenue is generated by the group through the brokering of foreign exchange currency
contracts for immediate (“spot”) and future delivery (“forward”)and foreign currency exchange
options (“options”). Revenue totalled £34.5m for the year to 31 March 2022 (FY21: £28.1m).
Revenue is a key performance indicator of the group and a key focus of investors, analysts
and management. Furthermore, the nature of the recording of revenue on the trading system
and the manual extraction of this data from the trading system also provides opportunity for
revenue to be recorded inaccurately.
Therefore, we have identified a key audit matter in relation to the accuracy of revenue
recognised by the group.
How the scope
of our audit
responded to the
key audit matter
We performed the following audit procedures:
— Obtained an understanding of the relevant controls over the revenue recognition process;
— Assessed the group’s policy against the requirements of IFRS 9 Financial Instruments;
— For a sample of spot, forward and option contracts, we tested the accuracy of revenue by:
— inspecting signed contracts with customers and brokers;
— where the contract had completed in the year, tracing the revenue recorded to bank
statements;
— where the contract was open at the year end, assessing whether the transaction was
appropriately recorded as a derivative financial asset or liability;
— recalculating revenue recognised based on the evidence we inspected; and
— reconciling total revenue as per the trading system to the general ledger.
Key observations We are satisfied that the recognition of revenue for the year is appropriate.
5.2. Presentation of derivative assets and liabilities
Refer to the summary of significant accounting policies on page 119 and notes 16, 18, 23 and 28 on pages 130, 131, 134
and 139.
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GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview
Key audit matter
description
The group enters into derivative contracts with both customers and institutional counterparties
as part of its normal course of business. Where these contracts remain open at the year end, a
derivative asset or liability is recognised in accordance with IFRS 9. At 31 March 2022 derivative
financial assets totalled £41.1m (FY21: £42.5m) and derivative financial liabilities totalled £23.9m
(FY21: £29.2m).
Under IAS 32, derivative assets and liabilities can only be offset when an entity has a legal right
and intent to settle on a net basis. Judgement is required in determining whether a legal right
and intent to settle exists and, in the current year, management reassessed the classification and
presentation of derivative financial assets and liabilities in line with these criteria.
As a result, management determined that the offsetting requirements of IAS 32 had not been
met and therefore certain derivative assets and liabilities were required to be presented on a
gross basis. Due to the material nature of these differences, the prior year financial statements
have been restated in accordance with IAS 8 and a third statement of financial position has been
presented in accordance of IAS 1. The net impact of presenting derivative assets and liabilities
on a gross basis was an increase of £17.3m in FY21 and £17.9m in FY20. We therefore identified the
presentation of derivative financial assets and liabilities as a key audit matter.
How the scope
of our audit
responded to the
key audit matter
We performed the following audit procedures:
— Obtained an understanding of the relevant controls over the derivative recognition process;
— Inspected legal contracts between the group and its customers and institutional
counterparties to determine whether a legal right exists;
— Inspected settlement activity to determine whether the intention to settle net exists; and
— Assessed the conclusions made by the group in relation to applying the requirements of IAS 32.
— Evaluated the prior year restatement disclosures and assessed these against the requirements
of IAS 8. Additionally, we also tested the completeness and accuracy of the FY22, FY21 and FY20
netting calculations prepared by management for a sample of derivatives.
Key observations We are satisfied that the presentation of derivative assets and liabilities as at 31 March 2022
is appropriate.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable
that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use
materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£517,000 (2021 predecessor auditor: £562,000)
£235,200 (2021 predecessor auditor: £449,600)
Basis for
determining
materiality
Rationale for
the benchmark
applied
1.5% of revenue (2021 predecessor auditor:
2% of revenue).
We determined that revenue was an
appropriate benchmark for materiality
given its importance to investors and users
of the financial statements.
Parent company materiality equates to 1% of net
assets, which is capped at 70% of group materiality
(2021 predecessor auditor: 0.4% of net assets).
The parent company is not profit driven. The
balance sheet is the key measure of financial
health that is important to shareholders since the
primary concern for the parent company is the
receipt and payment of dividends.
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Annual Report 2022
Revenue
Group Materiality
£34.5m
99+1
Group Materiality £0.52m
Component materiality
range £0.09m to £0.32m
Audit Committee reporting
threshold £0.03m
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Parent company financial statements
Performance
materiality
Basis and
rationale for
determining
performance
materiality
65% (2021 predecessor auditor: 80%) of group
materiality
65% (2021 predecessor auditor: 80%) of parent
company materiality
In determining performance materiality, we considered the following factors:
— The current financial year being our first year auditing the group and parent financial
statements;
— The quality of the control environment and our ability to rely on controls;
— The nature, volume and size of misstatements identified in the previous audit; and
— The restatements to prior year balances as a result of misstatements identified in the
current year.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess
of £25,000, as well as differences below that threshold that, in our view, warranted reporting on qualitative
grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the
overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1.
Identification and scoping of components
Our audit was scoped by obtaining an understanding of the group and its environment, key processes and
controls over financial reporting, and assessing risks of material misstatement at a group level.
The audit was performed using the materiality levels set out above, for the group and the parent company.
The group consists of the parent company and three subsidiaries, all of which were subject to full scope audit
procedures. As such the group audit covered 100% of revenue, profit before tax and total assets, which is
consistent with the prior year. The group engagement team is the statutory auditor for all entities within the
group and therefore performed all procedures for the purposes of the group audit.
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GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview
7.2. Our consideration of the control environment
We tested internal controls over financial reporting where our scoping and risk assessment determined those
controls to be relevant to the audit. This involved testing general IT controls, with the involvement of our
internal IT specialists, process level controls and entity level controls at the group level.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the impact of climate change on the group’s operations and
subsequent impact on its financial statements.
We held discussions with management to understand the process for identifying climate-related risks and the
impact on the group’s financial statements. Management concluded that there was no material impact to the
financial statements.
We performed our own qualitative risk assessment of the potential impact of climate change on the group’s
account balances and classes of transactions. We read the climate related disclosures on pages 64 to 67 in the
strategic report and considered whether they were materially consistent with the financial statements and the
knowledge obtained in our audit.
8. 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 contained within the
annual report.
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.
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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, 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.
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Annual Report 2022
10. 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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
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.
11.1.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, we considered the following:
— the nature of the industry and sector, control environment and business performance including the design
of the group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance
targets;
— results of our enquiries of management and the audit committee about their own identification and
assessment of the risks of irregularities;
— any matters we identified having obtained and reviewed the group’s documentation of their policies and
procedures relating to:
— identifying, evaluating and complying with laws and regulations and whether they were aware of any
instances of non-compliance;
— detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud;
— the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
and
— the matters discussed among the audit engagement team and relevant internal specialists, including tax,
financial instruments, and IT specialists regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in revenue recognition. In common
with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory frameworks that the group operates in, focusing
on provisions of those laws and regulations that had a direct effect on the determination of material amounts
and disclosures in the financial statements. The key laws and regulations we considered in this context
included the UK Companies Act, AIM Listing Rules, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the
financial statements but compliance with which may be fundamental to the group’s ability to operate or to
avoid a material penalty. These included the group’s regulatory requirements.
