ARGENTEX GROUP PLC
ANNUAL REPORT 2023
Year ended 31 December 2023
C O N T E N TS
Argentex
Group PLC
Annual Report
Argentex is a leading
financial solutions
group providing global
payment and currency
risk management
solutions for businesses
and financial institutions.
Argentex is listed on AIM
in London, with offices in
the UK, the Netherlands,
Dubai and Australia.
Strategic Report
04 Chairman’s Statement
06 Group strategy at a glance
08 Our way of doing business
10 CEO’s Statement
14 Market overview
20
Our purpose, business
model and strategy
24 Our resources and relationships
30
Our principal risks
and uncertainties
36 Financial Review
40 Section 172(1) Statement
Governance
42
Corporate Governance
Statement : Chairman’s Letter
44 The QCA Code
45 Vision, strategy and culture
46 Stakeholder engagement
48 Balance, skills and evaluation
50 Board of Directors
54 Nominations Committee Report
58 Remuneration Committee Report
62 Structures and processes
68 Audit and Risk Committee Report
72 Directors’ Report
76 Independent Auditor's Report
2
Argentex Group PLC Annual Report 2023
Financial Statements
86
Consolidated Statement
of Profit or Loss
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
87
89
90
92
120 Company Financial Statements
122 Notes to the Company
Financial Statements
Other information
126 Glossary of terms
127 KPI Comparatives Table
128 Shareholder information
129 Company information
130 Notice of Annual General Meeting
G R O U P OV E R V I E W
Key
Performance
Indicators
Financial year ended 31 December 20232
Revenue
£49.9m
£8.1m
4.6p
Operating profit
Total dividend per share
0.75p
649
1,938
New clients traded
EPS (Basic)1
Total clients traded
1 Note 13 to the Consolidated Financial Statements
2 For comparative figures (both the 12 and 9 months to 31 December 2022) please see table p127
3
Strategic Report C H A I R M A N ’S STAT E M E N T
A year of
change
We embarked upon a meaningful change at Argentex over the
past year, due to the challenges faced by the business in 2023.
During the period, we recognised
the need to transform our strategic
thinking, which in turn meant
changing our senior management
team in order to take full advantage
of what remains a significant global
opportunity. The new management
team has undertaken a full strategic
review of the business, culminating
in the development of a multi-year
operational plan focused on driving
profitable growth across the business
and improved shareholder returns.
Trading conditions in 2023 were
benign in comparison with 2022
due to the steadier macro-economic
backdrop, resulting in reduced
currency volatility and suppressed
activity, particularly in the
institutional sector. In light of the
challenges faced by the business,
we have embarked on a period of
meaningful change with the aim of
diversifying the product offering,
improving customer economics,
and driving operational and
financial efficiencies.
Service provision continues to be
dominated by banks in this segment
and we are now seeing a much wider
opportunity as clients recognise the
advantages of addressing their FX,
payments and alternative banking
needs via an expert Fintech business
specialising in the provision of
these services.
The Board is therefore committed
to diversifying the business in order
to better serve our customers, build
revenue visibility and, through scale
and further efficiencies, deliver higher
margin growth and increased market
share. Going forward, our renewed
ambition manifests in a need for
greater executive accountability
and better visibility of our route to
creating shareholder value. Jim and
his team share my passion for having a
clear and coherent strategy including
not just “who we want to be” but also
“how we are going to get there”.
Nigel Railton
Non-Executive Chairman
4
Argentex Group PLC Annual Report 2023
“ Going forward, our renewed
ambition manifests in a
need for greater executive
accountability and better
visibility of our route to
creating shareholder value.”
I should like to thank everyone at
Argentex for their hard work and
contribution in what has been a
challenging year but one which allows
us to face the future with optimism.
Nigel Railton
Non-Executive Chairman
01 May 2024
5
DIVIDEND
During the year ended 31 December
2023, we declared and paid an interim
dividend of 0.75p per share. However,
in light of the Company’s financial
performance and trading conditions
during the second half of FY23, the
Board have decided that no further
dividends will be declared for FY23.
Full particulars of the dividends
are contained within the Financial
Review on pages 36-39.
GOVERNANCE
We are committed to keeping our
stakeholders informed and taking
their views into consideration as we
drive the business forward. We also
acknowledge our responsibilities
with regard to governance and
sustainability and recognise the
ongoing need for high standards
in these matters.
In terms of Board changes during the
period, I took over from Digby (Lord
Jones of Birmingham) as Chairman
in September after he announced his
forthcoming retirement. The Board
and I would like to thank him for
supporting the business since it
came to the market in 2019.
We also welcome Jim Ormonde and
Tim Haldenby to the Board, and I
look forward to working with them as
we implement our new strategy. The
Board continues to review the skills
and experience required, to ensure
that we can support the management
team and provide robust advice and
challenge for the future.
CONCLUSION
Notwithstanding the challenges
faced by the business throughout
2023, the Board remains encouraged
by the strong brand and reputation
of the Group as the foundation for
delivery against its future growth
strategy. The recently completed
strategic review undertaken by the
new management team has created a
clear roadmap to scale the business,
reduce earnings volatility and expand
our customer offering, whilst driving
a more efficient operating model.
Delivery against this plan will ensure
a return to profitable growth and
the restoration of shareholder value.
I am therefore confident that the
changes which we began to embrace
in 2023 will allow Argentex to evolve
at a much faster pace over the longer
term and ensure we are able to build a
strong and profitable future.
Strategic Report ST R AT E G I C R E P O RT
Group
strategy at
a glance
We are an
evolving business
with strong core
fundamentals
— Argentex is a global
payment and currency risk
management specialist
— Established in 2012 and
headquartered in London,
Argentex listed on London’s AIM
market in mid-2019 and has since
added operations in Amsterdam,
Dubai and Australia
Our strategy
in 2023
Our strategy
for 2024
— Our strategy has been to
— Use our strong brand and
transform Argentex from a
single-product, single-office
business into a multi-product,
global business
— In 2022 FX markets were very
active and volatile, whereas in
2023 they were much less so
— As 2023 progressed, with the
lower levels of volatility and the
consequent lower levels of client
activity, it became apparent our
revenue growth expectations
were unlikely to be met
— 2023 revenues were flat year-on-
year, and operating profit was
lower due to higher costs
— As a result, a strategic review has
been underway since the latter
part of 2023 to reposition the
business for growth, underpinned
with greater operational resilience
reputation in what remains a
large addressable market
— Implement near-term measures
to align costs more appropriately
with revenues
— Continue to pursue product
diversity in our efforts to expand
and differentiate the service
offering to our clients and increase
our share of customer wallet
— Focus on customer segmentation
and aligning service levels by
customer tier
— Streamline our sales processes and
align them to focus on customer
lifetime value and long-term
customer relationships
— Diversify our product suite
including continued investment in
Alternative Banking (virtual iBans)
and other payment services
— Pursue our goal of geographic
expansion, ensuring we leverage
our existing locations and licences
to ensure our footprint grows in
an efficient manner with greater
operational resilience
For more information, see Our purpose,
business model and strategy on pages 20-23.
6
Argentex Group PLC Annual Report 2023
H OW W E WO R K
Our way
of doing
business
Having a blend of
spot and forward
contracts is
important for an
optimum mix of
revenue generation
and cash flow.
As global payment and currency risk management
specialists, we offer bespoke services and, increasingly,
new technology to engage with clients.
Providing value
for our clients
— Flexibility
— Pricing
— Segregation of sales
and dealing roles
— Dealers’ experience
— Proactivity
— Forecasting accuracy
— Credibility
Full range of
customised FX
capabilities
— Spot Contracts
— Forward Contracts
— Structured Solutions
— Personalised
hedging strategies
Delivered via
multiple channels
— Traditional voice broking
— Online Alternative Banking
(virtual IBANS)
8
Argentex Group PLC Annual Report 2023
In a high quality
and diverse
client base
We are not over-exposed
to any single sector.
— Financial Services
— Insurance
— Fund, Fund Managers
and Trusts
1% of total revenue32+
Consists of individual sectors
each responsible for less than
How we work
— Executing FX spot, forward and structured
solutions contracts on behalf of our clients
— Having a blend of spot and forward
contracts is important for an optimum
mix of revenue generation and cash flow
— Diversifying our revenue mix, with clear
signs that there is a significant appetite
for our new products
Revenue
14%
38%
48%
A 38+
Spot
Forward
Structured Solutions
Our People
to 196 people
— We are powered by our people
— We are committed to equality of
opportunity for all of our employees
— Headcount grew over 40% in 2023
Financial Services (32%)
Other Corporate (21%)
Manufacturing &
Machinery (7%)
Film Production &
Animation (6%)
Electrical (6%)
Food & Beverages (5%)
IT, Technology &
Software (5%)
Media, PR, Events &
Marketing (3%)
Construction (3%)
Medical &
Pharmaceutical (2%)
Fashion (2%)
Consultancy
& Recruitment (2%)
Agriculture (2%)
Motor, Vehicle, Aerospace,
Shipping, Boating (2%)
Private Client (1%)
Real Estate (1%)
— For more information see page 24
Our Sustainability
focus
— We are a small but growing service
company in four offices
— We have a very limited negative
environmental impact
— Despite this, we strive to minimise or
mitigate any harm that we might do and
actively seek to contribute positively
For more information see page 26.
9
Strategic Report
21
+
7
+
6
+
6
+
5
+
5
+
3
+
3
+
2
+
2
+
2
+
2
+
2
+
1
+
1
+
48
+
14
C E O' S STAT E M E N T
Building
resilience
and scale
OVERVIEW
After a robust performance in 2022, the
Group made significant investments
in people, technology and overseas
expansion for anticipated growth in
2023 and beyond.
the twelve months ended
31 December 2022. In January 2024,
we confirmed that we expected
revenues for the twelve months to
31 December 2023 to be approximately
£49.8m and operating profit to be not
less than £8.0m.
In 2022 FX markets were very
active due to the impact of the UK’s
“mini budget” and other political/
geopolitical factors, including the
Conservative party leadership
campaign and the war in Ukraine.
However, as the year progressed it
became apparent that 2023 would not
see similar levels of volatility and that
the institutional market in particular,
which tends to track market trends
closely, would deliver suppressed
levels of trading due to the market’s
general “risk off” approach.
With lower levels of client activity,
it was evident that revenue
growth expectations for the year
were unlikely to be met and that
the planned increases in costs
previously flagged to investors would
simultaneously challenge overall
profit levels.
Accordingly, in November 2023, we
announced that we expected to report
revenue and operating profit for
the year ending 31 December 2023 at
approximately the same levels as for
FINANCIAL AND OPERATIONAL
PERFORMANCE
The Group’s investment in people,
technology and overseas expansion
in 2023 meant that costs grew faster
than revenues.
Revenue for the year ended
31 December 2023 was £49.9m
(compared to £50.4m in the
12 months ended 31 December 2022
and £41.0m in the nine months ended
31 December 2022). Operating profit
was £8.1m (compared to £11.3m in the
twelve months ended 31 December
2022 and £8.1m in the nine months
ended 31 December 2022).
It is disappointing that 2023 revenues
were flat year-on-year and operating
profit lower due to a higher cost
base following the investment made
in the earlier part of the year. We
are committed to repositioning our
business and overall client focus,
including some near-term measures
to align costs more appropriately
with revenues.
Jim Ormonde
Chief Executive Officer
10
Argentex Group PLC Annual Report 2023
“ A key area of focus is
expanding into the
broader payments and
alternative banking markets;
diversifying our product
offering to increase our
exposure to more visible,
stable revenue streams.”
We have a strong brand and
reputation in what remains a large and
fragmented addressable market and
we will continue to build on our key
strengths and expand internationally
to strengthen our position as a leader
in the segment.
To enable the business to become
a global financial solution expert
it is necessary to have a scalable
and efficient platform to facilitate
accelerating growth, while delivering
market leading products. To ensure
that we maximise shareholder returns,
and maximise investment value,
we intend to undergo a period of
consolidation where we will look for
operational efficiencies while market
conditions remain more muted.
This will ensure costs are aligned
with carefully considered growth
expectations and an overall strategic
focus underpinned by a detailed
operational plan designed to minimise
execution risk and fully embrace an
exceptional market opportunity.
We are in the early stages of the move
to diversify the business, ensuring
we have the product scope and
client portfolio to protect us against
fluctuating market dynamics with
PEOPLE
Our people are the most important
strategic asset in our company. Having
the right people in the right roles is
fundamental to our success and we
made a significant number of changes
in 2023, particularly across the senior
management team. We need to ensure
we have the correct balance of people
to support our clients’ evolving needs
as we move forward but we are
also looking to improve quality,
knowledge and expertise in every
facet of the business.
We are proud that our first employee
engagement survey returned an
overall score of 80% but there is much
we can do to improve, and the new
senior management team hold regular
“open door” sessions, townhalls and
other staff events to ensure a culture
of success and involvement emanates
throughout the business.
Additionally, we continue to
directly support the Social Mobility
Foundation and the Argentex
Academy, putting inclusivity at
the heart of everything we do and
building strong relationships with
superstars of the future no matter
what their backgrounds may be.
CLIMATE CHANGE & SUSTAINABILITY
As a small but growing services
company with a team of less than
200 in four offices, we have a very
limited impact on the environment.
Nonetheless, we strive to minimise
or mitigate any harm that we might
do and also actively seek
to contribute positively.
STRATEGY 2024 & OUTLOOK
We have concluded a thorough
review of the business with the aim
of identifying future opportunities
for driving profitable growth across
the business. A key area of focus is
expanding into the broader payments
and alternative banking markets;
diversifying our product offering
to increase our exposure to more
visible, stable revenue streams and
reduce our reliance on more volatile
FX markets. However, in the near
term, as we focus on repositioning
and restructuring the business for
profitable growth, we expect FY24
revenues to be in the mid £40s
million, with an EBITDA margin
in the low single digits1.
1 The forecasts are the Board’s estimates only, using internal assumptions which have not been independently verified or reported on and actual results
may differ. The forecasts are not a representation of facts and should not be regarded as such by prospective investors. Rather, the forecasts are
statements about the forward-looking expectations of the Board with respect to the revenue, revenue growth and EBITDA margin of the Group.
11
Strategic Report “ We believe there is an
enormous opportunity
to go further than we
had originally envisaged
as a global financial
solutions expert.”
Payments, Alternative Banking
and FX market, particular on
those territories where business
customers are underserved and
where technology presents
new opportunities
We believe there is an enormous
opportunity to go further than we
had originally envisaged as a global
financial solutions expert and to
be part of the historic coalescence
between Payments, Alternative
Banking and FX. This will make our
earnings more predictable, improve
our margins, and make us less
susceptible to market dynamics than
a traditional agency business.
Jim Ormonde
Chief Executive Officer
01 May 2024
higher quality earnings and more
predictable revenue streams. We
must be less transactional as a
business and more focused on expert
account management and wider
product provision. We must put our
clients’ needs at the very heart of all
trading activities and we will seek
to provide new customers with the
exceptional rather than merely the
expected as regards service and their
client journey.
Our increased confidence in the
market fundamentals underpins our
new ambitious strategy, with a focus
on three key areas in particular:
— Operational and Financial
efficiencies, including enhanced
client retention:
We have a series of initiatives
aimed at financial, operational
and capital optimisation, seeking
shrewder control of costs and also
a thorough review of our licencing
arrangements and their effect
on our capital requirements. We
will continue to let our clients’
needs inform our strategic focus
and seek to tailor our approach
and solutions more carefully to
the type of clients we serve. By
automating processes, we also
aim to offer our clients greater
autonomy whilst freeing up
our resources to concentrate
on customers who require
higher levels of support. We are
also seeking to make our sales
processes more sophisticated and
deliver a laser focus on customer
lifetime value with a view to
keeping customers for longer via
careful account management
focused explicitly on their needs
as a business rather than any
preference to transact
— Product diversification:
We are doubling down on our
investment across a broader
product set, especially around
payments and Alternative Banking,
as we seek more predictable
revenue streams and diversify our
market offering to bring higher
quality earnings and a greater
share of our customers’ preferred
service provision
— Geographic expansion:
And finally, we continue to
pursue our goal of geographic
expansion, ensuring we leverage
our existing locations and licences
to ensure our footprint grows
in an efficient manner alongside
global banking partners who share
our vision to capture and keep
a more significant share of the
12
Argentex Group PLC Annual Report 2023
ST R AT E G I C R E P O RT
Market
overview
Both the geo-political macro-environment and FX
volatility are traditionally important factors for Argentex.
Our clients, products and geographies are diverse, so
we’re ideally positioned to capture opportunities even in
challenging environments.
Volatile market conditions offer
increased revenue opportunities.
The heightened trading activity
during volatile periods can result in
higher transaction volumes, and the
complexity and risk associated with
volatile markets often drive the use of
advanced risk management products
and services. Argentex can provide
these at a premium, diversifying
our income streams and further
enhancing profitability.
The calm after
the storm
In 2022 FX markets were very active
and volatile, whereas in 2023 they were
much less so. Although there were
flashpoints that temporarily increased
volatility – the Q1 US mini banking
crisis (collapse of Silicon Valley
Bank), Chinese property problems
(Evergrande), and geopolitical
escalation in the Middle East – major
FX pairs traded in a low volatility
regime, with EUR/USD experiencing
its second-lowest price range ever.
A year ago, we stated that ‘if no new
unforeseen events occur… we expect
reduced volatility to unwind much
of the USD dominance of last year’.
Indeed, as disinflation eventually
took hold, FX volatility reduced,
and the dollar weakened. This
year, the comparative timing and
extent of rate cuts between major
central banks will be paramount to
FX markets. The US economy may
finally slow, just as the UK, Europe
and China find their footing. World
growth is expected at between just
2% and 3%, whilst 2024 FX will absorb
the ramifications of the biggest
electoral year ever, with some 40% of
the world’s population going to the
polls from the USA to Russia, India to
South Africa and beyond.
“ 2024 will focus on
disinflation fuelled rate
cuts, suppressed but
steady economic growth
and the return of political
turmoil, with some 40%
of the world’s population
going to the ballot box.”
Joe Tuckey
Argentex Lead Analyst
14
Argentex Group PLC Annual Report 2023
Graph of FX volatility
Great financial crisis
Tech bubble
COVID-19
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A
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
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1
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2
Source: Trading View
Reaching the 2% target
UK
Europe
10%
8%
6%
4%
2%
0%
2021
2022
2023
2024
2025
Source: OECD forecasts as of Jan 2024
15
Strategic Report
The year ahead
DISINFLATION
We have seen sizeable drops in
inflation through 2023, but the ‘last
mile’ to get to the 2% target through
2024 and possibly into 2025 may prove
difficult to achieve.
Central banks will cut rates in line
with this disinflationary pattern. The
differing timing and extent of the
rate cuts between the various central
banks will drive FX moves in 2024,
although the trajectory for such cuts
look broadly similar across the G10.
Risks to the disinflation narrative
would be a catalyst for higher oil
prices, such as a geopolitical
escalation in the Middle East. The
major risk to current FX narratives
will be if disinflation stalls and the
central banks do not cut as much as
markets expect. Expectations for the
timing of rate cuts are already being
pushed back significantly.
POLITICS
The UK general election is approaching,
as is the presidential election in the
US. Events such as these usually create
some volatility, given the implications
for new economic policies, tax, foreign
direct investment, international
relations and so on.
Labour’s assertion that they would
integrate closer to Europe is seen
as a potential sterling positive, as
is the fiscally responsible mantra
promoted by Rachel Reeves following
the learnings of the Liz Truss era. In
the US, a potential return of Donald
Trump could re-ignite volatility
after the relative calm of Joe Biden’s
tenure. Trumpian themes remain:
Tax cuts, tariffs on imports, a NATO
exit, reducing financial support for
overseas conflict, alongside somewhat
erratic commentary on the dollar.
ECONOMIC GROWTH
Financial media speculate around
‘hard landings’, ‘soft landings’, or no
recessions at all. The lag effect from all
the rate increases may still not be fully
felt, but a hard landing scenario now
looks unlikely.
Germany stands out as a weak
performer, China’s post-COVID-19
rebound has been disappointing,
whilst the US has scope to slow
down after an impressive 2023. US
employment data will be a key item
to monitor. Wage growth and the
services sector remain sources of
‘sticky’ inflation. The UK seems to
have perennially low expectations
for growth, which, as seen in H1 2023,
means the bar is set low for an upside
surprise. The UK is set to outperform
France and Germany in 2024.
“ The lag effect from all
the rate increases may
still not be fully felt, but
a hard landing scenario
now looks unlikely.”
Joe Tuckey
Argentex Lead Analyst
16
Argentex Group PLC Annual Report 2023
EUR
There are reasons to be concerned
about the euro: poor German economic
performance, social unrest, a dovish
central bank and decreased demand for
exports from certain regions, and yet it
seems that last summer’s slide sought
to have priced much of this in. The euro
is still at historically low levels, and has
the capacity to edge higher, as steady
growth, a potential upturn in China,
no major elections and non-extreme
speculative positioning all allow for
gains to be made. We stay neutral in our
view and must allow the inbound data
to shape market moves.
For more information on our business
model and strategy, see pages 20-23
and for the associated principal and
emerging risks and uncertainties, see
pages 30-34.
USD
The dollar suffered for much of
last year as US inflation came
down quickly, setting the stage
for the Federal Reserve to pause
rate hikes first. Through much of
the inflationary cycle, the Federal
Reserve were too little too late with
rate hikes and were behind the
curve. They may not want to make
the same mistake when loosening
policy. The summer strength seen
in the dollar was a result of very
resilient US data, despite all the rate
hikes. Growth remained robust.
This is changing. The ‘lag effect’ of
policy tightening is now having an
effect, and a softer period for the US
lies ahead, alongside a likely period
of rising unemployment. Markets
are pricing over 1.25% of cuts this
year, likely to be via a series 0.25%
increments. The broad expectations
lie in a weaker dollar, but we must be
cognisant of the dollar’s appeal as a
safe haven (if war escalates), heavily
dovish market expectations (which
may not fully materialise), and the
presidential election, which may
bring about more protectionist policy
and political volatility.
Will politics
reignite FX
volatility in 2024?
GBP
Much of sterling’s strength in 2023
was sponsored by a more palatable
government and fiscal responsibility,
better-than-feared economic data
(avoiding recession) and an underlying
inflation rate staying stubbornly higher
than many peers, thus causing the risk
of higher rates/higher sterling.
A new calendar year does not lead to a
fresh set of fundamentals. Many of last
year’s driving themes remain. Growth
will stay steady but unspectacular,
and there is a chance that the Bank of
England cuts rates less than current
market expectations. The potential
of a Labour Government is on the
horizon, but history shows that general
elections don’t have lasting impacts
on sterling. The UK may confront the
commentators and outperform, as it did
in the first half of 2023, but not yet in
a spectacular fashion. The Gilt market
will remember the Truss premiership,
so action may happen here if the market
doesn’t see election pledges as fiscally
palatable or viable, leaving similar
shocks a theoretical risk in the run-up
to the election.
O U R B U S I N E SS
Our purpose,
business model
and strategy
Our purpose
Our purpose is to provide a
credible alternative to traditional
banks, offering bespoke global
payment and currency risk
management services, for
businesses, financial institutions
and private customers.
