Alpha Growth Plc
Annual Report & Financial Statements
for the sixteen months
ended 31 December 2021
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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
Page
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46
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Company Information
Directors
Gobind Sahney
Daniel Swick
Jason Sutherland
Company Secretary
Neil Warrender
Registered Office
35 Berkeley Square
London W1J 5BF
Registered Number
09734404 (England and Wales)
Broker
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
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 Sixteen Months Ended 31 December 2021
Chairman’s Statement
I am pleased to present the annual financial statements of Alpha Growth Plc (“the Company”)
and its subsidiaries (together, “the Group”) for the sixteen months ended 31 December 2021.
During the period the Group reported a loss of £1,666,304 (2020 - loss of £567,200) and so the
Company was reliant on external fundraises in the period to support its growth.
Over this past sixteen months, the Company made significant investments into its various
strategies. On 11 February 2021 the Company announced it had acquired 95% of the issued
share capital of Northstar Group (Bermuda) Limited which is the 100% owner of Providence Life
and Assurance Company, a life assurance company with over $280 million of reported gross
assets. This acquisition, together with subscriptions into BlackOak Alpha Growth Fund, has led
to a significant increase in turnover with the Group anticipating that it will be break even on an
operating profits basis by the end of 2022.
For 2022, we continue with our 2B plan as announced. This includes expanding our activities
within the life insurance business and continue with the growth of BlackOak Alpha Growth Fund.
As the constraints of working within the pandemic protocols fall off, we are optimistic in
accelerating the pace of growth of the group’s assets under management.
I would like to thank all of those who work with us, our clients and especially our shareholders
who continue to support our strategies and growth for a successful future.
…………………………..
Gobind Sahney
Executive Chairman
27 May 2022
2
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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.
3
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Directors’ Report
The Directors present their report with the audited consolidated financial statements of the Group
for the sixteen month period ended 31 December 2021. 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 8 to 13.
The Company’s Ordinary Shares are 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 period and their beneficial interest in the Ordinary
Shares of the Company at 31 December 2021 were as follows:
Director
Position
Gobind Sahney
Daniel Swick
Jason Sutherland
Executive
Chairman
Chief Operating
Officer
Non-Executive
Director
Appointed Ordinary
shares
Options
Other
15/08/2015 7,462,500 54,392,236
01/06/2018 2,166,667 24,645,665
06/03/2019
133,333
8,514,731
-
-
-
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.
Substantial shareholders
As at 26 May 2022, the total number of issued Ordinary Shares with voting rights in the Company
was 431,887,388. Details of the Company’s capital structure and voting rights are set out in note
12 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
Roy Rawlins
Number of Ordinary
Shares
89,901,792
16,400,000
% of
Share Capital
21%
4%
4
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Directors’ Report (continued)
Financial instruments
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 21 of the financial
statements.
Greenhouse Gas (GHG) Emissions
At Alpha Growth, we are committed to long-term environmental sustainability and reducing our
impact on biodiversity. While we are an investment management company which does not have
the direct environmental impact of other industries such as manufacturing, energy, or retail
businesses, we are committed to using natural resources efficiently and optimizing our energy
use. In this regard, we have adopted the following initiatives and programs both to increase
environmental awareness among our employee base and reduce our corporate impact on natural
resources where possible:
• Reducing usage of paper and plastic, supported by recycling programs and the
successful elimination of single-use plastic water bottles and plastic straws from our
principal offices, along with the reduction of paper products.
• Prioritizing the use of energy-efficient office equipment, including the implementation of
energy-efficient lighting, setback thermostats and water filtration systems throughout our
global offices, as well as energy-conserving building materials.
• Lowering the environmental impact of employee commuting and travel by establishing
flexible work arrangements and investing in telecommuting and telepresence equipment.
As a firm, we also seek to increase the development and awareness of socially and
environmentally responsible procurement, and to align with businesses that not only deliver
superior quality goods and services, but also operate in ways that are respectful of the rights of
their employees and in ways that preserve natural resources and promote environmental
sustainability.
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 period 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 period ended 31 December 2021 (2020:
nil).
Future developments and events subsequent to the year end
Further details of the Company’s future developments and events subsequent to the period-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 Sixteen Months Ended 31 December 2021
Directors’ Report (continued)
Going Concern
As at 31 December 2021 the Group had a cash balance (excluding cash held in insurance
business) of £195,523 (2020: £43,620) and net current assets (excluding those held in insurance
business) of £617,617 (2020: £196,732). The Group revenues, excluding those from owned
insurance companies, are approximately £100,000 a quarter and the run rate for expenses is
approximately £50,000 a month. The Company will accordingly continue to raise money for
capital projects and working capital purposes as and when required but has a reasonable
expectation that sufficient of the outstanding warrants will be exercised during the first six months
following the issue of these financial statements to meet any such requirements. The Group
carefully monitors its core spend. The Directors are confident that, provided the acquisition of the
Guernsey subsidiary completes in the anticipated timeframe, the Group will be cashflow positive
by the end of 2022. 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 21 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 United Kingdom.
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.
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 pursuant to the Regulation (EC) No 1606/2002
as it applies in 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.
6
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Directors’ Report (continued)
Statement of Directors’ responsibilities (continued)
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 confirm that, to the
best of their knowledge and belief:
•
•
the financial statements prepared in accordance with IFRS as adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in 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.