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GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview
11.2. Audit response to risks identified
As a result of performing the above, we identified revenue recognition as a key audit matter related to the
potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also
describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
— reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on the
financial statements;
— enquiring of management, the audit committee and external legal counsel concerning actual and potential
litigation and claims;
— performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;
— reading minutes of meetings of those charged with governance and reviewing correspondence with
regulators; and
— in addressing the risk of fraud through management override of controls, testing the appropriateness of
journal entries and other adjustments; assessing whether the judgements made in making accounting
estimates are indicative of a potential bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members including internal specialists, and remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12. 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.
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 any material misstatements in the strategic report or the
directors’ report.
13. Matters on which we are required to report by exception
13.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
— we have not received all the information and explanations we require for our audit; or
— 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.
We have nothing to report in respect of these matters.
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Annual Report 2022
13.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’
remuneration have not been made.
We have nothing to report in respect of this matter.
14. Use of our report
This report is made solely to the 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 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 company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Isabel Agius
FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
05 July 2022
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GovernanceStrategic ReportFinancial StatementsOther InformationGroup Overview
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 2022
Notes
5
2.13
8
22
11
12
13
13
13
13
2022
£m
34.5
(0.6)
33.9
(22.9)
11.0
(0.4)
(0.2)
10.4
(0.4)
10.0
(2.6)
7.4
6.6p
6.6p
7.0p
7.0p
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
5.2p
5.2p
5.9p
5.9p
Revenue
Cost of sales
Gross profit
Administrative expenses
Adjusted operating profit
Non-adjusted expenditure
Share-based payments charge
Operating profit
Finance costs
Profit before taxation
Taxation
Profit for the year and total comprehensive income
Earnings per share
Basic
Diluted
Adjusted - Basic
Adjusted - Diluted
110
Annual Report 2022 Consolidated Statement
of Financial Position
as at 31 March 2022
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
Other assets
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
14
15
16
16
17
28
16
18
18
18
18
2022
£m
2.2
8.3
3.1
13.6
0.6
37.9
7.2
38.0
83.7
(34.2)
(21.6)
(55.8)
27.9
(6.0)
(2.3)
(8.3)
33.2
2021
2020
£m
(restated)
1
£m
(restated)
1
1.7
9.1
3.8
14.6
0.6
26.8
11.6
38.7
77.7
(28.5)
(27.1)
(55.6)
22.1
(5.9)
(2.1)
(8.0)
28.7
1.8
0.2
8.2
10.2
0.3
22.7
26.5
34.5
84.0
(36.5)
(27.9)
(64.4)
19.6
-
(4.9)
(4.9)
24.9
1 Restatements relate to disclosure formats of derivative netting and cash collateral. There is no impact on net assets. See note 28.
111
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Consolidated Statement
of Financial Position (continued)
as at 31 March 2022
Equity
Share capital
Share premium account
Share option reserve
Merger reserve
Retained earnings
Total Equity
Notes
20
21
22
21
21
2022
£m
0.1
12.7
0.4
4.5
15.5
33.2
2021
2020
£m
(restated)
1
£m
(restated)
1
0.1
12.7
0.2
4.5
11.2
28.7
0.1
12.7
-
4.5
7.6
24.9
1 Restatements relate to disclosure formats of derivative netting and cash collateral. There is no impact on net assets.
See note 28.
The financial statements of Argentex Group PLC were approved by the
Board of Directors on 5 July 2022 and were signed on its behalf by:
Harry Adams
Director
Registered number 11965856
112
Annual Report 2022
Consolidated Statement
of Changes in Equity
for the year ended 31 March 2022
Share
capital
Share
premium
£m
0.1
£m
12.7
-
-
-
-
-
-
-
-
Balance at 1 April 2020
Comprehensive income
for the year
Profit for the year
Total comprehensive income
for the year
Transactions with owners:
— Dividends paid
— Share-based payments charge
Balance at 31 March 2021
0.1
12.7
Comprehensive income
for the year
Profit for the year
Total comprehensive income
for the year
Transactions with owners:
— Dividends paid
— Share based payments
-
-
-
-
-
-
-
-
Balance at 31 March 2022
0.1
12.7
Share
option
reserve
£m
-
-
-
-
0.2
0.2
-
-
-
0.2
0.4
Merger
reserve
Retained
earnings
Total
equity
£m
4.5
-
-
-
-
4.5
-
-
-
-
4.5
£m
7.6
5.9
5.9
(2.3)
-
11.2
7.4
7.4
(3.1)
-
15.5
£m
24.9
5.9
5.9
(2.3)
0.2
28.7
7.4
7.4
(3.1)
0.2
33.2
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Consolidated Statement
of Cash Flows
for the year ended 31 March 2022
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 charge
Decrease in receivables
Increase/(decrease) in payables
Decrease in derivative financial assets
(Decrease) in derivative financial liabilities
Decrease in other assets
Net cash generated from operating activities
Investing activities
Purchase of intangible assets
Purchases of plant and equipment
Net cash used in investing activities
114
Notes
14
15
2022
£m
10.0
(2.2)
0.4
0.5
0.8
1.2
0.2
-
5.8
1.4
(5.3)
4.4
17.2
(1.7)
(0.4)
(2.1)
2021
£m
(restated)
1
7.4
(2.1)
0.4
0.2
0.8
1.3
0.2
(0.3)
(8.6)
0.2
(3.6)
14.9
10.8
(1.2)
(2.7)
(3.9)
Annual Report 2022 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 2022
Notes
19
10
Financing activities
Payments made in relation to lease liabilities
Dividends paid
Net cash used in financing activities
Net 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 1
17
2022
£m
(0.9)
(3.1)
(4.0)
11.1
26.8
37.9
2021
£m
(restated)
1
(0.5)
(2.3)
(2.8)
4.1
22.7
26.8
1 Collateral deposits removed from prior year cash and cash equivalents total and derivative financial assets and liabilities
updated to reflect nettings. Further details given in Note 28.
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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 2022 and 31 March 2021 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. Significant accounting policies
The principal accounting policies are summarised below.
2.1. 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 2.7.
The Group has reviewed its relationship with counterparty banks and as a result, restated its derivative
financial assets, derivative financial liabilities and cash and cash equivalents FY21 and FY20 balances on the
Consolidated Statement of Financial position. Further details given on note 28.
2.2. Adoption of new and revised standards
In the prior year, the Group adopted the Phase 1 amendments Interest Rate Benchmark Reform —
Amendments to IFRS 9/IAS 39 and IFRS 7. These amendments modify specific hedge accounting requirements
to allow hedge accounting to continue for affected hedges during the period of uncertainty before the hedged
items or hedging instruments are amended as a result of the interest rate benchmark reform.