Our business
model
WHAT WE DO
— We are a service-led currency
management, payment and
multi-currency account provider
— We provide currency
management, FX execution and
hedging through spot, forward
and structured solutions
— We also provide alternative
transaction banking, with digital
solutions including multi-
currency accounts (vIBANs) and
global payments
HOW WE CREATE VALUE
Argentex executes FX spot, forward
and structured solutions contracts
on behalf of our clients. Our long-
term value creation is based on
revenue from FX spread, payments,
and account fees. 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
than spot trades 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
HOW WE ARE DEVELOPING
Offices
Market
Product
UK
EUROPE
AUSTRALIA
DUBAI
CORPORATE | INSTITUTIONAL
CURRENCY MANAGEMENT
ALTERNATIVE TRANSACTION BANKING
EXECUTION
HEDGING
SPOT CONTRACTS
MULTI-CURRENCY ACCOUNTS (vIBANS)
GLOBAL PAYMENTS
DIGITAL PLATFORM
FORWARD CONTRACTS
TRANSACTION REPORTING
STRUCTURED SOLUTIONS CONTRACTS
API
Argentex Group 2020
Argentex Group 2023
20
Argentex Group PLC Annual Report 2023
— A blend of spot and forward
CLIENT DIVERSITY
contracts is therefore
important for an optimum
mix of revenue generation and
cash flow
— Since inception, this has led
to a mix of approximately
two thirds spot and one third
forward contracts by volume,
which, due to the wider
spreads achieved in forward
contracts, translates into a
revenue split of 45% spot/55%
forwards by product
— The introduction of our
structured solutions offering
now accounts for 14% of our
revenue (FY2022: 10%)
— The diversity of our client base
means we are not overly exposed
to any single sector. 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
— This not only reduces risk but
also makes the Group agnostic
of market direction, allowing the
Group to generate revenue in a
broad set of market conditions
ESTABLISHED MARKET POSITION
— We have a strong growth record
— We are increasingly
since inception
diversifying our revenue mix
— We are the only listed UK Non-
SIGNIFICANT ADDRESSABLE MARKET
WITH INCREASING MARKET SHARE
— We are focused on a $160bn
global total addressable market,
with our operations in UK, EMEA
and Australia
— 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
Bank Financial Institution (NBFI)
regulated to hold client money with
both Electronic Money Institution
(EMI) and investment licences
— We hold a Tier 1 regulatory
licence to expand into the $60bn
European market
— Our positive long-term
prospects are driven by our
clients’ requirement to trade for
commercial reasons, irrespective
of market environment
21
Strategic Report “ Our purpose is to provide a credible
alternative to traditional banks, offering
bespoke global payment and currency
risk management services, for businesses,
financial institutions and private customers.”
Jim Ormonde
Chief Executive Officer
Our strategy
in 2023
Our strategy has been to transform
Argentex from a single-product,
single-office business into a multi-
product, global business. We focused
our investments throughout
2023 across the key areas of
people, technology & product and
international expansion, to
drive transformation.
INTERNATIONAL EXPANSION
Whilst seeking to transform Argentex
from a single-office business into
a global business, we maintain a
measured and client-led approach to
our international expansion and are
actively seeking long-term growth
opportunities in new regions.
The Netherlands office continued to
deliver a meaningful contribution
to Group revenue and has grown
to 29 professionals in the last year.
Efforts throughout the year have been
focused on developing the operational
efficiency of the Netherlands office,
ensuring their local capabilities can
match that of London headquarters
and provide a stable, scalable model
for future European expansion.
PRODUCT AND TECHNOLOGY
We continually seek to optimise
our client’s experience and journey,
transforming our products
innovatively to meet clients’ evolving
needs whilst increasing wallet share,
creating new revenue opportunities
and improving operational efficiency
and risk controls.
Technology remained an important
factor of the growth strategy in 2023,
with the varying needs of our clients
acting as the key driver for how we
develop our technology and product
offering, alongside the additional
requirements needed to expand our
international footprint.
PEOPLE
Our investment in people continued
throughout the year, increasing total
headcount by over 40% to over 190
staff members. We strengthened our
teams across our geographies and
throughout our divisions, particularly
in our technology, finance, compliance
and risk management, as well as in
our critical sales and dealing teams.
In doing so we have resourced the
business to maintain and further
its high governance benchmark
and ensure we are enabled to scale
efficiently with a balanced approach to
risk management.
OUTCOME
As 2023 progressed, it became
apparent that our revenue growth
expectations were unlikely to be
met. As such, given the significant
cost expansion throughout 2023, we
recognise the need to ensure our
strategic investments are aligned
with our expectations for growth
and return on those investments. As
a result, a strategic review has been
underway since the latter part of
2023 to ensure we refine our focus
and ensure enhanced execution of
our ambitions.
Our strategy
in 2024
Whilst we are in the process of
concluding a thorough review of the
business strategy, we understand
that our focus in 2024 is to build on
what we know are the key strengths
of our business. We believe we have a
strong brand and reputation in what
remains a large addressable market.
FINANCIAL AND OPERATIONAL
EFFICIENCIES
The initial focus of 2024, in light
of the financial and operational
performance, will be in addressing
22
Argentex Group PLC Annual Report 2023
and improving efficiencies within
the business. Firstly, this will consist
of reassessing our cost base, which
grew significantly in 2023 due to
headcount expansion of over 40%.
We acknowledge that the Group
had invested for growth in 2023,
but did not expand revenues in line
with this investment, as a result of
challenging market conditions. This
will necessitate a tight control of costs,
alongside strategic initiatives focused
on improving operational efficiencies
throughout the company, to ensure
they are aligned with our expectations
for growth and revenue.
assessment has confirmed and
refined our strategy on client-led
product diversification, and we are
in the early stages of building a
significant payments and Alternative
Banking business in order to
diminish our reliance on the less
predictable FX revenues associated
with market volatility.
As part of the diversification of the
product portfolio, we will ensure the
products we invest in also provide
greater resilience of earnings to the
business, increasing our forward-
looking visibility of earnings.
PRODUCT DIVERSITY AND
ALTERNATIVE BANKING
In reviewing the performance of
revenue growth in 2023 against the
volatility and trading patterns of
the year compared to 2022, it is clear
that our core product offering is
dependent on market volatility and,
as we continue to scale, we must seek
to diversify our product offering in an
effort to reduce some of this reliance.
CUSTOMER SEGMENTATION AND
CUSTOMER LIFETIME VALUE
Additionally, we are concentrating
efforts to ensure our existing and
future sales processes are more
effective and sophisticated. This
will include introducing customer
segmentation that will allow for
a more tiered approach to client
service levels. We will seek to align
our approach and solution offering to
the type of client we are serving.
Whilst investment in structured
solutions and online trading capability
did support initial growth, the
continued underlying influence of
these products on the FX markets
has limited their contribution in a
period of lower-level volatility. This
By automating processes, we aim to
offer our clients greater self-service
capability whilst freeing up our
resources to concentrate on our
customers who require higher levels
of support and expertise from us.
We will also be evolving our selling
model, transforming our approach
toward consultative solution selling,
as well as focusing on acquiring and
retaining the right type of client
that will generate volume and repeat
business, mitigating against risk
of churn. This will streamline our
sales processes and align them more
with customer lifetime value, whilst
increasing our operational efficiency.
INTERNATIONAL EXPANSION
Finally, we are focused on ensuring
the ongoing expansion of our
geographic reach is done in the most
efficient manner, from both a cost
and also a regulatory perspective.
2023 saw the Group continuing with
its licence application processes
in Australia and the successful
initiation of our presence in Dubai,
we expect to be granted licences
in both of these locations in 2024,
and the strategy for the next three
years will see the Group focus on
leveraging our existing presence
in the Netherlands to grow our
European footprint.
23
Strategic Report 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
Our
resources and
relationships
This section discusses the resources and relationships needed
to make our business model work and to deliver our strategy.
Argentex is powered by our people and we want to respect and
enable everyone to thrive and feel valued in order to make a
significant difference to our company. We also place great emphasis
on the Environment and outline our Sustainability approach below.
Male
Female Percentage Female
Board
Senior Executives1
Employees
1 Excludes Board members
6
19
157
Age Group2
Under 30
30 to 40
40 to 50
50 plus
2 Excludes Board & LLP members
0
10
39
0.0%
34.5%
19.9%
Number
Percentage
90
55
27
14
48%
30%
15%
7%
People
Our total headcount increased c40%
year-on-year in 2023, up from 137 to 196.
Argentex is committed to equality of
opportunity for all of our employees.
We believe that a focus on diversity,
inclusion and belonging enhances
employee satisfaction, boosts our
business performance and supports
our carefully calibrated and balanced
approach to risk. We are proud of
the entrepreneurial and supportive
culture we have created, and to which
every Argentex employee contributes.
We record and monitor the diversity
and social economic information
of all our employees to recognise
and support the different groups
which make up our workforce, which
represents 14 different ethnicity groups
and seven different religious beliefs.
24
Argentex Group PLC Annual Report 2023
Male
Female Percentage Female
Board
Senior Executives1
Employees
6
19
157
0
10
39
0.0%
34.5%
19.9%
Our values
and culture
In 2022, the Argentex Culture
Committee was formed as a forum
where ideas could be shared and
actions taken to maintain a positive,
inclusive and thriving working
environment. Throughout 2023,
a variety of additional cultural
initiatives were formed within
department teams and with the
Women Supporting Women in
Argentex programme, to reach a
greater cross section of employees
within the business and increase
lines of communication.
The approach taken by the Board
is intended to deliver performance
and growth whilst maintaining
high standards of business conduct.
Central to our focus on these matters
is the development of a set of values
underpinning our desired culture.
This sets out the essential behaviours,
skills and knowledge needed to be
effective at Argentex, based on our
fundamentals of Integrity, Quality,
Passion, Agility and Dedication.
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.
These forums have encouraged
greater diversity of thought which is
particularly important for our Culture
of Belonging as our business scales
and increases its global footprint.
QUALITY
We are proud to provide superior
products and outstanding service
which when combined ensures
excellence with every exchange.
Further to these groups, we promote
staff engagement through anonymous
feedback boxes and, in September
2023 we ran our first companywide
Employee Survey which returned an
overall engagement score of 80%.
PASSION
Our people are passionate about
providing the quality of service we
demand from ourselves as a business.
We are passionate about our people,
enabling them through collaborative
working, wellness programmes and
continuous personal development.
AGILITY
We pride ourselves on 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 focused and
determined – we go the extra mile.
We encourage our workforce to
be entrepreneurial and creative
as well as fostering a transparent
culture with excellent lines of
communication. We also have a
robust code of conduct which our
employees are expected to adhere to
without exception.
The Board reviews the results of
the employee engagement surveys
and uses this as the principal means
of assessing the culture across
the Group. Questionnaires are
completed by our employees on an
anonymous basis and the process is
facilitated by an external provider.
The Board also gains valuable
insight and feedback from the
Senior Leadership Team and the
Culture Committee in respect of
the culture and behaviour across
the Group and the internal audit
function also considers culture as
part of its reviews.
25
Strategic Report Sustainability
STREAMLINED ENERGY AND
CARBON REPORTING (SECR)
As a small but growing service
company with a team of less than 200
in four offices, we have a very limited
negative impact. Despite this, we strive
to minimise or mitigate any harm
that we might do and actively seek to
contribute positively.
We are pleased to see a reduction in
our carbon footprint in our latest
Planet Mark certification. These
figures were based on our emissions
per turnover intensity metric and on
our London office only.
and competitive professions, believing
‘success should be determined by
ability, not where you were born, went
to school or the occupation of your
parents or guardians.’
We once again welcomed five students
to our head office in Argyll Street
for the four-week, paid programme
in July. The students worked across
all sectors of the business, gaining a
thorough insight into the industry and
our organisation. On completion, they
were offered mentoring and registered
internally with our HR department
to keep them informed on our open
vacancies as they become available for
permanent work.
Students are also added to our
Argentex Academy Alumni and will
be given opportunities to return
to network with one another, with
the business and to act as Academy
champions for future Academy intakes.
Following the end of the 2023
Academy one of the Interns who
had finished his studies successfully
secured a place on our Graduate Sales
Accelerator Programme.
The Argentex Academy in partnership
with the Social Mobility Foundation
We are well positioned to support
a change in the narrative that
the financial services industry is
notoriously inaccessible to those from
lower socioeconomic backgrounds.
We do this by encouraging and
supporting talented and ambitious
students from diverse backgrounds to
choose a career at Argentex.
2023 marked the second year of our
Argentex Academy, where we have
partnered with the Social Mobility
Foundation, whose aim is to make
practical improvements in social
mobility for young people from low-
income backgrounds. Their Aspiring
Professionals Programme welcomes
over 2000 high achieving young people
from low-income backgrounds across
the UK in accessing top universities
26
Argentex Group PLC Annual Report 2023
Total per £m tCO2e FY21/22
Total per £m tCO2e FY22/23
For the period of 12 months to March 2023
0.29
0.271
Scope
Detail
Unit
Amount
tCO2e
tCO2e
Normalised
Amount
tCO2e
01/04/22 to 31/03/23
01/04/21 to 31/03/22
Scope 12
Scope 2
Scope 3
Natural Gas
Electricity (location based)
Transmission & Distribution
losses
Procurement (paper)
Travel
Waste
Water Supply/Treatment
m3
kW h
kW h
t
km
t
m3
3,833.9
162,591.1
162,591.1
0.1
256,073.3
8.5
563.2
Intensity metric
for year-on-year, per employee:
7.7
31.4
2.9
0.1
27.9
0.2
0.1
0.7
0.0
31.4
2.9
0.1
27.9
0.2
0.1
0.0
154,649.4
154,649.4
0.1
14,758.2
4.1
639.0
0.0
32.8
2.9
0.1
1.5
0.1
0.1
0.5
1 Normalised figure excluding natural gas consumption reported for the first time in FY22/23. tCO2e with gas consumption was 0.31
2 Year-on-year comparison has been normalised to exclude gas consumption which has been reported for the first time in FY22/23
* All rows and tables are rounded to one decimal place. This may lead to slight discrepancies in totals within the report
During 2023 we took on an additional
floorspace in our offices on Argyll
Steet in London and moved to new
offices in Amsterdam, as part of
these moves and office fit outs we
considered the environmental impact
of our decisions and made pro-active
choices to minimise our impact.
27
Strategic Report In 2023 our ‘Trades for Trees’ initiative
committed to 69,426 trees being
planted – and this has contributed to
2,611.8 tCO2e being sequestered.
For FY2023, we off-set our carbon
footprint of 70.4 tCO2e as calculated
by Planet Mark, via Earthly in support
of Ethio Trees. This project is located
in the Tembien Highlands in the
Tigray region of Ethiopia. The dryland
ecosystems in the Ethiopian highlands
are vulnerable to degradation because
of their high livestock densities and
steep slopes. In addition, climate
change and the loss of forest cover
bring increased risk of drought,
leading to further deforestation and
land degradation.
The project is tackling these issues
through a combination of grazing
exclusion and planting indigenous
trees within the exclosures. This
sequesters a significant amount of
carbon within the exclosures and also
provides many ecosystems and social
benefits. https://earthly.org/projects/
tist-agroforesty-farmers-kenya
EARTHLY TREES FOR TRADES
We partnered with Earthly again in
2023. Earthly is a platform showcasing
high-integrity nature-based solutions
that remove carbon, restore biodiversity
and support frontline communities.
Through TIST’s agreement policy,
farmers planting trees pledge to keep
them in the ground for at least 30
years. Since their beginning in
early 2000s, TIST has planted
19 million trees globally. This brings
innumerable biodiversity benefits,
especially around increased pollinator
population, improving soil health,
and purifying air quality. Farmers are
free to choose the tree species, which
prevents the creation of monoculture
plantations and improves regional
plant biodiversity.
In April 2022 we launched our ‘Trees
for Trades’ initiative and, for every
trade made, Argentex purchased a
tree on behalf of its clients via Earthly
to be planted in support of the TIST
Farmers Agroforestry Tree planting
initiative in Kenya.
28
Argentex Group PLC Annual Report 2023
R IS K M A N AG E M E N T
Our principal
risks and
uncertainties
REFLECTING ON 2023
During the year, the business
enhanced its product offering along
with its systems and controls, whilst
also increasing its global footprint.
The Risk Management framework
in support of the strategy has
evolved to meet the global demands
of a business that is developing its
operational capabilities.
This year we continued to develop
our risk management controls to
ensure we are equipped to support
the development of our business in
a safe and compliant manner across
multiple jurisdictions:
— Strengthening our regulatory
capital controls, ensuring we’re
proactively enhancing our capital
position to enable business
growth across the business lines
in support of our growth strategy
— Accelerating our liquidity
management responses and
bringing more robust responses
to the business that deliver
high quality liquidity solutions
when stressing the economic
environment
— Building out our regulatory
horizon scanning capabilities
so that we stay ahead of the
changing regulatory landscape
— Innovating to remain agile
to changing demands, whilst
enforcing a strong governance and
control framework
— Developing the Operational Risk
Management framework including
Operational Resilience and Third-
Party Risk Management whilst
ensuring we remain aligned to our
ESG strategy
HEADWINDS IN 2024
Moving into 2024, we recognise that
there will be a number of headwinds
that have required us to assess
our principal risks in line with
our strategy and the wider macro
environment.
Headline inflation during the prior
year brought pressure for many
businesses and individuals. The
cost-of-living challenges were felt
across the jurisdictions in which
we operate and, with inflation
remaining stubbornly above target in
many economies, along with higher
interest rates, we are cognisant of the
heightened threats of credit, cyber,
and fraud risks within the business.
For more information on our risk
management and internal control
processes, see pages 65-67.
“ A strong risk
management
framework is
essential to our
successful growth.”
David Winney
Chief Compliance and
Risk Officer
30
Argentex Group PLC Annual Report 2023
Strategic Risk
DESCRIPTION and potential impact:
If we are not able to carry out our
strategy and achieve our objectives
and growth plans.
↑ INCREASE IN RESIDUAL RISK
The business has seen some
attrition in its senior leadership
as part of its overall Board-led
strategic focus, inevitably creating
some short-term impacts. Clear
strategic mitigation of this risk is
being achieved by the refinement of
key goals complemented by strong
execution planning.
MITIGATION
The Board articulates our strategy
and the senior leadership teams
ensure it is communicated to the
wider business and that we operate
within the defined risk appetite.
The Board and its Managing
Executives in the business work
closely to determine strategy and our
execution of it is fully aligned.
The firm has focused on refining
its strategy throughout 2023 with
a view to detailed operational
planning and execution focus in
2024. Embedding new senior leaders
in the organisation is already making
a positive impact in this respect.
Credit
DESCRIPTION and potential impact:
If the Group is unable to realise
the cash value of its assets. The
Group is exposed to credit risk if
an institutional counterparty or 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.
↑ INCREASE IN RESIDUAL RISK
Given the ongoing geopolitical
issues along with the ongoing
cost-of-living crisis and rising
interest rates, we recognise an
increase in our credit risk profile.
The Group closely monitors its
portfolio credit risks and will
undertake deep dive reviews of
single names exposure on a case-by-
case basis. To date, and due in part
to our close monitoring, the Group
has not experienced a materially
negative credit risk exposure.
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 are applied before a margin
call is made
— Timely collection of margin calls
or early settlement of client
contracts to reduce or eliminate
credit exposures
— Scenario analyses on the
portfolio’s top exposures are
developed to keep potential
exposures under close review
— Dispute risks are managed
through clear articulation of
credit facility terms
Argentex utilise regulated
international banks with sound
capital resources and monitors their
creditworthiness on an ongoing
basis. A degree of concentration is
necessary for the Group to command
strong pricing and settlement terms;
however, the Group continues
to review the composition of its
institutional counterparty base
to ensure that there is sufficient
redundancy in its liquidity offering.
Capital
DESCRIPTION and potential impact:
If we have insufficient capital
to support our business activities
and to meet our regulatory
capital requirements.
↔ NO CHANGE IN RESIDUAL RISK
The Group continues to be well
capitalised and the decision to retain
earnings in each entity offsets the
new jurisdictions being entered
that require capital. This balanced
approach supports the decision to
keep the residual risk unchanged.
MITIGATION
Reporting, compliance and analysis
of the capital required under the UK
Investment Firm Prudential Regime
and EU Investment Firm Directive/
Investment Firm Regulations.
Retained earnings building the
capital bases of the regulated
entities of the Group.
Liquidity
DESCRIPTION and potential impact:
If the Group has insufficient cash
resources to meets its obligations or
can only do so at an unsustainable
cost. Our liquidity risks are primarily
driven by:
— a sudden sharp movement in
exchange rates when a currency
is net long/short
31
Strategic Report — 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
↑ INCREASE IN RESIDUAL RISK
There were periods of increased
volatility during the last year that
we believe also form part of the
headwinds noted for 2024 and
therefore we expect further pressure
to be presented on our liquidity
position as we execute our strategy.
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 managed on an
aggregated net basis.
To mitigate margin calls from
institutional counterparties, our terms
facilitate client margin calls.
Regular stress testing is performed
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 never remits
funds to the client prior to receiving
cleared funds in the sell currency.
A balanced portfolio across
institutional counterparties has
supported the dilution of margin calls.
We have actively increased our
institutional counterparty pool to
reduce concentration risks.
32
Argentex Group PLC Annual Report 2023
Regulatory,
compliance and
conduct
DESCRIPTION and potential impact:
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. Conduct
risk stems from creating detriment
to a customer, counterparty, or
market arising from inappropriate
conduct in the execution of
business activities.
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 Licence Firm).
Furthermore, the Group must
abide by the AIM rules and other
significant legislation including
the Companies Act 2006 and
GDPR. Consequences of failure
to meet regulatory requirements
include penalties and withdrawal
of permissions, and the dynamic
and evolving nature of financial
and other regulations could lead to
significant expenditure in order to
remain compliant with the evolving
regulatory environment.
↔ NO CHANGE IN RESIDUAL RISK
The Group has continued to develop
its compliance teams as our global
strategy takes shape. In addition, it
has completed a wholesale rebuild
of its Group Risk function during
2023, not only in the UK, but also in
its new jurisdictions, and leverages
its external advisory panel to
stay ahead of regulatory change,
therefore there has been no change
to the residual risk this period.
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 engages 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 safeguarding, CASS and AML
processes and procedures and
provide recommendations on
enhancements to the existing
compliance environment.
The governance structure within
the Group supports the escalation
and reporting of key regulatory risks
within the business as and when
they arise.
The Group has an online mandatory
training programme to ensure all
members of the firm keep up to date
with the latest developments.
Technology
DESCRIPTION and potential impact:
If the in-house or third-party
systems fail this would impact our
own earnings and funds. Failure
of either the system or its hosting
environment would also be likely to
be detrimental to both the Group
and its clients.
↔ NO CHANGE IN RESIDUAL RISK
Significant work over the past year
has supported maintaining the status
of our residual risks. There have been
considerable successes in reducing
our legacy infrastructure, deploying
market leading platforms and building
resilience. Further work in this regard
will continue through 2024.
MITIGATION
The Group maintains business
continuity and operational resilience
arrangements which are periodically
tested and enhanced.
Group policies, processes, training,
infrastructure, governance, and tools
to ensure the business can recover
from a range of business interruption
scenarios are in place.
