Alpha Growth Plc
Annual Report & Financial Statements
for the year
ended 31 August 2020
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Contents
Company Information
Chairman’s Statement
Board of Directors and Senior Management
Directors’ Report
Strategic Report
Governance Report
Remuneration Committee Report
Audit Committee Report
Nomination Committee Report
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
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Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Company Information
Directors
Gobind Sahney
Daniel Swick
Jason Sutherland
Company Secretary
Neil Warrender
Registered Office
35 Berkeley Street
London W1J 5BF
Registered Number
09734404 (England and Wales)
Broker
Pello Capital Limited
10 Lower Thames Street
London
EC3R 6AF
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
Solicitors
Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Principal Bankers
Barclays Bank UK Plc
Leicester
LE87 2BB
Registrars
Link Asset Services
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0GA
1
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Chairman’s Statement
I am pleased to present the annual financial statements of Alpha Growth Plc (“the Group” or “the
Company”) for the year ended 31 August 2019. During the year the Company reported a loss of
£567,200 (2019 - loss of £644,361) and so the Company was reliant on external fundraises in
the period to support its growth.
Over this past year, the Company made significant investments into its various strategies as
announced. We launched the BlackOak Alpha Growth Fund LP and generated the Company’s
first revenues. Unfortunately, a number of asset building opportunities that were set to come on
line in the first quarter of 2020, were curtailed or postponed due to the Covid-19 pandemic.
For 2021, we continue to be optimistic about the future and continue to adjust to the pandemic’s
impact on our counterparties. We go into the year capitalized to carry out our activities in a
professional manner and at the date of this report, the Company has approximately £300,000 of
cash balances. Having recently announced the listing of its shares on the OTCQB® market in
the US we expect the level of interest in the Company’s shares and products to continue to grow.
We will continue to generate revenue from our fund management activity and expect to add to it
with the other strategies.
In this coming year, we look to build on these achievements, attract further world class partners,
generate revenues, whilst keep our operating costs low. Both the Board and I am very excited
about our prospects of the Company to generate returns for all of our shareholders.
I would like to take this opportunity to thank all those who have contributed to bringing the
Company to its present position, our clients and shareholders especially, thus far and look
forward to a successful future.
…………………………..
Gobind Sahney
Executive Chairman
21 December 2020
2
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Board of Directors and Senior Management
Gobind Sahney, Executive Chairman
Mr. Sahney is an experienced professional in alternative asset management. In addition to Alpha
Growth, he is currently Director of Alpha Longevity Management Limited, an investment
management company regulated and licensed by the Financial Services Commission of the
British Virgin Islands. He has been a principal of multiple entities that specialized in distressed
debt and discounted assets in US, Europe, and UK totaling over $750 million. Additionally, Mr.
Sahney was the Chairman of AIM listed Stratmin Global Resources plc. His involvement began
with the Company’s investment and turnaround which consisted of £2 million in distressed
assets. As Chairman, he organized and executed the plan of turnaround through the liquidation
of those assets and the identification and reverse takeover of a mining company and associated
fundraise of over £6 million. He has spoken on the subject matter of distressed debt and
discounted assets investing at ACA International conferences in the US and at Credit Services
Association conferences in the UK. He is a graduate of Babson College, Wellesley,
Massachusetts, with a Bachelors degree in accounting and finance. He served on the board of
trustees of Babson College from 2001 to 2010.
Daniel Swick, Chief Operating Officer
Mr. Swick is the founder of Kango Group, located in Newport Beach, California. Kango Group is
an established alternative investment management firm that targets opportunities in the longevity
asset class on behalf of private equity and hedge fund clients. Prior to founding Kango Group,
Mr. Swick served as CEO for Life Distributors of America, LLC (LDA), a life settlement firm
specialising in the distribution of longevity risk insurance products to institutional investment
portfolios. While at LDA, Mr. Swick was responsible for the closing of over $4 billion in life
settlements. Prior to this, Mr. Swick spent eight years working for American International Group
(“AIG”) as Vice President of Alternative Distribution. Responsibilities included developing and
executing marketing strategies for life/annuity products in the alternative distribution channels,
which included product distribution through broker-dealers and third-party administrators in both
the U.S. and international markets. Mr. Swick earned a Bachelor of Science degree in Marketing
from California State University Northridge, and an MBA from Pepperdine University.
Jason Sutherland, Non-Executive Director
Mr. Sutherland is the founder and Senior Partner of Citadel Legal Services LLC, based in Atlanta,
Georgia and represents clients in North America, Europe and Asia predominantly within the
insurance backed assets industry. Mr. Sutherland is also the Senior Vice President of Capital
Markets and Senior Counsel for DRB Financial Solutions which is majority owned by the
Blackstone Tactical Opportunities Group. He also launched the first ever AAA rated placement
of mortality backed linked annuity receivables totalling $151m. Mr. Sutherland also recently ran
$3bn of policies under the Lamington Road Fund in Dublin, Ireland which was acquired by
Emergent Capital and ran Citadel's London office at the same time. Prior to that Mr. Sutherland
spent 12 years with the Peach Holdings Group, most recently as Managing Director of Legal and
operations for Peachtree Asset Management based in London and Luxembourg, where he was
an FCA approved person, guiding the fundraising efforts, and coordinating with regulatory bodies
in UK, US, Cayman Islands, Luxembourg and Ireland. Mr Sutherland maintains his approved
person status with the FCA.
3
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Directors’ Report
The Directors present their report with the audited consolidated financial statements of the Group
for the year ended 31 August 2020. A commentary on the business for the year is included in the
Chairman’s Statement on page 2. A review of the business is also included in the Strategic
Report on pages 9 to 13.
The Company’s Ordinary Shares were admitted to listing on the London Stock Exchange, on the
Official List pursuant to Chapters 14 of the Listing Rules, which sets out the requirements for
Standard Listings.
Principal Activities
The Company’s principal activity is to seek acquisitions and opportunities to provide advisory
services, strategies, performance monitoring and analytical services to existing and prospective
holders of Senior Life Settlements (SLS) Assets, mainly through acquisition strategies,
performance monitoring and analytical services. The Company will only advise on the United
States SLS market.
Directors
The Directors of the Company during the year and their beneficial interest in the Ordinary
Shares of the Company at 31 August 2020 were as follows:
Director
Position
Appointed Ordinary
shares
Options
Other
Andrew Dennan*
Rory Heier**
Gobind Sahney
Daniel Swick
Jason Sutherland
15/08/2015 5,962,500
Non-Executive
Director
Finance Director
02/12/2015 5,962,500
Executive Chairman 15/08/2015 7,462,500
01/06/2018 2,166,667
Chief Operating
Officer
Non-Executive
Director
06/03/2019
133,333
-
-
-
-
-
-
-
-
-
-
*Mr Dennan resigned on 11 December 2019
**Mr Heier resigned on 10 February 2020
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in place for all active
Directors.
4
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Directors’ Report (continued)
Substantial shareholders
As at 21 December 2020, the total number of issued Ordinary Shares with voting rights in the
Company was 240,815,959. Details of the Company’s capital structure and voting rights are set
out in note 11 to the financial statements.
The Company has been notified of the following interests of 3 per cent or more in its issued share
capital as at the date of approval of this report.
Party Name
M Ward
Mr GP and Mrs AC Fitzherbert
M Alder
Financial instruments
Number of Ordinary
Shares
30,951,453
10,900,000
10,394,749
% of
Share Capital
13%
5%
4%
Details of the use of the Company’s financial risk management objectives and policies as well as
exposure to financial risk are contained in the Accounting policies and note 16 of the financial
statements.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational carbon footprint in order to limit
and control its environmental impact. However, given the very limited nature of its operations
during the year under review, it has not been practical to measure its carbon footprint.
In the future, the Company will only measure the impact of its direct activities, as the full impact
of the entire supply chain of its suppliers cannot be measured practically.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 August 2020 (2019: nil).
Future developments and events subsequent to the year end
Further details of the Company’s future developments and events subsequent to the year-end
are set out in the Strategic Report on pages 10 to 14.
Corporate Governance
The Governance Report forms part of the Director’s Report and is disclosed on pages 15 to 21.
5
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Directors’ Report (continued)
Going Concern
As at 31 August 2020 the Group had a cash balance of £43,620 (2019: £173,941) and net current
assets / net assets of £196,732 (2019: net current assets of £177,069). The Group has recently
started generating revenues but continues to raise money for capital projects and working capital
purposes as and when required and has raised £500,000 pre expenses post year end with the
strong prospect of raising a further £500,000 early in 2021. The Group also carefully monitors its
core spend. There can be no assurance that the Group will reach breakeven nor that there will
be sufficient cash resources available to the Group to do so. Notwithstanding the loss and cash
outflows incurred in the year and the requirement for further funds to become available, the
Directors have a reasonable expectation that the Group will be able to manage its funds to
continue in operational existence whilst moving towards generating sufficient revenues to cover
expenses. The Group therefore continues to adopt the going concern basis in preparing the
Annual Report and Financial Statements. Further details on the Directors assumption and their
conclusion thereon are included in Note 2 to the financial statements. In addition, note 16 to the
financial statements discloses the Company’s financial risk management policy.
Auditors
The auditors have expressed their willingness to continue in office and a resolution to reappoint
them will be proposed at the Annual General Meeting.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report alongside the financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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 Group and Company and
of the profit or loss of the Group and Company for that year. The Directors are also required to
prepare financial statements in accordance with the rules of the London Stock Exchange for
companies with a Standard Listing.
6
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Directors’ Report (continued)
In preparing these financial statements, the Directors are required to:
•
•
•
•
Select suitable accounting policies and then apply them consistently;
Make judgments and accounting estimates that are reasonable and prudent;
State whether applicable IFRSs as adopted by the European Union have been followed,
subject to any material departures disclosed and explained in the financial statements; and
Prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Remuneration Committee Report comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities. They are also responsible to make a statement that they consider that the
annual report and accounts, taken as a whole, is fair, balanced, and understandable and provides
the information necessary for the shareholders to assess the Group’s and Company’s position
and performance, business model and strategy.
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 the financial statements may differ from legislation in other
jurisdictions.
Directors’ responsibility statement pursuant to disclosure and Transparency Rule
Each of the Directors, whose names and functions are listed on pages 3 and 4 confirm that, to
the best of their knowledge and belief:
•
•
the financial statements prepared in accordance with IFRS as adopted by the European
Union, give a true and fair view of the assets, liabilities, financial position and loss of the
Company; and
the Annual Report and financial statements, including the Strategic Report, includes a
fair review of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties that they
face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of which the Company’s
auditors are unaware, and each Director has taken all the steps that he ought to have taken as
a Director in order to make himself aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
7
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Directors’ Report (continued)
Subsequent events
Subsequent events have been detailed in the Strategic Report on page 10 and note 21 to the
financial statements.
This responsibility statement was approved by the Board of Directors on 21 December 2020 and
is signed on its behalf by;
Signed ………………………………………….
Gobind Sahney
Executive Chairman
8
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Strategic Report
The Directors present the Strategic Report of Alpha Growth Plc for the year ended 31 August
2020.
Review of Business in the Period
Operational Review
The Company’s principal activity is set out in the Directors’ Report on page 5.
The Company does not advise its clients or consider transacting business in an SLS Asset other
than that which relates to an underlying US exposure. This is because the SLS market in the US
is highly regulated. The Company will only advise on business relating to policies that are over
two years old in order to avoid the statutory contestability period. The Policies which the
Company will focus on are those with low face values (typically US$250,000 - $1.5m) allowing
the greater number of policies to be aggregated with the relevant funds available.