In the current year, the Group adopted the Phase 2 amendments Interest Rate Benchmark Reform —
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. Adopting these amendments enables the Group to
reflect the effects of transitioning from interbank offered rates (IBOR) to alternative benchmark interest rates
(also referred to as ‘risk free rates’ or RFRs) without giving rise to accounting impacts that would not provide
useful information to users of financial statements. The Group has not restated the prior period. Instead,
the amendments have been applied retrospectively with any adjustments recognised in the appropriate
components of equity as at 1 April 2022. Implementation had no material impact on the Group.
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.
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2.3. 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 over a 12 month period from the
approval date of these Consolidated Financial Statements. The Group’s principal trading subsidiary, Argentex
LLP, has been profitable since inception in 2012, 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.
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 23.3 for further disclosures relating to
liquidity risk).
The Board of Directors is confident that in context of the Group’s financial requirements these measures give
sufficient liquidity to the Group to ensure that the Group can withstand significant shocks, whilst remaining
as a going concern for the next twelve months from the date of approval of the Directors’ report and
financial statements.
For these reasons, the Directors adopt the going concern basis of accounting in preparing these
financial statements.
2.4. 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.
Argentex PTY Ltd
Inactive pending
regulatory authorisation
Inactive pending
regulatory authorisation
Netherlands
Australia
All subsidiary undertakings are owned 100% either directly or indirectly by Argentex Group PLC.
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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.
2.5. 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
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.
2.6. 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. The execution date is when a binding contract is entered into with the client.
The revenue is fixed and determined representing the difference between the premium paid by the client and
the premium paid by the Group to its banking counterparties.
2.7.
Financial instruments
The Group operates as a riskless principal deliverable foreign exchange broker therefore financial
instruments are significant to its financial position and performance.
2.7.1.
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.
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Annual Report 2022
2.7.2. Derivative financial instruments
Forward foreign exchange contracts and foreign exchange options are classified as financial assets
and liabilities at fair value through profit or loss (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 and a derivative with a negative
fair value is recognised as a financial liability. Where there is a legally enforceable right to set off the
recognised amounts and an intention to settle on a net basis or to realise the asset and the liability
simultaneously, financial assets and financial liabilities are offset, and the net amount presented in the
statement of Financial Position. Management have presented the derivative assets and liabilities with
banking and brokerage counterparties and with clients on a gross basis.
2.7.3. 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 matched with a number of counterparty banks.
2.7.4. 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.
2.7.5. Amortised cost and effective interest rate method
The effective interest rate method is a method of calculating the amortised cost of a financial liability or
debt instrument.
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.
2.7.6. 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.
2.7.7.
Financial assets at FVTPL
Forward foreign exchange contracts and foreign exchange options are measured at FVTPL (see note 24).
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Other financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are
measured at FVTPL (see note 24).
Fair value is determined in the manner described in note 24.
2.7.8. Other financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets.
Cash held as collateral with banking counterparties is shown as other assets on the Consolidated
Statement of Financial Position.
2.7.9.
Impairment of financial assets
The Group has applied the simplified approach in IFRS 9 to measure applicable loss allowances at
lifetime ECL. The Group determines the expected credit losses on these items by using a provision
matrix, estimated based on historical credit loss experience based on the past due status of the debtors,
adjusted as appropriate to reflect current conditions and estimates of future economic conditions.
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.
2.7.10. Derecognition of other financial assets
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.
2.7.11. Classification of financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest rate
method or at FVTPL.
2.7.12. Financial liabilities at FVTPL
Derivative financial liabilities are automatically held at FVTPL. Other financial liabilities are classified
as at FVTPL when the financial liability is designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value with any gains or losses arising on changes in fair
value recognised in profit or loss.
Fair value is determined in the manner described in note 24.
2.7.13. Other Financial liabilities
Other financial liabilities are obligations to pay for goods or services that have been acquired in the
ordinary course of business. Other financial liabilities are subsequently measured at amortised cost using
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Annual Report 2022
the effective interest rate method.
The Group holds amounts payable to customers at amortised cost. These are short term balances that do not
attract interest.
2.7.14. 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.
2.8. 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. Cash and cash equivalents includes
client funds disclosed in note 17.
2.9. 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.
In accordance with IFRS 16, 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 the statement of profit or 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.
2.10. 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.
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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 Consolidated Statement of Comprehensive Income.
Amortisation is charged to the Consolidated Statement of Comprehensive Income 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.
2.11. Property, Plant & Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised
impairment loss.
Depreciation is charged so as to write off the cost of assets to their residual values, over their estimated useful
lives, using the straight-line method, on the following bases:
Office equipment
Computer equipment
Leasehold improvements
Right of use assets
-
-
-
-
Three 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.
2.12. 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.
2.13. Adjusted operating profit
The Group presents adjusted operating profit as an Alternative Performance Measure on the face of the
Consolidated Statement of Comprehensive Income. Adjusted operating profit excludes those 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 align with management's evaluation of financial performance
in the year. Non-adjusted expenditure will relate to one off costs and structural set up costs.
Adjusted operating profit also excludes the share-based payments charge due to its non-trading nature.
2.14. Employee benefits
(i) Short-term benefits
Short term employee benefits including holiday pay and annual bonuses are accrued as services are rendered.
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Annual Report 2022
(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 Statement of Financial Position.
The assets of the plan are held separately from the Group in independently administered funds.
2.15. 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.
2.16. 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.
2.17. 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
Comprehensive Income. 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 Consolidated Statement of Comprehensive Income, 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. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium.
2.18. 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 operating profit
as reported in the Consolidated Statement of Comprehensive Income 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.
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To the extent, it is material deferred tax is calculated on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are
recognised to the extent that it is probable future taxable profits will be available against which the temporary
differences can be utilised.
3. 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.
3.1. Accounting judgements
(i) Capitalisation of costs to intangible assets
The extent to which costs should be capitalised to intangible assets is a key judgement. The Group capitalise
costs as intangible assets if they have a value that will benefit the performance of the Group over future
periods.
(ii) Derivative financial asset and liability netting
Management have assessed the classification and presentation of derivative transactions and determined
that although the Group has a legal right of offset of such assets and liabilities in certain circumstances, it
does not have the intent in all cases to settle such transactions on a net basis.
3.2. Key sources of estimation uncertainty
Useful economic life of intangible assets (see note 14)
Technology within the financial services sector is in a perpetual state of development and evolution, providing
uncertainty over the useful economic life of the Group’s bespoke dealing system. Extending the estimated
useful life of the intangible costs from 3 years to 4 years would result in increased operating profit of £0.7m
(2021: £0.5m), decreasing the estimated useful life from 3 years to 2 years would result in decreased operating
profit of £1.6m (2021: £1m).
4. 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 2022 or 31 March 2021.