The Business Continuity Policy
provides guidelines for developing,
maintaining, and exercising Argentex’s
Business Continuity Management
(BCM) and IT Disaster Recovery (DR).
Dependency on in-house servers has
been mitigated through the cloud
services adopted during the prior year.
Improvements in our change-
management framework has reduced
delivery risks of key IT enhancements.
Business Impact Assessments are
embedded into the business functions
and rehearsals of business disruptions
are worked through.
Cyber
DESCRIPTION and potential impact:
his is a continual pervasive threat
which we define as the risk of losses
arising from being targeted by
hackers resulting in significant
disruption to our operations and
ability to service customers.
↑ INCREASE IN RESIDUAL RISK
The pervasive threat of cybercrime
remains a high risk and the Group
remains vigilant to its threat to both
the firm and its clients. The macro-
economic environment leads to a
higher concern level and attempts to
infiltrate our business or that of our
clients using our services remain an
area of concern. Whilst we remain
confident in the focused investment
placed to combat Cyber threats, we
remain extremely vigilant to the
threat level.
MITIGATION
The Group maintains robust levels
of insurance to cover losses in such
scenarios should they materialise,
meaning financial impact of the
event should be restricted to costs for
support and remedial works if needed.
The Group maintains and continues
to enhance its information security
management framework which is
systemically tested against evolving
threat vectors.
Employee training on security, and
fraud-related matters like phishing
and ransomware, continues to
evolve and forms part of an ongoing
programme of training.
All our 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.
An ongoing plan has been deployed
to monitor the web and dark web for
any threats and have appropriate
incident management and expertise
in place to react to any threat should
it emerge.
Operational
DESCRIPTION and potential impact:
This 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.
↔ NO CHANGE IN RESIDUAL RISK
Projects have been rationalised and
a reassessment conducted to replan
deliverables in a business wide holistic
way. The development of our second
line function, through our investment
in people strategy, has started to yield
positive outcomes for the governance
of group activity.
MITIGATION
The Group conducts a Risk &
Control Self-Assessment to capture
control points that require
additional development.
The Group has developed appropriate
insurance undertakings to minimise
disruption from operational events.
Roles and responsibilities across the
Group are clearly articulated to ensure
adequate controls are in place to reduce
operational risks in the business.
The Group has aggressively been
developing its oversight forum, bringing
together third-party risk management,
operational resilience, business
continuity and operational events.
Deep dive reviews on external events
are conducted through an internal
lens to drive continuous improvement.
Execution risk of our programme
change has been reduced with the
strategic additions of our Programme
Change team.
33
Strategic Report regions where we deploy our human
and financial capital, are discussed at
the relevant governance meetings.
Reputational
DESCRIPTION and potential impact:
If an unforeseen event materialises,
leading to clients and or regulators
questioning our integrity. This could
materialise in a significant negative
impact to our revenue, be cause for a
regulatory sanction, potential threat
of litigation, negative publicity, and
damage the Argentex brand.
↔ NO CHANGE IN RESIDUAL RISK
There have been positive indicators
throughout the year that have given
comfort to our view for reputational
risk. Our values and risk culture are
driving those positive indicators,
and we anticipate further maturity
of our risk framework that will lead
to reduced residual risks over the
coming period.
MITIGATION
The risk management framework
promotes policies, procedures and
controls that aim to prevent major
incidents from occurring or ensure
the right escalation processes are in
place to effectively mitigate the risk
when these incidents do occur.
The Group has invested in fostering
and embedding a sound and healthy
risk culture.
Our values are defined to enhance
our reputational standing and deliver
long-term, high-quality customer
journey experiences.
Geopolitical
DESCRIPTION and potential impact:
If an increase in political instability,
and by extension a deterioration
in the business and economic
environment, unfolds this could
adversely affect the financial
condition and prospects of our
business. Together with the
escalating threat from the Middle
East, the ongoing impact from the
war in Ukraine, the long tail of a cost-
of-living crisis and stubborn core
inflation are all contributing factors
to macroeconomic uncertainty.
↑ INCREASE IN RESIDUAL RISK
A key part of the Group’s strategy
is tied to the expansion of its
global footprint. There are growth
opportunities in regions that are
recently of higher concern which the
group closely monitor. Instability in
Eastern Europe and the Middle East
may pose a threat to the growth and
development of the business and will
therefore be kept under particularly
close review.
MITIGATION
The Group’s primary responsibility
is the safety and welfare of its staff
and has developed its business
continuity programme and responses
as external threats evolve.
The Group has robust policies and
procedures that facilitate remote
working and a safe return to work.
The Group’s systems and capabilities,
cloud-based infrastructure and its
reactive agility to crises, provide
assurance that we can minimise
disruption to clients.
Ongoing threat assessments,
provided by external experts in
the field of geopolitical risk in the
34
Argentex Group PLC Annual Report 2023
F I N A N C I A L R E V I E W
Performance
period at a
glance
Continued investment to support future growth,
during challenging trading conditions.
OVERVIEW
As previously communicated, we
made the decision in 2022 to change
our year end to 31 December, in line
with the Group’s transition to a global
financial solutions provider. Our
report throughout is reflective of the
12-month accounting period to
31 December 2023, whilst the statutory
comparative is nine months to
31 December 2022. Where appropriate,
we refer to performance for the
12 months to 31 December 2022, for
information purposes only, to
aid comparability. 9 month comparative
figures are presented on page 127.
In the year to 31 December 2023,
Argentex continued to pursue its
investment programme across the
three areas of people, technology and
international expansion. The business
experienced challenging market
conditions across its core foreign
exchange broking business in the UK
as lower levels of foreign exchange
volatility, particularly in Sterling
versus the US Dollar, led to lower levels
of demand. This re-emphasises the
importance of diversifying our business
model to strengthen its long-term
resilience and highlights the Group's
need to deliver for all stakeholders
against any economic backdrop. Given
current market conditions and trading
performance the Board will not be
declaring a final dividend for the year
ended 31 December 2023. In September
2023, the Board declared an interim
dividend of 0.75p per share for the
year ended 31 December 2023.
FINANCIAL PERFORMANCE
Argentex generated revenues of
£49.9m in the year to 31 December 2023,
broadly in line with the comparable
12-month period in the prior year.
Revenues generated in the year were
underpinned by an increase in the
number of corporate clients trading, in
addition to incremental contributions
from an enhanced product mix, such
as structured solutions and revenues
from our online platform.
1,938 clients traded with Argentex in
the year compared to 1,750 clients who
traded for 12 months to 31 December
2022. Of the corporate clients trading,
649 were new in the period (12m FY22*:
546). Prior to FY22, our revenue mix
has been a 50:50 split from spot and
forward trades; however, since the
inception of our Structured Solutions
division in FY22, 14% of revenue was
generated through this new division
Guy Rudolph
Interim Chief Financial Officer
* 12m FY22 refers to the 12 months
ended 31 December 2022
36
Argentex Group PLC Annual Report 2023
in the year to 31 December 2023. Not
only has the product mix diversified,
but we have also seen an increase in
clients using our new online platform,
with 496 clients who traded online
with Argentex for the year compared
to 374 clients trading in 12m FY22*.
The Group continued its stated
strategic investment programme in
FY23 resulting in an operating profit
of £8.1m or 16% margin (12 months
to 31 December 2022: £11.3m, 22%
margin). The decline in operating
margins compared to 12m FY22*
reflects the combination of the
investment programme across all
three dimensions of Argentex’s growth
strategy and more challenging market
conditions, particularly in the second
half of FY23, which resulted in lower-
than-expected Group revenues for the
year. The Group's robust approach to
risk remains unchanged and this has
been reflected in the extremely low
number of instances of client default.
PEOPLE
In the year to 31 December 2023 the
number of employees (including
Directors and LLP members) grew to
196 (12m FY22*: 137). Front office/back-
office split has shifted moderately
versus prior periods to 51%:49%. This
reflects the investment in the support
functions as the business matures
and continues its balanced approach
to risk. A total of 59 people were hired
into new roles created in the period, 42
in the UK and 17 overseas.
TECHNOLOGY
Total investment in technology in the
year was £1.8m (9 months to December
2022: £1.4m). This investment spend
is treated as a capital investment and
amortised over a three-year period in
line with accounting policy.
OVERSEAS EXPANSION
International expansion continued
within the Netherlands and Australia.
During the year a new entity and
office was set up in Dubai. It is
expected that both Australia and
Dubai will receive licences to operate
during 2024. Revenues generated in
the Netherlands for the year totalled
£3.9m (9 months to December 2022:
£1.6m). The Netherlands will be
the central hub for our European
operations and the licences granted in
the Netherlands will allow the Group
to open branches in the EU countries
in the coming years.
FINANCIAL POSITION
The Group views its ability to generate
cash from its trading portfolio as a
key indicator of performance within
an agreed risk appetite framework.
As at 31 December 2023, Argentex has
net cash of £18.3m, an increase of
£2.1m on the prior period. 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.
Collateral placed with financial
counterparties of £5.7m (FY22*:
£10.0m) is recorded in other assets in
the Statement of Financial Position.
31 Dec
2023
£m
31 Dec
2022
£m
33.0
(14.7)
29.0
(12.8)
Cash and
Collateral
Cash at bank
Less: amounts
payable to
clients
Net cash
18.3
16.2
5.7
10.0
Collateral
held at
institutional
counterparties
(other assets)
Before movements in client balances
held as shown in the consolidated
financial statements note 19, the
Group generated £11.7m in cash.
37
Strategic Report A £1.9m increase in client balances
held, when added to cash
generated results in a net cash
inflow inclusive of client balance
movements of £13.6m. Of the £11.7m
in cash generated, £1.8m was used to
invest in technology and a further
£3.4m was returned to shareholders
in the form of a dividend (being
£2.5m FY22 final dividend and £0.9m
FY23 Interim dividend).
Cash generation from the Group's
revenues is a function of:
— the composition of revenues
(spot, forward, option and
swap revenues)
— the average duration of the
FX forwards in the portfolio
In the period, Argentex has
generated revenues in a ratio of
approximately 45%:55% 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.
Excluding swap revenue, 82% of
revenue converts to cash within 3
months, which is consistent with
prior years as follows:
CASH CONVERSION
Revenues
Revenues (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)
12 months to
31 Dec 2023
£m
9 mths to
31 Dec 2022
£m
12 mths to
31 Mar 2022
£m
12 mths to
31 Mar 2021
£m
49.9
43.6
(7.7)
35.9
82%
41.0
37.7
(7.1)
30.6
81%
34.5
31.5
(4.6)
26.9
85%
28.1
27.2
(3.1)
24.1
88%
38
Argentex Group PLC Annual Report 2023
Derivative financial assets were
£48.7m with current element being
£38.9m (80% of total derivative
financial assets). Derivative financial
liabilities were £29.4m with the
current element being £23.6m (80% of
total derivative financial liabilities).
The Group diversifies liquidity
requirements across five liquidity
providers, the largest providing 65%
of liquidity required (62% at
31 December 2022).
PORTFOLIO COMPOSITION
Argentex's client base continues to
grow with an increase in corporate
clients traded in the year to 1,938
(12m FY22*: 1,750), and 649 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 76% 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 limited.
Further, client concentration has
been maintained with 36% of revenue
represented by the top twenty
customers (12m FY22*: 36%).
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 has continued to avoid any
material issues over settlement.
In addition, as a result of a
conservative approach to risk,
Argentex continues to enjoy an
immaterial occurrence of bad debt.
DIVIDEND
Given the financial results achieved
in FY23 and in light of current trading
performance, the Board has decided
that Argentex will not declare a final
dividend for the year ended
31 December 2023.
Guy Rudolph
Interim Chief Financial Officer
01 May 2024
“ 1,938 clients traded with
Argentex in the year
compared to 1,750 clients
who traded for 12 months
to 31 December 2022.”
Guy Rudolph
Interim Chief Financial Officer
39
Strategic Report
ST R AT E G I C R E P O RT
Section 172(1)
Statement
The purpose of the Strategic Report is to inform members of
the Company and help them assess how the directors have
performed their duty under section 172. This section 172(1)
statement incorporates information from other areas of the
Annual Report to avoid unnecessary duplication.
The Directors have had regard for
the matters set out in section 172(1)
(a)-(f) of the Companies Act 2006
when performing the duty as set out
in section 172. The Directors consider
that they have acted in good faith in
the way that would be most likely to
promote the success of the Company
for the benefit of its members as a
whole, while also considering the
broad range of stakeholders who
interact with and are impacted
by our business. The table below
indicates the location of relevant
information that demonstrates
how we act in accordance with the
requirements of s.172(1).
It is acknowledged that it is not
possible for all of the Board’s
decisions to result in a positive
outcome for every stakeholder
group. When making decisions, the
Board considers the Company’s
purpose, vision and values, together
with its strategic priorities and takes
account of its role as a responsible
corporate citizen. The aim of this is
to ensure that decisions are robust
and sustainable.
Examples of matters discussed in the
year by the Board and their impact
on, amongst others, employees,
customers and shareholders are
included in the table below and
discussed throughout the Strategic
Report and in the Governance
section on pages 42-85.
The following table identifies
where, in the Annual Report,
information on the issues, factors
and stakeholders the Board has
considered in respect of Section
172(1) can be found.
This Strategic Report has been
approved and signed on behalf of
the Board.
Jim Ormonde
Chief Executive Officer
01 May 2024
Our key
stakeholders
and factors
To ensure we operate to the
benefit of all our members
and stakeholders.
— Our workforce
— Our business
relationships
— The community and
our environment
— Our shareholders
— Long-term results
— Our reputation
40
Argentex Group PLC Annual Report 2023
Our key stakeholders
The board has had regard
to the following matters:
Example:
More information
Our
workforce
The interests of
our employees
— Direct feedback through our employee engagement
Strategic Report
survey Culture Amp which helped us identify
key areas of improvement. The Interim CEO
10
20
24
implemented an open-door policy to encourage
Governance
communication which was one of the areas of
improvement under the survey
45
46
72
— Implementation of Argentex Hero Awards which
recognise the contributions staff make to Argentex
following feedback from the Employee Survey
Our business
relationships
The importance of
— Client surveys were sent out to customers with
Strategic Report
developing the Group’s
results shared with the Executive Team. Results
business relationships
have informed the strategic planning, and the Board
10
14
20
24
30
with suppliers, customers
reviewed the Company’s service proposition to
Governance
and others
ensure it is aligned with customer needs
— The Board received an update on pipeline
management and areas in which the company could
improve its service offering to reduce client attrition
and have factored this into their strategic planning
46
72
The community
and our
environment
Our
shareholders
The impact
— The Board noted the requirement for an enhanced
Strategic Report
of the Group’s operations
sustainability strategy and to begin its journey to
on the community and
a commitment to Net Zero. The Group engaged
24
the environment
consultants to develop an ESG strategic plan which
Governance
will be embedded into decision making, and enable
the identification of key areas of improvement
46
72
The need to act fairly
— Regular calls and meetings were held between
Strategic Report
as between members
shareholders and the Executive Directors and the
of the Company
Chair held several meetings and calls with major
04
24
shareholders to discuss governance matters. These
Governance
have informed the activities and developments
during the year
46
72
Our key factors
Long-term
results
The board has had regard
to the following matters:
Example:
More information
The likely consequences
— The Board initiated an in-depth strategic review
Strategic Report
of any decision in the
to determine how best to enhance the customer
long-term
experience to strengthen our competitive
04
10
14
20
24
advantage and brand differentiation, creating
distinction in the market to promote the long-term
success of the Company
30
Governance
45
54
58
62
68
Our desire to maintain
— Approval and implementation of a compliance
Strategic Report
Our
reputation
our reputation for
high standards of
business conduct
monitoring programme to monitor adherence to the
Group’s business standards and compliance with
04
10
20
24
30
local regulatory compliance requirements
Governance
— The Board recognises the need to maintain
strong relationships with regulators and a strong
compliance culture. Feedback from local and foreign
regulators is presented, monitored and incorporated
by the Board
45
46
62
68
41
Strategic Report G OV E R N A N C E
Corporate
governance
statement
We are continuing our succession
planning process in the light of our
strategic review and expect to fill
any gaps in the Board’s skills and
experience as they become apparent.
Whilst we fully acknowledge the need
for diversity on the Board, it is essential
that we get the people with the key
attributes we require in place at pace
– if we can do that whilst increasing
the diversity of the Board, so much the
better. This planning process is to be
supported by a robust programme of
Board evaluation.
The strategic review has also been
receiving a lot of attention, to ensure
that Argentex is focused on the long
term as a growth company. We expect
to engage with our stakeholders about
this over the coming months and there
is more information about this review
in the Strategic Report.
Dear Shareholder,
I am pleased to present the Corporate
Governance statement for the year
ended 31 December 2023 which shows
how we adopt and apply the principles
of the Quoted Companies Alliance’s
Corporate Governance Code.
Board composition and succession
planning has been an important
aspect for the Board this year. I took
over as Chairman from Digby Jones
in September. Jim Ormonde has
taken over as Interim Chief Executive
Officer and member of the Board, Tim
Haldenby has joined the Board as an
independent non-executive director
and Chair of the Audit and Risk
Committee, taking over this role from
me. Jonathan Gray has become the
Senior Independent Director, taking
over from me and Henry Beckwith has
stepped down from two Committee
memberships, in line with governance
good practice, as he is not deemed to be
independent. In addition, Guy Rudolph
has joined the Executive Team as
interim Chief Financial Officer.
Nigel Railton
Non-Executive Chairman
42
Argentex Group PLC Annual Report 2023
— Received updates and
recommendations from the
Committee Chairs following each
Committee meeting
— Received briefings from the
Company’s brokers and training
from the Company’s lawyers
— Received feedback and insights
from myself as Chairman gathered
from meetings with the Company’s
top shareholders
I am passionate about creating the
right strategy, delivered by the right
executive team and supported by the
right Board with sound corporate
governance, in order to deliver value
for our stakeholders.
Nigel Railton
Non-Executive Chairman
01 May 2024
Other Board Activities during
2023 included:
— Considered and recommended the
interim dividend for 2023
— Considered geographical markets
and approved the Company’s
global expansion in the UAE region
— Debated the Group’s principal risks
and the Board’s approach to setting
risk appetite which included the
approval of an enterprise risk
framework, risk register and risk
appetite statement
— Reviewed, and updated the
terms of reference for the
Audit and Risk Committee and
Nominations Committee
— Monitored financial performance
against budgets and forecasts and
discussed any deviations
from expectations at each
scheduled meeting
— Reviewed and approved the
Company’s trading updates, full
and half-year results and the
Annual Report and Accounts
— Reviewed performance
updates relating to technology
infrastructure, technical
capabilities, cyber and data privacy
43
Governance G OV E R N A N C E
The QCA
Corporate
Governance
Code
1. Establish a strategy and business
model which promotes long-term
value for shareholders.
6. Ensure that between them the Directors
have the necessary up to date
experience, skills and capabilities.
11
12
20 23
45
50 52
62 64
2. Seek to understand and meet
shareholder needs and expectations.
04 05
40 41
46 47
7.
Evaluate Board performance based on
clear and relevant objectives, seeking
continuous improvement.
47
48 49
58 61
3. Take into account wider stakeholder
and social responsibilities and their
implications for long-term success.
8. Promote a corporate culture that is
based on ethical values and behaviours.
10 12
24 28
40 41
46 47
25
45
55
58 61
65
67
4. Embed effective risk management,
considering both opportunities and
threats throughout the organisation.
30 34
65 67
69 71
9. Maintain governance structure and
processes that are fit for purpose
and support good-decision making
by the Board.
62 67
5. Maintain the Board as a well-functioning
balanced team led by the Chair.
48 49
50 52
54 56
10. Communicate how the Company
is governed and is performing by
maintaining a dialogue with shareholders
and other relevant stakeholders
24 28
40 41
42 71
44
Argentex Group PLC Annual Report 2023
Vision,
strategy
and culture
Vision
The Board has undertaken a
strategic review to gain a detailed
understanding of the Argentex value
proposition, to develop the leadership
team’s vision for the business and to
identify opportunities for growth that
are open to the business underpinned
by market research.
More information on this is
provided in the Chairman’s and CEO’s
Statements on pages 04-05 and 10-12.
Business model
and strategy
Given the breadth of opportunities
available to Argentex, the Board has
undertaken an extensive review
to allow for careful consideration
and assessment of which options
the business should pursue to drive
shareholder value.
priorities and a strong understanding
of the enablers required to achieve
them. This will inform the three-
to-five-year strategic development
roadmap, that will be underpinned by
a financial plan.
The Board are confident that the
strategic plan is clear and looks to
make the most of the opportunities
and resources available. Management
have worked to determine how best to
execute the growth strategy and have
identified the investments and enablers
required to realise these opportunities.
More information on this is provided
in the Strategic Report on pages 04-41.
As a Board, we will closely monitor
Management’s execution of the
strategy once decided and continue to
provide support and challenge on the
strategic direction of the Company.
Culture
and values
achieves its objectives in a way that
is supported by the right culture
and behaviours.
The Board has embedded a new
leadership team committed to
establishing a culture of operational
excellence and focussing on our
strengths to ensure we can continue
to offer an exciting proposition
to clients while also generating
shareholder returns.
Whilst the Board remains
opportunity-driven, it recognises
the importance of creating a
culture of risk awareness to
enable us to continue to deliver
sustainable growth. Having now
completed the strategic review the
Board will undertake a corporate
culture refresh to ensure that
the Company’s objectives and
promotion of healthy behaviours
are aligned and implemented at all
levels of the organisation.
More information on this is
provided in Resources and
Relationships on pages 24-28.
The review has allowed the Board
and Management to agree the
prioritisation of opportunities and
reach a consensus on the implications
for a growth strategy. The Company
now has clearly defined key strategic
The Board acknowledges that, in
addition to setting the Group’s
purpose, strategy and values, it
is accountable to shareholders
for ensuring that the Group is
appropriately managed and
45
Governance G OV E R N A N C E
Stakeholder
engagement
Shareholder
communications
The Board is committed to
maintaining engagement with
the Company’s shareholders. The
principal methods of communication
with private investors have been
the Annual Report and Financial
Statements, the Interim Report, the
AGM and the Group’s website
(www.argentex.com).
The Company is now taking steps
to ensure that the full-year and
other public announcements are as
meaningful, understandable and
transparent as possible through the
development of an enhanced investor
relations function.
All Directors will normally attend each
AGM and shareholders are given the
opportunity to ask questions.
The most recent AGM was held on
21 June 2023. The Chair and all other
Directors attended the AGM and
were available to answer shareholder
questions. Shareholders were also
given the opportunity to pose
questions to the Directors ahead of the
meeting via email. Shareholders voted
on each resolution by way of a poll and
the results of voting were published
on our website www.argentex.com/
investor-relations.
The Board noted the feedback received
from shareholders with regard to
the membership of Henry Beckwith
(a Non-Executive Director who is
deemed not to be independent)
on the Remuneration and Audit
& Risk Committees. Following the
recommendation of the Nominations
Committee, Henry Beckwith ceased
to be a member of the Remuneration
Committee or the Audit and Risk
Committee, but continues to attend in
the capacity of an observer, with effect
from 5 September 2023.
The Chairman and CEO of the
Company have been in regular
communication with major
shareholders throughout the various
management changes that took place
in the latter half of the financial year.