The Company has signed a Heads of Terms agreement on 21 November 2018 with SL
Investment Management Limited. This collaboration will become its first advisory contract with
the fund, BlackOak Alpha Growth Fund LP, launched in 2019. The Group generated its first
revenue from the management of the fund in this financial year.
Business Strategy
The Company’ business strategy is to win advisory mandates from institutions through the
existing relationships of the Directors and by active promotion within the SLS Asset sector.
The Company believes that, despite the pandemic, the United States SLS Asset class is still an
attractive investment proposition and its potential customer base will increase year on year.
Whilst the Company anticipates repeat or on-going business from some clients, it does not
consider that it will become dependent on a limited pool of customers.
As the SLS Asset sector is relatively new and immature and is generally classed as an
“alternative” asset class, most typical target clients do not, and will not, have the sector expertise
internally to enable them to properly assess SLS Assets. Unlike most other asset classes, within
any portfolio there will be a large number of policies and associated variables all which need
analysis before a decision can be reached as to the valuation placed on the portfolio as a whole.
As the SLS Asset class tends to form a small part of overall investment portfolios, the Company
believes that many institutions (particularly family offices and hedge funds), do not consider it
cost effective to hire full-time experienced professionals with experience in the SLS Asset class.
This creates an opportunity for the Company to win advisory mandates and to advise on
acquisitions, disposals and servicing of SLS Asset portfolios.
S172 (1)
In formulating and implementing the business strategy the Board has sought to balance each of
the matters in Section 172 (1) (a) to (f) of the Companies Act bearing in mind the only employees
are the directors, whilst the Group has few customer or suppliers and its environmental impact
is limited to travel which has been significantly curtailed by the pandemic.
9
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Strategic Report (continued)
The Company’s fee model will be structured on a client-by-client basis dependent on the relevant
services provided. Asset sourcing and acquisition will be charged on a fixed percentage or
minimum amount of the acquisition costs of any portfolio.
Where a client requires servicing, valuation, modelling, project management, etc services, fees
will either be charged on a fixed percentage of the aggregate value of the assets or on a fixed
costs basis. In some circumstances the Company will negotiate a bonus structure.
Events since the year end
Subsequent to the year end the Company raised £454,000 net of costs through the issue of
35,714,286 Ordinary Shares of £0.001 each at a placing price of £0.014 per share. Further details
of this issue are included in note 20.
Financial review
Results for the 2020 year
The Group incurred a loss for the year to 31 August 2020 of £567,200 (2019: loss of £644,361).
The loss for the period occurred as a result of on-going administrative expenses to operate the
PLC and a standard listing. It is expected to generate advisory revenue in 2021.
Cash flow
Net cash outflow for 2020 was £130,321 (2019: inflow £66,858).
Closing cash
As at 31 August 2020, the Company held £43,620 in the bank accounts (2019: £173,941).
Key Performance Indicators
The main KPI for the Company is achieving its cash flow forecasts whilst efforts continue to
implement its strategy in attaining clients for advisory services.
The Board monitors its cash flow carefully to ensure that it has the funds necessary to meet
its on-going requirements. Detailed forecasts are produced and reported against on a regular
basis.
10
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Strategic Report (continued)
Position of Company’s Business
During the year
The Company raised approximately £616,700 net of costs through the following share issues:
On 29 November 2019 the Company issued 24,360,000 ordinary shares of £0.001 each at a
placing price of £0.0125 per placing share. The shares rank pari passu in all respects of the
existing ordinary shares.
On 6 December 2019, the Company issued 9,166,650 ordinary shares of £0.001 each at a price
of £0.014 per share following the exercise of warrants held by the Company’s former broker. The
shares rank pari passu in all respects to the existing ordinary shares.
On 18 December 2019, the Company issued 9,406,690 ordinary shares of £0.001 each at a
placing price of £0.0175 per placing share. The shares rank pari passu in all respects to the
existing ordinary shares.
On 28 May 2020, the Company issued 3,466,667 ordinary shares of £0.001 each at a price of
£0.015 per share partly in settlement of amounts owed to Colva Insurance in relation to the
termination of the joint venture agreement and partly to settle directors’ fees owed. The shares
rank pari passu in all respects to the existing ordinary shares.
At the year end
At the year end the Group’s Statement of Financial Position shows net assets totaling £196,732
(2019: £177,069). The Company has few liabilities and is considered to have an adequate cash
position at the reporting date, whilst it has raised over £450,000 since the reporting date which
is anticipated to cover all expenses up to the point the Company reaches break-even.
Environmental matters
The Board contains personnel with a good history of running businesses that have been
compliant with all relevant laws and regulations and there have been no instances of non-
compliance in respect of environmental matters.
Employee information
At present, there are no female Directors in the Company. The Company has an Executive
Chairman, Chief Operating Officer and two Non-Executive Directors. There are no employees
other than Directors.
Social/Community/Human rights matters
The Company ensures that employment practices take into account the necessary diversity
requirements and compliance with all employment laws. The Board has experience in dealing
with such issues and sufficient training and qualifications to ensure they meet all requirements.
Anti-corruption and anti-bribery policy
The government of the United Kingdom has issued guidelines setting out appropriate procedures
for companies to follow to ensure that they are compliant with the UK Bribery Act 2010. The
11
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Strategic Report (continued)
Company has conducted a review into its operational procedures to consider the impact of the
Bribery Act 2010 and the board has adopted an anti-corruption and anti-bribery policy.
Principal Risks and Uncertainties
The Company operates in an uncertain environment and is subject to a number of risk factors.
The Directors consider the following risk factors are of particular relevance to the Company’s
activities although it should be noted that this list is not exhaustive and that other risk factors not
presently known or currently deemed immaterial may apply.
Risks/Uncertainties to the Company
Issue
Developing business model
Company may
The
significant
advisory opportunities
competition
face
for
Loss of key personnel
The Company may be subject to
foreign exchange risks
The Company may be subject to
changes in regulation affecting its
services and the SLS Asset class
be
may
than
The
Management
less
Risk/Uncertainty
The Company commenced trading
through its Group company Alpha
Ltd,
Longevity
however much
the
net
incurred.
expenses
proceeds from the share issues in
May 2019 and December 2019 have
been used to continue corporate
development and marketing efforts
to attract potential advisory clients.
There
significant
competition for some or all of the
advisory opportunities
the
Company may explore. Such
competition may come from direct
competitors offering similar services
or
private
investment funds many of which
internal
may
experience in managing longevity
assets and/or SLS strategies and
portfolios. A number of
these
competitors are likely to possess
greater technical, financial and other
resources than the Company.
The Company comprises a few key
individuals. Any unforeseen loss of
these key personnel would be
damaging to the Company.
extensive
public
have
from
and
that
The Company’s
functional and
presentational currency is pounds
sterling. As a result, the Company’s
financial statements will carry the
Company’s assets in sterling. Where
the Company conducts business in
USD it exposes itself to foreign
exchange risk.
The SLS Asset class in the United
States is highly regulated and will
likely continue to be the focus of
increasing regulatory oversight.
Compliance with various laws and
regulations does impose compliance
costs and
the
Company, with
and/or
sanctions for non-compliance.
restrictions on
fines
12
Mitigation
Management team is experienced in
the
their
industry and using
relationships to attract clients. The
Heads of Terms signed in November
2018 with a UK based Investment
Manager as a co-advisor is evidence
of their ability to succeed in the set
business model.
financial
resources,
While some competitors may have
greater
the
Company will be able to provide a
its
more personal approach
clients and with greater retention
rates
potential
than
competitors.
other
to
The Company has a continuity
program in place to ensure that
Directors would be able to minimise
the disruption of the loss of key
personnel.
The Company will manage
its
foreign exchange exposure with the
use of active hedging and derivative
instruments in future financial years.
business
The Company monitors legislative
and regulatory changes and alters
its
practices where
appropriate. In the event that the
to
Company becomes subject
specific
its
regarding
regulation
activities, the Company will put in
place such procedures as are
necessary to ensure it complies with
such regulation.
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Strategic Report (continued)
Principal Risks and Uncertainties (continued)
Risks/Uncertainties to the Company
Issue
The Company
the
experience and talent of its senior
management and on its ability to
recruit and retain key employees
relies on
Risk/Uncertainty
The successful management and
operations of the Company are
reliant upon the contributions of
senior management and directors.
In addition, the Company’s future
success depends in part on its ability
to continue to recruit, motivate and
retain highly experienced and
qualified management and directors.
Mitigation
The Company will offer incentives to
Directors through participation in
share offerings, which makes them
linked to the long term success of
the business.
The Group has been and may
continue to be impacted by the
Covid-19 pandemic
Raising emergency funding
The pandemic has led to delays in
implementing some of the planned
strategies and may have further
impact if travel restrictions remain in
place.
In the event of a significant issue
arising for which the Company is
required to access substantial liquid
funds in excess of its available cash
balances, it may not be easy to
obtain additional funds as and when
required.
The Company has raised capital
since the year end which is expected
to be sufficient to cover costs arising
the
from such delays. Further
pandemic has highlighted
the
benefits of investing in SLS assets.
The Company monitors its cash
requirements carefully and in the
need of significant additional funds
would look to increase its financing.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the Governance
Report.
Capital structure
The Company’s capital consists of ordinary shares which rank pari passu in all respects which
are traded on the Standard segment of the Main Market of the London Stock Exchange. There
are no restrictions on the transfer of securities in the Company or restrictions on voting rights and
none of the Company’s shares are owned or controlled by employee share schemes. There are
no arrangements in place between shareholders that are known to the Company that may restrict
voting rights, restrict the transfer of securities, result in the appointment or replacement of
Directors, amend the Company’s Articles of Association or restrict the powers of the Company’s
Directors, including in relation to the issuing or buying back by the Company of its shares or any
significant agreements to which the Company is a party that take effect after or terminate upon,
a change of control of the Company following a takeover bid or arrangements between the
Company and its Directors or employees providing for compensation for loss of office or
employment (whether through resignation, purported redundancy or otherwise) that may occur
because of a takeover bid.
Approved by the Board on 21 December 2020
Gobind Sahney
Executive Chairman
13
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report
Introduction
The Company recognises the importance of, and is committed to, high standards of Corporate
Governance. Whilst the Company is not formally required to comply with the UK Corporate
Governance Code, the Company has voluntarily applied the requirements of the UK Code of
Corporate Governance published in 2018 (the Code). The following sections explain how the
Company has applied the Code:
Compliance with the UK Code of Corporate Governance
The UK Corporate Governance Code, as published by the Financial Reporting Council, is the
corporate governance regime for England and Wales. The Company has stated that, to the
extent practicable for a company of its size and nature, it follows the UK Corporate Governance
Code. The Directors are aware that there are currently certain provisions of the UK Corporate
Governance Code that the Company is not in compliance with, given the size and early stage
nature of the Company. These include:
• Section 3.17 of the Code requires that a majority of the members of the Audit Committee
must be independent. Since the resignation of Rory Heier, the Audit Committee
comprised of just one Executive and one Non-Executive Director as the Company has
been focussed on marketing activity and has been unable to identify another Non-
Executive Director. The Directors consider the present composition to be adequate given
the size of the Company and volume of transactions.
• The Code requires that a smaller company should have at least two Independent Non-
Executive Directors. The Board currently consists of two Executive Directors and one
Non -Executive Directors. The Non-Executive Director is interested in ordinary shares in
the Company and cannot therefore be considered fully independent under the Code.