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5. Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations
Spot foreign exchange contracts
Forward foreign exchange contracts
Option premiums
6. Operating profit
Operating profit for the period is stated after charging:
Depreciation of plant and equipment
Depreciation of Right of Use assets
Amortisation of intangibles
Staff costs (see note 9)
Net foreign exchange (gains)/losses
7. Auditor’s remuneration
Fees payable to the Company’s auditor and its associates for other
services to the Group:
— The audit of financial statements of the Group and subsidiaries
— Other assurance and advisory services
8. Non-adjusted expenditure
2022
£m
6.4
27.2
0.9
34.5
2022
£m
0.5
0.8
1.2
15.2
(0.2)
2022
£m
0.2
0.1
2021
£m
9.1
18.1
0.9
28.1
2021
£m
0.2
0.8
1.3
12.6
0.5
2021
£m
0.1
-
The Directors have classified certain costs as non-adjusted in accordance with the accounting policy set out in note
2.13. These costs amount to £0.4m (2021: £0.7m) and for 2022 relate to: i) costs related to the creation of and regulatory
applications for overseas operations and; ii) fees incurred in the year in relation to Director changes in the Group.
In 2021, non-adjusted expenditure related to: i) moving the Group’s headquarters which are ineligible for capitalisation;
ii) staff costs in relation to Director changes in the Group and iii) costs related to the creation of and regulatory
applications for overseas operations.
Costs relating to the creation of overseas operations are infrequent despite inclusion in FY21 and FY22 as these
costs will not be recurring once the operations are fully functional. The director change costs are non-recurring and
inclusion in both FY21 and FY22 is due to the timing of the change.
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9. Staff costs
The average number of employees employed by the Group, including executive and non-executive directors, was:
2022
Number
2021
Number
Directors
LLP members (excl. executive directors)
Sales and dealing
Operations
Staff costs for the above persons were:
Wages and salaries
Social security costs
Pension costs
Share based payments
LLP members’ remuneration*
Directors remuneration
Directors’ remuneration
Directors’ remuneration comprised:
Salaries and LLP members remuneration
8
6
45
27
86
2022
£m
8.4
0.9
0.1
0.2
4.1
1.5
15.2
2022
£m
1.5
8
4
37
18
67
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.
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. In the opinion of the Board, the Group and Company’s key
management are the Directors of Argentex Group plc. Information regarding their compensation is provided in the
Remuneration Committee report.
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Annual Report 2022
LLP members (excl. executive directors)
Directors
Sales and dealing
Operations
Staff costs for the above persons were:
Wages and salaries
Social security costs
Pension costs
Share based payments
LLP members’ remuneration*
Directors remuneration
Directors’ remuneration
Directors’ remuneration comprised:
Salaries and LLP members remuneration
2022
Number
2021
Number
8
6
45
27
86
2022
£m
8.4
0.9
0.1
0.2
4.1
1.5
15.2
2022
£m
1.5
8
4
37
18
67
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.
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. 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.
9. Staff costs
10. Dividends
The average number of employees employed by the Group, including executive and non-executive directors, was:
Amounts recognised as distributions to equity holders:
Final Dividend for the year ended 31 March 2021
of 2p per share (2021: Dividend for the year
ended 31 March 2020 of 2p per share)
Interim dividend declared of 0.75p per share (2021: nil)
Proposed Final Dividend for the year ended 31 March 2022
of 1.25p per share (2021: 2p per share)
11. Finance costs and finance income
Interest on lease arrangements
Finance Costs
2022
£m
2.3
0.8
3.1
1.5
2022
£m
0.4
0.4
2021
£m
2.3
-
2.3
2.3
2021
£m
0.4
0.4
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.
12. Taxation
Current tax
In respect of the current year
Total tax expense for the year
2022
£m
2.6
2.6
2021
£m
1.5
1.5
Tax has been calculated using an estimated annual effective tax rate of 19% (2021: 19%) on profit before tax. The UK
main rate of corporation tax is set to increase to 25% for Financial Year 2023.
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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:
Other amounts charged
Adjustments in respect of prior period
Total tax expense for the year
2022
£m
10.0
1.9
0.6
0.1
2.6
2021
£m
7.4
1.4
0.1
-
1.5
Other items charged relate to adjustments for tax purposes including non-allowable expenses and capital
allowances.
13. Earnings per share
The Group calculates basic earnings to be net profit attributable to equity shareholders for the period. The Group
also calculates an adjusted earnings figure, which excludes the effects of share-based payments, and non-adjusted
costs as described further in note 2.13.
Earnings
Earnings for the purposes of basic and diluted earnings per share
— basic and diluted
Adjustments for:
Non-adjusted expenditure
Shared based payments
Tax impact
Adjusted earnings (basic and diluted)
Number of shares
2022
£m
7.4
0.4
0.2
(0.1)
7.9
The calculation of basic and earnings per share is based on the following number of shares (m).
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
113.2
0.2
113.4
128
2021
£m
5.9
0.7
0.2
(0.1)
6.7
113.2
0.1
113.3
Annual Report 2022
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:
Tax on profit on ordinary activities at standard UK corporation tax
Profit before taxation
rate of 19%
Effects of:
Other amounts charged
Adjustments in respect of prior period
Total tax expense for the year
allowances.
13. Earnings per share
Other items charged relate to adjustments for tax purposes including non-allowable expenses and capital
The Group calculates basic earnings to be net profit attributable to equity shareholders for the period. The Group
also calculates an adjusted earnings figure, which excludes the effects of share-based payments, and non-adjusted
costs as described further in note 2.13.
Earnings for the purposes of basic and diluted earnings per share
Earnings
— basic and diluted
Adjustments for:
Non-adjusted expenditure
Shared based payments
Tax impact
Adjusted earnings (basic and diluted)
Number of shares
The calculation of basic and earnings per share is based on the following number of shares (m).
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
2022
£m
10.0
1.9
0.6
0.1
2.6
2022
£m
7.4
0.4
0.2
(0.1)
7.9
113.2
0.2
113.4
2021
£m
7.4
1.4
0.1
-
1.5
2021
£m
5.9
0.7
0.2
(0.1)
6.7
113.2
0.1
113.3
Earnings per share
Basic
Diluted
Adjusted - Basic
Adjusted - Diluted
2022
6.6p
6.6p
7.0p
7.0p
2021
5.2p
5.2p
5.9p
5.9p
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.
14. Intangible fixed assets
Software
development costs
Cost
At 1 April 2020
Additions
At 31 March 2021
Additions
At 31 March 2022
Amortisation
At 1 April 2020
Charge for year
At 31 March 2021
Charge for year
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
£m
4.5
1.2
5.7
1.7
7.4
2.7
1.3
4.0
1.2
5.2
2.2
1.7
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15. Property, plant and equipment
Leasehold
improvements
Right of use
Asset
Office
equipment
Computer
equipment
Total
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Additions
Disposals
At 31 March 2022
Depreciation
At 1 April 2020
Charge for the year
Disposals
At 31 March 2021
Charge for the year
Disposals
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
£m
0.4
1.7
(0.4)
1.7
0.1
-
1.8
0.4
0.1
(0.4)
0.1
0.2
-
0.3
1.5
1.6
£m
1.2
7.2
(1.2)
7.2
0.1
-
7.3
1.1
0.8
(1.2)
0.7
0.8
-
1.5
5.8
6.5
Right of use Asset relates to head office lease disclosed in note 19.