In addition, the Chief Executive
Officer and Interim Chief Financial
Officer welcome dialogue with
individual institutional shareholders
to understand their views and feed
these back to the Board.
Our Section 172(1)
Statement on pages
40-41 details how the
views of our employees,
shareholders and other
stakeholders have been
taken into account in the
Board’s decision making
during the period
46
Argentex Group PLC Annual Report 2023
During the period, the Board
received the results of the employee
engagement survey, Culture Amp,
which provided key insights into
data concerning people together with
trends and levels of engagement,
as well as areas for improvement
for the forthcoming year (for more
information, see pages 41 and 55).
Other
stakeholders
Other key stakeholders aside from
shareholders are the Group’s staff,
its clients and its key suppliers. Our
Section 172(1) Statement on pages
40-41 details how the views of our
employees, shareholders and other
stakeholders have been taken into
account in the Board’s decision making
during the period.
The Board actively encourages and
presents opportunities for our 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. The
CEO and Executive Committee engage
directly with staff through regular
townhall meetings and maintain an
open-door policy.
The Board also receives quarterly
people updates from the HR Director,
including on the progress of embedding
the Group’s culture and values,
enhancing inclusion and diversity,
expanding learning and development
resources and the results and actions
from previous engagement.
47
Governance G OV E R N A N C E
Balance, skills
and evaluation
Board meetings
The Board met nine times during
the reporting period and the Non-
Executive Directors communicate
directly with Executive Directors
and Senior Management between
formal meetings. Additional Board
meetings were held in relation to
urgent matters and projects as and
when required.
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 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.
The roles of the Chairman and Chief
Executive Officer are distinct, with
a clear division of responsibilities.
The Chairman'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.
Time commitment
The Board is satisfied that all Non-
Executive Directors have sufficient
time to commit to their roles on
the Board and in the Committees
and to fulfil their obligations to the
Company. Any changes to the time
commitments and interests of the
Directors are reported to and, where
appropriate, agreed, by the rest of the
Board. The Board is satisfied that the
number of external appointments
held by each Director is appropriate
and none of the Directors are
considered to be over-boarded.
Directors are expected to attend all
Board meetings, and the meetings of
Committee of which they are members.
The table below outlines the Board
and Committee meetings held with
attendance of each Board Member.
Board evaluation
process
The Nominations Committee
completed an internal Board
evaluation prior to the year end, with
a survey of 14 questions sent to all
Board members for their completion
anonymously. As a result of Board
and Leadership changes, the survey
was reduced, but the responses were
still reviewed.
Strategy, process and plans for the
future and the Board’s collective
judgement were felt to be very
strong and Health & Safety and
Sustainability was felt to be strong.
Shareholder Engagement, Corporate
Governance and succession planning
were felt to be above average.
48
Argentex Group PLC Annual Report 2023
Respondents felt strongly that
they had sufficient opportunity
to contribute to the strategy and
were kept abreast of significant
issues between Board meetings. In
addition, the Board was generally
focused on key issues and had
sufficient knowledge of the risks
facing Argentex.
They also felt there was room to
strengthen the processes for the
identification of risks, finesse the
balance of skills and experience
on the Board and enhance the
information derived from stakeholder
engagement. These are the areas of
focus for the next period.
The Board recognises that a
formal evaluation of the Board,
its Committees and individual
performance is an important
tool to identify opportunities for
improvement and to enhance
overall Board effectiveness on an
ongoing basis. As a consequence,
the Nominations Committee are
looking to enhance the robustness of
the Board effectiveness review and
evaluation. A formal process will be
carried out once the new directors
and those with new responsibilities
have settled into their roles.
Board Meetings
Audit and Risk
Remuneration
Nominations
Nigel
Railton
Lord Digby
Jones Kb
Henry
Beckwith
Jonathan
Gray
Tim
Haldenby†
Lena Wilson
CBE FRSE*
Harry
Adams*
Jo
Stent*
Jim
Ormonde†
* Departed
† Appointed in the reporting period.
Attended meeting
Attended as an observer
Absent
N/A
Left/ Not joined
49
Governance G OV E R N A N C E
Board of
Directors
Nigel Railton
Non-Executive Chairman from 1 September 2023,
appointed to the Board 19 June 2019, and Audit & Risk
Chairman from 19 June 2019 to 14 November 2023
Jim Ormonde
Chief Executive Officer, appointed
to the Board 26 October 2023
Nigel was previously CEO of Camelot UK, having held the
position since April 2017. Nigel previously served as both
CEO of Camelot’s Global business and Group Finance,
Strategy and Operations Director. Prior to Camelot, he
also held senior finance positions at Black & Decker and
Daewoo Cars Ltd.
Nigel has over 20 years’ experience of positively
contributing to boards and has chaired multiple
committees, including in Ireland and South Africa. He has
significant experience in developing teams and brings a
strong transformational and operational track record in
executive roles.
Jim was appointed to the Board as Interim Chief
Executive Officer in October 2023, and became Chief
Executive Officer in April 2024. He has more than 30 years’
entrepreneurial and leadership experience across the
Fintech segment having been CEO of Cardsave, one of
Europe's largest independent payments businesses, before
serving on the board of Retail Merchant Services which
was sold successfully to TCV Private Equity and then
SaltPay. He has provided strategic advice to a wide range
of companies including regulated, private and public
companies of all sizes.
External appointments
External appointments
— Non-Executive Chairman of Gusbourne PLC
— Trustee of the Social Mobility Foundation
50
Argentex Group PLC Annual Report 2023
Jonathan Gray
Senior Independent Non-Executive Director, with effect
from 1 September 2023, appointed to the Board and
Chairman of the Remuneration Committee from 7 June 2019
Lord Digby Jones Kb.
Independent Non-Executive Director, Non-Executive
Chairman until 1 September 2023, appointed to the Board
7 June 2019. Chairman of the Nominations Committee
from 1 March 2023
Jonathan has considerable financial services
experience having worked as a corporate financier
in the City of London since graduating from Oxford
University in 1988. He was a Managing Director and
headed the Smaller Companies Team at both UBS and
HSBC where, over a period of 15 years he worked on
a large number of both equity and debt fundraisings,
as well as mergers and acquisitions, and well over 100
IPOs mainly on the London Stock Exchange. He has
sat on a number of public and private company boards
and is currently Chairman of Urban Logistics, the
manager of a Mid-250 industrial property REIT as well
as a board member of a Spanish property company.
He is also an officer in the Army Reserve. Jonathan
is Senior Independent Director and Chairman of the
Remuneration Committee.
After three years in the Royal Navy, Lord Jones spent
20 years at Edge & Ellison, a major Birmingham-based
corporate law firm, where he served as Senior Partner
in the mid-1990’s. He was appointed Director-General
of the Confederation of British Industry in 2000.
In 2007 he became Minister of State for UK Trade
& Investment becoming a life peer but not joining
the party of government. Thereafter he served as
Chairman of International Advisory Boards of, or
senior advisor to, major multi-national companies.
He has extensive experience in deal making, corporate
finance, change management & export & investment
markets around the World.
External appointments
— Non-Executive Chairman of Triumph Motorcycles
Ltd & Metalfloor UK Ltd
— Non-Executive Director of Norman Piette Ltd
51
Governance Tim Haldenby
Independent Non-Executive Director, appointed to the
Board 15 November 2023 and Audit & Risk Chairman from
15 November 2023
Tim qualified as a Chartered Management Accountant
in 2001 and brings substantial experience in finance,
strategy, operational performance management and data
management. Tim gained this experience during a 23-
year career at Camelot, the operator of the UK National
Lottery and provider of lottery technology, consulting
and operating services to international lotteries. In
the past 10 years, Tim’s roles have included Director of
Strategy at Camelot Global (Camelot’s international
business), Chief of Staff and then Interim Chief Data
Officer at Camelot UK Lotteries.
Henry Beckwith
Non-Executive Director, appointed to the
Board 7 June 2019
Henry is a director of Pacific Investments Ltd, 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.
Henry was a founding partner and Board member of Argentex
when it was first backed by Pacific Investments in 2013 and as
such has over 12 years in the foreign exchange industry.
External appointments
— Director of Pacific Investments, a diversified investment
group with interests in Real Estate, Asset Management,
Financial Services and Leisure
— Founding Partner of Pacific Asset Management, an
asset manager with $6bn under management
— Non-Executive Director of Pacific Capital Partners Limited,
an Alternative Investment Fund Management Company
authorised and regulated by the FCA
52
Argentex Group PLC Annual Report 2023
G OV E R N A N C E
Nominations
Committee
Report
As Chairman of the Nominations Committee,
I am pleased to present the Nominations Committee
report for the year ended 31 December 2023.
The Nominations Committee plays a vital role in ensuring that
the Board and its committees have the right balance of skills and
experience and also oversees the Board’s development of succession
planning to provide the Company and shareholders with continuity
of talent at senior levels within the company. It is also responsible for
oversight and application of the diversity policies of Argentex.
We identify and nominate members of the Board, recommending
Directors to be appointed to each committee of the Board and also the
chairs of each 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 49 and is chaired by me, Digby Jones. The
Nominations Committee met four times during the period.
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/investor-relations/
corporate-governance. The key focus of the committee during the
period included:
— In the light of the considerable movement of positions on the
Board, reviewing the structure, size and composition (including
the skills, knowledge, experience and diversity) of the Board and
making recommendations to the Board with regard to the
various changes
— Giving consideration to succession planning for Directors and
other senior executives, taking into account the challenges and
opportunities facing the Company, and the skills and expertise
needed on the Board in the future
Lord Digby Jones Kb
Chairman of the
Nominations Committee
54
Argentex Group PLC Annual Report 2023
— 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 both to deliver on the strategy of
Argentex and compete effectively in the marketplace
Diversity
The Board recognises that diversity, in the broadest
sense, enables wider perspectives and offers up
different and helpful insights, which encourages more
effective discussions and better decision-making which
is crucial for an effective Board. It also sets the tone
for diversity, equality and inclusion throughout the
business. Accordingly, the Committee looks to ensure
that it approaches succession planning in a manner that
establishes the importance of diversity in the broadest
sense, not just gender or ethnicity, but also experience,
skills, professional background and tenure.
COMPOSITION OF THE BOARD AND ITS COMMITTEES
There were several significant Board changes during
the period.
Lena Wilson stepped down from the Board as a
Non-Executive Director and Chair of the Committee on
28 February 2023, as reported in last year’s Annual Report
and Accounts.
I stepped down as Chairman of the Board on 1 September
2023 and became Nominations Committee Chairman and
an Independent Non-Executive Director. As reported to
the market in July 2023, I intend to retire from the Board
in October 2025.
The Committee recommended and the Board appointed
Nigel Railton as Chairman of the Board with effect from
1 September 2023 and to remain as interim Chairman of
the Audit and Risk Committee (ARC) until an appropriate
replacement could be found. The Committee considered
that the appointment of Nigel as Chairman would provide
the Group with continuity in leadership, leverage his
existing knowledge of the Company’s operations and
culture, and enhance board cohesion. The Company will
benefit from his ability to help the Executive in setting
and executing the new strategy and oversee governance
processes. Jonathan Gray stepped into the role of Senior
Independent Director to replace Nigel and remains
Chairman of the Remuneration Committee.
The demands of the roles of Chairman and Chairman of
the ARC are such that there was an urgent need to find
a replacement ARC Chairman to ensure that both roles
functioned effectively. Following interviews with the
Chairman and other Board members, the Nominations
Committee recommended to the Board that Tim Haldenby
be appointed to the Board as a non-executive director given
Tim’s extensive experience across finance, strategy and
accounting. Tim is a member of The Chartered Institute
of Management Accountants. The Committee believe that
Tim’s data expertise would also play a significant role in
informing strategic decision making and risk management
through enhanced oversight and efficiencies. Accordingly,
the Committee further recommended that Tim become a
member of the Nominations Committee, Remuneration
Committee and Chairman of the ARC with effect from his
joining date. The Board approved the recommendations
and Tim was appointed to the Board as set out above with
effect from 15 November.
55
Governance Harry Adams stepped down as CEO and member of the
Board with effect from 26 October 2023.
Jim Ormonde was appointed as interim CEO with effect
from 26 October. Jim was known to the Board in his
capacity as a consultant to Argentex and, following
the implementation of the changes adopted from
his comprehensive reviews, Jim was shown to be
best suited to be an interim replacement throughout
his comprehensive interviews with members of the
Board and relevant stakeholders. Jim was made a
member of the Board to ensure appropriate division of
responsibilities between the Chairman and the CEO and
thereby ensure effective leadership, accountability and
governance within the organisation. The Committee are
confident that Jim will develop and implement the new
strategy to ensure continued growth of the business,
a confidence born out by his appointment being made
permanent on 01 May 2024.
Jo Stent resigned as CFO and member of the Board with
effect from 8 November 2023. To facilitate an orderly
handover and transition, Jo remained in post until such
time that a suitable replacement was found. On behalf
of the Board, I should like to thank Jo for her hard work
throughout her time with us.
effectively challenge management. Their role has been
particularly important given the major leadership
changes that have taken place this year. They have
not been found wanting and their frankness, clarity
of decision implementation and representation of the
shareholder base has been excellent.
PRIORITIES FOR 2023/24
— Stability
— A sounding board and critical friend of the
Executive Committee
— Implementing the strategy and the policies
and assisting in every way the execution of the
Executives’ plans
Succession Planning
There have been numerous changes at both Board
and Executive Committee level that now require a full
refresh of Board, executive and senior leader succession
planning. Accordingly, a key focus for the Committee
during FY24 will be on the composition of the Board and
Executive Committee and the succession pipeline for
the Executive Committee and senior management roles,
including a rigorous internal talent review, to ensure
we have the right individuals to support the Group in
delivering the strategy.
Post period end Guy Rudolph was appointed as interim
CFO although he has not been appointed as an executive
director of the Company.
The Committee will also continue to assess the
candidates for a permanent CFO.
The Committee considers all of the Non-Executive
Directors, with the exception of Henry Beckwith, to
be independent in accordance with UK corporate
governance requirements and they continue to show
commitment, make effective contributions and
Lord Digby Jones Kb
Chairman of the Nominations Committee
01 May 2024
56
Argentex Group PLC Annual Report 2023
G OV E R N A N C E
Remuneration
Committee
Report
I am pleased to present the Remuneration Report
for the 12-month period ending 31 December 2023.
This summarises the work of the Remuneration
Committee, the remuneration policy and the
remuneration paid to the Directors for the period.
As an AIM-quoted company, the information provided is disclosed to fulfil
the requirements of AIM Rule 19. By 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 49 and is made up entirely
of the Group’s independent Non-Executive Directors. Henry Beckwith is no
longer a member of the committee but attends in the capacity of an observer.
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 continued to use independent remuneration consultants
h2glenfern to provide information to assist the Committee in making decisions
in respect of executive and Board remuneration. They were instructed to
deliver detailed information on, and analysis of, the remuneration structures,
levels and practices at a group of comparable UK-quoted companies.
Jonathan Gray
Chairman of the
Remuneration Committee
58
Argentex Group PLC Annual Report 2023
After receiving this information, the Committee agreed
as follows:
— The CEO would be awarded a pay rise of £25,000,
The Non- Executive Directors’ fees are subject to the
aggregate limit set out in the Company’s Articles
of Association.
effective from 1 July 2023
— The new Company Chairman would be paid fees
of £150,000, effective from the date of his appointment,
being 1 September 2023
— Lord Digby Jones would remain on his existing fee
of £75,000
— Jonathan Gray would be paid a fee of £70,000 (an
increase of £15,000) to reflect his new role of Senior
Independent Director and continuance as chairman
of the Committee effective from 1 September 2023
The Committee has met five times during the financial
period and attendance is shown on page 49.
REMUNERATION POLICY
The Committee is conscious of the scale and importance
of remuneration in a business of this type.
The Group’s policy is to offer competitive remuneration
with the aim of motivating and retaining high quality
executives to support the achievement of the Group’s
financial and non-financial targets and to pay
executives fairly.
The Committee considers the appropriate balance
between fixed and variable remuneration as well as
ensuring that the remuneration policy is aligned with the
interests of shareholders.
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.
Following this year’s review, the annual salary of the
CEO was increased to £375,000 and the salary of the CFO
remained unchanged during the period at £270,000.
The Executive Directors do not receive any pension or
other benefits.
Fees for Non-Executive Directors are determined by
the Board, having regard to fees paid to Non-Executive
Directors in other UK quoted companies of a similar scale,
the time commitment, and responsibilities of the role.
The fee for the Company Chairman was increased to
£150,000 per annum. Jonathan Gray’s fee was raised to
£70,000 as Senior Independent Director and Digby Jones’
fee remained at £75,000. The other Non-Executive Directors
remain at £55,000. See Salary table below for more details.
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.
Considering the financial performance of the Group in
FY2023, no performance bonuses in relation to overall
corporate performance have been proposed or paid to
Executive Directors.
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 long-term incentive plan that creates
alignment through share-based remuneration.
The Company introduced the Argentex Group Value
Creation Plan (“VCP”) in November 2022 under which
awards were made to Executive Directors and senior staff
members who are accountable for our product, growth and
operational effectiveness.
The VCP was implemented by way of an issue of growth
shares in a wholly-owned subsidiary of Argentex, whereby
the growth shares were acquired by participants at the
outset at market value. Following vesting, the growth shares
will be acquired by Argentex in exchange for ordinary
shares in Argentex or, at Argentex’s option, cash.
A number of employees have not been awarded growth
shares under the VCP and instead have retained their share
options under the Company’s original share option plan
(CSOP). All participants under the VCP who had options
under the CSOP have surrendered their options.
59
Governance 30% of the awards were granted to Argentex’s three most
senior executives, split 12% to each of the CEO and COO
and 6% to the CFO. As at 31 December 2023 the senior
executives who served during the year remained holders
of growth shares under the VCP. Non-Executive Directors
continue to be excluded from share-based rewards and
any other incentives but are entitled to hold shares. At the
date of writing all Non-Executive Directors apart from Tim
Haldenby are shareholders.
SERVICE CONTRACTS
The current executive director previously had a rolling
consultancy contract , with a mutual three month notice
period up until his formal permanent appointment on
01 May 2024.
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.
DIRECTORS’ REMUNERATION
The tables below summarise the gross aggregate remuneration
of the Directors who served during the year to 31 December
2023 compared to the 9-month period ended 31 December 2022.
31 December 2023
Executive Directors
Harry Adams1
Jo Stent2
Jim Ormonde3
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
Jonathan Gray4
Nigel Railton5
Dr Lena Wilson6
Tim Haldenby7
Basic salary/ Fees/ Fixed
profit shares
£
Performance related bonus in respect
of year to 31 December 2023
£
300,000
270,000
69,166
75,000
55,000
60,000
86,667
13,750
7,122
0
0
0
—
—
—
—
—
—
Other amounts
2023 Total
£
300,000
270,000
69,166
75,000
55,000
60,000
86,667
13,750
7,122
—
—
—
—
—
—
—
—
1 Harry Adams basic salary was increased from £350,000 to £375,000 with effect from 1 July 2023. Harry Adams then stepped down as a Director on 26 October
2023. Reported numbers cover the amounts paid pro rata up to and including this date.
2 Jo Stent resigned as a Director on 8 November 2023 and has received her basic salary due up until 31 December 2023.
3 Jim Ormonde was appointed as Interim CEO with effect from 26 October 2023 with an annual consultant fee of £375,000. Reported numbers cover the amount
paid pro rata from the date of appointment to 31 December 2023.
4 Jonathan Gray was appointed Senior Independent Non-Executive Director with effect from 1 September 2023 with an annual fee of £70,000. Prior to this date
Mr Gray served as an Independent Non-Executive Director and Chair of the Remuneration Committee with an annual fee of £55,000. Reported numbers cover
the amounts paid pro rata in the period.
5 Nigel Railton was appointed as Chairman with effect from 1 September 2023, with a fee of £150,000. Prior to this date Mr Railton served as the Senior Independent
Non-Executive Director and Audit and Risk Committee Chairman with a fee of £55,000. Reported numbers cover the amounts paid pro rata in the period.
6 Lena Wilson resigned as director on 28 February 2023. Reported numbers include amounts paid pro rata from 1 January 2023 until 31 March 2023.
7 Tim Haldenby was appointed as an Independent Non-Executive Director on 15 November 2023 with an annual fee of £55,000. Reported numbers cover the
amount paid pro rata from the date of the appointment to 31 December 2023.
31 December 2022
Executive Directors
Harry Adams
Jo Stent
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
60
Argentex Group PLC Annual Report 2023
Basic salary/ Fees/ Fixed
profit shares
£
Performance related bonus in respect
of period to 31 December 2022
£
Other amounts
2022 Total
262,500
202,500
56,250
41,250
656,000
355,000
—
—
—
—
—
—
£
918,500
557,500
56,250
41,250
31 December 2022
Jonathan Gray
Nigel Railton
Dr Lena Wilson
Basic salary/ Fees/ Fixed
profit shares
£
Performance related bonus in respect
of period to 31 December 2022
£
Other amounts
2022 Total
41,250
41,250
41,250
—
—
—
—
—
—
£
41,250
41,250
41,250
AGM
Our Remuneration Report for the period ended December
2022 was put to an advisory resolution at our AGM on
21 June 2023 and was supported by 99.91% of votes cast.
DIRECTORS’ SHARE INTERESTS
This table summarises the interests in the ordinary shares
of the Company of the Directors and Non-Executive
Directors who served in the period.
PAYMENTS FOR LOSS OF OFFICE
No payments were made to Harry Adams or Jo Stent during
the reporting period, following their departure from office.
Comparative information relates to equity interests of the
Directors in Argentex LLP, prior to the merger and group
formation further described in the financial statements.
Directors’ Share Interests
Number of ordinary shares held in
the Company at 31 December 2023
Number of ordinary shares held in
the Company at 31 December 2022
Executive Directors
Current
Jim Ormonde
Former
Harry Adams
Jo Stent
Non-Executive Directors
Lord Digby Jones
Henry Beckwith
Jonathan Gray
Nigel Railton
Dr Lena Wilson
Tim Haldenby
64,935
—
—
434,451
7,675,247
75,000
179,815
—
0
—
13,882,894
37,500
434,451
7,675,247
75,000
86,084
12,500
—
SHARE OPTIONS
The individual interests of the Directors under the VCP are as follows:
Date of grant
Aggregate no. of growth shares held
under the LTIP as at 31 December 2023
Earliest exercise date
Executive Directors
Harry Adams
9 November 2022
Jo Stent
9 November 2022
2,400
1,200
50% from 01/04/2026 and
50% from 01/04/2027
50% from 01/04/2026 and
50% from 01/04/2027
Following the award of the VCP scheme the directors no longer have any further interests under the CSOP.
Jonathan Gray
Chairman of the Remuneration Committee
01 May 2024
61
Governance G OV E R N A N C E
Structures
and
processes
Board composition
Changes to the Board
The Board is responsible to shareholders for the
long-term success of the business and for the proper
management of the Company by formulating, reviewing
and approving the Company’s strategy, budgets and
corporate activity. The Board is the principal forum for
directing the business of the Group
It is important that the Board comprises of a mixed skill
set, experience and knowledge to deliver the Strategy of
the Group.
The Board is comprised of one Executive Director and
five Non-Executives, including the Chairman.
The size, skill sets, and experience are felt to be
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.