However, those Non-executive Director is considered to be independent in character and
judgement and the Company considers that one Non-Executive Director is adequate
given the size and stage of development of the Company.
• As a consequence of the above, where provisions of the Code require the appointment
of independent directors, for example as chairman or as senior independent director, the
Company is not in full compliance with the Code – this applies in relation to various
provisions of the Code. However, the Directors consider the present structure and
arrangements to be adequate given the size and stage of development of the Company.
• The roles of Chairman and Chief Executive are undertaken by the same individual. This
is outside the principles of 2.9 of the Corporate Governance Code applicable to smaller
companies, which requires that these roles should not be exercised by the same
individual. However, the Directors consider the present structure and arrangements to be
adequate given the size and stage of development of the Company.
• There is currently no formal induction for directors joining the Board. This is outside the
principles of the Corporate Governance Code, which requires that the Chairman should
ensure than new Directors receive a full, formal and tailored induction on joining the
Board. As set out in page 19, an informal induction is considered sufficient given the size
and limited complexity of the Company.
14
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
Compliance with the UK Code of Corporate Governance (continued)
• The Nomination Committee is made up of two Executive Directors. This is outside the
principals of the Corporate Governance Code, which requires that a majority of members
should be independent Non-Executive Directors. The Directors consider the present
structure and arrangements to be adequate given the size and stage of development of
the Company.
• The Remuneration Committee comprises just one non-executive director whereas the
Corporate Governance Code requires a minimum of two members. The Directors
consider the present structure and arrangements to be adequate given the size and stage
of development of the Company.
The UK Corporate Governance Code can be found at www.frc.org.uk
Set out below are Alpha Growth Plc’s corporate governance practices for the year ended 31
August 2020.
Leadership
The Company is headed by an effective Board which is collectively responsible for the long-term
success of the Company.
The role of the Board - The Board sets the Company’s strategy, ensuring that the necessary
resources are in place to achieve the agreed strategic priorities, and reviews management and
financial performance. It is accountable to shareholders for the creation and delivery of strong,
sustainable financial performance and long-term shareholder value. To achieve this, the Board
directs and monitors the Company’s affairs within a framework of controls which enable risk to
be assessed and managed effectively. The Board also has responsibility for setting the
Company’s core values and standards of business conduct and for ensuring that these, together
with the Company’s obligations to its stakeholders, are widely understood throughout the
Company. The Board has a formal schedule of matters reserved which is provided later in this
report.
Board Meetings - The core activities of the Board are carried out in scheduled meetings of the
Board. These meetings are timed to link to key events in the Company’s corporate calendar and
regular reviews of the business are conducted. Additional meetings and conference calls are
arranged to consider matters which require decisions outside the scheduled meetings. During
the year, the Board met on 4 occasions. Outside the scheduled meetings of the Board, the
Directors maintain frequent contact with each other to discuss any issues of concern they may
have relating to the Company or their areas of responsibility, and to keep them fully briefed on
the Company’s operations. Where Directors have concerns which cannot be resolved about the
running of the company, or a proposed action, they will ensure that their concerns are recorded
in the Board minutes.
Matters reserved specifically for Board - The Board has a formal schedule of matters reserved
that can only be decided by the Board. The key matters reserved are the consideration and
approval of;
• The Company’s overall strategy;
• Financial statements and dividend policy;
15
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
• Management structure including succession planning, appointments and remuneration;
material acquisitions and disposals, material contracts, major capital expenditure projects
and budgets;
• Capital structure, debt and equity financing and other matters;
• Risk management and internal controls;
• The Company’s corporate governance and compliance arrangements; and
• Corporate policies.
Certain other matters are delegated to the Board Committees, namely the Audit, Nomination
and Remuneration Committees.
Summary of the Board’s work in the year – During the year, the Board considered all relevant
matters within its remit, but focused in particular on the establishment of the Company and the
identification of suitable investment opportunities for the Company to pursue.
Attendance at meetings:
Member
Position
Rory Heier (resigned)
Gobind Sahney
Daniel Swick
Jason Sutherland
Non-Executive Director
Executive Chairman
Chief Operating Officer
Non-Executive Director
Meetings
attended
4 of 6
6 of 6
6 of 6
6 of 6
The Board is pleased with the high level of attendance and participation of Directors at Board
and committee meetings. Attendance at Committee meetings is detailed in the respective
Committee reports.
The Chairman, Gobind Sahney, sets the Board Agenda and ensures adequate time for
discussion.
Directors appointed by the Board are subject to election by shareholders at the Annual General
Meeting of the Company following their appointment and thereafter are subject to re-election in
accordance with the Company’s articles of association.
Non-Executive Directors - The Non-Executive Directors bring a broad range of business and
commercial experience to the Company and has a particular responsibility to challenge
independently and constructively the performance of the Executive management (where
appointed) and to monitor the performance of the management team in the delivery of the agreed
objectives and targets.
Non-Executive Directors are initially appointed for a term of 12 months, which may, subject to
satisfactory performance and re-election by shareholders, be extended by mutual agreement.
The terms and conditions of appointment of Non-Executive Directors will be made available upon
written request.
16
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
Remuneration Committee
The Company has established a Remuneration Committee, the sole members of which at
present is the independent Non-Executive Director; Jason Sutherland, to assist the Board in
determining its responsibilities in relation to remuneration, including making recommendations to
the Board on the Group’s policy on executive remuneration, including setting the over-arching
principles, parameters and governance framework of the Company’s remuneration policy and
determining the individual remuneration and benefits package of each of the executive Directors
and the Company Secretary. The Remuneration Committee also ensures compliance with the
UK Corporate Governance Code in relation to remuneration wherever possible.
The report of the Remuneration Committee is included in this annual report. Formal terms of
reference for the Remuneration Committee have been documented and are made available for
review at the AGM.
Audit Committee
The Company has established an Audit Committee with delegated duties and responsibilities,
the members of which, during the year were one independent Non-Executive Director and the
Chief Financial Officer; Jason Sutherland and Rory Heier, with Rory Heier resigning during the
year. The Company is looking to identify an additional Non-Executive Director but those efforts
have been hindered by the pandemic. The Audit Committee is responsible, amongst other things,
for making recommendations to the Board on the appointment of auditors and the audit fee,
monitoring and reviewing the integrity of the Company’s financial statements and any formal
announcements on the Company’s financial performance as well as reports from the Company’s
auditor on those financial statements. In addition, the Audit Committee will review the Company’s
internal financial control and risk management systems to assist the Board in fulfilling its
responsibilities relating to the effectiveness of those systems, including an evaluation of the
capabilities of such systems in light of the expected requirements for any specific acquisition
target.
The Audit Committee meets at least twice a year and more frequently if required.
Terms of reference of the Audit Committee will be made available upon written request.
The Audit Committee report is included on pages 29 to 30.
Nominations Committee
The Company has established a Nominations Committee, the members of which are the
Executive Chairman and Chief Operating Officer. The committee meets as required to fulfil its
duties of reviewing the Board structure and composition and identifying and nominating
candidates to fill Board vacancies as they arise.
Terms of reference of the Nominations Committee will be made available upon written request.
The Nominations Committee report is included on page 31.
Other governance matters - All of the Directors are aware that independent professional advice
is available to each Director in order to properly discharge their duties as a Director. In addition,
each Director and Board committee has access to the advice of the Company Secretary.
17
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
The Company Secretary - The Company Secretary is Neil Warrender who is responsible for the
Board complying with UK procedures.
Effectiveness
For the period under review the Board comprised of an Executive Chairman, Chief Financial
Officer (until 10 February 2020), Chief Operating Officer and one independent Non-Executive
Directors. Biographical details of the Board members are set out on page 3 of this report.
The Directors are of the view that the Board and its committees consist of Directors with an
appropriate balance of skills, experience, independence and diverse backgrounds to enable
them to discharge their duties and responsibilities effectively.
Independence - The Non-Executive Directors bring a broad range of business and commercial
experience to the Company. The Board considers the non-executive Directors to be independent
in character and judgement.
Appointments – the Board is responsible for reviewing the structure, size and composition of
the Board and making recommendations to the Board with regards to any required changes.
Commitments – All Directors have disclosed any significant commitments to the Board and
confirmed that they have sufficient time to discharge their duties.
Induction - All new Directors received an informal induction as soon as practical on joining the
Board. No formal induction process exists for new Directors, given the size of the Company, but
the Chairman ensures that each individual is given a tailored introduction to the Company and
fully understands the requirements of the role.
Conflict of interest - A Director has a duty to avoid a situation in which he or she has, or can have,
a direct or indirect interest that conflicts, or possibly may conflict with the interests of the
Company. The Board had satisfied itself that there is no compromise to the independence of
those Directors who have appointments on the Boards of, or relationships with, companies
outside the Company. The Board requires Directors to declare all appointments and other
situations which could result in a possible conflict of interest.
Board performance and evaluation – The Executive Chairman normally carries out an annual
formal appraisal of the performance of the other Executive Directors which takes into account
the objectives set in the previous year and the individual’s performance in the fulfilment of these
objectives. All the appraisals of the Executive Directors are provided to the Remuneration
Committee. The Non-Executive Directors are responsible for the performance evaluation of the
Chairman, taking into account the views of Executive Directors.
Although the Board consisted of three male Directors, the Board supports diversity in the
Boardroom and the Financial Reporting Council’s aims to encourage such diversity. Aside from
the Directors, there are no employees in the Company. The following table sets out a breakdown
by gender at 31 August 2020:
Directors
Male
3
Female
-
18
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
The Board will pursue an equal opportunity policy and seek to employ those persons most
suitable to delivering value for the Company.
Accountability
The Board is committed to providing shareholders with a clear assessment of the Company’s
position and prospects. This is achieved through this report and as required other periodic
financial and trading statements. The Board has made appropriate arrangements for the
application of risk management and internal control principles. The Board has delegated to the
Audit Committee oversight of the relationship with the Company’s auditors as outlined in the
Audit Committee report on pages 30-31.
Going concern – The preparation of the financial statements requires an assessment on the
validity of the going concern assumption.
The Directors have reviewed projections for a period of at least 12 months from the date of
approval of the financial statements. The Company has insufficient revenue to cover costs, but
significant cash resources were raised, in September 2020, to finance its activities whilst it
identifies and completes suitable transaction opportunities prior to breakeven being reached. The
Company may need to raise additional funds in order to meet its working capital needs during
the going concern period depending on how quickly revenues grow and whether or not additional
marketing executives need to be recruited to address any travel restrictions imposed as a result
of the Covid-19 pandemic.
In making their assessment of going concern, the Directors acknowledge that the Company has
a very small cost base and can therefore confirm that they consider sufficient funds will be
available to ensure the Company continues to meet its obligations they fall due for a period of at
least one year from the date of approval of these financial statements. Accordingly, the Board
believes it is appropriate to adopt the going concern basis in the preparation of the financial
statements.
Internal controls - The Board of Directors reviews the effectiveness of the Company’s system of
internal controls in line with the requirement of the Code. The internal control system is designed
to manage the risk of failure to achieve its business objectives. This covers internal financial and
operational controls, compliance and risk management. The Company has necessary
procedures in place for the year under review and up to the date of approval of the Annual Report
and financial statements. The Directors acknowledge their responsibility for the Company’s
system of internal controls and for reviewing its effectiveness. The Board confirms the need for
an ongoing process for identification, evaluation and management of significant risks faced by
the Company. The Directors carry out a risk assessment before signing up to any commitments.