16. Trade and other receivables
Non-Current
Derivative financial assets at fair value (note 23)
Current
Derivative financial assets at fair value (note 23)
Other debtors
Prepayments
Trade and other receivables
1 Refer to note 28.
130
£m
0.2
0.6
(0.2)
0.6
0.2
-
0.8
0.2
-
(0.2)
-
0.1
-
0.1
0.7
0.6
£m
0.4
0.4
(0.2)
0.6
0.1
-
0.7
0.3
0.1
(0.2)
0.2
0.2
-
0.4
0.3
0.4
£m
2.2
9.9
(2.0)
10.1
0.5
-
10.6
2.0
1.0
(2.0)
1.0
1.3
-
2.3
8.3
9.1
2022
£m
3.1
38.0
0.1
0.5
0.6
2021
£m
(restated)
1
3.8
38.7
0.1
0.5
0.6
Annual Report 2022
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Additions
Disposals
At 31 March 2022
Depreciation
At 1 April 2020
Charge for the year
Disposals
At 31 March 2021
Charge for the year
Disposals
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
Leasehold
Right of use
Office
improvements
Asset
equipment
Computer
equipment
Total
£m
0.4
1.7
(0.4)
1.7
0.1
-
1.8
0.4
0.1
(0.4)
0.1
0.2
-
0.3
1.5
1.6
£m
1.2
7.2
(1.2)
7.2
0.1
-
7.3
1.1
0.8
(1.2)
0.7
0.8
-
1.5
5.8
6.5
£m
0.2
0.6
(0.2)
0.6
0.2
-
0.8
(0.2)
0.2
-
-
-
0.1
0.1
0.7
0.6
£m
0.4
0.4
(0.2)
0.6
0.1
-
0.7
0.3
0.1
(0.2)
0.2
0.2
-
0.4
0.3
0.4
Right of use Asset relates to head office lease disclosed in note 19.
16. Trade and other receivables
Derivative financial assets at fair value (note 23)
Non-Current
Current
Other debtors
Prepayments
Trade and other receivables
2022
£m
3.1
38.0
0.1
0.5
0.6
£m
2.2
9.9
(2.0)
10.1
0.5
-
10.6
2.0
1.0
(2.0)
1.0
1.3
-
2.3
8.3
9.1
2021
£m
3.8
38.7
0.1
0.5
0.6
15. Property, plant and equipment
17. Cash and cash equivalents
Cash and cash equivalents
2022
£m
37.9
2021
£m
(restated)
26.8
1
Included within cash and cash equivalents are client held funds relating to margins received and client balances
payable (See note 18). Client balances held as electronic money in accordance with the Electronic Money Regulations
2011 are held in accounts segregated from the firm’s own bank accounts.
The Directors consider that the carrying amount of these assets is a reasonable approximation of their fair value.
Cash is held at authorised credit institutions and non-bank financial institutions with robust credit ratings (where
published) and sound regulatory capital resources.
18. Trade and other payables
Non-Current
Derivative financial liabilities at fair value (note 23)
Provisions
Lease Liability (note 19)
Trade and other payables
Current
Derivative financial liabilities at fair value (note 23)
Derivative financial assets at fair value (note 23)
Amounts due to members and former members of Argentex LLP
(restated)
Amounts payable to clients
Other creditors
Corporation tax
Accruals
Other taxation and social security
Lease liability (note 19)
Trade and other payables
1 Refer to note 28.
2022
£m
2.3
0.2
5.8
6.0
2022
£m
21.6
24.9
0.1
1.9
2.8
3.4
0.3
0.8
34.2
2021
£m
(restated)
1
2.1
0.2
5.7
5.9
2021
£m
(restated)
1
27.1
18.7
0.7
1.5
3.8
2.3
0.3
1.2
28.5
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19. Leases
In May 2020, the Group signed a ten-year lease for its head office premises at Argyll Street, London. 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 2.9. The rent is subject to a rent review
after five years and contains a break clause at this same anniversary. The rate implicit in the lease is not evident
and so the Group’s incremental borrowing rates have been used. Management have assessed the incremental
borrowing rate to be 6% (2021: 6%). Information about the lease liability is presented below:
2022
2021
Lease liability at beginning of financial year
Additions
Payments made in the year
Unwinding of finance costs
Lease liability at end of financial year
Of which
Current (note 18)
Non-current (note 18)
£m
6.9
0.1
(0.9)
0.5
6.6
0.8
5.8
Amounts recognised in the consolidated statement of comprehensive income is presented below:
Depreciation charge on right-of-use assets (note 15)
Interest on lease liabilities (note 11)
At 31 March
20. Share Capital
2022
£m
0.8
0.4
1.2
£m
-
7.0
(0.5)
0.4
6.9
1.2
5.7
2021
£m
0.8
0.4
1.2
Allotted and paid up
Ordinary shares
Management shares
Nominal value
At 1 April 2021 and 31 March 2022
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 in
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.
Subsequently, the Group issued 13,207,547 at 106p per share, generating share premium of £13,988,679 before
issuance costs.
21. 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.
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Annual Report 2022
19. Leases
In May 2020, the Group signed a ten-year lease for its head office premises at Argyll Street, London. 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 2.9. The rent is subject to a rent review
after five years and contains a break clause at this same anniversary. The rate implicit in the lease is not evident
and so the Group’s incremental borrowing rates have been used. Management have assessed the incremental
borrowing rate to be 6% (2021: 6%). Information about the lease liability is presented below:
Lease liability at beginning of financial year
Additions
Payments made in the year
Unwinding of finance costs
Lease liability at end of financial year
Of which
Current (note 18)
Non-current (note 18)
Depreciation charge on right-of-use assets (note 15)
Interest on lease liabilities (note 11)
At 31 March
20. Share Capital
Amounts recognised in the consolidated statement of comprehensive income is presented below:
2022
£m
6.9
0.1
(0.9)
0.5
6.6
0.8
5.8
2022
£m
0.8
0.4
1.2
2021
£m
-
7.0
(0.5)
0.4
6.9
1.2
5.7
2021
£m
0.8
0.4
1.2
£m
0.1
Allotted and paid up
Ordinary shares
Management shares
Nominal value
At 1 April 2021 and 31 March 2022
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 in
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.
Subsequently, the Group issued 13,207,547 at 106p per share, generating share premium of £13,988,679 before
issuance costs.
21. 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 22 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.
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.
22. 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 Group issued 311,311 share options under Part I of an approved Group 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 Group.
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 previous financial year, the Group issued a total of 4,981,130 share options under Parts I, II and III of the
Group 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
Group and the similar listed entities to the Group. 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 total share-based payment reserve at 31 March 2022 is £0.4m (2021: £0.2m). The Group has recognised a total
expense of £0.2m (2021: £0.2m) based on the estimated number of share options expected to vest across all parts of
the CSOP.