Subsequent events
Subsequent events have been detailed in the Strategic Report on page 9 and note 23 to the
financial statements.
This responsibility statement was approved by the Board of Directors on 27 May 2022 and is
signed on its behalf by;
Signed ………………………………………….
Gobind Sahney 27 May 2022
7
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Executive Chairman
Strategic Report
The Directors present the Strategic Report of Alpha Growth Plc for the period ended 31
December 2021.
Review of Business in the Period
Operational Review
The Company’s principal activity is set out in the Directors’ Report on page 4.
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 Company advises on life
settlement contracts that meet the relevant fund, investment structure, criteria.
The Company signed a Heads of Terms agreement on 21 November 2018 with SL Investment
Management Limited. This collaboration led to the Group’s first advisory contract with the fund,
BlackOak Alpha Growth Fund LP, launched in 2019. During the period the Group acquired a
95% interest in a Bermudan life assurance company, Providence Life and Assurance Company
(“PLAC”). The Group generated its first revenues for services provided to PLAC in this financial
period. The acquisition of PLAC expanded the business activity of the Group into life insurance
linked asset management
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)
The success of our business is dependent on the support of all of our stakeholders. Building
positive relationships with stakeholders that share our values is important to us, and working
together towards shared goals assists us in delivering long-term sustainable success. The
Directors make decisions on behalf of the Group with a long-term view in mind. In order to fulfil
their duties, the Directors of each business and the Group itself take care to have regard to the
likely consequences on all stakeholders of the decisions and actions which
8
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Strategic Report (continued)
S172 (1) (continued)
they take. Where possible, decisions are carefully discussed with affected groups and are
therefore fully understood and supported when taken. At Group level, the Board is well informed
about the views of stakeholders through the regular reporting on stakeholder views and it uses
this information to assess the impact of decisions on each stakeholder group as part of its own
decision-making process. Details of the Group’s key stakeholders and how we engage with them
are set out below.
Shareholders As owners of our Group we rely on the support of shareholders and their opinions
are important to us. We have an open dialogue with our shareholders through one-to-one
meetings, group meetings, webcasts and the Annual General Meeting. Discussions with
shareholders cover a wide range of topics including financial performance, strategy, outlook,
governance and ethical practices. Shareholder feedback is regularly reported and discussed by
the Directors and their views are considered as part of decision-making.
Colleagues Whilst the Group operates with a small team of employees and consultants, those
people are key to our success and we want them to be successful individually and as a team.
Key areas of focus include health and well-being, development opportunities, pay and benefits.
Customers Our ambition is to deliver best-in-class service to investors. We build strong lasting
relationships with our investors and spend considerable time with them to understand their
investment needs and views and listen to how we can improve our range of products and service
for them. We use this knowledge to inform our decision-making, for example by acquiring
businesses like PLAC to expand our offering.
Suppliers We build strong relationships with our suppliers to develop mutually beneficial and
lasting partnerships. Engagement with suppliers is primarily through a series of interactions and
informal reviews. Key areas of focus include innovation and flexibility. The Board recognises that
relationships with suppliers are important to the Group’s long-term success and is briefed on
supplier feedback and issues on a regular basis.
Communities We seek to engage with the communities in which we operate to build trust and
understand the local issues that are important to them. During the year the Company entered
into a five year lease to evidence its commitment to the Newport Beach community.
Government and regulators We engage with the government and regulators through our
representatives with a focus are compliance with laws and regulations, anti-money laundering,
anti-bribery and corruption and sanctions testing. The Board is updated on legal and regulatory
developments and takes these into account when considering future actions.
Further information on the ways in which the Board engages with stakeholders is set out in the
Governance Report on pages 14 to 20
9
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Strategic Report (continued)
Events since the period end
Following the year end the Company announced that its Bermuda subsidiary had signed a sale
and purchase agreement to acquire a Guernsey based insurance company which is a Category
1, international life insurer, with approximately 3,785 long-term life insurance contracts in force
as of 31 December 2021. The acquisition is subject to regulatory approvals and is a non-adjusting
event for accounting purposes.
In the same announcement the Company informed the market that PLAC had issued its first
policy since the acquisition for a $5 million committed premium.
Financial review
Results for the 2021 period
The Group incurred a loss for the sixteen-month period to 31 December 2021 of £1,666,304
(year to 2020: loss of £567,200).
The loss for the period occurred as a result of on-going administrative expenses to provide
service to clients and the costs of a standard listing as well as a number of one-off charges for
the period. One off charges included the cost of options issued to the Directors which included
catch-up awards for prior years, costs of acquiring and integrating PLAC and adjustments to
PLAC reinsurance revenues. The Group is expected to be at, or close to, break-even on an
operating profits basis by the end of 2022.
Cash flow
Net cash inflow for the sixteen months to 31 December 2021 was £151,903 (2020: outflow
£130,321).
Closing cash
As at 31 December 2021, the Group held £195,523 (2020: £43,620) in bank accounts, excluding
amounts held in insurance businesses.