The Directors are responsible for taking such steps as are reasonably available to them to
safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Remuneration
The report of the Remuneration Committee is included in this annual report. Formal terms of
reference for the Remuneration Committee have been documented and are made available for
review at the AGM.
19
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Governance Report (continued)
Shareholder relations
Communication and dialogue – Open and transparent communication with shareholders is given
high priority and there is regular dialogue with institutional investors, as well as general
presentations made at the time of the release of the annual and interim results. All Directors are
kept aware of changes in major shareholders in the Company and are available to meet with
shareholders who have specific interests or concerns. The Company issues its results promptly
to individual shareholders and also publishes them on the Company’s website. Regular updates
to record news in relation to the Company and the status of its exploration and development
programmes are included on the Company’s website. Shareholders and other interested parties
can subscribe to receive these news updates by email by registering online on the website free
of charge.
The Directors are available to meet with institutional shareholders to discuss any issues and gain
an understanding of the Company’s business, its strategies and governance. Meetings are also
held with the corporate governance representatives of institutional investors when requested.
Annual General Meeting - At every AGM individual shareholders are given the opportunity to put
questions to the Chairman and to other members of the Board that may be present. Notice of the
AGM is sent to shareholders at least 21 working days before the meeting. Details of proxy votes
for and against each resolution, together with the votes withheld are announced to the London
Stock Exchange and are published on the Company’s website as soon as practical after the
meeting.
This Governance Report was approved by the Board and signed on its behalf by;
…………………
Jason Sutherland
Non-Executive Director
21 December 2020
20
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report
The Remuneration Committee presents its report for the year ended 31 August 2020.
Membership of the Remuneration Committee
The Remuneration Committee during the year comprised of one Non-Executive Director and one
Executive Director; Jason Sutherland and Rory Heier (resigned 10 February 2020). The
Company is looking to recruit a further Non-Executive Director but those efforts have been
hampered by the pandemic.
During the year ended 31 August 2020, the two members of the Remuneration Committee were
present for one meeting.
Subject to what appears below, no other third parties have provided advice that materially
assisted the Remuneration Committee during the year.
The items included in this report are unaudited unless otherwise stated.
Remuneration Committee’s main responsibilities
•
•
•
•
The Remuneration Committee considers the remuneration policy, employment terms and
remuneration of the Executive Directors;
The Remuneration Committee’s role is advisory in nature and it makes recommendations
to the Board on the overall remuneration packages for Executive Directors in order to
attract, retain and motivate high quality executives capable of achieving the Company’s
objectives;
The Board’s policy is to remunerate the Company’s executives fairly and in such a manner
as to facilitate the recruitment, retention and motivation of suitably qualified personnel; and
The Remuneration Committee, when considering the remuneration packages of the
Company’s executives, will review the policies of comparable companies in the industry.
Report Approval
A resolution to approve this report will be proposed at the AGM of the Company. The vote will
have advisory status, will be in respect of the remuneration policy and overall remuneration
packages and will not be specific to individual levels of remuneration.
Remuneration policy
This Remuneration Policy was approved by shareholders at the AGM on 7th February 2020 and
will be put forward for approval once more at the next AGM. The formal policy remains exactly
as below pending approval. To facilitate the reading of the policy which follows, out of date
references have been removed.
21
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
Remuneration Policy Table:
Fixed Elements Purpose and link to
Operations
Base Salary
strategy
Reflects the individual’s
skills, responsibilities
and experience.
Supports the
recruitment and
retention of Executive
Directors and
employees of the
calibre required to
deliver the business
strategy within the
financial services
market.
Maximum potential
payments
Performance
Metrics
None, although
overall individual
and business
performance is
considered when
setting and
reviewing
salaries.
Reviewed annually and paid
monthly in cash or shares.
Consideration is typically given
to a range of factors when
determining salary levels,
including:
• Personal and Company-
wide performance.
• Typical pay levels in
relevant markets for each
executive whilst recognising
the need for an appropriate
premium to attract and
retain superior talent,
balanced against the need
to provide a cost- effective
overall remuneration
package.
There is no maximum
salary increase.
However, ordinarily
salary increases will be
in line with the average
increase awarded to
other employees in the
Company.
Increases may be made
above this level to take
account of individual
circumstances, which
may include:
•
•
Increase in size or
scope of the role or
responsibility.
Increase to reflect
the individual’s
development and
performance in role
Variable
Elements
Annual
Bonus
Scheme (Bonus)
Purpose and link to
strategy
Operations
Maximum potential
payments
Performance
Metrics
Incentivises
executives and
colleagues to
achieve key
strategic outcomes
on an annual basis.
Focus on key
financial metrics
and objectives to
deliver the
business strategy.
Measures and targets are set
annually based on business
plans at the start of the financial
year and pay- out levels are
determined by the Committee
following the year end based on
performance against objectives.
Paid once the results have
been audited. Annual bonus
calculations that are based on
the financial results for the year
are reviewed by the Audit
Committee before consideration
by the Committee.
The Committee has the
discretion to amend the bonus
pay-out should any formulaic
assessment of performance not
reflect a balanced view of
overall business performance
for the year.
The bonus is delivered in cash.
22
The maximum bonus
opportunity for any
Executive Director will
not exceed 200% of
base salary and will be
paid at the discretion of
the Committee. This
Bonus may be combined
with any other incentives
the business provides
the Employee.
Performance
measures and
targets are set by
the Committee
each year based
on corporate
objectives closely
linked to the
strategic priorities
and individual
contributions.
The majority of
the bonus
opportunity will
be based on the
corporate and
financial
measures.
The remainder of
the bonus will be
based on
performance
against individual
objectives.
Up to 20% of the
maximum
opportunity will be
for
received
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Long Term
Bonus Scheme
(LT Bonus) and
Deferred Share
Award Plan
(DSA)
The maximum bonus
opportunity for any
Executive Director will
not exceed 200% of
salary.
Increases above the
current opportunities, up
to the maximum limit,
may be made to take
account of individual
circumstances, which
may include:
Increase in size or scope
of the role or
responsibility.
Increase to reflect the
individual’s development
and performance in their
role.
Incentivises
executives and
colleagues to
achieve key
strategic outcomes
on an annual basis.
Focus on key
financial metrics
and objectives to
deliver the
business strategy.
The element
compulsorily
deferred into
shares, rewards
delivery of
sustained long-
term performance,
provides alignment
with the
shareholder
experience and
supports the
retention of
executives.
Measures and targets are set
annually or on a case by case
basis, based on business plans
at the start of the financial year
or project, and pay- out levels
are determined by the
Committee at the onset or
following the year end based on
the project or performance
against objectives.
Paid once the results have
been audited or on a pre-
agreed to schedule. The results
are audited by Internal Audit
and reviewed by the Audit
Committee before consideration
by the Committee.
The Committee has the
discretion to amend the bonus
pay-out should any formulaic
assessment of performance is
deficient of the objective and
there is a mutual understanding
with the employee. A long-term
bonus may be delivered in the
form of a Deferred Share
Award, which confers unto the
employee certain number of
shares as agreed to with
committee. Once delivered, the
DSA is recorded in the
company’s accounts.
are
Dividends
participants on
shares during
period.
paid
to
the deferred
the deferral
threshold
performance.
Performance
measures and
targets are set by
the Committee
each year based
on corporate
objectives closely
linked to the
strategic priorities
and individual
contributions.
The majority of
the bonus
opportunity will
be based on the
corporate and
financial
measures or as
defined between
the Committee
and the
employee for
specific project.
The remainder of
the bonus will be
based on
performance
against individual
objectives.
Up to 20% of the
maximum
opportunity will
be received for
threshold
performance.
The treatment of shares awarded under the DSA on termination, are set out below:
Good leaver
Mutual agreement
DSA
Injury,
ill health,
disability or transfer
of undertakings.
Awards release in
full at the leaving
date.
For other good
leaver
reasons
awards release at
the end of
the
deferral period.
the right
Committee has
to
exercise its discretion as to the
extent to which awards, if any,
may release, for example where
leave
someone
is asked
because of a change
in
circumstances outside of their
control.
to
Resignation
reason/misconduct
Awards lapse.
without
Change of control
Awards release in full
at effective date of
change.
23
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
There was no vote taken during the last general meeting with regard to the Directors’
remuneration policy although it was part of the financial statements that were approved. Specific
approval of the policy was addressed at the AGM.
Non-executive Directors
The table below summarises the main elements of remuneration for Non-executive Directors:
Component
Executive fees
Non-executive fees
Benefits
Approach of the Company
The Committee determines the fees of the Chairman and other Executive
Directors and sets the fees at a level that is considered to be appropriate,
taking into account the size and complexity of the business and the
expected time commitment and contribution of the role.
The Board determines the fees of the Non-Executive Directors and sets the
fees at a level that is considered to be appropriate, taking into account the
size and complexity of the business and the expected time commitment
and contribution of the role.
Fees are structured as a basic fee with additional fees payable for
membership and/or chairmanship of a committee or other additional
responsibilities.
Additional benefits may also be provided in certain circumstances, if
required for business purposes.
Application of remuneration policy
The chart below provides an indication of the level of remuneration that would be received by
each Employee under the following three assumed performance scenarios:
Below threshold
performance
On-target performance
Fixed elements of remuneration only – base salary, benefits and
pension or in the discretion of the Committee
Assumes 50% pay-out under the Bonus
Assumes 100% pay-out under the LT Bonus
Maximum performance
Assumes 100% pay-out under the Bonus
Assumes 100% pay-out under the LT Bonus
Service contracts and loss of office Executive Directors and Employees
Executive Directors have rolling service contracts that provide for 12 months’ notice on either
side. There are no special provisions that apply in the event of a change of control.
A payment in lieu of notice, including base salary, contractual benefits and contractual provision
for an income in retirement may be made if:
•
•
the Company terminates the employment of the executive with immediate effect, or without
due notice; or
termination is agreed by mutual consent.
The Company may also make a payment in respect of outplacement costs, legal fees and the
cost of any settlement agreement where appropriate.
24
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
With the exception of termination for cause or resignation, Executive Directors will be eligible for
a bonus award prorated to reflect the proportion of the financial year for which they were
employed and subject to performance achieved, provided they have a minimum of three months’
service in the bonus year.
Legacy plans
The Committee may make any remuneration payments and payments for loss of office (including
exercising any discretions available to it in connection with such payments) notwithstanding that
they are not in line with the policy set out above. This would apply where the terms of the payment
were agreed before the policy came into effect or at a time when the relevant individual was not
a director or employee of the Company and the payment was not in consideration for the
individual becoming a director or employee of the Company.
Malus and clawback
Malus is the possible reduction of bonuses and deferred awards, whilst clawback is the possible
recovery of awards that have already been made to executives. Deferred awards under the DSA
may be reduced or cancelled at the Committee’s discretion in such cases as material
misstatement of results, gross misconduct or fraud.
Recruitment
The Committee already has in place a recruitment and selection process. The process is set up
chronologically, from the time that the job becomes open for recruitment to the date the position
is filled. The Committee and the Company as a whole is committed to employ, in its best
judgment, suitable candidates for approved positions while engaging in recruitment and selection
processes that are in compliance with all applicable employment laws. It is the policy of the
Company to provide equal employment opportunity for employment to all applicants and
employees. The recruitment and selection process is based on the following underlying
principles:
• The applicant will be chosen on the basis of suitability with respect to the position.
• The applicant will be informed on the application procedure and the details of the
vacant position.
• The Company will request that the applicant provide only the information that is
needed to assess suitability for the position.
• The applicant will provide the Company with information it needs to form an
accurate picture of the applicant’s suitability for the vacant position.