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Movements in the number of outstanding share options during the year and their weighted average exercise prices
are shown in the following table:
2022
2021
Average exercise
price (£)
Number of options
outstanding
Average exercise
price (£)
Number of options
outstanding
At 1 April
Granted
Forfeited
Exercised
31 March
23. Financial instruments
1.34
-
1.06
-
1.34
4,754,708
-
(28,301)
-
4,726,407
1.06
1.35
1.35
-
1.34
226,408
4,981,130
(452,830)
-
4,754,708
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.
23.1. 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.
23.2. 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 Group 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
Amounts due to members and former members of Argentex LLP
Accruals (excluding non-financial instruments)
Lease liabilities
Total non derivative financial instrument liabilities 2
2022
£m
41.1
0.1
(23.9)
(24.9)
(1.9)
(2.8)
(1.2)
(6.6)
(37.4)
2021
£m
(restated)
42.5
1
0.1
(29.2)
(18.7)
(0.7)
(3.8)
(2.3)
(6.9)
(32.4)
1 Refer to note 28. 2 Provision relating to lease dilapidation removed from prior year comparative (£0.2m).
134
Annual Report 2022
23.3. Financial risk management objectives
The Group's principal risk management objective is to avoid financial loss and manage the Group’s working
capital requirements to continue in operations.
Market risk
Market risk for the Group comprises foreign exchange risk and interest rate risk.
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.
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
2022
£m
0.8
(0.6)
1.1
(0.9)
2021
£m
0.6
(0.5)
0.3
(0.3)
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.
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. The
table below summarises the maturity profile of the Group’s derivative financial assets and liabilities based
on contractual (undiscounted payments).
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Derivative financial assets at balance sheet date by contractual maturity
31 March 2022
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial assets
£m
908.1
£m
436.5
£m
700.9
£m
232.3
31 March 2021 (restated) 1
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial assets
£m
1,198.6
£m
563.5
£m
445.3
£m
187.0
Total
£m
2,277.8
Total
£m
2,394.4
Derivative financial liabilities at balance sheet date by contractual maturity
The following table details the profile of the Group’s derivative financial liabilities. The amounts are based
on the undiscounted cashflows based on the earliest date on which the Group can be required to pay.
31 March 2022
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial
liabilities
£m
902.9
£m
433.7
£m
693.7
£m
230.9
31 March 2021 (restated) 1
0-3 months
3-6 months
6-12 months
12 months +
£m
1,193.0
£m
560.8
£m
442.4
£m
185.3
Derivative financial
liabilities
Other Financial Liabilities
Total
£m
2,261.2
Total
£m
2,381.5
The table below summarises the maturity profile of the Group’s other financial liabilities based on
contractual (undiscounted) payments.
31 March 2022
Up to 1 year
1 year +
Total
Amounts payable to clients
Other Payables
Lease liabilities
£m
24.9
8.0
1.2
34.1
£m
-
-
7.1
7.1
£m
24.9
8.0
8.3
41.2
31 March 2021 (restated) 1
Up to 1 year
1 year +
Total
Amounts payable to clients
Other Payables
Lease liabilities
Credit risk
£m
18.7
6.8
0.9
26.4
£m
-
0.2
8.3
8.5
£m
18.7
7.0
9.2
34.9
The failure of a client to settle a contracted trade carries the risk of loss equal to the prevailing fair value of
1 Refer to note 28.
136
Annual Report 2022
the trade. Argentex employs rigorous procedures and ongoing monitoring to ensure that client risk exposures fit
within the Group’s risk appetite. Before accepting any new client, a dedicated team responsible for the
determination of credit risk assess the potential client’s credit quality and defines credit limits by clients. Limits
and scoring attributed to customers are reviewed on an ongoing basis.
Credit approvals and other monitoring procedures are also in place to ensure that follow-up action is taken to
recover overdue debts. Furthermore, the Group reviews the recoverable amount of each trade debtor at the end
of the reporting period to ensure that adequate loss allowance is made for irrecoverable amounts. In this regard,
the directors of the Group consider that the Group’s credit risk is significantly reduced. Trade receivables consist
of a large number of clients, spread across diverse industries and geographical areas.
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.
23.4. Overview of the Group’s exposure to credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations in relation to financial
derivative assets resulting in financial loss to the Group. As at 31 March 2022, 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.
If deemed appropriate, the Group will make a valuation adjustment to the estimated fair value of a financial
instrument. 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 24) best represents their
respective maximum exposure to credit risk. Note 23.6 details the Group’s credit risk management policies.
23.5. 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. 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.
23.6. Credit risk management
Note 23.4 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.
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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
24. Fair value measurements
This note provides information about how the Group determines fair values of various financial assets and
financial liabilities.
24.1. 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).
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.
Financial assets/
financial liabilities
Fair value as at
Fair value
hierarchy
Valuation technique(s) and key input(s)
Foreign exchange
forward and option
contracts
2022
Assets
£41.1m;
and
Liabilities
£23.9m
2021
(restated) 1
Assets
£42.5m;
and
Liabilities
£29.2m
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.
24.2. Fair value of financial assets and financial liabilities that are not measured at fair value
The Directors consider that the carrying amounts of financial assets and financial liabilities recognised in the
financial statements is a reasonable approximation of their fair value.
25. Related party transactions
Included in other creditors is £0.1m (2021: £0.6m) owed to Pacific Investments Management Limited, the former
owner of Argentex Foreign Exchange Limited.
26. Contingent liabilities
As at 31 March 2022 there were no capital commitments or contingent liabilities (2021: none).
1 Refer to note 28.
138
Annual Report 2022
27. Controlling party
In the opinion of the Directors there is no ultimate controlling party of Argentex Group PLC.
28. Restatements
28.1. Derivative financial assets and derivative financial liabilities
In previous years the Group offset derivative financial assets and derivative financial liabilities on the
Consolidated Statement of Financial Position and Consolidated Statement of Cashflows. Management have
reassessed the classification and presentation of derivative transactions and determined that although the
Group has a legal right of offset of such assets and liabilities in specific circumstances however in most cases
it does not have the legal right of offset. As a result, in the current financial year Management have presented
the derivative assets and liabilities with banking and brokerage counterparties and with clients on a gross
basis. Comparative figures have also been presented on this basis and there is no impact to the Consolidated
Statement of Comprehensive Income or to Net Assets. Disclosure impact on prior years is as follows:
2021
2020
£m
Net
£m
£m
Reclassification Restated
£m
Net
£m
Reclassification
£m
Restated
Current Financial
Assets
Current
Financial Liabilities
Non Current
Financial Assets
Non Current
Financial Liabilities
21.0
(9.3)
4.2
(2.6)
17.7
38.7
17.6
16.9
34.5
(17.8)
(27.1)
(10.9)
(17.0)
(27.9)
(0.4)
3.8
7.2
1.0
8.2
0.5
(2.1)
(4.0)
(0.9)
(4.9)
Net Financial Assets
13.3
0.0
13.3
9.9
0.0
9.9
The FY21 Consolidated Statement of Cash Flows has been restated to include updated movements of £0.2m and
£(3.6)m in the derivative financial assets and derivative financial liabilities (previously £(0.4)m and £(3.0)m).