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 Sixteen Months Ended 31 December 2021
Strategic Report (continued)
Position of Company’s Business
During the year
The Company raised approximately £3,954,745 net of costs through the following share issues:
On 7 September 2020 the Company issued 35,714,286 ordinary shares of £0.001 each at a
placing price of £0.014 per placing share. The shares rank pari passu in all respects of the
existing ordinary shares.
On 15 March 2021, the Company issued 187,500,000 ordinary shares of £0.001 each at a
placing price of £0.02 per placing share with each placing share entitling the subscriber to one
warrant exercisable at £0.03 per warrant. The shares rank pari passu in all respects to the
existing ordinary shares.
On 17 May 2021, the Company issued 3,571,429 ordinary shares of £0.001 each at a price of
£0.014 per share following the exercise of warrants by the Company’s former broker. 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 £3,066,948
(2020: £196,732). The Company has few liabilities and is considered to have an adequate cash
position at the reporting date.
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 of the Company. The Company has an Executive
Chairman, Chief Operating Officer and one Non-Executive Director. There are no employees of
the Company other than the 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
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.
11
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Strategic Report (continued)
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
Mitigation
Management team is experienced in
the
their
industry and using
relationships to attract clients. The
successful launch of Black Oak
Alpha Growth Fund and
the
acquisition of Providence Life
Assurance Company
(“PLAC”)
demonstrate management’s ability
to grow revenues based on this
knowledge.
to
financial
resources,
While some competitors may have
greater
the
Company will be able to provide a
more personal approach
its
clients and with greater retention
rates
potential
competitors. The acquisition of
PLAC
the
competitiveness of the Group and
in
also provide diversification
revenue streams.
enhance
other
than
will
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. Share options incentivise
the Directors to stay and grow the
Company.
Many of the Company’s costs are in
USD and therefore any impact on
revenues from a fall in the value of
the USD will largely be offset by
is not
in costs.
reductions
considered practical to hedge the
Company’s exposure
to USD
through its investment in PLAC.
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.
business
It
The
Risk/Uncertainty
The Company trades through its
Group companies Alpha Longevity
Management Ltd and Alpha Group
however
Limited,
(Bermuda)
revenues were much less than the
net
expenses
incurred.
proceeds from the share issues in
September 2020 and March 2021
have been used partly to acquire a
life assurance business and partly to
continue corporate development
and marketing efforts
to attract
potential advisory clients.
There
significant
may
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
may
internal
experience in managing longevity
assets and/or SLS strategies and
portfolios.
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
be
functional and
The Company’s
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
the
costs and
Company, with
and/or
sanctions for non-compliance.
restrictions on
fines
12
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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.
has
Company
Mitigation
The
offered
incentives to Directors and key staff
through participation in share option
schemes, 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
The pandemic has led to delays in
implementing some of the planned
strategies and may have further
impact if travel restrictions remain in
place.
Raising emergency funding
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.
Composition of the Board
The Company has raised capital
during the period which has been
sufficient to cover costs arising from
such delays. Further the pandemic
has highlighted
the benefits of
investing in SLS assets and created
opportunities to acquire assets such
as PLAC
The Company monitors its cash
requirements carefully and in the
need of significant additional funds
would look to increase its financing.
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.
Signed ………………………………………….
Gobind Sahney 27 May 2022
Chairman
13
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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 4.24 of the Code requires that a majority of the members of the Audit Committee
must be independent. The Audit Committee comprises of only one Non-Executive
Director as the Company has been focussed on its acquisition and marketing activities
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, the 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 that new Directors receive a full, formal and tailored induction on joining the Board.
As set out in page 18, 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 Sixteen Months Ended 31 December 2021
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 period ended 31
December 2021.
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 period, 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 Sixteen Months Ended 31 December 2021
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 joint venture with SL Investment
Management and the identification of suitable investment opportunities for the Company to
pursue.
Attendance at meetings:
Member
Gobind Sahney
Daniel Swick
Jason Sutherland
Position
Executive Chairman
Chief Operating Officer
Non-Executive Director
Meetings
attended
4 of 4
4 of 4
4 of 4
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 Sixteen Months Ended 31 December 2021
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 sole member of which, during the period was the independent Non-Executive Director; Jason
Sutherland. 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 Sixteen Months Ended 31 December 2021
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 Operating
Officer and one independent Non-Executive Director. 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 Director brings 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 December 2021.:
Directors
Male
3
Female
-
18
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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 29 to 30.
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 is expected to have insufficient revenue to
cover costs but has sufficient cash balances and short-term liquid debts to finance its activities
whilst it continues to grow revenues such that breakeven is expected to be achieved. The
Company may need to raise additional funds in order to meet its working capital needs during
the going concern period depending on, the extent to which warrants in issue are exercised and
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 as 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 Sixteen Months Ended 31 December 2021
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.
Principles for Responsible Investing – during the period the Company became a PRI signatory
https://www.unpri.org/signatories/signatory-resources/signatory-directory
This Governance Report was approved by the Board and signed on its behalf by;
…………………
Jason Sutherland
Non-Executive Director
27 May 2022
20
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Remuneration Committee Report
The Remuneration Committee presents its report for the period ended 31 December 2021.
Membership of the Remuneration Committee
The Remuneration Committee during the year comprised of one Non-Executive Director; Jason
Sutherland. The Company is looking to recruit a further Non-Executive Director but those efforts
have been hampered by the pandemic.