• The information provided by the applicant will be treated confidentially and with due
care; the applicant’s privacy will also be respected in other matters.
• If an applicant submits a written complaint to the Committee, the Committee will
investigate and respond to the complaint in writing.
Maximum Potential Payment
The maximum potential individual payment assuming all threshold and maximum performance
met is 400% of the individual’s base salary on top of their base salary annual amount.
25
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
Consideration of Shareholders Views
The views of our shareholders are always important to the Board, hence why the policy is to be
formally approved by shareholders at the next available General Meeting. We also welcome
shareholders views, where appropriate, at any time during the year, which can be submitted to
the Board at info@algwplc.com.
This feedback, plus any additional feedback received from time to time, is considered as part of
the Company’s annual policy on remuneration.
Other Employees
At present there are no other employees in the Company other than the Directors, so this policy
only applies to the Board.
Terms of appointment
The services of the Directors are provided under the terms of agreement with the Company dated
as follows:
Director
Gobind Sahney
Daniel Swick
Jason Sutherland
Year of
appointment
Number of years
completed
Date of current
engagement letter
2015
2018
2019
5
2
1
20/12/2017
01/12/2017
06/03/2019
The Directors’ service agreements are available for review on request.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the
individual’s experience and their current base salary. Where an individual is recruited at below
market norms, they may be re-aligned over time (e.g. two to three years), subject to performance
in the role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Board may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
26
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 August 2020 (GBP):
Salary and
fees
Taxable
benefits
Annual
bonus and
long term
benefits
Pension
related
benefits Other
Name of Director
Andrew Dennan
(Resigned)
Rory Heier
(Resigned)
Gobind Sahney
Daniel Swick
Jason Sutherland
9,083
3,750
104,144
97,995
24,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
9,083
3,750
- 8,029
112,173
-
-
-
-
97,995
24,000
Set out below are the emoluments of the Directors for the year ended 31 August 2019 (GBP):
Name of Director
Andrew Dennan
Rory Heier
Salary
and fees
55,000
45,000
Gobind Sahney
104,551
Daniel Swick
Jason Sutherland
95,887
12,000
Annual
bonus and
long term
benefits
Taxable
benefits
Pension
related
benefits
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
Total
-
-
55,000
45,000
16,147
120,698
-
95,887
12,000
None of the above remuneration was based on performance measures or targets.
Pension contributions (audited)
The Company does not currently have any pension plans for any of the Directors and does not
pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors or past Directors.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
27
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Remuneration Committee Report (continued)
UK Remuneration percentage changes
No percentage changes for remuneration have been set out in this report as the prior year
numbers include two Directors who resigned in the current year and therefore the Directors
consider that such percentages would be misleading. Each Director’s monthly fee was
unchanged from that in 2019.
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year performance graph comparing
the Company’s Total Shareholder Return with that of a comparable indicator. The Directors do
not currently consider that including the graph will be meaningful because the Company has only
been listed since 2017, is not paying dividends and is currently incurring losses as it gains scale.
In addition and as mentioned above, the remuneration of Directors is not currently linked to
performance and we therefore do not consider the inclusion of this graph to be useful to
shareholders at the current time. The Directors will review the inclusion of this table for future
reports.
UK 10-year CEO table and UK percentage change table
The Directors have considered the requirement for a UK 10-year CEO table. The Directors do
not currently consider that including these tables would be meaningful given that the Company
is not yet trading. The Directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance
of spend on pay compared to shareholder dividends paid. Given that the Company does not
currently pay dividends we have not considered it necessary to include such information.
UK Directors’ shares (audited)
The interests of the Directors who served during the year in the share capital of the Company at
31 August 2020 and at the date of this report has been set out in the Directors’ Report on pages
4-8.
Other matters
The Company does not currently have any annual or long-term incentive schemes in place for
any of the Directors and as such there are no disclosures in this respect.
Approved on behalf of the Board of Directors.
………………………
Jason Sutherland
Non-Executive Director
21 December 2020
28
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Audit Committee Report
The Audit Committee during the year comprised two Non-Executive Directors (Rory Heier (until
10 February 2020 and Jason Sutherland). It oversees the Company’s financial reporting and
internal controls and provides a formal reporting link with the external auditors. The ultimate
responsibility for reviewing and approving the annual report and accounts and the half-yearly
report remains with the Board.
Main Responsibilities
The Audit Committee acts as a preparatory body for discharging the Board’s responsibilities in a
wide range of financial matters by:
•
•
•
•
•
•
•
•
monitoring the integrity of the financial statements and formal announcements relating to
the Company’s financial performance;
reviewing significant financial reporting issues, accounting policies and disclosures in
financial reports, which are considered to be in accordance with the key audit matters
identified by the external auditors;
overseeing that an effective system of internal control and risk management systems are
maintained;
ensuring that an effective whistle-blowing, anti-fraud and bribery procedures are in place;
overseeing the Board’s relationship with the external auditor and, where appropriate, the
selection of new external auditors;
monitoring the statutory audit of the annual financial statements, in particular, its
performance, taking into account any findings and conclusions by the competent authority;
approving non-audit services provided by the external auditor, or any other accounting firm,
ensuring the independence and objectivity of the external auditors is safeguarded when
appointing them to conduct non-audit services; and
ensuring compliance with legal requirements, accounting standards and the Listing Rules
and the Disclosure and Transparency Rules.
Governance
The Code requires that at least one member of the Audit Committee has recent and relevant
financial experience. Rory Heier is a Chartered Accountant with over 15 years of experience
working with a wide variety of listed Companies. Following his resignation the Audit Committee
no longer includes anyone with relevant financial experience but the Company Secretary is a
qualified Chartered Accountant who has been involved in the production of accounts for listed
companies for over 15 years and therefore is able to advise the Audit Committee as required.
Members of the Audit Committee are appointed by the Board and whilst shareholders, the
Company believes they are considered to be independent in both character and judgement.
The Company’s external auditor is PKF Littlejohn LLP and the Audit Committee will closely
monitor the level of audit and non-audit services they provide to the Company.
29
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Audit Committee Report (continued)
Meetings
In the year to 31 August 2020 the two members of the Audit Committee have met on one
occasion.
The key work undertaken by the Audit Committee is as follows;
•
•
•
•
•
•
interview of external auditors and recommendation to the Board
review of audit planning and update on relevant accounting developments;
consideration and approval of the risk management framework, appropriateness of key
performance indicators;
consideration and review of full-year results;
review of the effectiveness of the Audit Committee; and
review of internal controls
The Code states that the Audit Committee should have primary responsibility for making a
recommendation on the appointment, reappointment or removal of the external auditor.
External auditor
The Company’s external auditor is PKF Littlejohn LLP. The external auditor has unrestricted
access to the Audit Committee Chairman. The Committee is satisfied that PKF Littlejohn LLP
has adequate policies and safeguards in place to ensure that auditor objectivity and
independence are maintained. The external auditors report to the Audit Committee annually on
their independence from the Company. In accordance with professional standards, the partner
responsible for the audit is changed every five years. The current auditor, PKF Littlejohn LLP
was first appointed by the Company in 2018 following a tender process, and therefore the current
partner is due to rotate off the engagement after completing the August 2022 audit. Having
assessed the performance objectivity and independence of the auditors, the Committee will be
recommending the reappointment of PKF Littlejohn LLP as auditors to the Company at the 2021
Annual General Meeting.
Jason Sutherland
Chairman of the Audit Committee
21 December 2020
30
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Nomination Committee Report
The Nomination Committee is comprised of the Executive Chairman Gobind Sahney and
Executive Director Daniel Swick.
The Committee considers potential candidates for appointment to the Company’s board who
maintain the highest standards of corporate governance and have sufficient time to commit to
the role.
Nomination committee evaluation
The Nomination Committee evaluates the composition, skills, and diversity of the board and its
committees and identifies a requirement for a board appointment. There were no new
appointments during the year.
Identify suitable candidates
The Nomination Committee undertakes a review of each candidate and their experience in
accordance with the Company’s ‘director’s profile’ and suitable candidates are identified.
For the appointment of a Chairman, the Nomination Committee will prepare a job specification,
including an assessment of the time commitment expected, recognising the need for availability
in the event of crises.
Nomination committee recommendation
Following interviews with a candidate conducted by the chairman, and other members of the
board, the Nomination Committee makes a recommendation on a preferred candidate to the
board.
Due diligence
After a candidate has been recommended to the board by the Nomination Committee, the
Company Secretary undertakes appropriate background checks on a candidate. The board of
directors meets any candidate recommended by the Nomination Committee and the candidate
is given an opportunity to make a presentation to the board prior to deciding on their appointment.
Board appointment
The board formally approves a candidate’s appointment to the board.
Approach to Diversity
The Nomination Committee believes in the benefits of diversity, including the need for diversity
in order to effectively represent shareholders’ interests. This diversity is not restricted to gender
but also includes geographic location, nationality, skills, age, educational and professional
background. The board’s policy remains that selection should be based on the best person for
the role.
On Behalf of the Nomination Committee
Gobind Sahney
Chairman
21 December 2020
31
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report to the Members of Alpha Growth Plc
Opinion
We have audited the financial statements of Alpha Growth Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 August 2020 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Company Statements of Financial
Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated
and Company Statements of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the
parent company’s affairs as at 31 August 2020 and of the group’s and parent company’s
loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs
as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union and as applied in accordance of the provisions
of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS
Regulation.
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
Auditors’ responsibilities for the audit of the financial statements section of our report. We are
independent of the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK)
require us to report to you where:
•
•
•
the directors’ use of the going concern basis of accounting in the preparation of the
financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material
uncertainties that may cast significant doubt about the company’s ability to continue to
adopt the going concern basis of accounting for a period of at least twelve months from
the date when the financial statements are authorised for issue.
32
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report for the Members of Alpha Growth Plc (continued)
Conclusions relating to principal risks, going concern and viability statements
We have nothing to report in respect of the following information in the annual report, in relation
to which the ISAs (UK) require us to report to you whether we have anything material to add or
draw attention to:
•
•
the disclosures in the annual report set out in pages 12 and 13 that describe the principal
risks and explain how they are being managed or mitigated;
the directors’ confirmation set out on pages 12 and 13 in the annual report that they have
carried out a robust assessment of the principal risks facing the group, including those
that would threaten its business model, future performance, solvency or liquidity;
•
• whether the directors’ statements relating to going concern and their assessment of the
prospects of the group required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) are materially inconsistent with our knowledge obtained in the audit; or
the directors explanation set out in note 2 as to how they have assessed the prospects
of the group, over what period they have done so and why they consider that period to
be appropriate, and their statement as to whether they have a reasonable expectation
that the group will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and
qualitative thresholds for materiality determine the scope of our audit and the nature, timing and
extent of our audit procedures.
Group materiality was set at £28,400 (2019: £9,500), based on 5% of loss before tax. Parent
company materiality was set at £28,200 (2019: £9,250) based on 5% of loss before tax. The key
performance indicator for the group is the cost management, and since this is the first period
where the group has generated revenue, we have used loss before tax as the basis for our
materiality to reflect that, whilst expenses are significantly larger than revenue, there is revenue
being generated which is offsetting some of the expenditure in this period. Note that we have
used expenses as basis of materiality in the previous year given that the Group and the parent
company did not generate revenue and did not have significant assets or liabilities. This has not
changed as the parent showed minimal trading in the year.
We agreed with the audit committee that we would report to the committee all unadjusted
differences identified within the group and parent company during our audit in excess of £1,420
(2019: £475) and £1,410 (2019: £450), respectively. This represents 5% of overall materiality.