All Directors have access to Alethia McDonald, the
Company Secretary, who is responsible for ensuring that
Board procedures and applicable rules and regulations
are observed.
The Board meets at least quarterly in every 12 months,
and additional meetings are held as required.
The Board is currently comprised of an Independent
Non-Executive Chairman, a Chief Executive Officer
and four Non-Executive Directors, three of whom are
considered to be independent. Henry Beckwith is not
considered to be independent due to his relationship
with Pacific Investments, which is a significant
shareholder of the Company.
There were numerous changes to the composition of
the Board during the year, with the retirement of Harry
Adams and Jo Stent, and the appointments of Jim
Ormonde and Tim Haldenby. In addition, Nigel Railton
became Chairman and Jonathan Gray took over as Senior
Independent Director, both with effect from
1 September 2023.
The Company’s Interim CFO is not an Executive Director;
however, the Board will continue to review the position
of a permanent CFO who will join the Board as an
Executive Director.
Biographies for the Directors as at the date of this report
are set out on pages 50-52.
Roles and responsibilities
The Board is responsible for:
— The maintenance of a robust system of internal
controls and risk management procedures
— Board appointments and succession planning
62
Argentex Group PLC Annual Report 2023
— The approval of the Remuneration Policy and
The Senior Independent director is responsible for:
remuneration arrangements for the Directors and other
senior managers
— Providing a sounding board for the Chair
— Serving as an intermediary for the non-executives
— Setting the terms of reference for Board Committees
where necessary
— The strategy and growth plans of the Business
— Being available to shareholders to discuss their views
— Structure and Capital
and concerns when required
— Risk Management and internal controls
— Contracts outside of the ordinary course of business
— Commitment to material expenditure
— Shareholder communication
— Corporate Governance
The Chairman is responsible for:
— Running the business of the Board
The Non-Executive Directors are responsible for:
— Exercising independent judgement and providing
constructive challenge to the Executive Directors
and the Senior Management Team, scrutinising
performance against objectives
— Providing strategic guidance to the Company, utilising
their wealth of knowledge, insight and experience
— Approving appropriate Group strategy and
— Ensuring the effectiveness of the Board and an
operating plans
appropriate strategic focus and direction
— Promoting corporate governance
— Ensuring that Board members receive timely, accurate
and clear information about the Group’s activities
— Ensuring active engagement and effective
communication with shareholders
— Setting the Board’s agenda and for ensuring the
Committees carry out their duties
The CEO is responsible for:
— Proposing the strategic focus to the Board
— Implementing and executing the strategy
— Leading the management of the Group alongside the
Executive Committee
— Representing the Group to external stakeholders and
engaging with them on the Group’s purpose
and strategy
— Having a pivotal role in the appointment and removal
of Executive Directors and sustaining the Company’s
corporate governance framework as a whole
How the Board operates
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.
63
Governance The Board Committees
The Board has delegated specific responsibilities to the
three Board Committees: Audit and Risk, Nomination
and Remuneration. The duties of each Committee are set
out in the Committees’ Terms of Reference, which are
available on the website at www.argentex.com/investor-
relations/corporate-governance.
Details of each of the Committee’s activities during the
period are set out in the Committee reports on pages
54-56, 58-61 and 68-71.
Each Committee has access, at the cost of the Group,
to the resources, information and advice that it deems
necessary to enable the Committee to discharge its duties.
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 also oversees the deployment
and any findings of the Internal Audit function who have
a direct line into the Committee.
The Audit and Risk Committee is comprised of Tim
Haldenby (Chairman), Jonathan Gray and Nigel Railton
with standing input from the Group’s Executive
Committee including any material risk updates or
escalations from the Chief Compliance and Risk Officer
and Chief Financial Officer.
The Audit and Risk Committee meets at least three times
per year at appropriate times in the reporting and audit
cycle and otherwise as required. In addition to a standing
agenda, the Committee considers “deep dive” topics for
detailed analysis, with subjects ranging from industrywide
themes such as cyber-security to risk processes or
regulatory change.
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 Lord Digby Jones
is Chairman.
The Nominations Committee meets at least twice a
year and otherwise as required.
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.
This involves 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 Chairman and the Executive Directors.
No Director is 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 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
Jonathan Gray (Chairman), Nigel Railton, Digby Jones
and Tim Haldenby.
The Remuneration Committee meets at least twice a
year and otherwise as required.
64
Argentex Group PLC Annual Report 2023
Business Strategy / Objectives
Risk Culture
Risk Management Framework
Identify
— Risk Appetite Statement
— Risk Register
Assess
— Risk Assessment
— RCSA
Mitigate
— Risk Tolerance
— Controls
Implement
— Policy Statements
— Procedural Documentation
Monitor
— Management Information
— Key Risk Indicators
Review
— Governance
— Assurance
s
k
s
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R
t
n
e
r
e
h
n
I
s
l
o
r
t
n
o
C
k
s
i
R
s
k
s
i
R
l
a
u
d
i
s
e
R
Risk
Owner
1st Line
of Defence
Independent
Oversight & Challenge
2nd Line of Defence
Assurance
3rd Line of Defence
RISK MANAGEMENT
Risk management
and internal control
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.
OUR RISK MANAGEMENT FRAMEWORK
Our risk management framework supports an effective
and strong risk culture. The Risk Framework supports
the identification of risks through our Risk Register and
Risk Appetite Statements. We use these to assess our risks
through the Risk & Control Self-Assessment process, which
help us define the mitigations to bring risk within appetite.
Documenting our processes allows us to implement these
controls in an effective manner and then deliver the
monitoring output to the extended Senior Leadership
Team, Executive and Board with key information needed to
support the management of the business.
65
Governance
This is complemented by Key Risk Indicators, allowing
monitoring to progress, which is essential to the ongoing
Risk Management Framework. A feedback loop includes
a thorough Review process, while the governance
structures for effective challenge, along with a robust
assurance programme, ensure an iterative evolution of
the framework towards a state of maturity.
Argentex operates a ‘three lines of defence’ model and
requires all staff being responsible and accountable for
managing its risks.
OUR LINES OF DEFENCE
Our risk governance is based on the ‘three lines of
defence’ model. This ensures that risk management,
risk oversight and assurance are independent activities
that are carried out by individuals, committees, and
departments, with overall responsibility assigned to the
relevant senior manager.
— The first line of defence consists of ‘the risk takers’
or front-line staff, who understand their risks, and
responsibilities, including assessing, controlling and
mitigating their risks
— The second line of defence consists of the oversight
functions, namely the Risk and Compliance teams.
These functions not only challenge, monitor
and report in relation to the effectiveness of risk
management practices but set policy, define works
practices, and oversee first line performance
— The third line of defence consists of auditors and
directors. They will also ensure that the three lines
of defence are operating effectively and according to
best practice
The overarching governance structure is shown in the
following diagram:
Argentex Group PLC
Board
Argentex Group PLC
Board Audit and Risk
Committee
O
v
e
r
s
i
g
h
t
a
n
d
M
o
n
i
t
o
r
i
n
g
B.V. Management
Board
LLP Executive
Committee
PTY Management
Board
n
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a
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a
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R
Compliance and Risk Oversight Committee
Forums & Working Groups
Management Information | Risk Tolerance Monitoring
66
Argentex Group PLC Annual Report 2023
OUR RISK CULTURE
A sound and healthy risk culture is critical for the effective
implementation of the Risk Management Framework. The
effective operation of the Risk Management Framework
also helps to strengthen the Risk Culture over time, in a
mutually beneficial and reinforcing manner.
Tone from the Top
Leadership of Senior Management
Ownership of Risk
Accountability
Diversity of Thought
Effective Communication & Challenge
Fairness in Evaluation for Employees
Incentives
RISK APPETITE AND TOLERANCE
Argentex produces a Risk Appetite Statement (RAS) that
forms part of the annual review and is an intrinsic part of
the Risk Management Framework.
— A high-risk appetite is usually aligned to our business
model and strategy
— Medium risk appetite typically aligns to where the
firm recognises that risk will exist, and controls will be
necessary, but those risks are inherent to the business
even though they are not drivers of the business model
— Low and Very Low appetite are undesirable risks and
considerable effort is made to mitigate, control and
where possible, eliminate those risks from the business
This Corporate Governance Statement has been approved
and signed by order of the Board.
Alethia McDonald
Company Secretary
01 May 2024
67
Governance 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 period
ending 31 December 2023.
The Audit and Risk Committee’s key objectives continue to be
ensuring 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 changed during the period as
a result of Board changes. Lena Wilson retired from the Board
and the Committee with effect from 28 February 2023. I joined the
Committee as Chairman upon appointment to the Board on 15
November 2023, replacing Nigel Railton who remains a member of
the Committee. Henry Beckwith stepped down from the Committee
with effect from 5 September 2023 and continues to attend in the
capacity of an observer.
The Committee is comprised of independent Non-executive
Directors, and the Chief Executive Officer, Chief Financial Officer,
Chief Compliance and Risk Officer and Group Finance Director are
invited to attend Committee meetings. Other members of senior
management are invited to attend where required. The Committee
met five times in the period and also held meetings with the
Company’s external Auditors, Deloitte LLP.
Tim Haldenby
Chairman of the Audit
Committee
68
Argentex Group PLC Annual Report 2023
The Committee meets with the external 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.
The full Terms of Reference for the Committee comply
with the UK’s QCA Corporate Governance Code and are
available on the Group’s website www.argentex.com/
investor-relations/corporate-governance or from the
Company Secretary at the registered office address.
The main duties the Committee carried out during the
period included:
— Review of the 2023 audit plan and audit
engagement letter
— Launch of a new internal audit function
— 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 Annual Report
— Going Concern Review
— Review of the evolving risk management and internal
control systems
— Review of the Group’s ICARA 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 period-on-period 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)
Significant issues
KEY JUDGEMENTS AND ESTIMATES
As part of monitoring the integrity of the financial
statements, accounting judgements identified by the
finance team and the external auditor are reviewed by
the Committee. Key judgements and estimates considered
by the Committee for the year ended 31 December 2023 are
as follows:
— Credit Valuation Adjustment (CVA)
The Committee reviewed Management’s methodology
adopted in the calculation of the group’s CVA which
remains largely unchanged from prior year. The
External Auditors have reviewed the Company’s CVA
for the period and are satisfied that it is appropriate
— Capitalisation of Costs to intangible assets
The Committee considered the extent to which costs
should be capitalised to intangible assets which is a key
accounting judgement. The Group capitalise costs as
intangible assets if they have a value that will benefit
the performance of the Group over future periods
— Share Based Payments
In November 2022, the Group launched the Argentex
Group PLC Value Creation Plan, which is deemed to
be an equity settled share-based payment plan. The
Committee noted that changes in senior management
have resulted in changes to the share-based payment
charge for the year however, that the impact of this
is not considered to have a material impact to the
financial statements
— Going Concern
The Committee reviewed the key assumptions in
Management’s going concern assessment including
downside scenarios and concluded that it was
appropriate to prepare the financial statements on the
going concern basis
RISK MANAGEMENT AND INTERNAL CONTROLS
The Committee has responsibility for assisting the Board
in maintaining an effective internal control environment
and risk management systems. These are set out on
pages 65-67. In order to discharge its responsibilities, it
69
Governance receives reports on the Group’s compliance and internal
control procedures and systems for managing risks along
with the regulatory environment which governs it.
Audit
The Group’s Chief Compliance and Risk Officer provides
a regular report to the Committee on the controls
framework, along with any testing and monitoring
outcomes, carried out by the Compliance function. This
also covers a regulatory update on upcoming regulatory
changes and the impact of changes implemented during
the period, a summary of other compliance issues.
The Company’s Compliance and Risk Committee (CROC),
established at a management level, reports directly to
the Audit and Risk Committee on a quarterly basis. The
objective of the CROC 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. To ensure a focused approach to risk
management and internal controls is applied across the
Group, the daily oversight of risk is managed and co-
ordinated by the Chief Compliance and Risk Officer and
the Head of Risk.
The Committee approved the Risk Appetite Statements,
the Risk Management Framework and the Risk Register
during the period.
Principal risks are set out on pages 30-34 in the
Strategic Report.
WHISTLEBLOWING, ANTI-BRIBERY AND FRAUD
PREVENTION
The Committee reviewed the Group’s whistleblowing
policy which sets out the formal process by which
an employee of the Group may raise concerns about
possible improprieties or suspected wrongdoing in the
financial reporting or any other Group related matters.
This includes an independent third-party hotline that
allows employees to report concerns anonymously and
confidentially. 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 Board has delegated authority to the Committee to
oversee the relationship with the External Auditor.
The external Auditor, Deloitte LLP, were re-appointed as
auditors to the Company at the Company’s AGM on
21 June 2023. The Audit and Risk Committee monitors the
relationship to ensure that auditor independence and
objectivity are maintained.
The audit scope, approach, materiality and areas of focus
are agreed in advance of the audit to align expectations
and timeframes.
The Committee holds private sessions with Deloitte
without management present to discuss feedback from
the audit. If Deloitte has any concerns about access to
information, or the information received during the audit,
it is reported to the Committee.
The Committee Chairman also meets with the audit
partner, Chris Brough, privately and he is authorised to
contact the Committee Chair at any time if he wishes to
raise any matters of concern.
The Committee ensures that the External Auditor
has challenged management and received the access
it required to conduct an effective audit, and in a
timely manner.
EXTERNAL AUDITOR EFFECTIVENESS
The Committee has not raised any concerns about the
effectiveness of the Auditor and as such the Board will
put forward a resolution to reappoint Deloitte as the
Company’s External Auditor at the forthcoming AGM.
POLICY ON AUDIT ROTATION
Deloitte have acted as the Company’s statutory auditors
since 2021.
The Committee will ensure that at least once every ten
years the audit services contract is put out to tender
to enable the Committee to compare the quality and
effectiveness of the services provided by the incumbent
auditor with those of other audit firms.
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Argentex Group PLC Annual Report 2023
EXTERNAL AUDITOR INDEPENDENCE AND OBJECTIVITY
Any non-audit services provided must be in accordance
with the Group’s Non-Audit Services Policy.
Before any service is provided, the Committee will
ensure that there is no issue in regard to independence
and objectivity and that other potential providers are
adequately considered.
The external auditor may only provide such services
if the service does not conflict with their statutory
responsibilities and ethical guidance.
Consideration is given to whether the skills and experience
make the external auditor the most suitable supplier of the
non-audit service when reviewing requests for permitted
non-audit services, taking into account independence
or objectivity, and the fee to be incurred for non-audit
services, both for individual non-audit services and in
aggregate, relative to the Group audit fee.
The breakdown of fees between audit and non-audit
functions is provided in note 7 of the financial statements.
INTERNAL AUDIT
This was the first year that the Group has operated an
outsourced internal audit function delivered by BDO LLP.
Internal Audit finding reports are shared with the
relevant Executive Committee Members. The Executive
Committee member is also responsible for ensuring the
timely implementation of any report recommendations
and subsequent actions resulting from the audit.
Summaries of reports are also shared with the Committee
for review and discussion and any actions arising are
monitored by the Committee.
The Committee approved the Internal Audit Plan for 2023
and monitored its progress at each meeting. The internal
audit function completed three internal control reviews
during the period, these were focused on:
— The Internal capital and risk assessment (ICARA)
was completed and a series of actions initiated to
deal with the findings. ICARA is part of a new IFPR
Prudential Regulatory Regime and the review included
consideration of controls relating to the Capital and
Liquidity Adequacy Assessment process and ICARA
document structure and content
— The fieldwork for the Compliance Monitoring Design
Review was completed. This assessed the design of the
Compliance Monitoring controls in place to ensure
all aspects of compliance risk are comprehensively
covered and designed appropriately. Findings in this
regard will be presented to the Committee in 2024
— A review of the HR infrastructure and Senior
Managers and Certification Regime (SMCR) was also
completed. This assessed the HR infrastructure that
maintains the roles and responsibilities of Senior
Managers within the organisation. The review focus
also included Argentex compliance with SMCR
regulation. Report findings in this regard will also be
presented to the Committee in 2024
The next review will be of cyber risk, covering the
governance, policy and process framework in relation to
the identification and management of cyber risks and will
look to assess the design and implementation of the cyber
framework, processes and controls over the Argentex
system landscapes.
PRIORITIES FOR 2024
For the year ahead, the Committee will continue to
focus on:
— Any emerging risks presented to the Group’s
operations such as cyber security and key
financial controls
— Maturing the Group’s ICARA and enterprise
risk frameworks
— Continued assessment of the Group’s international
expansion and controls framework supporting
this growth
— Continual assessment of the workstream and
effectiveness of the internal audit function
— Consideration of any other changes to the regulatory
environment, business practices and the risk profile
of the Group
As a result of the work performed, the Committee has
concluded that the Annual Report for the period ended
31 December 2023, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for users to understand Argentex's business model and
strategy,, and has reported on these findings to the Board.
Tim Haldenby
Chairman of the Audit Committee
01 May 2024
71
Governance
G OV E R N A N C E
Directors’
Report
The Directors present their annual report, including reports from the
Board Committees, and the audited Consolidated Financial Statements
for Argentex Group PLC for the year ended 31 December 2023.
PARENT COMPANY
For the purpose of this report, ‘the Company’ means
Argentex Group PLC, a public limited company
incorporated in England & Wales with registered number
11965856 and with registered office of 25 Argyll Street,
London, W1F 7TU.
References to ‘Argentex’ and ‘the Group’ mean the
Company and its subsidiaries. The Company acts as
the holding company for the Group and details of its
subsidiary undertakings can be found in note 6.
FINANCIAL RESULTS AND DIVIDENDS
The Group’s profit before taxation for the year was £7.3m
(FY22: £7.8m). More information about the Group’s financial
performance can be found in the Financial Review on
pages 36-39 and in the financial statements on pages 86-125.
For the period ended 31 December 2022, the Group declared
and paid a final dividend of 2.25p per share, resulting in
a total amount paid for the period of £2.5m. During the
year ended 31 December 2023, the Directors declared and
paid an interim dividend of 0.75p per share, however in
light of the Company’s financial performance and trading
conditions during the second half of FY2023 the Directors
determined that no further dividends would be declared.
Full particulars of the dividends are contained within the
Financial Review on pages 36-39.
DIRECTORS
The Directors of the Company who held office during
the year:
— Nigel Railton
— Jonathan Gray
— Henry Beckwith
— Lord Digby Jones Kb.
— Jim Ormonde (from 26 October 2023)
— Tim Haldenby (from 15 November 2023)
— Lena Wilson CBE FRSE (from 1 January 2023 to
28 February 2023)
— Harry Adams (from 1 January 2023 to 26 October 2023)
— Jo Stent (from 1 January 2023 to 8 November 2023)
Biographies of the current Directors, including their
committee memberships, are set out on pages 49-52.
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 58-61. 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.
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Argentex Group PLC Annual Report 2023
DIRECTORS’ INDEMNITY
Directors and Officers’ Liability Insurance is maintained
by the Group for all Directors and Officers of the Company
and the Group as permitted by the Companies Act 2006.
To the extent permitted by law and in accordance with
its Articles of Association, the Company indemnifies its
Directors and Officers of the Company in respect of any
loss, liability or expense they incur in relation to the
Company or any associated company of the Company.
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 period are set out in note
21 of the Consolidated Financial Statements.
Additional information which is
incorporated by reference into this
Directors’ report can be located as follows:
Review of the Business,
Operations, Principal
Risks and Outlook.
04
Strategic Report
Financial instruments and
their associated risks.
113
Financial Statements – note 24
Disclosures concerning
Greenhouse Gas Emissions.
26
Our resources and relationships
Important events since the
end of the financial year.
36
Financial Review
Likely future developments.
10
CEO Statement
Results and dividends.
04
Chairman’s Statement
Research and development.
10
CEO Statement
Employee involvement.
24
Our resources and relationships
73
Governance
SUBSTANTIAL SHAREHOLDINGS
At 31 December 2023, the company had been notified of the
following interests (excluding Directors within the Group)
representing 3% or more of its issued share capital:
Shareholder
Number of
shares
IC
%
Gresham House
15,709,434
13.88
Pacific Investments Management Ltd
15,442,694
13.64
Mr Harry Adams
Mr Andrew Egan
JM Finn & Co
Interactive Brokers
Charles Stanley
13,882,894
12.26
6,193,418
5.47
5,369,500
4,738,109
4,431,929
4.74
4.19
3.91
AXA Investment Managers
4,350,000
3.84
Downing
Hargreaves Lansdown
Asset Management
3,963,531
3.50
3,504,409
3.10
POLITICAL DONATIONS
The Group has not made any political donations, and does
not intend to in the future.
EMPLOYEE INVOLVEMENT
The Group continues to involve its staff in the future
development of the business, and to provide working
conditions to engender high performance. In addition,
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 (the Argentex
Group Value Creation Plan — VCP) designed to reward,
incentivise and retain key staff and engage employees with
the long-term growth aspirations of the Group.
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.
In light of the group’s FY24 projections, judgement was
required by the Directors in forming this conclusion.
Further detail on the process is provided in note 2.3 of the
Consolidated Financial Statements.
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(1) Statement on pages 40-41
provides a comprehensive overview of the Group’s
commitment to stakeholder engagement.
CORPORATE SOCIAL RESPONSIBILITY
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. This year, many of the
initiatives have been actioned for the first time, as outlined
earlier in this report on pages 24-28.
FINANCIAL INSTRUMENTS AND RISK
The financial instruments and their associated risks are set
out in note 24 of the Consolidated Financial Statements.
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 Directors’ 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.
AUDITOR
Deloitte 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 19 June 2024.
ANNUAL GENERAL MEETING
The AGM will take place on 19 June 2024 at 11.00am
at Gowling WLG 4 More 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.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
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Argentex Group PLC Annual Report 2023
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
directors are required to prepare the Group financial
statements in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006. The Directors have also chosen
to prepare the parent company financial statements
in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework. 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 of the company and of the
profit or loss of the company for that period.
In preparing the parent company 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 Financial Reporting Standard 101
Reduced Disclosure Framework has been followed,
subject to any material departures disclosed and
explained in the financial statements
— Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business
In preparing the group financial statements, International
Accounting Standard 1 requires that Directors:
— Properly select and apply accounting policies
— Present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information
— Provide additional disclosures when compliance
with the specific requirements in IFRS Standards are
insufficient to enable users to understand the impact
of particular transactions, other events and
conditions on the entity’s financial position and
financial performance
— Make an assessment of the company’s ability to
continue as a going concern
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
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
company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
DIRECTORS’ RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
— The financial statements, prepared in accordance with
the relevant financial reporting framework, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole
— The strategic report includes a fair review of the
development and performance of the business and
the position of the Company and the undertakings
included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face
— The annual report and financial statements, taken as
a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to
assess the Company’s position, performance, business
model and strategy
WEBSITE PUBLICATION
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.
By order of the Board
Alethia McDonald
Company Secretary
01 May 2024
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Governance
G OV E R N A N C E
Independent
Auditor's
Report
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1. In our opinion:
— the financial statements of Argentex Group PLC (the ‘company’) and its subsidiaries (the ‘group’) give a true and
fair view of the state of the group’s and of the company’s affairs as at 31 December 2023 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 company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework
— 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 company statements of financial position
— the consolidated and company statements of changes in equity
— the consolidated statement of cash flows
— the related notes to the consolidated financial statements 1 to 29; and
— the related notes to the company financial statements 1 to 11
The financial reporting framework that has been applied in the preparation of the group financial statements is
applicable law, and United Kingdom adopted international accounting standards. The financial reporting framework
that has been applied in the preparation of the company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice).