During the period ended 31 December 2021, the Remuneration Committee held two formal
meetings.
Subject to what appears below, no other third parties have provided advice that materially
assisted the Remuneration Committee during the period.
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
The Remuneration Policy was approved by shareholders at the AGM on 7th February 2020 and
the revised policy below will be put forward for approval once more at the next AGM. The formal
policy remains as set out in the 31 August 2020 report and accounts pending approval of the
below. 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 Sixteen Months Ended 31 December 2021
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
received
for
threshold
performance.
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Long Term
Bonus Scheme
(LT Bonus),
Share Option
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.
The maximum number
of awards under the
employee share option
scheme is 10% of the
shares in issue at the
end of the financial
period for which options
are issued. Options will
be exercisable at the
average share price in
the three months
immediately preceding
the award.
Incentivises
executives and
colleagues to
achieve key
strategic outcomes
on an annual basis
and to deliver
shareholder value
over the long term.
Focus on the share
price and key
financial metrics
and objectives to
deliver the
business strategy.
The element
focused on
shareholder value
rewards delivery of
outcomes that
deliver long term
growth in the value
of the Company’s
shares.
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.
Dividends are paid to
participants on the deferred
shares during the deferral
period.
Share options are issued
annually to reflect the
anticipated ability of the
executive to drive shareholder
value going forward,
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 option pool
will be allocated
to the team
based on their
ability to drive
shareholder
value.
The treatment of shares awarded under the DSA and options awarded under the share option plan on termination, are set out below:
Resignation
reason/misconduct
Awards lapse.
without
Change of control
Awards release in full
at effective date of
change.
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
in
because of a change
circumstances outside of their
control.
to
23
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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 this policy will be addressed at the upcoming 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 Sixteen Months Ended 31 December 2021
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 or cancellation of share options,
whilst clawback is the possible recovery of awards that have already been made to executives.
Deferred awards under the DSA and share option awards 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 (excluding any potential gains on share options)
assuming all threshold and maximum performance met is 400% of the individual’s base salary
on top of their base salary annual amount. There are no specific performance targets in place.
25
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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
7
4
3
20/12/2017
01/09/2018
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 Sixteen Months Ended 31 December 2021
Remuneration Committee Report (continued)
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the period ended 31 December 2021
(GBP):
Name of Director
Gobind Sahney
Daniel Swick
Jason Sutherland
Salary and
fees
Taxable
benefits
Annual
bonus and
long term
benefits
Pension
related
benefits
168,013
162,434
32,000
-
-
-
287,251
120,938
45,328
-
-
-
Other
Total
15,424
470,688
15,043
298,415
4,000
81,328
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
Name of Director
Andrew Dennan
(Resigned)
Rory
(Resigned)
Heier
9,083
3,750
Gobind Sahney
104,144
Daniel Swick
Jason Sutherland
97,995
24,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
-
-
Total
9,083
3,750
8,029
112,173
-
97,995
24,000
The long term benefits represent the estimated cost to the Company (see note 20) of options
awarded to the Directors in recognition of their level of contribution to the Company’s
advancement, participation, and other factors considered by the Remuneration Committee
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 Sixteen Months Ended 31 December 2021
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. At a remuneration committee meeting on
9 April 2021 the remuneration of the Executive Directors was increased from US$10,000 a month
to US$17,500 a month to reflect the increased activity following the acquisition of PLAC .
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.
Accordingly we 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
has only been trading for a little over two years. 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 December 2021 and at the date of this report has been set out in the Directors’ Report on
page 4.
Other matters
The Company has issued five-year options to the Directors and other key members of staff, which
are exercisable at the share price on the date of issue. These options serve to incentivise the
Directors to continue to generate shareholder value.
Approved on behalf of the Board of Directors.
………………………
Jason Sutherland
Non-Executive Director
27 May 2022
28
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Audit Committee Report
The Audit Committee during the year comprised the sole Non-Executive Director, 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. The Audit Committee does not include 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 Sixteen Months Ended 31 December 2021
Audit Committee Report (continued)
Meetings
In the period to 31 December 2021 the Audit Committee had one formal meeting with the
auditors.
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. The current partner took
over during the period and is due to rotate off the engagement after completing the December
2026 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 2022 Annual General Meeting.
Jason Sutherland
Chairman of the Audit Committee
27 May 2022
30
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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
27 May 2022
31
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
INDEPENDENT AUDITOR’S 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 period ended 31 December 2021 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 significant accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial Reporting Standards (IFRS) 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 December 2021 and of the group’s loss for the period then ended;
the group financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with
international accounting standards in conformity with the requirements of the Companies Act
2006 and as applied in accordance with 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 regard to the group financial statements, international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report. We are
independent of the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed 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
In auditing the financial statements, we have concluded that the director's use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the group’s and parent company’s ability to continue
to adopt the going concern basis of accounting included:
•
confirmation of any post period end share issuances and review of post period end regulatory
news service announcements; and
review of budgets and forecasts, including challenging any key assumptions; and
•
• discussion with management to understand the strategy for the business going forward and
•
assess the coherence of budgets and forecasts with this strategy; and
review of contracts or agreements in place that may result in revenue generation for the group in
future periods; and
32
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
•
•
conducting a sensitivity analysis on the group’s forecast cash flow position and considering the
appropriateness of the disclosures in note 2d to the financial statements and the Director’s report;
and
review of the availability of further funding as required.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group’s
or parent company's ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
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 £113,600 (2020: £28,400), based on 3% of net assets. Using the
net assets as a basis of setting materiality was determined to be most suitable because capital
position is the focus of management and other stakeholders, consistent with the nature of the
group’s business. We compared this with similar businesses and noted this to be a consistent
approach. In the previous period, 5% of loss before tax was used in calculating group materiality
and the change in the basis of Group materiality was driven by the group’s acquisition of PLAC.