Materiality was reassessed at the closing stages of the audit and no amendments were required
to the calculated level of materiality set at the planning stage of the audit for both the group and
parent company.
33
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report for the Members of Alpha Growth Plc (continued)
An overview of the scope of our audit
Our audit approach was developed by obtaining an understanding of the Group’s activities, the
key functions undertaken by the Board and the overall control environment. Based on this
understanding we assessed those aspects of the Group’s transactions and balances which
were most likely to give rise to a material misstatement and were most susceptible to
irregularities including fraud or error. We looked at areas involving significant accounting
estimates and judgement by the directors and considered future events that are inherently
uncertain. We have considered that the recoverability of the receivable from BlackOak Alpha
Growth Master Fund to be a significant estimate which is also linked to our assessment of the
Group’s ability to continue as a going concern. We also addressed the risk of management
override of internal controls, including evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to fraud. We identified what we
considered to be significant audit risks and planned our audit approach accordingly.
PKF Littlejohn LLP directly performed full scope audits on all group entities, without the use of
component auditors.
Key audit matters
We have determined that there are no other key audit matters to communicate in our report.
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditors’ report thereon. The directors are responsible for the other
information. Our opinion on the group and parent company financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address
the following items in the other information and to report as uncorrected material misstatements
of the other information where we conclude that those items meet the following conditions:
• Fair, balanced and understandable set out on page 7 – the statement given by the
directors that they consider the annual report and financial statements taken as a whole
is fair, balanced and understandable and provides the information necessary for
shareholders to assess the group’s performance, business model and strategy, is
materially inconsistent with our knowledge obtained in the audit; or
34
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report for the Members of Alpha Growth Plc (continued)
Other information (continued)
• Audit committee reporting set out on pages 29-30 - the section describing the work of
the audit committee does not appropriately address matters communicated by us to the
audit committee; or
• Directors’ statement of compliance with the UK Corporate Governance Code set
out on page 14 – the parts of the directors’ statement required under the Listing Rules
relating to the company’s compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in accordance with Listing Rule
9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK
Corporate Governance Code.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
•
• adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report
to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
35
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report for the Members of Alpha Growth Plc (continued)
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are
responsible for the preparation of the group and parent company 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 group and parent company financial statements, the directors are responsible
for assessing the group’s and the parent company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ 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
auditors’ 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 Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.This
description forms part of our auditors‘ report.
Other matters which we are required to address
We were appointed by the audit committee on 6 January 2020 to audit the financial statements
for the year ended 31 August 2020. Our total uninterrupted period of engagement is three years,
covering the years ended 31 August 2018, 31 August 2019 and 31 August 2020.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group
or the parent company and we remain independent of the group and the parent company in
conducting our audit.
We identified areas of laws and regulations that could reasonably be expected to have a material
effect on the financial statements from our sector experience and through discussion with the
directors. We considered the extent of compliance with those laws and regulations as part of our
procedures on the related financial statements items. We communicated laws and regulations
throughout our audit team and remained alert to any indications of non-compliance throughout
the audit. As with any audit, there remained a higher risk of non-detection of irregularities, as
these may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal controls.
Our audit opinion is consistent with the additional report to the audit committee.
36
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Independent Auditors’ Report for the Members of Alpha Growth Plc (continued)
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 auditors’
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.
Joseph Archer (Senior Statutory Auditor)
For and on behalf of
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
21 December 2020
37
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Consolidated Statement of Comprehensive Income
Year ended
31 August 2020
£
Year ended
31 August 2019
£
Note
3
3
5
Continuing operations
Turnover
Cost of Sales
Gross Profit
Operating expenses
Loss before taxation
Taxation
Loss for the year
Other comprehensive income for the
year
Total comprehensive loss for the
year attributable to the equity
owners
Earnings per share from continuing
operations attributable to the equity
owners
81,592
(81,592)
-
-
-
-
(567,200)
(644,361)
(567,200)
(644,361)
-
-
(567,200)
(644,361)
-
-
(567,200)
(644,361)
Basic and diluted earnings per share
(pence per share)
6
(0.3p)
(0.5p)
The notes to the financial statements form an integral part of these financial statements.
38
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Consolidated Statement of Financial Position
Note
As at
31 August 2020
£
As at
31 August 2019
£
Assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to shareholders
Share capital
Share premium
Share based payment reserve
Retained deficit
Total equity
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Total equity and liabilities
9
10
11
11
11
12
245,125
43,620
288,745
288,745
243,486
173,941
417,427
417,427
205,102
1,789,744
-
(1,798,114)
158,702
1,228,641
20,640
(1,230,914)
196,732
177,069
92,013
92,013
288,745
240,358
240,358
417,427
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the board and authorised for issue on 21 December 2020 and
signed on its behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
39
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Company Statement of Financial Position
Note
As at
31 August 2020
£
As at
31 August 2019
£
Assets
Non-current assets
Investment in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to shareholders
Share capital
Share premium
Share based payment reserve
Retained deficit
Total equity
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Total equity and liabilities
7
9
10
11
11
11
12
2
2
248,658
43,620
292,278
292,280
1
1
233,213
173,941
407,154
407,154
205,102
1,789,744
-
(1,794,579)
158,702
1,228,641
20,640
(1,230,914)
200,267
177,069
92,013
92,013
292,280
230,085
230,085
407,154
The notes to the financial statements form an integral part of these financial statements.
The company has elected to take the exemption under section 408 of the Companies Act 2006
not to present the parent company Statement of Comprehensive Income.
The loss for the parent company for the year was £563,665 (2019: £644,361 loss).
This report was approved by the board and authorised for issue on 21 December 2020 and
signed on its behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
40
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Consolidated Statement of Changes in Equity
Share
capital
£
Share
premium
£
Balance as at 1 September
2018
106,335
561,898
Share
based
payment
reserve
£
-
Retained
deficit
£
Total
£
(586,553)
81,680
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
-
(644,361)
(644,361)
-
(644,361)
(644,361)
Share based payments
Share issue
Share issue costs
2,367
50,000
-
13,993
800,000
(147,250)
20,640
-
-
-
-
-
37,000
850,000
(147,250)
Balance as at 31 August 2019
158,702 1,228,641
20,640
(1,230,914)
177,069
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
-
(567,200)
(567,200)
-
(567,200)
(567,200)
Share based payments
Share issue
Share issue costs
5,826
40,574
-
75,674
511,087
(25,658)
-
(20,640)
-
-
-
-
81,500
531,021
(25,658)
Balance as at 31 August 2020
205,102 1,789,744
-
(1,798,114)
196,732
Share capital comprises the ordinary issued share capital of the Company.
Share premium represents consideration less nominal value of issued shares and costs directly
attributable to the issue of new shares.
Share based payment reserve represents the value of equity settled share based payments
provided to third parties for services provided.
Retained deficit represents the cumulative retained losses of the Company at the reporting date.
The notes to the financial statements form an integral part of these financial statements.
41
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Company Statement of Changes in Equity
Share
capital
£
Share
premium
£
Balance as at 1 September
2018
106,335
561,898
Share
based
payment
reserve
£
-
Retained
deficit
£
Total
£
(586,553)
81,680
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
-
(644,361)
(644,361)
-
(644,361)
(644,361)
Share based payments
Share issue
Share issue costs
2,367
50,000
-
13,993
800,000
(147,250)
20,640
-
-
-
-
-
37,000
850,000
(147,250)
Balance as at 31 August 2019
158,702 1,228,641
20,640
(1,230,914)
177,069
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
-
(563,665)
(563,665)
-
(563,665)
(563,665)
Share based payments
Share issue
Share issue costs
5,826
40,574
-
75,674
511,087
(25,658)
-
(20,640)
-
-
-
-
81,500
531,021
(25,658)
Balance as at 31 August 2019
205,102 1,789,744
-
(1,789,744)
200,267
Share capital comprises the ordinary issued share capital of the Company.
Share premium represents consideration less nominal value of issued shares and costs directly
attributable to the issue of new shares.
Share based payment reserve represents the value of equity settled share based payments
provided to third parties for services provided.
Retained deficit represents the cumulative retained losses of the Company at the reporting date.
The notes to the financial statements form an integral part of these financial statements.
42
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Consolidated Statement of Cash Flows
Cash flow from operating activities
Loss before taxation
Adjustments for:
Services settled by way of payment in shares
Changes in working capital
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Year ended
31 August
2020
£
Year ended
31 August
2019
£
Note
(567,200)
(644,361)
81,500
37,000
(1,639)
(148,345)
(210,833)
182,302
Net cash used in operating activities
(635,684)
(635,892)
Cash flows from financing activities
Proceeds from issuance of shares net of issue costs
505,363
702,750
Net cash generated from financing activities
12
505,363
702,750
(Decrease)/increase in cash and cash equivalents
(130,321)
66,858
Cash and cash equivalents at beginning of period
173,941
107,083
Cash and cash equivalents at end of period
9
43,620
173,941
The notes to the financial statements form an integral part of these financial statements.
43
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Company Statement of Cash Flows
Cash flow from operating activities
Loss before taxation
Adjustments for:
Services settled by way of payment in shares
Changes in working capital
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Year ended
31 August
2020
£
Year ended
31 August
2019
£
Note
(563,665)
(644,361)
81,500
37,000
(15,445)
(138,073)
(200,559)
172,029
Net cash used in operating activities
(635,683)
(635,891)
Cash flows from investing activity
Investment in subsidiary undertakings
Net cash used in investing activities
Cash flows from financing activities
(1)
(1)
(1)
(1)
Proceeds from issuance of shares net of issue costs
505,363
702,750
Net cash generated from financing activities
12
505,363
702,750
(Decrease)/increase in cash and cash equivalents
(130,321)
66,858
Cash and cash equivalents at beginning of period
173,941
107,083
Cash and cash equivalents at end of period
9
43,620
173,941
The notes to the financial statements form an integral part of these financial statements.
44
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements
1. General Information
Alpha Growth Plc (the ‘Company’) is incorporated and domiciled in England and Wales as a
public limited company and operates from its registered office is 35 Berkeley Square, London
W1J 5BF, and is listed on the London Stock Exchange on the standard segment.
The Company’s principal activity is to seek acquisitions and opportunities to provide advisory
services, strategies, performance monitoring and analytical services to existing and
prospective holders of Senior Life Settlements (SLS) Assets, mainly through acquisition
strategies, performance monitoring and analytical services. The Company will only advise
on the United States SLS market.
These consolidated financial statements comprise the financial statements of the Company
and its subsidiaries Alpha Longevity Management Limited, Pacific Longevity Limited and
Policy Acquisition & Conveyance LLC (collectively the “Group”).
The financial statements are prepared to the nearest £.
2.
Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are
set out below. These policies have been consistently applied to all the years presented,
unless otherwise stated.
a) Basis of Preparation
The consolidated and parent company financial statements of Alpha Growth Plc have
been prepared in accordance with International Financial Reporting Standards (“IFRS”)
and IFRS Interpretations Committee (IFRS IC) interpretations as adopted for use by
the European Union, and the Companies Act 2006.
The financial statements have been prepared under the historical cost convention.
b) New Standards and Interpretations
i) New and amended standards adopted by the Group and Company
The Group and parent company have adopted all of the new and revised Standards
and Interpretations that are relevant to their operations and effective for accounting
periods beginning 1 September 2018. The group has and parent company have not
adopted any standards or interpretations in advance of the required implementation
dates.