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.
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Argentex Group PLC Annual Report 2023
We are independent of the group and the 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:
— Accuracy of revenue recognition
— Going concern
Within this report, key audit matters are identified as follows:
— Newly identified
— Increased level of risk
— Similar level of risk
— Decreased level of risk
Materiality
Scoping
The materiality that we used for the group financial statements was £993,000 which was
determined on the basis of 2% of revenue for the year to 31 December 2023, a benchmark
consistent with the prior period.
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 full scope audit scope procedures cover 99% of the group’s revenue, 97% of
the group’s profit before tax and 99% of the group’s total assets.
Significant
changes in our
approach
Going concern was identified as a key audit matter in the period in light of the decline in
profitability of the business in 2023 compared to the previous period. This increased the level of
judgement applied by the Directors in performing their going concern assessment.
The credit valuation adjustment for derivative financial assets is no longer considered a key
audit matter following a fall in the value of derivative financial assets in the period reducing the
impact on the audit.
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 company’s ability to continue to adopt the going concern
basis of accounting is discussed in section 5.2.
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 company’s ability to continue
as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
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Governance
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. Accuracy of revenue recognition
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 structured
solutions (“options”). Revenue totalled £49.9m for the year to 31 December 2023 (9 month period
ended 31 December 2022: £41m), as described in note 2.6 and note 5.
How the scope
of our audit
responded to the
key audit matter
Revenue is a key performance indicator of the group and a key focus of investors, analysts and
management. Furthermore, the process of recording 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, either due to fraud or error.
Therefore, we have identified a key audit matter in relation to the accuracy of revenue
recognised by the group.
We performed the following audit procedures:
— Obtained an understanding of the relevant controls over the revenue recognition process
— Assessed the group’s revenue recognition policy against the requirements of
IFRS 9 Financial Instruments
— For a sample of spot, forward and option contracts, tested the accuracy of revenue by
— recalculating the profits arising from trades with reference to supporting documentation
from broker confirmations, customer agreements and bank statements
— where the contract had completed in the period, tracing the revenue recorded to
bank statements
— where the contract was open at the period end, assessing whether the transaction was
appropriately recorded as a derivative financial asset or liability
— where trades had multiple legs, we obtained evidence regarding the requirement for the
draw/reversal leg from brokers and assessed this for appropriateness
Key observations Based on the work performed we concluded that revenue recorded was materially accurate.
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Argentex Group PLC Annual Report 2023
5.2. Going concern
Key audit matter
description
In the Directors’ Report on page 74 and note 2.3 of the financial statements, the Directors provide
their assessment of going concern and conclude that the group should adopt the going concern
basis of accounting in preparing the financial statements.
How the scope
of our audit
responded to the
key audit matter
In accordance with IAS 1 Presentation of Financial Statements, financial statements should be
prepared on a going concern basis unless management intends either to liquidate the entity or
to cease trading, or has no realistic alternative but to do so. When making its assessment of the
entity’s ability to continue as a going concern, if management is aware of material uncertainties
related to events or conditions that may cast significant doubt upon the entity’s ability to do so,
those uncertainties should be disclosed.
Whilst the group remained profitable and cash generative in 2023, revenue was lower than
anticipated and costs increased at a higher rate than revenue. Additionally, as outlined in note
2.3, management expect revenue and profit margins to decline in FY24. We identified that there
was an increase in the level of judgement required by the Directors when performing their
assessment, specifically in respect of judgements over revenue and cost projections and their
impact on cash flows. We therefore identified going concern as a key audit matter.
We performed the following audit procedures:
— Obtained an understanding of the relevant controls over the budgeting and
forecasting process
— Obtained an understanding of the key assumptions and judgements made by the Directors
in preparing the going concern assessment
— Considered financial projections used by the Directors and challenged key assumptions
including those on revenue and future costs
— Challenged the likelihood of the Directors’ stressed scenarios as described in note 2.3 with
reference to the group’s historic performance, external market data and consideration of
potentially contradictory evidence
— Assessed the impact of these scenarios by evaluating the mathematical accuracy of
the calculations
— Challenged the plausibility of the Directors’ proposed actions in the above scenarios with
reference to historic responses to significant increases in volatility and consideration of
contradictory evidence
— Reviewed correspondence with regulators to understand the group’s capital and
liquidity requirements
— Working with our internal regulatory specialists, reviewed and challenged the capital and
liquidity forecasts under the base and stressed scenarios to determine the impact on the
group’s regulatory position
— Assessed the historical accuracy of forecasts prepared by the group to assess their ability
to forecast accurately
— Considered the appropriateness of the disclosures made in the financial statements in view
of the requirements of IFRSs
Key observations Based on the work we have performed, including the assessment of revenue and cost
projections, we concur with the directors’ assessment that the group is a going concern and
consider that the disclosures in note 2.3 are appropriate.
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Governance
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
Company financial statements
Materiality
£993,000 (2022: £821,000)
£322,725 (2022: £375,000)
Basis for
determining
materiality
Rationale for
the benchmark
applied
2% of revenue for the year to 31 December 2022
(9 month period ended 31 December 2022: 2% of
9 month revenue).
Company materiality equates to 1% of net assets
(9 month period ended 31 December 2022: 1% of
net assets).
We determined that revenue was an
appropriate benchmark for materiality given
its importance to investors and users of the
financial statements.
The company is not profit driven. Net assets
is the key measure of financial health that is
important to shareholders since the primary
concern for the company is the receipt and
payment of dividends.
Revenue
Group Materiality
£49.9m
98+2
Group Materiality £0.99m
Component materiality
range £0.16m to £0.61m
Audit and Risk Committee
reporting threshold £50k
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.
Performance
materiality
Basis and
rationale for
determining
performance
materiality
Group financial statements
Company financial statements
65% (9 month period ended 31 December 2022:
65%) of group materiality
65% (9 month period ended 31 December 2022:
65%) of company materiality
In determining performance materiality, we considered the following factors:
— The ongoing improvements to the control environment
— The changes in senior management personnel in the year
— The uncertain economic environment
— The level of corrected and uncorrected misstatements identified in the prior year audit
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Argentex Group PLC Annual Report 2023
6.3. Error reporting threshold
We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in
excess of £50,000 (9 month period to 31 December 2022: £41,000), as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds. We also report to the Audit and Risk 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 company. We have
considered reporting components based on their contribution to group (revenue, profit and total assets), as well
as qualitative considerations. We performed full scope audit procedures over Argentex Group PLC and Argentex
LLP. We performed specific audit procedures over cash balances across the remaining components of the Group.
Our full scope audit procedures covered 99% of revenue, 97% of profit before tax and 99% of total assets.
All audit work was performed by the group engagement team.
7.2. Our consideration of the control environment
We gained an understanding of the relevant controls over financial reporting. This included working with
our internal IT specialists to gain an understanding of the relevant general IT controls, as well as gaining an
understanding of the relevant process level and entity level controls at the group level. We have observed a
sustained improvement in the overall control environment however in certain areas, remediation activity
requires further action or embedding.
The control environment is discussed by the Audit and Risk Committee on page 69-70.
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 26-28 in the
strategic report and considered whether they were materially consistent with the financial statements and the
knowledge obtained in our audit.
81
Governance
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 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 company or to cease
operations, or have no realistic alternative but to do so.
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.
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Argentex Group PLC Annual Report 2023
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, those charged with governance and the audit and risk committee
about their own identification and assessment of the risks of irregularities, including those that are
specific to the group’s sector
— 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
— the matters discussed among the audit engagement team and relevant internal specialists, including tax,
financial instruments, regulatory 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 accuracy of 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 framework 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 with the Financial Conduct Authority.
11.2. Audit response to risks identified
As a result of performing the above, we identified accuracy of 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 and risk 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
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Governance
— reading minutes of meetings of those charged with governance, reviewing internal audit reports and
reviewing correspondence with HMRC and the FCA
— 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
— 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 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
— adequate accounting records have not been kept by the company, or returns adequate for our audit have
not been received from branches not visited by us
— the company financial statements are not in agreement with the accounting records and returns
We have nothing to report in respect of these matters.
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.
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Argentex Group PLC Annual Report 2023
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.
Christopher Brough
FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
01 May 2024
85
Governance
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 December 2023
Year ended
31 December
2023
9 months ended
31 December
2022
£m
49.9
(1.7)
48.2
1.1
(40.7)
—
(0.5)
8.1
(0.8)
7.3
(2.2)
5.1
4.6p
4.6p
£m
41.0
(1.8)
39.2
—
(30.2)
(0.8)
(0.1)
8.1
(0.3)
7.8
(0.8)
7.0
6.2p
6.2p
Notes
5
8
23
11
12
13
13
Revenue
Cost of sales
Gross profit
Other operating income
Administrative expenses
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
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Argentex Group PLC Annual Report 2023
Consolidated Statement
of Financial Position
as at 31 December 2023
Notes
14
15
24
12
16
17
18
24
19
20
24
Non-current assets
Intangible assets
Property, plant and equipment
Derivative financial assets
Deferred tax asset
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 1
Lease liabilities 1
Derivative financial liabilities
Total current liabilities
Net current assets
31 December
2023
31 December
2022
£m
2.7
15.1
9.8
0.2
27.8
1.3
33.0
10.5
38.9
83.7
(29.3)
(0.9)
(23.6)
(53.8)
29.9
£m
2.5
7.9
8.8
0.5
19.7
1.0
29.0
10.0
57.7
97.7
(25.1)
(0.8)
(42.0)
(67.9)
29.8
87
1 In the prior period, Lease liabilities were presented within Trade and other payables in the Group Consolidated Statement of Financial Position.
Lease liabilities are now presented separately on the face of the Consolidated Statement of Financial Position with the comparative adjusted to
reflect the change in presentation. Further information on Lease liabilities is given in note 20.
Financial Statements F I N A N C I A L STAT E M E N TS
Consolidated Statement
of Financial Position (continued)
as at 31 December 2023
Non-current liabilities
Trade and other payables 1
Lease liabilities 1
Derivative financial liabilities
Total non-current liabilities
Net assets
Equity
Share capital
Share premium account
Share option reserve
Merger reserve
Retained earnings
Total Equity
Notes
19
20
24
21
22
23
22
22
The financial statements of Argentex Group PLC were approved by the
Board of Directors on 01 May 2024 and were signed on its behalf by:
Jim Ormonde
Director
Registered number 11965856
31 December
2023
31 December
2022
£m
(0.3)
(10.6)
(5.8)
(16.7)
41.0
0.1
12.7
1.0
4.5
22.7
41.0
£m
(0.2)
(5.3)
(5.2)
(10.7)
38.8
0.1
12.7
0.5
4.5
21.0
38.8
1 In the prior period, Lease liabilities were presented within Trade and other payables in the Group Consolidated Statement of Financial Position.
Lease liabilities are now presented separately on the face of the Consolidated Statement of Financial Position with the comparative adjusted to
reflect the change in presentation. Further information on Lease liabilities is given in note 20.
88
Argentex Group PLC Annual Report 2023
Consolidated Statement
of Changes in Equity
for the year ended 31 December 2023
Share
capital
Share
premium
Share
option
reserve
Merger
reserve
Retained
earnings
Total
equity
Balance at 01 April 2022
Comprehensive income
for the period
Profit for the period
Total comprehensive income
for the period
Transactions with owners:
— Dividends paid
— Share-based payments charge
Balance at 31 December 2022
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 December 2023
£m
0.1
—
—
—
—
0.1
—
—
—
—
0.1
£m
12.7
—
—
—
—
12.7
—
—
—
—
12.7
£m
0.4
—
—
—
0.1
0.5
—
—
—
0.5
1.0
£m
4.5
—
—
—
—
4.5
—
—
—
—
4.5
£m
15.5
7.0
7.0
(1.5)
—
£m
33.2
7.0
7.0
(1.5)
0.1
21.0
38.8
5.1
5.1
(3.4)
—
5.1
5.1
(3.4)
0.5
22.7
41.0
89
Financial Statements F I N A N C I A L STAT E M E N TS
Consolidated Statement
of Cash Flows
for the year ended 31 December 2023
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
(Increase) in trade receivables
Increase/(decrease) in trade and other payables
Decrease/(increase) in derivative financial assets
(Decrease)/increase in derivative financial liabilities
(Increase) in other assets
Net lease additions
Net cash generated from/(used in) operating activities
Investing activities
Purchase of intangible assets
Purchases of plant and equipment
Net cash used in investing activities
Financing activities
Payments made in relation to lease liabilities
Dividends paid
Net cash used in financing activities
90
Argentex Group PLC Annual Report 2023
Notes
11
15
20
14
23
16
19
24
24
18
14
15
20
10
Year ended
31 December
2023
9 months ended
31 December
2022
£m
7.3
(2.0)
0.8
1.1
1.2
1.6
0.5
(0.3)
4.3
17.8
(17.8)
(0.5)
(0.4)
13.6
(1.8)
(2.9)
(4.7)
(1.5)
(3.4)
(4.9)
£m
7.8
(2.5)
0.3
0.3
0.6
1.1
0.1
(0.4)
(7.0)
(25.4)
23.3
(2.8)
—
(4.6)
(1.4)
(0.5)
(1.9)
(0.9)
(1.5)
(2.4)
Consolidated Statement
of Cash Flows (continued)
for the year ended 31 December 2023
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Notes
Cash and cash equivalents at the end of the year
17
Year ended
31 December
2023
9 months ended
31 December
2022
£m
4.0
29.0
33.0
£m
(8.9)
37.9
29.0
91
Financial Statements N OT E S TO T H E C O NS O L I DAT E D F I N A N C I A L STAT E M E N TS
1. General information
Argentex Group PLC (“the Company”) is a public limited company, limited by shares, incorporated and domiciled in
England and Wales. The address of the registered office is 25 Argyll Street, London, W1F 7TU.
On 25 June 2019, the Company listed its shares on AIM, the London Stock Exchange’s market for small and medium
size growth companies (“the IPO”).
The Company is the ultimate parent company into which the results of all subsidiaries are consolidated. The
Consolidated Financial Statements for the year ended 31 December 2023 and the nine month period ended 31 December
2022 comprise the financial statements of the Company and its subsidiaries (together, “the Group”). The Group changed
its year end date from 31 March to 31 December in the prior period to align with the calendar year in order to provide
more meaningful information to shareholders and prospective investors. Therefore, the Group presented a shortened
period of nine months in the prior period and therefore amounts presented may not be entirely comparable.
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 periods 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.
2.2. Adoption of new and revised standards
There are no new standards, interpretations and amendments which became mandatorily effective for the
current reporting period which have had any material effect on the financial statements for the Group.
No upcoming changes under IFRS are likely to have a material effect on the reported results or financial
position. Management continues to monitor upcoming changes.
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 2011, the Group has no external debt, and the LLP continues to
generate sufficient cash to support the activities of the Group. Budgets and cash flow forecasts are prepared
to cover a variety of scenarios and are subsequently reviewed by the Directors to ensure they support the
Group’s continuing ability to operate as a going concern. Cash flow forecasts have also been assessed to ensure
that sufficient operational cash is retained in the business over the forecast period. Specific consideration was
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given to the Group’s expected decline in revenue and profit margin projections for FY24 and their impact on
the Group’s trading cash position.
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 24.2 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 Consolidated
Financial Statements.
2.4. Basis of consolidation
The Group Consolidated Financial Statements incorporate the Financial Statements of the Company and entities
controlled by the Company (its subsidiaries) prepared to 31 December 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.
Foreign exchange broking
The Netherlands
Argentex PTY Ltd
Pending regulatory
authorisation
Australia
Argentex Technologies Limited
Dormant subsidiary
England
Argentex (DIFC) (Managing Office) Ltd
Pending regulatory
authorisation
United Arab Emirates
All subsidiary undertakings are 100% owned either directly or indirectly by Argentex Group PLC.
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.
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2.4. Basis of consolidation (cont.)
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.
The following UK subsidiary will take advantage of the audit exemption set out within section 479A of the
Companies Act 2006 for the year ended 31 December 2023.
Name of undertaking
Company number
Argentex Foreign Exchange Limited
07814670
Argentex Group PLC guarantees all outstanding liabilities to which the subsidiary company listed above is
subject at the end of the financial year, until they are satisfied in full. This is in accordance with Section 479C
of the Companies Act 2006.
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 structured solutions, the Group recognises the net option premium receivable as revenue on the
date that the structured solution is executed. The execution date is when a binding contract is entered into
with the client or counterparty. The revenue is fixed and determined representing the difference between the
premiums paid. Structured solutions relates to a range of foreign exchange option structures.
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.
The Group’s financial assets include derivative assets (foreign exchange spot, foreign exchange forward and
foreign exchange structured solution option contracts with customers and banking counterparties) as well
as amortised cost assets including cash and cash equivalents, other assets and trade and other receivables.
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The Group’s financial liabilities include derivative liabilities (foreign exchange spot, foreign exchange forward
and foreign exchange structured solution option contracts) and trade and other payables. The Group does not
apply hedge accounting.
The Group undertakes matched principal broking involving immediate back-to-back derivative transactions
with counterparties. These transactions are classified as derivative financial assets and liabilities. 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 offset 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 Consolidated Statement of Financial
Position. Management have presented the derivative assets and liabilities with banking counterparties and
with clients on a gross basis.
2.7.1. Derivative financial instruments
Derivative financial assets are recognised when the Group becomes a party to the contractual
provisions of the instrument.
Derivative financial assets are measured at fair value through profit or loss (“FVTPL”) as they are held
for trading purposes.
Initial Recognition
Derivative assets are initially measured at fair value at the date the derivative contract is entered into.
The resulting gain or loss is recognised within profit or loss immediately. Transaction costs directly
attributable to the acquisition of such financial assets at fair value through profit or loss are recognised
immediately in profit or loss.
Subsequent Measurement
Derivative assets are subsequently remeasured to fair value at each financial period end date. Any
gains or losses derived from instances such as foreign exchange rate changes, which impact derivative
financial asset revaluation, would be immediately recognised through profit or loss. Valuation
adjustments to reflect potential inherent market risks on the fair value of derivative financial assets
are calculated and recorded where material. The credit valuation adjustment (“CVA”) reflects the market
value of counterparty credit risk and takes into account counterparty, applicable collateral agreements,
predicted losses and probabilities of default.
Derecognition
The Group derecognises derivative financial assets 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 have expired and the obligations of the Group, the client and the
institutional counterparty have been discharged.
2.7.2. Other financial instrument assets
Other financial assets are those which are not derivatives in nature and have been classified using the
amortised cost method. These assets arise principally as Solely Payments of Principal and Interest
(SPPI) and are intended to be held to maturity with all cashflows collected.
Initial Recognition
Purchases or sales of financial assets are recognised and derecognised on a trade date basis when the
Group becomes party to the contractual provisions of the instrument. They are initially recognised at fair
value plus transactions costs that are directly attributable to their acquisition.
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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
2.7.2. Other financial instrument assets (cont.)
Subsequent Measurement
All recognised financial assets are subsequently remeasured in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets.
The Group has applied the simplified approach in IFRS 9 to measure applicable loss allowances at lifetime
expected credit loss (“ECL”). The Group determines the expected credit losses on these items by using a
provision matrix, 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 past due,
whichever occurs earlier.
Derecognition
On derecognition of financial assets 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.
2.7.3. Derivative financial liabilities
Derivative financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the instrument.
Derivative financial liabilities are measured at FVTPL as they are held for trading purposes.
Initial Recognition
Derivative financial liabilities are initially measured at fair value at the date the derivative contract
is entered into. The resulting gain or loss is recognised within profit or loss immediately. Transaction
costs directly attributable to the acquisition of financial liabilities at fair value through profit or loss are
recognised immediately in profit or loss.
Subsequent Measurement
Derivative liabilities are subsequently remeasured to fair value at each financial period end date.
Any gains or losses derived from instances such as foreign exchange changes, which impact financial
liability revaluation, would be immediately recognised through profit or loss.
Derecognition
The Group derecognises derivative financial 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 liabilities have expired and the obligations of the Group, the client and
the institutional counterparty have been discharged.
2.7.4. Other financial instrument liabilities
Other financial liabilities are obligations to pay for goods or services that have been acquired in the
ordinary course of business, not including financial liabilities that are derivatives in nature. Other
financial liabilities are classified using amortised cost. This is used as the default classification method
for financial instruments not held as trade derivatives. The Group’s other financial liabilities include
trade and other payables.
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Argentex Group PLC Annual Report 2023
Initial Recognition
The Group holds amounts payable to customers at amortised cost. These are short term balances that
do not attract interest. Initial recognition consists of fair value minus transaction costs.
Subsequent Measurement
Subsequent measurement then makes use of the effective interest rate method, where applicable,
with interest related charges being recognised as finance costs in the Consolidated Statement of
Comprehensive Income.
Derecognition
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. Other assets
Other assets presented in the Consolidated Statement of Financial Position is made up of cash held as
collateral with banking counterparties and balances segregated to provide for out the money (OTM) positions
with Client Assets Sourcebook (CASS) Clients.
2.10. Leases
In accordance with IFRS 16, at inception of a contract the Group assesses whether a contract is or contains a
lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of the identified asset the Group considers whether:
1. The Group has the right to operate the asset.
2. The Group designed the asset in a way that predetermines how and for what purpose it will be used.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the
lease term, with the discount rate determined by reference to the rate inherent in the lease unless this is not
readily determinable, in which case the Group’s incremental borrowing rate on commencement of the lease is
used. Lease liabilities are 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 depreciated over the remaining (revised)
lease term, or it is recorded in the Consolidated Statement of Comprehensive Income 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 and included within Property,
plant and equipment on the Consolidated Statement of Financial Position.
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2.10. Leases (cont.)
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 depreciated 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.
Dilapidation provisions in relation to Group’s leases are disclosed in Trade and other payables. The provisions
relate to alterations made to the properties leased by the Group. The provisions are expected to unwind at the
end of the leases.
2.11.
Intangible assets and amortisation
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future
economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured.
Software development costs comprise the Group’s bespoke dealing system. Costs that are directly associated
with the production of the 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 life
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.
The intangible asset is tested annually for impairment or more frequently if events or changes in
circumstances indicate that the asset might be impaired.
2.12. Property, plant and 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.
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2.13. Foreign currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling
at the Consolidated Statement of Financial Position 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.
2.14. Cost of sales
Cost of sales includes bank charges paid to banking counterparties, third party platform fees and costs related
to option products taken to limit Group exposure.
2.15. Adjusted operating profit
The Group presents adjusted operating profit as an Alternative Performance Measure in the notes to the
Group Consolidated Financial Statements to provide further detail on prior period cost analysis and EPS.
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 period. Non-adjusted expenditure will
typically relate to one off costs and structural set up costs.
2.16. Employee benefits
(i) Short-term benefits
Short-term employee benefits including holiday pay and annual bonuses are accrued as services are rendered.