Group performance materiality was set at £79,250 (2020: £22,720), based on 70% of group
materiality, which was determined to be sufficient in providing a margin of safety to ensure the
risk of the aggregated misstatements, both detected and undetected, are sufficiently low. This
also considered the heightened risk involved in the audit because of the acquisition of PLAC in
the year.
Parent company materiality was set at £32,600 (2020: £28,200), based on 2% of expenses. In
the previous period, the basis of the parent company materiality was in line with group materiality
at 5% of loss before tax; however, given the acquisition of PLAC, it was determined that the most
suitable key performance indicator for the parent is the cost management. With this, we have
used expenses as the basis for parent company materiality as the parent is not revenue
generating and is mainly cost-driven, consistent with it being a holding company of the group.
Parent company performance materiality was set at £26,080 (2020: £22,560), based on 80% of
parent company materiality. The level of parent company performance materiality was
determined considering the low risk involved in the audit of the parent company and because
there were no issues noted in the audit of the parent company, historically.
Furthermore, 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 £5,680 (2020: £1,420), and £1,630 (2020: £1,410), 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 Sixteen Months Ended 31 December 2021
Our approach to the audit
As part of designing our audit, we determined materiality, as above, and assessed the risk of
material misstatement in the financial statements. Consistent with last year, we performed full-
scope audit on the parent entity and looked at areas involving significant accounting estimates
and judgements by the directors and considered future events that are inherently uncertain. 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. On 22 March 2021, the group acquired Providence Life Assurance Company (Bermuda)
Ltd. ("PLAC") via the group’s acquisition of 95% of Northstar Group (Bermuda) Ltd – the holding
company for PLAC. PLAC is in-scope in our audit based the entity’s significance to the group;
thus, we have performed a detailed review of the component auditor’s working papers to ensure
that the audit has been performed in line with the relevant standards and applicable regulations,
and in line with the referral instructions we sent them.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) we identified, including
those which had the greatest effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Valuation of reserves
claims (‘IBNR’)
for unreported
The valuation of the liabilities in the
the
insurance business, specifically
valuation of the unit-linked investment
contracts in PLAC, has been considered a
key audit matter because it represents the
single biggest area of judgement for the
business. Within
liabilities,
management calculates a best estimate of
the value of claims which have been
incurred but not reported yet as at the
period end. Valuing this ‘IBNR’ reserve
requires management to make numerous
estimates and assumptions. (Refer to
notes 2n and 15)
these
Our work in this area included:
•
review of the PLAC component auditor’s file
to ensure that their work was performed in
line with our referral instructions; and
• engagement of an actuarial specialist to
review management’s key assumptions
used to calculate the IBNR and review
management’s
for
reasonableness and consistency with prior
periods; and
recalculating the IBNR figure recognised by
management; and
methodology
•
• evaluating management’s accounting policy
with respect to the valuation of IBNR and
disclosures against the requirements of the
International Financial Reporting Standards
as adopted by the EU, particularly the
application of IFRS 4.
We obtained sufficient assurance that the
methodology and assumptions used in the
34
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Valuation of Deferred Acquisition Costs
in
there
insurance
Within the assets held
is an asset which
business,
represents costs that are directly related
to the successful acquisition of new and
renewal
(‘DAC’).
insurance business
These costs are deferred to the extent that
they are deemed recoverable from future
profits. DAC
is amortised using the
present value of estimated gross profits
expected to be realised over the life of the
policies. This is considered a key audit
matter because there is an inherent risk
that the assumptions and estimates used
the present value of
in determining
estimated gross profits to amortize DAC
are not appropriate. (Refer to Note 15)
valuation of IBNR are appropriate, based on
the performance of the procedures above.
Our work in this area included:
•
review of the PLAC component auditor’s file
to ensure that their work was performed in
line with our referral instructions; and
• engagement of an actuarial specialist to
review management’s key assumptions
used to determine the estimated gross
profits to amortise the DAC; and
reviewing the previously forecasted gross
profits against actual performance and
challenging the reasonableness of future
profit estimates; and
•
• agreeing the policy values used in the DAC
calculated back to other audited policy
schedules; and
• evaluating management’s accounting policy
and disclosures against the requirements of
the IFRS 4.
We obtained sufficient assurance that the
methodology and assumptions used in the
valuation of DAC are appropriate, based on
the performance of the procedures above.
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the 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. Our
responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
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:
35
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
•
•
the information given in the strategic report and the directors’ report for the financial period
for which the financial statements are prepared is consistent with the financial statements;
and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate
•
for our audit have not been received from branches not visited by us; or
the parent company financial statements 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.