45
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
b) New Standards and Interpretations (continued)
ii) New standards, amendments and Interpretations in issue but not yet effective or not
yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet effective and (in some
cases) have not yet been endorsed by the EU, up to the date of issuance of the
financial statements are listed below. The Group and Parent Company intend to
adopt these standards, if applicable, when they become effective.
Standard
Impact on initial application
Effective date
IFRS 3
(Amendments)
IAS 1 and IAS 8
(Amendments)
IFRS 9
IFRS 16
(Amendments)
Business combinations
Definition of material
Interest rate benchmark reform
Leases, Covid-19 related rent concessions
1 January
2020
1 January
2020
1 January
2020
1 June 2020
The Directors have evaluated the impact of the new and amended standards above.
The Directors believe that these new and amended standards will not have a
material impact on the financial statements of the Group and Parent Company.
There are no other IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Group and Parent Company.
46
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
c) Going Concern
The preparation of the financial statements requires an assessment on the validity of
the going concern assumption.
The Directors have reviewed projections for a period of at least 12 months from the date
of approval of the financial statements. The Group currently has no gross profits but has
started earning revenue since the year end from a fund that launched in January 2020.
The Group may need to raise additional funds in order to meet its working capital needs
during the going concern period, being 12 months for the date of signing the financial
statements, depending on the assets raised in the fund but this is only necessary to
facilitate future growth.
In making their assessment of going concern, the Directors acknowledge that the Group
has a very small cost base and can therefore confirm that they consider sufficient funds
will be available to ensure the Group continues to meet its obligations they fall due for a
period of at least one year from the date of approval of these financial statements.
Accordingly, the Board believes it is appropriate to adopt the going concern basis in the
preparation of the financial statements.
d) Basis of Consolidation
Subsidiaries are all entities over which the group has control, either directly or indirectly
through other subsidiaries. The group controls an entity when the group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the group. They are
deconsolidated from the date that control ceases.
These consolidated financial statements include the results of the Company and its
100% owned subsidiaries Alpha Longevity Management Limited, Pacific Longevity
Limited and Pacific Acquisition and Conveyance LLC. Of the results for the year losses
of £563,665 (2019: £644,361) were incurred by the Company.
The group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity
interests issued by the group. The consideration transferred includes the fair value of
any asset or liability resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the
recognised amounts of acquiree’s identifiable net assets.
47
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
d) Basis of Consolidation (continued)
Inter-company transactions, balances and unrealised gains on transactions between
group companies are eliminated. Unrealised losses are also eliminated.
The subsidiaries are not required to produce financial statements and have yet to
produce any. For the purpose of these consolidated financial statements the results
have been prepared for the period 1 September 2019 to 31 August 2020, in order to be
co-terminous with the Company.
Where necessary, adjustments are made to the accounting records of subsidiaries to
bring the accounting policies used into line with those use by other members of the
group.
e)
Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (£), which is the Group’s
functional and presentational currency.
ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions or valuation where items are
re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the income
statement.
iii) Group Companies
The results and financial position of all the group entities that have a functional
currency different from the presentation currency are translated into the presentation
currency as follows:
i) The assets and liabilities for each statement of financial position presented are
converted using the rates in effect at the date of the statement of the financial
position;
ii) The income and expenses for each statement of comprehensive income
presented are converted using the average rates for the period (unless this
average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
iii) All resulting exchange differences are recognised in other comprehensive
income and are transferred to the income statement upon disposal of these
companies.
48
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
f) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with International Financial
Reporting Standards requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company’s
accounting policies.
Estimates and judgements are continually evaluated, and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the financial statements for the year ended 31 August 2020 are discussed below:
Recoverability of loan balances
Included in debtors is a loan balance of £25,079 (2019: £16,654) due from Alpha Longevity
Management Limited. The relationship between the Company and Alpha Longevity
Management Limited is set out in note 20. This balance arose as a result of the Company
paying expenses on behalf of Alpha Longevity Management Limited and settling part of a
loan by Gobind Sahney to Alpha Longevity Management Limited. The recovery of this
balance is reliant on Black Oak Alpha Growth Fund LP successfully raising capital. The
Directors do not consider this debtor balance to be impaired.
Included in debtors is a loan balance of £18,067 (2019: £nil) due from Pacific Longevity
Limited. The relationship between the Company and Pacific Longevity Limited is set out in
note 19. This balance arose as a result of the Company paying expenses on behalf of Pacific
Longevity Limited. The recovery of this balance is reliant on Pacific Longevity successfully
issuing an SLS asset backed bond. The Directors do not consider this debtor balance to be
impaired
Included in debtors is a loan amount of £182,790 (2019: £162,020) to Black Oak Alpha
Growth Fund LP, a fund established by the Company with a view to it generating future
revenues. The recovery of this loan is dependent on the Company successfully raising
capital for the fund. The Directors do not consider this debtor balance to be impaired.
Fair value of warrants
In the prior year the Company included a share-based payment reserve for the value of
warrants issued in relation to shares issued during the current and prior year. The fair value
of the warrants was based on a Black Scholes model that is better suited to securities with
a much longer trading history and a Company with a more established business model.
Accordingly there is significant uncertainty as to whether the share-based payment reserve
accurately reflects the cost to the Company of issuing warrants. All warrants in issue were
exercised during the year resulting in the reversal of this reserve.
49
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
g) Financial Instruments
i) Initial recognition
A financial asset or financial liability is recognised in the statement of financial position of the
group when it arises or when the group becomes part of the contractual terms of the financial
instrument.
ii) Classification
a) Financial assets at amortised cost
The Group measures financial assets at amortized cost if both of the following conditions are
met:
• the asset is held within a business model whose objective is to collect contractual cash
flows; and
• the contractual terms of the financial asset generating cash flows at specified dates only
pertain to capital and interest payments on the balance of the initial capital.
Financial assets which are measured at amortised cost, using the Effective Interest Rate
Method (EIR) and are subject to impairment where there is significant uncertainty as to the
timing and likelihood of recovery due to credit risks. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired.
b) Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest rate method
include trade and other payables that are short term in nature. Financial liabilities are
derecognised if the Group’s obligations specified in the contract expire or are discharged or
cancelled.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the effective interest rate (“EIR”). The EIR
amortisation is included as finance costs in profit or loss. Trade payables other payables are
non-interest bearing and are stated at amortised cost using the effective interest method
iii) Derecognition
A financial asset is derecognised when:
The rights to receive cash flows from the asset have expired, or the Group has transferred
its rights to receive cash flows from the asset or has undertaken the commitment to fully pay
the cash flows received without significant delay to a third party under an arrangement and
has either (a) transferred substantially all the risks and the assets of the asset or (b) has
neither transferred nor held substantially all the risks and estimates of the asset but has
transferred the control of the asset.
50
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
h) Turnover
Turnover represents management fees earned by the Group and is recognised on an accruals
basis when earned
i) Taxation
Current Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the tax authorities. The tax rates and the tax laws
used to compute the amount are those that are enacted or substantively enacted by the
statement of financial position date.
Deferred Tax
Deferred income tax is recognised on all temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements, with the
following exceptions:
• where the temporary difference arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither accounting nor taxable profit or loss;
in respect of taxable temporary differences associated with investment in subsidiaries,
associates and joint ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future; and
•
• deferred income tax assets are recognised only to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences,
carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax
rates that are expected to apply when the related asset is realised or liability is settled, based
on tax rates and laws enacted or substantively enacted at the statement of financial position
date.
51
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
i) Taxation (continued)
The carrying amount of deferred income tax assets is reviewed at each statement of financial
position date. Deferred income tax assets and liabilities are offset, only if a legally
enforcement right exists to set off current tax assets against current tax liabilities, the
deferred income taxes related to the same taxation authority and that authority permits the
Company to make a single net payment.
Income tax is charged or credited directly to equity if it relates to items that are credited or
charged to equity. Otherwise income tax is recognised in the statement of comprehensive
income.
j) Segmental Reporting
At this point, identifying and assessing investment projects is the only activity the Company
is involved in and is therefore considered as the only operating/reportable segment.
The financial information of the single segment is therefore the same as that set out in the
statements of comprehensive income, statements of financial position, the statements of
changes to equity and the statements of cashflows.
k) Share-based payments
The Group has applied the requirements of IFRS 2 Share-based payments.
The cost of equity settled transactions are recognised, together with any corresponding
increase in equity, in the period during which the service was provided. Equity settled share
based payment transactions with other parties are measured at the fair value of the
services provided which equates to the amounts invoiced by the service provider. The
corresponding expense is recognised in the Statement of Comprehensive Income. Details
of equity settled transactions can be found in note 15.
In addition to the above the Company when placing shares through its Broker has granted
the Broker warrants to subscribe for additional shares at a future date. The fair value
determined at the grant date of the warrants is credited to share based payment reserves
with an offsetting reduction in the share premium account to reflect the cost to the Company
of the share issue. On exercise of the warrants the share based payment reserve has been
reversed with an offsetting increase in the share premium account.
Fair value of the warrants is measured by the use of the Black Scholes model. The
expected life used in the model is the life of the warrant, notwithstanding those warrants
were exercised subsequent to the year end
52
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
l) Financial Risk Management Objectives and Policies
The Company does not enter into any forward exchange rate contracts.
The main financial risks arising from the Company’s activities are market risk, interest rate
risk, foreign exchange risk, credit risk, liquidity risk and capital risk management. Further
details on the risk disclosures can be found in Note 16.
m) Equity
Equity instruments issued by the Company are recorded at the value of net proceeds after
direct issue costs.
n) Cash and Cash Equivalents
Cash and cash equivalents comprise cash held in bank. This definition is also used for the
Statement of Cash Flows.
The Company considers the credit ratings of banks in which it holds funds in order to reduce
exposure to credit risk. The Company only keeps its holdings of cash and cash equivalents
with institutions which have a minimum credit rating of ‘A-’.
The Company considers that it is not exposed to major concentrations of credit risk.
3.
Turnover
Turnover all relates to the one business segment of fund management and is from one
client located in North America.
4.
Expenses by Nature
Directors’ fees (Note 14)
Audit fees
Professional and consultancy fees
Other expenses
Group
2020
Company
2020
Group
2019
Company
2019
£
£
£
£
247,001
21,000
94,190
205,009
247,001
21,000
94,190
201,474
328,585
15,000
75,233
225,543
328,585
15,000
75,233
225,543
Operating expenses
567,200
563,665
644,361
644,361
53
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
5. Auditors’ remuneration
Group
2020
Company
2020
Group
2019
Company
2019
£
£
£
£
Fees payable to the Company’s current auditor
for the audit of the Company’s annual
accounts:
21,000
21,000
15,000
15,000
Fees payable to the Company’s current auditor
for non-audit services:
11,000
11,000
12,500
12,500
6.
Income tax
Analysis of charge in the year
Group
2020
Company
2020
Group
2019
Company
2019
£
-
-
-
£
-
-
-
£
-
-
-
£
-
-
-
(567,200)
(563,665)
(644,361)
(644,361)
(107,768)
(107,096)
(122,429)
(122,429)
Current tax
Deferred tax
Income tax
on
Loss
activities before tax
ordinary
Analysis of charge in the
year
Loss on ordinary activities
multiplied by
rate of
corporation tax in the UK
of 19% (2019: 19%)
Tax losses carried forward
107,768
107,096
122,429
122,429
Total tax for the year
-
-
-
-
The Group has accumulated tax losses of approximately £1,758,100 (2019: £1,190,900) that
are available, under current legislation, to be carried forward indefinitely against future profits.