(ii) Defined contribution pension plans
The Group operates a defined contribution pension plan for its employees. A defined contribution
plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once
the contributions have been paid, the Group has no further payment obligations. The contributions
are recognised as an expense when they are due. Amounts not paid are shown in accruals in the
Consolidated Statement of Financial Position. The assets of the plan are held separately from the Group in
independently administered funds.
2.17. 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 period end, they are shown as liabilities in the Consolidated
Statement of Financial Position.
2.18. 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.
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2.19. 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 of the Company Share Option
Plan (CSOP) scheme is measured using a Black-Scholes option pricing model. Fair value of the Value Creation
Plan is measured using a Monte Carlo Simulation.
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.
2.20. 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 period. 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.
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.
2.21. Other operating income
Other operating income relates to net interest generated from the Group’s house cash balance and client cash
balances recognised as cash and cash equivalents on the Consolidated Statement of Financial Position along
with interest generated on the Group’s other asset balances.
3. Critical accounting judgements and key sources of estimation uncertainty
In applying the Group’s accounting policies, the Directors are required to make judgements (other than those
involving estimations) that have a significant impact on the amounts recognised and to make estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
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Argentex Group PLC Annual Report 2023
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
3.1. Accounting judgements
The following are the critical judgements, apart from those involving estimations (which are presented
separately below), that the Directors have made in the process of applying the Group’s accounting policies and
that have the most significant effect on the amounts recognised in the financial statements.
(i) Capitalisation of costs to intangible assets
The extent to which costs should be capitalised to intangible assets is a key judgement. The Group
capitalises costs as intangible assets if they have a value that will benefit the performance of the Group
over future periods.
(ii) Credit valuation adjustment
The CVA is a calculation based on the credit risk of counterparties inherent in the valuation of derivative
financial instruments. The failure of a client to settle a contracted trade carries the risk of loss equal to the
prevailing fair value of the trade. Within the CVA calculation to quantify credit risk, judgement is required
in determining the credit quality of the client based on current market and other information and key
estimates include loss on default of a client and the probability of default. A 10 percent increase across all
Probability of Defaults (PDs) would result in decreased operating profit of £0.2m (2022: £0.1m).
(iii) Share-based payments
In determining the fair value of equity-settled awards and the related charge to the Consolidated
Statement of Comprehensive Income, the Group makes use of option valuation models which require key
judgements to be made in assessing the inputs. Key judgements include the number of shares on vesting,
the risk-free interest rate, dividend yield and share price volatility.
3.2. Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting
period that may 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.
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 £0.4m
(2022: £0.7m), decreasing the estimated useful life from 3 years to 2 years would result in decreased operating
profit of £0.8m (2022: £1.3m).
4. Segment reporting
For the year to December 2023, the Group consisted of a single operating segment (being Argentex LLP’s foreign
currency dealing business) that operated in a market not bound by geographical constraints as the overseas
subsidiaries are yet to obtain full licenses in their jurisdictions and continued to trade on behalf of Argentex LLP.
There is no reliance on an individual customer and no customer contributed to more than 10 percent of revenues in
the year ended 31 December 2023 or period ended 31 December 2022.
101
Financial Statements
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
5. Revenue
An analysis of the Group’s revenue is as follows:
Spot foreign exchange contracts
Forward foreign exchange contracts
Structured solutions
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)
7. Auditor’s remuneration
Fees payable to the Group’s auditor and its associates for
services to the Group:
The audit of financial statements of the Group and subsidiaries
Other assurance and advisory services
Year ended
31 December 2023
£m
9 months ended
31 December 2022
£m
13.4
29.5
7.0
49.9
9.3
27.9
3.8
41.0
Year ended
31 December 2023
£m
9 months ended
31 December 2022
£m
1.1
1.2
1.6
27.7
(0.4)
0.3
0.6
1.1
20.2
—
Year ended
31 December 2023
9 months ended
31 December 2022
£m
0.4
0.1
0.5
£m
0.3
—
0.3
8. Non-adjusted expenditure
The Directors classify certain costs as non-adjusted in accordance with the accounting policy set out in note 2.15.
In the year to December 2023 there was no classified (£nil) non-adjusted costs.
In the nine month period to December 2022 the non-adjusted costs amount to £0.8m and related to the creation
of and regulatory applications for overseas operations and fees incurred in the period in relation to the Group’s
executive leadership change.
102
Argentex Group PLC Annual Report 2023
5. Revenue
9. Staff costs
Year ended
31 December 2023
9 months ended
31 December 2022
The average number of employees employed by the Group, including executive and non-executive directors, was:
£m
13.4
29.5
7.0
49.9
£m
1.1
1.2
1.6
27.7
(0.4)
£m
0.4
0.5
£m
9.3
27.9
3.8
41.0
£m
0.3
0.6
1.1
20.2
—
£m
0.3
—
0.3
An analysis of the Group’s revenue is as follows:
Spot foreign exchange contracts
Forward foreign exchange contracts
Structured solutions
Operating profit for the period is stated after charging:
6. Operating profit
Depreciation of plant and equipment
Depreciation of right of use assets
Amortisation of intangibles
Staff costs (see note 9)
Net foreign exchange (gains)
7. Auditor’s remuneration
Year ended
31 December 2023
9 months ended
31 December 2022
Fees payable to the Group’s auditor and its associates for
services to the Group:
The audit of financial statements of the Group and subsidiaries
Other assurance and advisory services
0.1
8. Non-adjusted expenditure
The Directors classify certain costs as non-adjusted in accordance with the accounting policy set out in note 2.15.
In the year to December 2023 there was no classified (£nil) non-adjusted costs.
In the nine month period to December 2022 the non-adjusted costs amount to £0.8m and related to the creation
of and regulatory applications for overseas operations and fees incurred in the period in relation to the Group’s
executive leadership change.
Directors
LLP members (excl. executive directors)
Sales and dealing
Operations
Year ended
31 December 2023
9 months ended
31 December 2022
Employees, members and directors as at 31 December 2023 and 2022
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
Year ended
31 December 2023
9 months ended
31 December 2022
No.
6
4
85
74
169
196
No.
7
5
66
47
125
137
Year ended
31 December 2023
£m
9 months ended
31 December 2022
£m
20.3
2.3
0.5
0.5
2.6
1.5
27.7
12.7
1.4
0.1
0.1
4.2
1.7
20.2
Year ended
31 December 2023
9 months ended
31 December 2022
£m
1.5
£m
1.7
*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 are remunerated under the Amended and Restated LLP
Agreement by a combination of (i) fixed annual remuneration (ii) participation in revenue commission schemes
(iii) annual bonuses and (iv) other variable compensation based on the LLP’s performance.
Key management are those persons having authority and responsibility for planning, controlling, and directing the
activities of the Group, or in relation to the Company. 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.
103
Financial Statements
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
10. Dividends
Amounts recognised as distributions to equity holders:
Final dividend for the 9 month period ended 31 December 2022
of 2.25p per share (December 2022: dividend for the year ended
31 March 2022 of 1.25p per share)
Interim dividend for the year to 31 December 2023 of 0.75p per share
(2022: nil )
Proposed final dividend for the year ended 31 December 2023
of nil per share (2022: 2.25p per share)
11. Finance costs
Interest on lease arrangements
12. Taxation
Year ended
31 December 2023
9 months ended
31 December 2022
£m
2.5
0.9
3.4
—
£m
1.5
—
1.5
2.5
Year ended
31 December 2023
9 months ended
31 December 2022
£m
0.8
£m
0.3
Year ended
31 December 2023
9 months ended
31 December 2022
£m
£m
Income tax recognised in Consolidated Statement of Comprehensive Income:
Current tax
Current tax on profit for the year
Adjustments in respect of prior years
Total current tax
Deferred tax
Origination and reversal of temporary differences
Total deferred tax
Total tax expense
1.6
0.3
1.9
0.3
0.3
2.2
1.3
—
1.3
(0.5)
(0.5)
0.8
Tax has been calculated using an estimated annual effective tax rate of 23.5% (2022: 19%) on profit before tax.
104
Argentex Group PLC Annual Report 2023
10. Dividends
The increase is due to the increase in the UK main rate of corporation tax on 01 April 2023 to 25% from 19%.
Year ended
31 December 2023
9 months ended
31 December 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:
Year ended
31 December 2023
9 months ended
31 December 2022
Amounts recognised as distributions to equity holders:
Final dividend for the 9 month period ended 31 December 2022
of 2.25p per share (December 2022: dividend for the year ended
31 March 2022 of 1.25p per share)
Interim dividend for the year to 31 December 2023 of 0.75p per share
(2022: nil )
Proposed final dividend for the year ended 31 December 2023
of nil per share (2022: 2.25p per share)
11. Finance costs
Interest on lease arrangements
12. Taxation
Income tax recognised in Consolidated Statement of Comprehensive Income:
Current tax
Current tax on profit for the year
Adjustments in respect of prior years
Origination and reversal of temporary differences
Total current tax
Deferred tax
Total deferred tax
Total tax expense
£m
2.5
0.9
3.4
—
£m
0.8
1.6
0.3
1.9
0.3
0.3
2.2
£m
1.5
—
1.5
2.5
£m
0.3
1.3
—
1.3
(0.5)
(0.5)
0.8
Profit/(loss) for the year
Income tax expense
Profit before income taxes
Tax using the Group's domestic tax rate of 23.5% (2022: 19%)
Effects of:
Expenses not deductible for tax purposes
Other amounts charged
Adjustments in respect of prior years
Tax credit relating to future periods
Total tax on ordinary activities
Year ended
31 December 2023
9 months ended
31 December 2022
£m
£m
Current tax assets and liabilities
Corporation tax
Current tax liability
Year ended
31 December 2023
9 months ended
31 December 2022
£m
5.1
2.2
7.3
1.7
0.1
—
0.4
—
2.2
£m
7.0
0.8
7.8
1.5
—
0.2
(0.4)
(0.5)
0.8
Year ended
31 December 2023
£m
9 months ended
31 December 2022
£m
(0.6)
(0.6)
(0.7)
(0.7)
Year ended
31 December 2023
9 months ended
31 December 2022
Tax has been calculated using an estimated annual effective tax rate of 23.5% (2022: 19%) on profit before tax.
Deferred tax in relation to timing differences on fixed assets. There is no expiry on the deferred tax asset.
The deferred tax asset is based on the future rate of corporation tax 25%.
Deferred tax
Assets
At 1 January 2023 and 1 April 2022
Current year movement recognised
Tax credit relating to future periods
Total deferred tax asset
£m
0.5
(0.3)
—
0.2
£m
—
—
0.5
0.5
105
Financial Statements
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
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 2.15.
Year ended
31 December 2023
9 months ended
31 December 2022
£m
£m
Earnings
Earnings for the purposes of basic and diluted earnings per share
— basic and diluted
Adjustments for:
Non-adjusted expenditure
Share-based payments
Tax impact
Adjusted earnings (basic and diluted)
Number of shares
5.1
—
0.5
(0.1)
5.5
The calculation of basic and diluted 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
Earnings per share
Basic
Diluted
Adjusted — Basic
Adjusted — Diluted
113.2
0.1
113.3
4.6p
4.6p
5.0p
5.0p
7.0
0.8
0.1
(0.2)
7.7
113.2
0.1
113.3
6.2p
6.2p
6.8p
6.8p
The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all
of which arise from share options. A calculation is performed to determine the number of share options that are
potentially dilutive based on the number of shares that could have been acquired at fair value, considering the
monetary value of the subscription rights attached to outstanding share options.
106
Argentex Group PLC Annual Report 2023
14. Intangible fixed assets
Cost
At 31 March 2022
Additions
At 31 December 2022
Additions
At 31 December 2023
Amortisation
At 31 March 2022
Charge for 9 month period
At 31 December 2022
Charge for year
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
Software development costs
£m
7.4
1.4
8.8
1.8
10.6
5.2
1.1
6.3
1.6
7.9
2.5
2.7
107
Financial Statements
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
15. Property, plant and equipment
Leasehold
improvements
£m
Right of use
asset
£m
Office
equipment
£m
Computer
equipment
£m
Cost
At 31 March 2022
Additions
Disposals
At 31 December 2022
Additions
Disposals
At 31 December 2023
Depreciation
At 31 March 2022
Charge for the 9 month period
Disposals
At 31 December 2022
Charge for the year
Disposals
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
1.8
—
—
1.8
2.0
—
3.8
0.3
0.1
—
0.4
0.4
—
0.8
1.4
3.0
7.3
—
—
7.3
6.6
—
13.9
1.5
0.6
—
2.1
1.2
—
3.3
5.2
10.6
0.8
0.5
—
1.3
0.5
—
1.8
0.1
0.1
—
0.2
0.4
—
0.6
1.1
1.2
0.7
—
—
0.7
0.4
—
1.1
0.4
0.1
—
0.5
0.3
—
0.8
0.2
0.3
Right of use asset relates to head office lease disclosed in note 20.
16. Trade and other receivables
Total
£m
10.6
0.5
—
11.1
9.5
—
20.6
2.3
0.9
—
3.2
2.3
—
5.5
7.9
15.1
31 December 2023
31 December 2022
£m
0.6
0.7
1.3
£m
—
1.0
1.0
Current
Other receivables
Prepayments
Trade and other receivables
108
Argentex Group PLC Annual Report 2023
15. Property, plant and equipment
17. Cash and cash equivalents
Leasehold
Right of use
asset
£m
Office
equipment
Computer
equipment
£m
£m
improvements
£m
1.8
—
—
1.8
2.0
—
3.8
0.3
0.1
—
0.4
0.4
—
0.8
1.4
3.0
7.3
—
—
7.3
6.6
—
13.9
1.5
0.6
—
2.1
1.2
—
3.3
5.2
10.6
0.8
0.5
—
1.3
0.5
—
1.8
0.1
0.1
—
0.2
0.4
—
0.6
1.1
1.2
0.7
—
—
0.7
0.4
—
1.1
0.4
0.1
—
0.5
0.3
—
0.8
0.2
0.3
Cost
At 31 March 2022
At 31 December 2022
Additions
Disposals
Additions
Disposals
At 31 December 2023
Depreciation
At 31 March 2022
Disposals
At 31 December 2022
Charge for the year
Disposals
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
Charge for the 9 month period
Current
Other receivables
Prepayments
Trade and other receivables
Right of use asset relates to head office lease disclosed in note 20.
16. Trade and other receivables
31 December 2023
31 December 2022
£m
0.6
0.7
1.3
Total
£m
10.6
0.5
—
11.1
9.5
—
20.6
2.3
0.9
—
3.2
2.3
—
5.5
7.9
15.1
£m
—
1.0
1.0
Cash and cash equivalents
31 December 2023
31 December 2022
£m
33.0
£m
29.0
Included within cash and cash equivalents are client held funds relating to margins received and client balances
payable. These amounts are disclosed as amounts payable to clients of £14.7m (2022: £12.8m) in note 19 and are not
available for the Group’s own use. 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.
Client balances that fall under the scope of the FCA’s Client Assets Sourcebook (“CASS”) are held in segregated client
bank accounts which are off balance sheet and excluded from the cash and cash equivalents figure.
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. Other assets
Collateral with banking counterparties
Balances segregated for CASS MTM
Other assets
31 December 2023
31 December 2022
£m
5.7
4.8
10.5
£m
10.0
—
10.0
Other assets is made up of collateral with banking counterparties and balances segregated to provide for OTM
positions with CASS Clients. Client margins received and disclosed within client balances payable are used to service
margin calls with counterparties.
19. Trade and other payables
Non-current
Lease dilapidation provisions
Trade and other payables
Current
Amounts payable to clients
Corporation tax
Amounts due to members and former members of Argentex LLP
Trade payables
Accruals
Other taxation and social security
Trade and other payables
31 December 2023
31 December 2022
£m
0.3
0.3
14.7
0.6
0.4
6.9
5.6
1.1
29.3
£m
0.2
0.2
12.8
0.7
4.4
0.4
6.1
0.7
25.1
109
Financial Statements
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
20. Leases
In May 2020, the Group signed a ten-year lease for its head office premises at Argyll Street, London. In February 2023,
the Group signed a nine-year lease for an additional floor for its head office at Argyll Street, London and in February
2023, the Group signed a five-year lease for its office in the Netherlands.
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 2.10. The lease payments are discounted
using the interest rate implicit in the UK leases (7%). The implicit interest rate is not evident in the Dutch lease and
therefore management have assessed the incremental borrowing rate to be 7%. In the prior period, an incremental
borrowing rate of 6% was used to discount the lease liability. The Group remeasured its liability for its head office
lease signed in May 2020 as a deed of variation was signed in February 2023. Information about the lease liability is
presented below:
31 December 2023
31 December 2022
Lease liability at beginning of financial period
Additions
Payments made in the period
Unwinding of finance costs
Lease liability at end of financial period
Of which
Current
Non-current
£m
6.1
6.1
(1.5)
0.8
11.5
0.9
10.6
£m
6.6
—
(0.9)
0.4
6.1
0.8
5.3
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)
Year ended
31 December 2023
9 months ended
31 December 2022
£m
1.2
0.8
£m
0.6
0.3
Maturity profile of lease liability based on contractual (undiscounted) payments disclosed in note 24.
21. Share capital
Allotted and paid up
Ordinary shares
Management shares
Nominal value
At 1 January 2023 and 31 December 2023
113,207,547
23,589,212
No.
No.
£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.
110
Argentex Group PLC Annual Report 2023
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.
22. Reserves
Details of the movements in reserves are set out in the Consolidated Statement of Changes in Equity. A description
of each reserve is set out below.
Share premium
The share premium account is used to record the aggregate amount or value of premiums paid in excess of the
nominal value of share capital issued, less deductions for issuance costs. Where an equity issuance is accounted for
using merger relief, no share premiums are recorded.
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 share option schemes that are explained in note 23 of these Consolidated Financial Statements.
The Group recognises the services received from eligible scheme participants as a charge through the Consolidated
Statement of Comprehensive Income, 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 Comprehensive Income, less amounts distributed to shareholders.
23. Share-based payments
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 of the CSOP schemes is measured using a Black-Scholes
option pricing model. Fair value of the Value Creation Plan is measured using a Monte Carlo Simulation.
When share options are exercised, the Group issues new shares.
CSOP
In June 2019, the Group issued 311,311 share options under Part I of an approved company share option plan (“CSOP”)
to participating employees. The share options have an exercise price of £1.06, being the IPO issue price, and vest
three years after issuance. The fair value of these options at issuance has been derived using a Black-Scholes model,
with expected volatility of 30%, based on derived volatilities of the AIM index and the similar listed entities to the
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.
In the year to March 2021, the Group issued a total of 4,981,130 share options under Parts I, II and III of the company
share option plans (“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
111
Financial Statements
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
23. Share-based payments (cont.)
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.
Movements in the number of outstanding share options during the period and their weighted average exercise
prices are shown in the following table.
31 December 2023
31 December 2022
Average exercise
price (£)
Number of options
outstanding
Average exercise
price (£)
Number of options
outstanding
1.35
—
—
—
1.35
996,226
—
—
—
996,226
1.34
—
1.34
—
1.35
4,726,407
—
(3,730,181)
—
996,226
Outstanding at
beginning of period
Granted
Forfeited
Exercised
Outstanding at
end of period
The share-based payment charge in relation to the above scheme in the period ended 31 December 2023 is £nil
(31 December 2022: £0.1m).
Value Creation Plan
In November 2022, selected employees and senior executives of the Group were issued with Growth shares in
Argentex Capital Limited. When and to the extent vested, the growth shares will be exchanged into ordinary
shares of Argentex Group PLC. The Growth shares vest in two equal tranches (A and B) over two periods. Growth
A shares vest over a three year and four-month period and Growth B shares vest over a four year and four-month
period. The rate of exchange is that the Growth Shares will be regarded as worth a pro rata share of the share
price gain of Argentex Group PLC above hurdle prices. Upon exchange, the number of ordinary shares in
Argentex Group PLC that a Growth shareholder will receive is such number of shares whose value is equivalent
to the Group’s closing share price at the exchange date subject to the extent that Growth shares have vested.
The average weighted value of Growth shares granted in Argentex Capital Limited is £85.
The share-based payment charge of the Value Creation Plan in the period ended 31 December 2023 was £0.5m
(2022: £nil).
31 December 2023
31 December 2022
Number of options outstanding
Number of options outstanding
20,000
—
(1,750)
—
18,250
—
20,000
—
—
20,000
Outstanding at beginning of period
Granted in period
Forfeited in period
Exercised in period
Outstanding at end of period
112
Argentex Group PLC Annual Report 2023
The fair value of the Growth shares was calculated using a Monte Carlo simulation model. The model considers
historical and expected dividends and the share price volatility of the Group to predict the share performance. When
determining the fair value of awards, service and non-market performance conditions are not considered. However,
the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity
instruments that will ultimately vest. Market performance conditions are reflected within the fair value. The
assumptions relating to the fair value charge include share price at grant, risk free interest rate, time to vesting and
expected share price volatility.
The total share-based payment reserve at 31 December 2023 is £1.0m (31 December 2022: £0.5m).
24. Financial instruments
The Directors have performed an assessment of the risks affecting the Group through its use of financial
instruments and believe the principal risks to be: capital risk; credit risk; market risk, including interest rate risk and
foreign exchange risk.
24.1. Capital management
Capital risk is the risk that there are insufficient Own Funds to support the Group’s business activities and
to meet its regulatory capital requirements. Own Funds are the sum of the Group’s common equity tier 1
capital, additional tier 1 capital and tier 2 capital. The Group manages its capital to ensure that entities in the
Group will be able to continue on a going concern basis while maximising the return. Capital is repayable in
accordance with the terms set out in the partnership agreement. Management regularly reviews the adequacy
of the Group's capital and ensures capital held remains in excess of regulatory requirements. The Group
manages its capital resources with reference to both the business and regulatory requirements. This process
also ensures there is adequate capital and liquidity to either absorb losses or to ensure there are adequate
levels to perform an orderly wind-down without causing undue harm to clients, counterparties, or the market.
24.2. 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 and achieve its strategic objectives.
Market risk
Market risk for the Group comprises foreign exchange risk and interest rate risk. Foreign exchange risk
arises from the exposure to changes in foreign exchange spot and forward prices and volatilities of foreign
exchange rates.
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 to meet its immediate obligations with
those institutional counterparties.
Foreign exchange risk — sensitivity analysis
The Group’s significant cash balances other than those denominated in pounds sterling are foreign currency
balances held in Euros and US Dollars.
The table below shows the impact on the Group’s operating profit of a 10% change in the exchange rate of
Euros and US Dollars against pounds sterling.
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24.2. Financial risk management objectives (cont.)
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
31 December 2023
31 December 2022
£m
1.1
(0.9)
0.7
(0.6)
£m
1.2
(1.0)
1.5
(1.2)
Interest rate risk affects the Group to the extent that forward foreign exchange contracts and foreign
exchange structured solutions 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 through the matching of
foreign currency assets and liabilities between clients and institutional counterparties which move in parity.
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.
Derivative financial assets at balance sheet date by contractual maturity
The following table details the profile of the Group’s derivative financial assets. The amounts are based on the
undiscounted cashflows based on the earliest date on which the contractual cashflows are due to the Group.