Corporate governance statement
We have reviewed the directors' statement in relation to going concern and that part of the
Corporate Governance Statement relating to the group’s and parent company's compliance with
the provisions of the UK Corporate Governance Code specified for our review by the Listing
Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
• Directors' statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 6;
• Directors’ explanation as to their assessment of the group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 2;
• Directors’ statement on whether they have a reasonable expectation that the group will be
able to continue in operation and meet its liabilities set out on page 6:
• Directors' statement that they consider the annual report and the financial statements, taken
as a whole, to be fair, balanced and understandable set out on page 7;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on pages 12 and 13;
• The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 18; and
• The section describing the work of the audit committee set out on page 29.
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
36
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the group and parent company and the sector in which they
operate to identify laws and regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding in this regard through
discussions with group and component management, industry research, review of minutes
and RNSs, application of cumulative audit knowledge and experience of the sector.
• We determined the principal laws and regulations relevant to the group and parent company
in this regard to be those arising from taxation, the Companies Act 2006, the Listing Rules
and the UK Corporate Governance Code.
• We designed our audit procedures to ensure the audit team considered whether there were
any indications of non-compliance by the group and parent company with those laws and
regulations. These procedures included, but were not limited to enquiries of management,
review of minutes, review of legal / regulatory correspondence, review of legal fees etc.
• We identified the risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from
management override of controls. We assessed the susceptibility of the financial statements
to material misstatement with respect to management override, including the possibility of
occurrence of fraud. As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included, but were
not limited to: the testing of journals; reviewing accounting estimates for evidence of bias
such as impairment of investments in subsidiaries, impairment of goodwill, the valuation of
IBNR and the valuation of deferred acquisition costs; and evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business.
• We reviewed the audit file of PLAC’s auditors, placing greater focus on the areas addressing
fraud and non-compliance with laws and regulations locally as well as its compliance in the
applicable UK laws and regulations. We reviewed the component auditor’s audit procedures
on the identified key audit matters, management override and its assessment of the entity’s
compliance with local laws and regulations via review discussions with management and
review of the audit file.
37
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Because of the inherent limitations of an audit, there is a risk that we will not detect all
irregularities, including those leading to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that compliance with a law or
regulation is removed from the events and transactions reflected in the financial statements, as
we will be less likely to become aware of instances of non-compliance. The risk is also greater
regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
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 auditor’s report.
Other matters which we are required to address
We were appointed by the audit committee on 5 March 2021 to audit the financial statements for
the period ending 31 December 2021. Our total uninterrupted period of engagement is four years,
covering the periods ended 31 August 2018, 31 August 2019, 31 August 2020 and 31 December
2021.
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.
During the period, we were asked by the group to act as Reporting Accountant in relation to a
Prospectus pertaining to the placing of ordinary shares on the London Stock Exchange Standard
Segment. Our role was limited to reporting solely on the historic financial information (‘HFI’)
relating to PLAC, being its financial statements for the year ended 31 December 2020. This
service is a permitted non-audit service under the FRC Ethical Standard. The key safeguards to
our independence comprised the use of an independent review partner across both the audit and
reporting accounting work.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Martin Watson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
27 May 2022
38
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Consolidated Statement of Comprehensive Income
Note
15
3
4
6
Revenue from Owned Insurance
Companies
Revenue from Contracts with Clients
Total revenue
Cost of Sales Owned Insurance
Companies
Cost of Sales on Contracts with Clients
Gross profit
Investment income and movement in
deferred acquisition costs
Interest expense
Operating expenses
Loss before taxation
Taxation
Loss for the period
Attributable to:
Owners of the Company
Non-controlling Interests
Earnings per share from continuing
operations attributable to the equity
owners
16 mths ended
31 December 2021
£
Year ended
31 August 2020
£
2,290,948
354,224
2,645,172
(1,639,167)
(253,090)
752,915
27,355
(8,306)
(2,467,888)
-
81,592
-
(81,592)
-
(567,200)
(1,695,924)
(567,200)
29,620
-
(1,666,304)
(567,200)
(1,654,811)
(11,493)
(567,200)
-
(1,666,304)
(567,200)
Basic and diluted earnings per share
(pence per share)
7
(0.5p)
(0.3p)
All results derive from continuing operations.
The notes to the financial statements form an integral part of these financial statements.
The Group had no comprehensive income other than the loss for the period.