A deferred tax asset has not been recognised in respect of these losses due to the uncertainty
of future profits. The amount of the deferred tax asset not recognised is approximately
£310,000 (2019: £202,000).
54
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
7.
Earnings per share
The calculation of the basic and diluted earnings per share is calculated by dividing the loss
for the year from continuing operations of £567,200 (2019: £644,361) for the Group by the
weighted average number of ordinary shares in issue during the year of 190,901,671 (2019:
134,224,772):
Loss for the year from continuing operations
2020
£
(567,200)
2019
£
(644,361)
Weighted average number of shares in issue
190,901,671
134,224,772
Basic and diluted earnings per share
(0.3p)
(0.5p)
In accordance with IAS 32 no diluted EPS is shown as the Group is loss making.
Potential dilutive shares are detailed in note 15.
Details of post year end share issues are included in note 20.
8.
Investments
Shares in group undertakings:
Opening balance
Additions in the period (note 19)
Closing balance
Company
£
1
1
2
Investment in group undertakings are recorded at cost, which is the fair value of the
consideration paid.
Principal subsidiaries
The group’s subsidiaries at 31 August 2020 are set out below. Unless otherwise stated, they
have share capital consisting solely of ordinary shares, and the proportion of ownership
interests held equals the voting rights held by the group. The country of incorporation or
registration is also their principal place of business.
Name
Registered office
Direct ownership
2020
2019
Alpha Longevity
Management Limited
Pacific Longevity Ltd
Policy Acquisition &
Conveyance LLC
British Virgin Islands
Republic of Ireland
100%
100%
100%
100%
United States
100%
100%
The registered office of Policy Acquisition & Conveyance LLC is 1675 South State Street,
Dover, Delaware, 19901, USA
55
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
8.
Investments (continued)
The registered office of Alpha Longevity Management Limited is at Sea Meadow House, PO
Box 116, Road Town, Tortola, VG1110, BVI.
The registered office of Pacific Longevity Management Limited is at The Black Church, St
Mary’s Place, Dublin 7, Republic of Ireland.
All subsidiaries are included in the consolidation and share the same principal activity. Policy
Acquisition & Conveyance LLC was dormant throughout the accounting period.
During the year, the Company entered into a joint venture agreement with SL Investment
Management Limited and became a member of BOAGF GP, LLC, with a 50% interest. There
has been no activity in this entity during the period.
9.
Trade and other receivables
Group
As at 31
August
2020
£
Company
As at
31 August
2020
£
Group
As at 31
August
2019
£
Company
As at
31 August
2019
£
Other receivables
Loans
Prepayments
5,942
222,403
16,780
5,942
225,936
16,780
19,532
190,492
33,462
19,9532
180,219
33,462
245,125
248,658
243,486
233,213
There are no material differences between the fair value of trade and other receivables and
their carrying value at the year end.
No receivables were past due or impaired at the year end.
The loans due are interest free, unsecured and repayable on demand.
10. Cash and cash equivalents
Cash at bank
Group
As at 31
August
2020
£
43,620
Company
As at
31 August
2020
£
43,620
Group
As at 31
August
2019
£
173,941
Company
As at
31 August
2019
£
173,941
43,620
43,620
173,941
173,941
The Directors consider the carrying amount of cash and cash equivalents approximates to
their fair value.
56
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
11. Called up share capital
Shares
As at 31 August 2019 the Company’s issued and outstanding capital structure comprised
158,701,666 shares and there were no other securities in issue and outstanding.
On 29 November 2018 the Company issued 22,000,000 ordinary shares of £0.001 each at
a placing price of £0.0125 per placing share. The shares rank pari passu in all respects to
the existing ordinary shares.
On 29 November 2019, the Company issued 2,360,000 ordinary shares of £0.001 each at
an equivalent price of £0.0125 per share in settlement of a sum of £4,500 owed in director’s
fees and £25,000 owed for placing fees. The shares rank pari passu in all respects to the
existing ordinary shares.
On 6 December 2019, the Company issued 9,166,650 ordinary shares of £0.001 each on
exercise of warrants at a weighted average price of £0.014 per warrant share. The shares
rank pari passu in all respects to the existing ordinary shares.
On 18 December 2019, the Company issued 9,406,690 ordinary shares of £0.001 each at a
placing price of £0.0175 per placing share. The shares rank pari passu in all respects to the
existing ordinary shares.
On 9 May 2020, the Company issued 3,466,667 ordinary shares of £0.001 each at an
equivalent price of £0.015 per share in settlement of a sum of £22,000 owed in director’s
fees and £30,000 owed to Colva Insurance under the terms of a termination agreement
following the Company’s decision not to proceed with an acquisition. The shares rank pari
passu in all respects to the existing ordinary shares
The ordinary shares have attached to them full voting, dividend and capital distribution rights
(including on a winding up). The ordinary shares do not confer any rights of redemption.
Number of
Ordinary
Shares of
£0.001 each
Share
Capital
£
Share
Premium
£
SBP
Reserve
£
As at 31 August 2019
158,701,666
158,702
1,228,641
20,640
Share issue for cash
Warrants exercised
Settlement of fees
Share issue costs
31,406,690
9,166,650
5,826,667
-
31,407
9.167
370,864
140,223
-
(20,640)
5,826
75,674
-
(25,658)
-
-
-
At 31 August 2020
205,101,673
205,102
1,789,744
There were no warrants in issue at the year-end (2019: 9,166,650).
57
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
12. Trade and other payables
Trade payables
Amounts due to Director
Accruals
Group
As at 31
August
2020
£
Company
As at
31 August
2020
£
57,113
-
34,900
57,113
-
34,900
Group
As at 31
August
2019
£
214,755
7,603
18,000
Company
As at
31 August
2019
£
212,084
-
18,001
92,013
92,013
240,358
230,085
13. Reconciliation of liabilities arising from financing activities
No reconciliation of liabilities arising from financing activities has been presented as there
are no liabilities in relation to financing activities as at 31 August 2019 and 31 August 2020.
14. Related party disclosures
The remuneration transactions with Directors have been included in in the remuneration
table in Note 14.
Directors fees paid to Daniel Swick were paid to Kango Group LLC (“Kango Group”). Kango
Group is connected by way of Mr. Swick’s directorship and major shareholding in Kango
Group. There were no balances outstanding between the Company and Kango Group at 31
August 2020 (2018: £nil).
During the year, the Company paid expenses of £8,425 (2019: £1,092) and also settled Mr
Sahney’s loan on behalf of Alpha Longevity Management Limited. Alpha Longevity
Management Limited (“ALM”) is connected by way of Mr. Sahney’s directorship and prior to
its acquisition by the Company, major shareholding. Further details of the relationship
between the Company and Alpha Longevity Management Limited is set out in note 20. At
the year-end ALM owed the Company £25,079 (2019: £16,654) and also owed Mr Sahney
nil (2019: £7,603). This balance i interest free, unsecured and repayable on demand.
During the year, the Company paid expenses of £18,067 (2019: £nil) on behalf of Pacific
Longevity Limited. Pacific Longevity Limited is connected by way of Mr. Sahney’s
directorship. Further details of the relationship between the Company and Pacific Longevity
Limited is set out in note 20. At the year-end Pacific Longevity Limited owed the Company
£18,067 (2019: £nil). This balance is interest free, unsecured and repayable on demand
58
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
15. Directors’ emoluments
Details concerning Directors’ remuneration can be found below. The Directors are
considered to be the key management.
Name of Director
Andrew Dennan
Gobind Sahney
Rory Heier
Daniel Swick
Jason Sutherland
Total
16. Share-Based Payments
Warrants
Fees
£
9,083
112,173
3,750
97,995
24,000
Other
£
-
-
-
-
-
Total
£
9,083
112,173
3,750
97,995
24,000
247,001
-
247,001
The Company has in the past granted warrants to its Broker. Warrants are exercisable at a
price normally equal to the average quoted market price of the Company’s shares on the
date of grant or at the nearest placing price. Typically, the warrants vest immediately and
with an exercise period of 3 years from the date of grant. No warrants were granted in the
year end 31 August 2020 (2019: 3,750,000).
Details of the warrants outstanding during the year are as follows:
Outstanding at the beginning of
the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
Weighted
average
exercise
price
£
2019
Number of
warrants
000’s
Weighted
average
exercise
price
£
0.014
-
0.014
-
-
5,417
0.012
3,750
-
0.017
-
9,167
0.014
9,167
0.014
2020
Number of
warrants
000’s
9,167
-
(9,167)
-
-
59
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
16.
Share based payments (continued)
The credit against the share premium account on exercise was £20,640 (2019 charge:
£20,640).
In addition during the year, the Company agreed with certain suppliers to settle payment for
services through the issue of shares rather than payment in cash. The fair value of such
services was £25,658 (2019: £37,000) and those costs are recognised in the statement of
comprehensive income.
17.
Financial Instruments
The following table sets out the categories of financial instruments held as at 31 August 2020
and 31 August 2019:
Group
As at 31
August
2020
Company
As at
31 August
2020
Group
As at 31
August
2019
Company
As at
31 August
2019
£
£
£
£
43,620
5,941
43,620
173,941
173,941
5,941
19,532
19,532
197,323
225,936
190,492
180,219
92,013
38,731
240,358
230,085
Financial Assets
Financial assets measured
at amortised cost
Loans and receivables -
Cash and cash equivalents
Loans and receivables -
Trade and other receivables
Loans and receivables –
Loans
Financial liabilities
Financial liabilities
measured at amortised cost
- Trade and other payables
a) Market risk
The Group is not materially exposed to market risk as it has not nor does it intend to
hold instruments subject to market risk. Market risk is the risk that changes in market
prices, such as share prices and interest rates will affect the Group’s income or value
of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while
optimising the return on risk.
60
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
17.
Financial Instruments (continued)
b)
Interest rate risk
The Group is not materially exposed to interest rate risk because it does not have any
funds at either fixed or floating interest rates.
c)
Foreign currency risk
The Group is not currently materially exposed to foreign currency risk as its dollar
cash holdings are small and likely to be matched by outgoings in the same currency
d) Credit risk
The Group’s maximum exposure to credit risk in relation to each class of recognised
asset is the carrying amount of those assets as indicated in the balance sheet. At the
reporting date, there was no significant concentration of credit risk. Receivables at the
year-end were not past due, and the Directors consider there to be no significant credit
risk arising from these receivables.
The Group’s cash and cash equivalents are held with banks whose ratings are ‘A’.
e)
Liquidity risk
Cash flow working capital forecasting is performed for regular reporting to the directors.
The directors monitor these reports and forecasts to ensure the Group has sufficient
cash to meet its operational needs.
f)
Capital risk management
The Company defines capital based on the total equity of the Company. The Company
manages its capital to ensure that the Company will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the
debt and equity balance.
In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new shares or
sell assets to reduce debt, in the future.
18.
Average number of people employed
Average number of people employed, including Directors:
Group
2020
Company
2020
Group
2019
Company
2019
Office and management
Number
Number
Number
Number
4
4
5
5
61
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 August 2020
Notes to the Financial Statements (continued)
19. Ultimate Controlling Party
The Directors have determined that there is no controlling party as no individual shareholder
holds a controlling interest in the Company.
20. Post balance sheet events
Effective 7th September 2020 the Company raised the following monies through the issue
of additional shares:
No of shares
Net proceeds £
Placing
35,714,286
454,000
21. Copies of the Annual Report
Copies of the annual report will be available on the Company’s website at
http://algwplc.com and from the Company’s registered office, 35 Berkeley Square,
London W1J 5BF.
62