31 December 2023
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial assets
£m
1,072.7
£m
585.1
£m
716.1
£m
492.4
31 December 2022
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial assets
£m
1,012.5
£m
372.6
£m
511.7
£m
337.3
Total
£m
2,866.3
Total
£m
2,234.1
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Argentex Group PLC Annual Report 2023
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
31 December 2023
31 December 2022
£m
1.1
(0.9)
0.7
(0.6)
£m
1.2
(1.0)
1.5
(1.2)
Interest rate risk affects the Group to the extent that forward foreign exchange contracts and foreign
exchange structured solutions 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 through the matching of
foreign currency assets and liabilities between clients and institutional counterparties which move in parity.
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.
Derivative financial assets at balance sheet date by contractual maturity
The following table details the profile of the Group’s derivative financial assets. The amounts are based on the
undiscounted cashflows based on the earliest date on which the contractual cashflows are due to the Group.
31 December 2023
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial assets
Derivative financial assets
£m
1,072.7
£m
1,012.5
£m
585.1
£m
372.6
£m
716.1
£m
511.7
£m
492.4
£m
337.3
31 December 2022
0-3 months
3-6 months
6-12 months
12 months +
Total
£m
2,866.3
Total
£m
2,234.1
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 December 2023
0-3 months
3-6 months
6-12 months
12 months +
Derivative financial
liabilities
£m
1,068.0
£m
581.9
£m
710.1
£m
487.7
31 December 2022
0-3 months
3-6 months
6-12 months
12 months +
£m
1,005.4
£m
370.4
£m
506.5
£m
334.2
Derivative financial
liabilities
Other financial liabilities
Total
£m
2,847.7
Total
£m
2,216.5
The table below summarises the maturity profile of the Group’s other financial liabilities based on contractual
(undiscounted) payments.
31 December 2023
Up to 1 year
1 year +
Total
Amounts payable to clients
Other payables
Lease liabilities
£m
14.7
10.9
1.7
27.3
£m
—
—
13.6
13.6
£m
14.7
10.9
15.3
40.9
31 December 2022
Up to 1 year
1 year +
Total
Amounts payable to clients
Other payables
Lease liabilities
Credit risk
£m
12.8
4.8
1.2
18.8
£m
—
—
6.3
6.3
£m
12.8
4.8
7.5
25.1
The failure of a client to settle a contracted trade carries the risk of loss equal to the prevailing fair value of the
trade. The Group employs rigorous procedures and ongoing monitoring to mitigate this risk and 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 assigns a credit
limit. Limits and scoring attributed to customers are reviewed on an ongoing basis. Individual counterparty
exposures are monitored against assigned limits by the Risk function to ensure appropriate escalation and
mitigating action is taken.
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24.2. Financial risk management objectives (cont.)
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 trade debtors 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.
24.3. 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.
31 December 2023
31 December 2022
£m
£m
9.8
38.9
48.7
33.0
10.5
43.5
8.8
57.7
66.5
29.0
10.0
39.0
Financial asset instruments
Measured at FVTPL
Non-current
Derivative financial assets
Current
Derivative financial assets
Total derivative financial assets
Measured at amortised cost
Current
Cash and cash equivalents
Other assets
Total amortised cost assets
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Argentex Group PLC Annual Report 2023
Financial liability instruments
Measured at FVTPL
Non-current
Derivative financial liability
Current
Derivative financial liability
Total derivative financial liabilities
Measured at amortised cost
Amounts payable to clients
Other creditors
Amounts due to members and former members of Argentex LLP
Accruals (excluding non-financial instruments)
Lease liabilities
Non-derivative financial liabilities
31 December 2023
31 December 2022
£m
£m
(5.8)
(23.6)
(29.4)
(14.7)
(8.7)
(0.4)
(1.7)
(11.5)
(37.0)
(5.2)
(42.0)
(47.2)
(12.8)
(1.1)
(2.9)
(1.0)
(6.1)
(23.9)
Derivative financial assets and derivative financial liabilities include derivative transactions with banking
counterparties. The transactions are subject to ISDA (International Swaps and Derivatives Association) Master
Agreements and similar master agreements which provide a legally enforceable right to offset under certain
conditions. These derivative financial instruments have not been offset in the Consolidated Statement of
Financial Position but are presented separately in the table below. These derivatives are subject to collateral
and margin calls by banking counterparties and the amounts are disclosed in note 18.
Amounts with counterparties subject to Master Netting agreements:
Derivative financial assets
Derivative financial liabilities
31 December 2023
31 December 2022
£m
27.1
17.8
£m
29.5
31.3
117
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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
24.4. 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 December 2023, 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 period, the Group included a CVA of £0.5m (2022: £1.1m) to represent the credit risk inherent
in the fair value of derivative financial instruments. 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 25 best represents their
respective maximum exposure to credit risk. Note 24.6 details the Group’s credit risk management policies.
24.5. Counterparty risk
The Group relies on third party institutions in order to trade and clear settlement funds through client
accounts. To reduce counterparty credit risk to acceptable levels, the Group 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 to mitigate counterparty risk.
24.6. Credit risk management
Note 24.4 details the Group’s 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.
25. Fair value measurements
This note provides information about how the Group determines fair values of various financial assets and
financial liabilities.
25.1. 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.
118
Argentex Group PLC Annual Report 2023
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
31 December
2023
31 December
2022
Assets
£48.7m;
and
Liabilities
£29.4m
Assets
£66.5m;
and
Liabilities
£47.2m
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.
Future cashflows are estimated based on
forward exchange rates and contract rates,
discounted to reflect maturity.
25.2. 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 are a reasonable approximation of their fair value.
26. Related party transactions
As at 31 December 2023, no material related transactions require further disclosure.
27. Contingent liabilities
As at 31 December 2023 there were no capital commitments or contingent liabilities (2022: none).
28. Controlling party
In the opinion of the Directors there is no ultimate controlling party of Argentex Group PLC.
29. Events after the reporting date
On 14 March 2024, the Group received an Employment Tribunal claim from a former director. The Group will contest
the claim.
119
Financial Statements
F I N A N C I A L STAT E M E N TS
Company Statement
of Financial Position
as at 31 December 2023
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
31 December 2023
31 December 2022
£m
61.8
61.8
6.0
6.0
(5.1)
(5.1)
62.7
0.1
12.7
1.0
45.5
3.4
62.7
£m
120.1
120.1
8.7
8.7
(5.3)
(5.3)
123.5
0.1
12.7
0.5
106.0
4.2
123.5
Under section s408 of the Companies Act 2006 the
Company is exempt from the requirement to present its
own income statement. The trading profit for the year
was £2.6m (December 2022: £4.9m). The Loss for the year
following the impairment to the Company’s investment
in Argentex Capital Limited under IAS 36 was £57.9m
(December 2022: £4.9m). The impairment amount is offset
by an equal credit to Retained earnings from the Merger
reserve. There is no impact on the Group consolidated
financial statements.
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Argentex Group PLC Annual Report 2023
The financial statements of Argentex Group PLC were
approved by the Board of Directors on 01 May 2024 and
were signed on its behalf by:
Jim Ormonde
Director
Registered number 11965856
Company Statement
of Changes in Equity
for the year ended 31 December 2023
Share
capital
Share
premium
Balance at 01 April 2022
Total comprehensive income
for the period
Transactions with owners:
Dividends paid
Share-based payments charge
Balance at 31 December 2022
Total comprehensive loss for the year
Transactions with owners:
Dividends paid
Share-based payments charge
Transfer between reserves
£m
0.1
—
—
—
0.1
—
—
—
—
£m
12.7
—
—
—
—
—
—
—
Balance at 31 December 2023
0.1
12.7
Share
option
reserve
£m
0.4
—
—
0.1
Merger
reserve
Retained
earnings
Total
equity
£m
106.0
—
—
—
£m
0.8
4.9
(1.5)
—
£m
120.0
4.9
(1.5)
0.1
12.7
0.5
106.0
4.2
123.5
—
—
0.5
—
1.0
—
—
—
(60.5)
(57.9)
(57.9)
(3.4)
—
60.5
(3.4)
0.5
—
45.5
3.4
62.7
121
Financial Statements 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
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 7TU.
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. The Company changed its year end date from 31 March to
31 December in the prior period and has presented a shortened comparative period of nine months. Therefore
amounts presented may not be entirely comparable.
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)
— 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 Profit or Loss. To the extent applicable, balances in the Merger reserve will be
recycled into Retained earnings to correspond with any impairment charge.
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Argentex Group PLC Annual Report 2023
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 reduced the carrying value of the investments in subsidiaries to their
recoverable amount under IAS 36.
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:
31 December 2023
31 December 2022
N0.
6
£m
0.4
N0.
7
£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 31 March 2022
Additions
At 31 December 2022
Additions
Impairment of investment in subsidiary
At 31 December 2023
£m
118.4
1.7
120.1
2.2
(60.5)
61.8
123
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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
6. Investment in subsidaries (cont.)
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
Holding Company
England
Argentex B.V.
Argentex PTY Ltd
Argentex (DIFC)
(Managing Office) Ltd
Foreign exchange
broking
Pending regulatory
authorisation
Pending regulatory
authorisation
The Netherlands
Australia
United Arab Emirates
Indirectly held
Argentex LLP
Argentex Foreign
Exchange Limited
Argentex Technologies
Limited
Foreign exchange
broking
England
Holding Company
England
Dormant Company
England
25 Argyll Street,
London, W1F 7TU
Herengracht 54, Amsterdam,
The Netherlands
Level 27, 120 Collins Street,
Melbourne Vic 3000
Unit 606, Innovation One,
Dubai international
financial centre,
Dubai, UAE
25 Argyll Street,
London, W1F 7TU
25 Argyll Street,
London, W1F 7TU
25 Argyll Street,
London, W1F 7TU
All subsidiaries are majority owned either directly or indirectly owned by the Company. During FY23, as the result of the
decline in trading performance, a review was carried out of the recoverable amount of its investment in Argentex Capital
Limited. This led to the recognition of an impairment loss of £60.5m, which has been recognised in profit or loss, offset by
a release from the Merger reserve. The fair value less costs of disposal was deemed to be higher than the value in use and
was used to determine the recoverable amount of the investment. This was determined as Level 2 in the fair value
hierarchy and the valuation technique used quoted prices for the Group adjusted for post year end share performance.
7. Trade and other receivables
Other receivables
Amounts due from group companies
31 December 2023
£m
31 December 2022
£m
0.1
5.9
6.0
0.1
8.6
8.7
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
Trade payables
Amounts owed to group companies
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Argentex Group PLC Annual Report 2023
31 December 2023
£m
31 December 2022
£m
0.2
4.9
5.1
0.1
5.2
5.3
Details of the Company’s subsidiaries, which are all included in the Consolidated Financial Statements of the Group,
The Directors consider that the carrying amount of Trade and other payables is a reasonable approximation of their
fair value. Amounts owed to group undertakings are unsecured, interest free, and repayable on demand. All Trade
and other payables amounts are short-term.
Name of undertaking
Nature of business
Country of incorporation
Address
9. Share capital
are as follows:
Directly held
Argentex B.V.
Foreign exchange
The Netherlands
Herengracht 54, Amsterdam,
Argentex Capital Limited
Holding Company
England
Argentex PTY Ltd
Pending regulatory
Australia
broking
authorisation
Allotted and paid up
Ordinary shares of £0.0001 each
Management shares of £0.0025 each
Ordinary
shares
No.
Management
shares
No.
113,207,547
—
—
23,589,212
Argentex (DIFC)
Pending regulatory
United Arab Emirates
Unit 606, Innovation One,
(Managing Office) Ltd
authorisation
At 31 December 2022 and 31 December 2023
113,207,547
23,589,212
10. Reserves
Details of the movements in reserves are set out in the Company Statement of Changes in Equity. A description of
each reserve is set out below.
Share premium
The Share premium account is used to record the aggregate amount or value of premiums paid less issuance costs
when the Company’s shares are issued at a premium.
Share option reserve
The Company operates a share option scheme that is explained in Note 23 of the Consolidated Financial Statements.
The Company is the settling entity of the share based payment scheme, and recognises the services received as an
increase in investments in subsidiary undertakings, with the corresponding entry credited to the Share option reserve.
Merger reserve
The Merger reserve represents the difference between the cost of the investment (being the fair value at acquisition)
and the nominal value of shares being issued. 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 Limited, 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.
In the current year, the Merger reserve was reduced by £60.5m following an assessment of the carrying value of the
Investments in subsidiaries under IAS 36.
Retained earnings
Retained earnings are the accumulated undistributed profits of the Company that have been recognised through the
Company Statement of Profit or Loss, less amounts distributed to shareholders.
The Directors declared a final dividend of 2.25p per ordinary share for the period to 31 December 2022 amounting to
£2,547,169.80 which was paid in the period. The Directors declared an interim dividend of 0.75p per ordinary share for
the year to 31 December 2023 amounting to £849,056.60 which was paid in the period.
11. Events after the reporting date
On 14 March 2024, the Company received an Employment Tribunal claim from a former director. The Company will
contest the claim.
125
Indirectly held
Argentex LLP
Argentex Foreign
Exchange Limited
Limited
Foreign exchange
England
broking
Holding Company
England
Argentex Technologies
Dormant Company
England
All subsidiaries are majority owned either directly or indirectly owned by the Company. During FY23, as the result of the
decline in trading performance, a review was carried out of the recoverable amount of its investment in Argentex Capital
Limited. This led to the recognition of an impairment loss of £60.5m, which has been recognised in profit or loss, offset by
a release from the Merger reserve. The fair value less costs of disposal was deemed to be higher than the value in use and
was used to determine the recoverable amount of the investment. This was determined as Level 2 in the fair value
hierarchy and the valuation technique used quoted prices for the Group adjusted for post year end share performance.
7. Trade and other receivables
Other receivables
Amounts due from group companies
8. Other payables
Trade payables
Amounts owed to 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.
25 Argyll Street,
London, W1F 7TU
The Netherlands
Level 27, 120 Collins Street,
Melbourne Vic 3000
Dubai international
financial centre,
Dubai, UAE
25 Argyll Street,
London, W1F 7TU
25 Argyll Street,
London, W1F 7TU
25 Argyll Street,
London, W1F 7TU
31 December 2023
31 December 2022
£m
0.1
5.9
6.0
£m
0.2
4.9
5.1
£m
0.1
8.6
8.7
£m
0.1
5.2
5.3
31 December 2023
31 December 2022
Financial Statements
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.
AML – Anti Money Laundering.
CAGR – Compound annual growth rate.
CASS – The FCA's Client Assets Sourcebook (CASS)
provides rules for firms to follow whenever the firm
holds or controls client money or safe custody assets.
CASS helps ensure the safety of client money and
assets if a firm fails and leaves the market.
CSOP – Company Share Options Plan.
Directors – individuals who hold either executive or
non-executive positions in Argentex Group PLC.
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.
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.
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 25 June 2019.
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.
OTC – Over the counter. A transaction agreed directly
between two parties without the use of a central clearing
house or exchange.
PRU – Principal Risks and Uncertainties.
RegTech – Companies that use cloud computing
technology through software-as-a-service (SaaS) to help
businesses comply with regulations. Regtech is also
known as regulatory technology.
Revenue – The total in pounds sterling of all profits made
during the financial period.
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.
Spot – An FX trade between two parties, who exchange
currencies within two business days following the
agreement of the trade.
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.
Structured Solutions – 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, a
structured solutions contract may provide the potential
for achieving a rate better than that available in a
standard forward contract.
VCP – Value Creation Plan.
Year end / Period end – 31 December.
126
Argentex Group PLC Annual Report 2023
KPI
Comparatives
Table
Revenue
Operating profit
EPS basic
Final dividend
Total dividend
New clients traded
Total clients traded
12 months to
31 December 2023
12 months to
31 December 2022
9 months to
31 December 2022
£49.9m
£8.1m
4.6p
nil
0.75p
649
1,938
£50.4m
£11.3m
8.1p
—
—
546
1,750
£41.0m
£8.1m
6.2p
2.25p
2.25p
409
1,595
127
Other Information OT H E R I N F O R M AT I O N
Shareholder
information
Shareholder enquiries
→
investorrelations@argentex.com
Annual shareholder calendar
→
→
→
→
→
→
31 December 2023 – Financial year end
02 May 2024 – Period results announcement
19 June 2024 – AGM
30 June 2024 – Half year end
September 2024 – Half year results announcements
31 December 2024 – Financial year end
128
Argentex Group PLC Annual Report 2023
Company
information
AUDITORS
Deloitte LLP
1 New Street Square
London, EC4A 3HQ
FINANCIAL PUBLIC RELATIONS
Teneo
The Carter Building, 11 Pilgrim Street,
London, EC4V 6RN
ARGENTEX REGISTERED OFFICE
Argentex Group PLC
25 Argyll Street,
London, W1F 7TU
T: +44 (0) 203 772 0300
BANK
Barclays
1 Churchill Place, Canary Wharf,
London, E14 5HP
LEGAL ADVISERS
Gowling WLG (UK) LLP
4 More London Riverside,
London, SE1 2AU
NOMINATED ADVISOR AND BROKER
Singer Capital Markets
1 Bartholomew Lane,
London, EC2N 2AX
REGISTRAR
Computershare Investor Services PLC
The Pavilions, Bridgwater Road,
Bristol BS13 8AE
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
Designed by Everything–Connected
www.e-c.agency
Printed by Elle Media Group
www.ellemediagroup.co.uk
Printed in the UK by Elle Media Group,
an ISO14001:2015 (Environmental
Management) accredited printer.
129
Other Information A N N UA L G E N E R A L M E E T I N G
Notice of Annual
General Meeting
Notice is hereby given that the annual general meeting (“AGM”) of Argentex Group PLC
(the “Company”) will be held at the offices of Gowling WLG, 4 More London Riverside,
London, SE1 2AU on 19 June 2024 at 11.00 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 11 as ordinary resolutions and resolutions 12 and 13 as special resolutions):
ORDINARY BUSINESS
Ordinary Resolutions
1. To receive and adopt the Annual Report and
6. That Tim Haldenby, who retires as a Director in
Accounts of the Company for the financial year
ended 31 December 2023 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
7. That Jim Ormonde, who retires as a Director in
the financial year ended 31 December 2023.
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 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.
5. That Jonathan Gray, who retires as a Director in
accordance with the Articles and being eligible to
do so offers himself for re-election as a Director, be
elected as a Director of the Company.
accordance with the Articles and being eligible to do so
offers himself for re-election as a Director, be elected as
a Director of the Company.
8. That Nigel Railton, who retires as a Director in
accordance with the Articles and being eligible to do so
offers himself for re-election as a Director, be elected as
a Director of the Company.
9. 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.
10. To authorise the Directors to determine the amount of
the auditors' remuneration.
130
Argentex Group PLC Annual Report 2023
SPECIAL BUSINESS
Ordinary Resolution
11. 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
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 01 May
2024) 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
2025 save that the Company shall be entitled to make,
prior to the expiry of such authority, any offer or
agreement which would or might require shares to
be allotted or rights to subscribe for or convert any
security into shares to be granted after the expiry of
such authority and the Directors may allot shares or
grant rights to subscribe for or convert securities into
shares in pursuance of such offer or agreement as if
the authority conferred hereby had not expired. The
authority granted by this resolution shall replace all
existing authorities to allot any shares in the Company
and to grant rights to subscribe for or convert any
security into shares in the Company previously granted
to the Directors pursuant to section 551 of the Act.
Special Resolution
12. That, subject to the passing of resolution no. 11, 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. 11 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
01 May 2024), 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 2025 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.
13. 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 11,320,754, representing
approximately 10 per cent. of the issued ordinary
share capital of the Company as at 01 May 2024;
(b). the minimum price which may be paid for an
Ordinary Share is £0.0001; and
131
Other Information
(c). the maximum price which may be paid for an
NOTES:
Ordinary Share is the higher of: (i) five per cent.
above the average of the mid-market value of the
Ordinary Shares for the five business days before
the purchase is made; and (ii) the higher of the
last independent trade and the highest current
independent bid for any number of Ordinary
Shares on the trading venue where the purchase
is carried out.
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:
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 2025 save that the
Company may, before the expiry of the authority granted
by this resolution, enter into a contract to purchase
Ordinary Shares which will or may be executed wholly or
partly after the expiry of such authority.
By order of the Board of Directors
Alethia McDonald
Company Secretary of Argentex Group PLC
01 May 2024
Registered Office:
25 Argyll Street, London, W1F 7TU United Kingdom
132
Argentex Group PLC Annual Report 2023
(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
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.
7. CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the AGM and
any adjournment(s) thereof by using the procedures
described in the CREST Manual (available via www.
euroclear.com). CREST Personal Members or other
CREST sponsored members, and those CREST members
who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate
action on their behalf.
8. In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be
properly authenticated in accordance with Euroclear's
specifications and must contain the information
required for such instructions, as described in the
CREST Manual. The message, regardless of whether
it constitutes the appointment of a proxy or an
amendment to the instruction given to a previously
appointed proxy must, in order to be valid, be
transmitted so as to be received by the Company’s agent
ID (3RA50) by the latest time(s) for receipt of proxy
appointments specified in this notice of AGM. For this
purpose, the time of receipt will be taken to be the
time (as determined by the timestamp applied to the
message by the CREST Applications Host) from which
the Company’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies
appointed through CREST should be communicated to
the appointee through other means.
9. CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear does not make available special procedures
in CREST for any particular messages. Normal system
timings and limitations will therefore apply in relation
to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member
or sponsored member or has appointed a voting service
provider(s), to procure that his or her CREST sponsor or
voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In
this connection, CREST members and, where applicable,
their CREST sponsors or voting service provider(s) are
referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST
system and timings.
10. The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001
(as amended).
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 17 June 2024 (or if the AGM is adjourned,
members entered on the Register of Members of the
Company no later than 48 hours before the time fixed
for the adjourned AGM) shall be entitled to attend,
speak and vote at the AGM in respect of the number of
Ordinary Shares registered in his or her name at that
time. Changes to entries on the Register of Members of
the Company after the close of business on 17 June 2024
shall be disregarded in determining the rights of any
person to attend, speak or vote at the AGM.
133
Other Information 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 01 May 2024, being the latest practicable date
before the publication of this notice of AGM, the
Company's issued share capital consisted of: (i)
113,207,547 Ordinary Shares each carrying one vote and
(ii) 23,589,212 management shares which, so long as
there are shares of any other class in issue, do not carry
any voting rights. Therefore, the total voting rights in
the Company as at 01 May 2024 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 02 May 2024 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. Shareholders may not
use any electronic address provided either in the notice
of AGM or any related documents (including the form
of proxy) to communicate with the Company for any
purpose other than those expressly stated.
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 Accounts.
2. Resolution 2 – the Directors are required to approve the
Remuneration Report for the financial year.
3. Resolutions 3 to 8 – 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 50-52 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 9 and 10 – 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 10 separately authorises the
Directors to determine the remuneration of the auditors.
5. Resolution 11 – 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 2025 and 30 June 2025 (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 01 May 2024 (the latest practicable date prior to the
publication of this document)).
6. Resolution 12 – 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 12 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
134
Argentex Group PLC Annual Report 2023
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 01 May 2024, 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 2025.
7. Resolution 13 – market purchases – the Directors
are requesting authority for the Company to make
market purchases of Ordinary Shares up to a
maximum nominal amount of £1,132.08 (representing
approximately 10 per cent. of the issued Ordinary
Share capital of the Company as at 01 May 2024 (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 2025.
135
Other Information
A R G E N T E X . C O M