39
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Consolidated Statement of Financial Position
Note
As at
31 December 2021
£
As at
31 August 2020
£
Assets
Non-current assets
Right of use asset
Intangible fixed assets
Current assets
Total assets in insurance business
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to shareholders
Share capital
Share premium
Option reserve
Share based payment reserve
Retained deficit
Total equity attributable to
shareholders
Non-controlling interests
Total equity
Liabilities
Non-current liabilities
Lease liabilities
Current liabilities
Total liabilities in insurance
business
Lease liabilities
Trade and other payables
Total liabilities
24
9
15
10
11
12
12
12
12
15
13
262,117
864,821
1,126,938
209,251,676
273,564
195,523
209,720,763
210,847,701
431,887
5,404,313
480,674
113,390
(3,452,925)
2,977,339
89,609
3,066,948
-
-
-
-
245,125
43,520
288,745
288,745
205,102
1,789,744
-
-
(1,798,114)
196,732
-
196,732
217,241
-
207,449,925
51,868
61,719
207,780,753
-
-
92,013
92,013
Total equity and liabilities
210,847,701
288,745
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 27 May 2022 and signed on
its behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
40
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Company Statement of Financial Position
As at
31 December 2021
£
As at
31 August 2020
£
Note
Assets
Non-current assets
Right of use asset
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
Option reserve
Share based payment reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Lease liabilities
Current liabilities
Lease liabilities
Trade and other payables
Total liabilities
8
10
11
12
12
12
12
13
262,117
2,894,660
3,156,777
369,891
109,558
479,449
3,636,226
-
2
2
248,658
43,620
292,278
292,280
431,887
5,404,313
480,674
113,390
(3,130,915)
205,102
1,789,744
-
-
(1,794,579)
3,299,349
200,267
217,241
51,868
67,768
336,877
-
-
92,013
92,013
Total equity and liabilities
3,636,226
292,280
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 period was £1,336,336 (2020: £563,665 loss).
This report was approved by the board and authorised for issue on 27 May 2022 and signed on
its behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
41
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Consolidated Statement of Changes in Equity
Share
capital
£
Share
premium
£
Option
Reserve
£
Share
based
payment
reserve
£
Retained
deficit
£
Non-
controlling
interests
£
Total
£
20,640
(1,230,914)
177,069
-
-
(567,200)
-
(567,200)
-
(567,200)
(20,640)
-
-
-
-
-
-
-
-
(567,200)
81,500
531,021
(25,658)
-
(1,798,114)
-
196,732
-
(1,654,811)
(11,493)
(1,666,304)
-
(1,654,811)
(11,493)
(1,666,304)
-
-
-
-
-
-
-
-
-
Balance as at 1 September
2019
158,702
1,228,641
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
Share based payments
Share issue
Share issue costs
Balance as at 31 August
2020
5,826
40,574
-
75,674
511,087
(25,658)
205,102
1,789,744
-
-
-
-
Loss for the period
Total comprehensive loss
for the period
Share issue
Share issue costs
Employee share options
issued
Non-controlling interests
acquired
Balance as at 31
December 2021
226,785
-
4,082,730
(468,161)
(9,515)
122,905
-
-
-
4,300,000
(345,256)
480,674
-
-
480,674
-
-
-
101,102
101,102
431,887
5,404,313
480,674 113,390
(3,452,925)
89,609
3,066,948
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.
Option reserve represents the fair value of employee options at the time of issue
Retained deficit represents the cumulative retained losses of the Company at the reporting date.
Non-controlling interests represents the amount of equity in subsidiaries attributable to minority
interests.
The notes to the financial statements form an integral part of these financial statements.
42
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Company Statement of Changes in Equity
Share
capital
£
Share
premium
£
Option
reserve
£
Balance as at 1
September 2019
Loss for the year
Total
comprehensive
loss for the year
Share based
payments
Share issue
Share issue costs
Balance as at 31
August 2020
Loss for the
period
Total
comprehensive
loss for the period
158,702 1,228,641
-
-
-
-
5,826
40,574
-
75,674
511,087
(25,658)
205,102 1,789,744
-
-
-
-
-
-
-
-
-
-
-
-
-
Share
based
payment
reserve
£
Retained
deficit
£
Total
£
20,640
(1,230,914)
177,069
-
(563,665)
(563,665)
-
(563,665)
(563,665)
-
(20,640)
-
-
-
-
81,500
531,021
(25,658)
-
(1,794,579)
200,267
-
(1,336,336)
(1,336,336)
-
(1,336,336)
(1,336,336)
Share issue
Share issue costs
Options issued
226,785 4,082,730
(468,161)
-
-
-
480,674
(9,515)
122,905
-
- 4,300,000
(345,256)
-
480,674
-
Balance as at 31
December 2021
431,887 5,404,313
480,674
113,390
(3,130,915) 3,299,349
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.
Option reserve represents the fair value of employee options at the time of issue
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.
43
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Consolidated Statement of Cash Flows
Cash flow from operating activities
Loss before interest and taxation
Adjustments for:
Services settled by way of payment in shares/options
Amortisation of intangible assets and right of use
assets
Changes in working capital
Increase in trade and other receivables
Increase in non-tax assets in insurance company
Decrease in trade and other payables
Increase in liabilities in insurance company
16 mths ended
31 December
2021
£
Year ended
31 August
2020
£
Note
(1,687,618)
(567,200)
480,674
72,873
81,500
(28,439)
(209,222,056)
(30,294)
207,449,925
(1,639)
-
(148,345)
-
Net cash used in operating activities
(2,964,935)
(635,684)
Cash flows from investing activity
Acquisition of intangible asset
Acquisition of non-controlling interest
Net cash used in investment activity
Cash flows from financing activities
(903,075)
101,102
(801,973)
-
-
-
Repayment of leasing liabilities
Interest on leasing liabilities
Proceeds from issuance of shares net of issue costs
(27,627)
(8,306)
3,954,744
-
-
505,363
Net cash generated from financing activities
3,918,811
505,363
Increase/(decrease) in cash and cash equivalents
151,903
(130,321)
Cash and cash equivalents at beginning of period
43,620
173,941
Cash and cash equivalents at end of period
11
195,523
43,620
The notes to the financial statements form an integral part of these financial statements.