28.2. Undiscounted contractual cashflows
In prior years the Financial Assets and Liabilities on the Consolidated Statement of Financial Position have
been analysed by contractual maturity date. In the current financial year, the undiscounted contractual cash
flows have been disclosed. Comparative figures have also been disclosed on this basis. Undiscounted cashflows
disclosed in note 23.3.
28.3. Collateral balances
In previous years the cash held as collateral with banking and brokerage counterparties has been included
in the cash and cash equivalents balance and disclosed as such in the cash and cash equivalents note. In the
current year, management have included cash held as collateral with banking and brokerage counterparties
£7.2m (2021: £11.6m, 2020: £26.5) as Other Assets on the Consolidated Statement of Financial Position resulting
in a corresponding decrease in the cash and cash equivalents figures. There is no impact to the Consolidated
Statement of Comprehensive Income or to Net Assets. The Consolidated Statement of Cash Flows has been
restated to reconcile to the restated cash and cash equivalents figure.
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F I N A N C I A L STAT E M E N TS
Company Statement
of Financial Position
as at 31 March 2022
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
10
2022
£m
118.4
118.4
4.0
4.0
(2.4)
(2.4)
120.0
0.1
12.7
0.4
106.0
0.8
120.0
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
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 £0.7m (2021: £6.3m).
The financial statements of Argentex Group PLC were approved by the Board of Directors on 05 July 2022 and
were signed on its behalf by:
Harry Adams
Director
Registered number 11965856
142
Annual Report 2022
Company Statement
of Changes in Equity
for the year ended 31 March 2022
Balance at 01 April 2020
Total comprehensive income for the year
Transactions with owners:
Dividends paid
Share-based payments charge
Share
capital
Share
premium
£m
0.1
-
-
-
£m
12.7
-
-
-
Balance at 31 March 2021
0.1
12.7
Total comprehensive income for the year
Transactions with owners:
Dividends paid
Share-based payments charge
-
-
-
-
-
-
Share
option
reserve
£m
-
-
-
0.2
0.2
-
-
0.2
Merger
reserve
Retained
earnings
Total
equity
£m
106
£m
(0.8)
£m
118.0
-
-
-
106.0
-
-
-
6.3
6.3
(2.3)
-
3.2
0.7
(3.1)
-
(2.3)
0.2
122.2
0.7
(3.1)
0.2
Balance at 31 March 2022
0.1
12.7
0.4
106.0
0.8
120.0
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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 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 adopted are consistent with those set out in note 2 to the Consolidated Financial
Statements in addition to the policies noted below for Company only.
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 Comprehensive Income. To the extent applicable, balances in the Merger
Reserve will be recycled into Retained Earnings to correspond with any impairment charge. Management
have reviewed the Group and subsidiaries’ financial position and believe the subsidiaries are not impaired in
accordance with IAS 36.
144
Annual Report 2022
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.
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.
4. Auditor’s remuneration
The auditor’s remuneration for audit and other services is disclosed in Note 7 to the consolidated financial statements.
5. Directors’ Emoluments
Executive and non-executive directors
Costs for the above persons were:
2022
Number
2021
Number
7
£m
0.4
8
£m
0.3
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 1 April 2020
Additions
At 31 March 2021
Additions
At 31 March 2022
£m
118.0
0.2
118.2
0.2
118.4
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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
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
Address
Directly held
Argentex Capital Limited
Foreign exchange broking
England
Indirectly held
Argentex LLP
Holding company
England
Argentex Foreign
Exchange Limited
Argentex B.V.
Holding company
England
Inactive pending
regulatory authorisation
Netherlands
Argentex PTY Ltd
Inactive pending
regulatory authorisation
Australia
All subsidiaries are 100% owned either directly or indirectly owned by the company.
7. Trade and other receivables
Other receivables
Amounts due from group companies
25 Argyll Street, London,
W1F 7TU
25 Argyll Street, London,
W1F 7TU
25 Argyll Street, London,
W1F 7TU
Atrium Amsterdam
WTC, Centre Building,
Strawinskylaan 3051,
1077 ZX Amsterdam, The
Netherlands
17 One International
Towers Sydney
Barangaroo, NSW 2000
2022
£m
0.1
3.9
4.0
2021
£m
0.1
4.7
4.8
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 are short-term.
8. Other payables
Amounts owed to group companies
2022
£m
2.4
2.4
2021
£m
0.8
0.8
The directors consider that the carrying amount of trade and other payables is a reasonable approximation of their
fair value. Amounts owed to group companies are unsecured, interest free and repayable on demand. All trade and
other payable amounts are short-term.
146
Annual Report 2022
are as follows:
Directly held
Indirectly held
Argentex Foreign
Exchange Limited
Details of the company’s subsidiaries, which are all included in the consolidated financial statements of the Group,
9. Share capital
Name of undertaking
Nature of business
Country of incorporation
Address
Argentex Capital Limited
Foreign exchange broking
England
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
Argentex LLP
Holding company
England
25 Argyll Street, London,
At 31 March 2021 and 31 March 2022
113,207,547
23,589,212
Holding company
England
25 Argyll Street, London,
10. Reserves
Argentex B.V.
Inactive pending
Netherlands
regulatory authorisation
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.
Argentex PTY Ltd
Inactive pending
Australia
regulatory authorisation
All subsidiaries are 100% owned either directly or indirectly owned by the company.
7. Trade and other receivables
Other receivables
Amounts due from group companies
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 are short-term.
8. Other payables
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 22 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 2019, the Company acquired the entire issued share capital of
Argentex Capital Limited via a share- for-share exchange. Subsequent to the acquisition, the Company invested a
further £12.0m 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 Comprehensive Income, less amounts distributed to shareholders.
The Directors declared an interim dividend of 0.75p per ordinary share amounting to £849,056.60 which was paid in
the year.
Amounts owed to group companies
11. Events after the Reporting Date
On 22 June 2022, the Company’s 100% owned subsidiary, Argentex Capital Limited, declared a dividend of £2.0m
payable to the Company.
The directors consider that the carrying amount of trade and other payables is a reasonable approximation of their
fair value. Amounts owed to group companies are unsecured, interest free and repayable on demand. All trade and
other payable amounts are short-term.
147
25 Argyll Street, London,
W1F 7TU
W1F 7TU
W1F 7TU
Atrium Amsterdam
WTC, Centre Building,
Strawinskylaan 3051,
1077 ZX Amsterdam, The
Netherlands
17 One International
Towers Sydney
Barangaroo, NSW 2000
2022
£m
0.1
3.9
4.0
2022
£m
2.4
2.4
2021
£m
0.1
4.7
4.8
2021
£m
0.8
0.8
Financial StatementsStrategic ReportGovernanceOther InformationGroup Overview
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.
151
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Shareholder
information.
Shareholder enquiries
→
investorrelations@argentex.com
Dividend dates
→
→
22 August 2022 – Final dividend approved
25 August 2022 – Ex-dividend date
Annual shareholder calendar
31 March 2022 – Financial year end
6 July 2022 – Full year results announcement
22 August 2022 – AGM
30 September 2022 – Half year end
→
→
→
→
152
→
→
→
→
26 August 2022 – Final dividend record date
26 September 2022 – Final dividend payment date
November 2022 – Half year results announcements
31 December 2022 – Financial year end
Annual Report 2022 Company
information.
AUDITORS
Deloitte LLP
1 New Street Square
London, EC4A 3HQ
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
ARGENTEX OFFICE
Atrium Amsterdam WTC
Centre Building
Strawinskylaan 3051
1077 ZX Amsterdam
The Netherlands
BANK
Barclays
1 Churchill Place, Canary Wharf,
London, E14 5HP
LEGAL ADVISERS
Gowling WLG (UK) LLP
4 More London Riverside,
London, SE1 2AU
REGISTRAR
Computershare Investor Services PLC
The Pavilions, Bridgwater Road,
Bristol BS13 8AE
BROKERS
Singer Capital Markets
1 Bartholomew Lane,
London, EC2N 2AX
COMPANY SECRETARY
Alethia McDonald
Argentex Group PLC
25 Argyll Street,
London, W1F 7TU
This document is also available on the
Company’s website at www.argentex.com
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Other InformationStrategic ReportGovernanceFinancial StatementsGroup Overview 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 Gowling WLG, 4 More London Riverside, London SE1 2AU
on 22 August 2022 at 11.30 a.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 the Annual Report and Accounts of the
7. That Jonathan Gray, who retires as a Director in
Company for the financial year ended 31 March 2022
together with the Directors’ Report and Auditors’
Report thereon.
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 2022.
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.
154
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 re-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 2022 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 5 July 2022) 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 June 2023 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 £1,415,094.34/1.25 pence per
Ordinary Shares for the year ended 31 March 2022
be declared.
Special Resolutions
14. That, subject to the passing of resolution no. 12, the
Directors be and are hereby empowered pursuant to
sections 570 and 573 of the Act to allot equity securities
(as defined in section 560 of the Act) for cash either
pursuant to the authority conferred by resolution
no. 12 above or by way of sale of treasury shares as if
section 561(1) of the Act did not apply to such allotment,
provided that this power shall be limited to:
(a). the allotment of equity securities in connection with
an offer of, or invitation to apply for, equity securities:
(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 5 July 2022), 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
June 2023 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 5 July 2022;
(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
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Other InformationStrategic ReportGovernanceFinancial StatementsGroup Overview last independent trade and the highest current
independent bid for any number of Ordinary
Shares on the trading venue where the purchase is
carried out.
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 June 2023 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.
We are pleased to invite shareholders to attend our AGM
in person this year. We will continue to monitor
developments and the latest prevailing Government
guidance and regulations relating to public gatherings
prior to the holding of the AGM, and whether any
changes are required to the arrangements for the AGM.
Shareholders are advised to check the Company’s website
for any updates. Shareholders are asked not to attend the
AGM in person if they are displaying any symptoms of
COVID-19 or have recently been in contact with anyone
who has tested positive.
By order of the Board of Directors
Alethia McDonald
Company Secretary of Argentex Group PLC
6 July 2022
Registered Office:
25 Argyll Street,
London, W1F 7TU
United Kingdom
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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.
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 or on
the electronic copy sent via email where members
have signed up to Ecomms..
(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 where members have requested paper
copies. 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. Calls 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.
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
Annual Report 2022 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.
4. A shareholder may 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.
5. To direct your 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 proxy
will vote or abstain from voting at his or her discretion.
Your proxy 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.
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.
7. CREST members who wish to appoint a proxy
10. The Company may treat as invalid a CREST 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
Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
Thresholds and entitlement to vote
11. To be passed, ordinary resolutions require a majority
in favour of the votes cast and special resolutions
require a majority of not less than 75% of members
who vote in person or by proxy at the meeting. On
a show of hands every shareholder who is present
in person (or being a company is present by a
representative not himself, a shareholder) and who
is allowed to vote at a general meeting shall have one
vote. Upon a poll every member holding Ordinary
Shares who is present in person or by proxy (or being a
company is represented) shall have one vote for every
Ordinary Share of which he is the registered holder.
12. The Company, pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001 (as amended),
specifies that only those members registered in the
Register of Members of the Company at the close of
business on 20 August 2022 (or if the AGM is adjourned,
members entered on the Register of Members of the
157
Other InformationStrategic ReportGovernanceFinancial StatementsGroup Overview 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 20 August
2022 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.
15. As at 5 July 2022, 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 5 July 2022 is 113,207,547.
Miscellaneous
16. Copies of the Directors' service contracts and letters of
appointment are available for inspection at the registered
office of the Company during normal business hours
from 6 July 2022 and will be available for inspection
at the place where the meeting is being held from 15
minutes prior to and during the meeting.
17. Members who have general queries about the Annual
General Meeting should email the Company Secretary at
Alethia.McDonald@argentex.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.
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 2022.
2. Resolution 2 – the Directors' are required to approve
the Remuneration Report for the financial year.
3. Resolutions 3 to 9 – 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
77 and 79 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
of each of the Directors.
4. Resolution 10 and 11 – auditor re-appointment and
remuneration – at each general meeting at which the
Company's accounts are presented to its
shareholders, the Company is required to appoint
an auditor to serve until the next such meeting and
following normal practice, resolution 11 separately
authorises the Directors to determine the remuneration
of the auditors.
5. Resolution 12 – general authority to allot – this
resolution, to be proposed as an ordinary resolution,
relates to the grant to the Directors of authority to
allot unissued Ordinary Shares until the earlier of
the conclusion of the annual general meeting to be
held in 2023 and 30 June 2023 (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 approximately 10 per cent. of
the issued Ordinary Share capital of the Company as
at 5 July 2022 (the latest practicable date prior to the
publication of this document)).
6. Resolution 13 – 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
26 September 2022 to holders of Ordinary Shares on
the register of members at the close of business on 26
August 2022.
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Annual Report 2022
7. Resolution 14 – disapplication of statutory pre-emption
rights – the passing of this resolution 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 14 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 approximately 10 per cent of
the issued ordinary share capital of the Company
(excluding treasury shares) as at 5 July 2022, 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 June 2023.
8. Resolution 15 – 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
approximately 14.99 per cent. of the issued Ordinary
Share capital of the Company as at 5 July 2022 (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. This authority will expire at the conclusion
of the next AGM of the Company or, if earlier, at the
close of business on 30 June 2023.
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