44
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Company Statement of Cash Flows
Cash flow from operating activities
Loss before taxation and interest
Adjustments for:
Services settled by way of payment in shares/options
Amortisation of right of use asset
Changes in working capital
Increase in trade and other receivables
Decrease in trade and other payables
16 mths ended
31 December
2021
£
Year ended
31 August
2020
£
Note
(1,328,030)
(563,665)
480,674
34,619
81,500
-
(121,233)
(24,245)
(15,445)
(138,073)
Net cash used in operating activities
(958,215)
(635,683)
Cash flows from investing activity
Investment in subsidiary undertakings
Net cash used in investing activities
Cash flows from financing activities
(2,894,658)
(2,894,658)
(1)
(1)
Repayment of leasing liabilities
Interest on leasing liabilities
Proceeds from issuance of shares net of issue costs
(27,627)
(8,306)
3,954,744
-
-
505,363
Net cash generated from financing activities
3,918,811
505,363
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
65,938
43,620
(130,321)
173,941
Cash and cash equivalents at end of period
11
109,558
43,620
The notes to the financial statements form an integral part of these financial statements.
45
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
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 at 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 Providence Life and Assurance Company Ltd, Northstar Group
(Bermuda) Ltd, Alpha Group (Bermuda) Ltd, Alpha Longevity Management Limited, Alpha
Growth Management Inc, Pacific Longevity Limited and Alpha Longevity Management
(Ireland) Limited (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 pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union and the Companies
Act 2006.
The financial statements have been prepared under the historical cost convention.
b) Comparative Information
The Company changed its year-end during the period from 31 August to 31 December
in order to make its year-end coterminous with that of PLAC, which is the most significant
entity in the Group in terms of gross assets and operating revenues. As a result these
accounts show the results for a sixteen month period whereas the comparative
information is for a twelve month period and therefore is not directly comparable.
c) New Standards and Interpretations
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 2020. The group has and parent company have not
adopted any standards or interpretations in advance of the required implementation
dates.
46
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
c) New Standards and Interpretations (continued)
The following Standards and Interpretations have become effective and have been
adopted in these financial statements. No other Standards or Interpretations have been
adopted early in these financial statements.
Standard/Interpretation
IFRS 9/ IAS 39/ IFRS 7/ IFRS 4/ IFRS
Subject
Interest rate benchmark reform
16
Standards not yet applied
At the date of authorisation of these financial statements, the following relevant
Standards and Interpretations, which have not been applied in these financial
statements, were in issue but not yet effective (and in some cases have not yet been
adopted by the UK Endorsements Board):
Standard/Interpretation Subject
IAS 1
IAS 8
IFRS 17
Presentation of financial
statements
Definition of accounting
estimates
Insurance contracts
Period first applies
(year ended)
31 December 2023
31 December 2023
31 December 2023
The Group has yet to quantify the impact of these new standards but does not expect
them to have a material impact on the Group in future periods.
d) 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 revenues mainly comprise
policy charges and premiums on life assurance policies issued by PLAC together
with a share of management fees earned from BOAGF. The PLAC revenues are
partly used to service the life policies but the board of PLAC has agreed to pay
$75,000 a quarter to Alpha Group (Bermuda) Ltd to cover support from head office.
The Group’s share of management fees from BOAGF for 2022 is projected to be
circa £175,000. Since the period end Northstar Group (Bermuda) Ltd, the
Company’s 95% subsidiary, has signed heads of terms to acquire a Guernsey
insurance company subject to regulatory approvals. If this acquisition goes ahead
in will generate additional fees for the Group of over £500,000 per year. Operating
costs, excluding those related to PLAC are currently running at approximately
£50,000 a month which means that if the planned acquisition were to complete in
the second quarter, as planned, the Group will be cash flow positive as an operating
business. If the transaction does not complete, or is delayed, the Group may need
to raise additional funds in order to meet its working capital needs during the going
47
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
d) Going Concern (continued)
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 and there is a reasonable expectation that such additional funds will arise from
warrant holders exercising their warrants.
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
e) 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, Alpha Group (Bermuda) Limited and Alpha Growth Management Inc as well as
its 95% owned subsidiaries Northstar Group (Bermuda) Ltd and Providence Life
Assurance Company Ltd (“PLAC”). Of the results for the year losses of £1,336,336
(2020: £563,665) 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.
Inter-company transactions, balances and unrealised gains on transactions between
group companies are eliminated. Unrealised losses are also eliminated.
None of the subsidiaries except PLAC are required to produce financial statements and
only PLAC has produced any. For the purpose of these consolidated financial
statements the results have been prepared for the period 1 September 2020 to 31
December 2021, in order to be co-terminous with the Company. PLAC was acquired in
March 2021 and its accounts are prepared for the year to 31 December 2021 with
revenues and expenses incorporated on a pro-rata basis from the date of acquisition.
48
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2)
Summary of Significant Accounting Policies (continued)
f)
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.
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.
49
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
g) Financial Instruments - continued
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
c) Financial assets and liabilities at fair value through profit and loss
Insurance contracts transfer financial risk of the financial assets held within those contracts
to the Group. The financial assets are recorded at fair value as are the offsetting unit-linked
liabilities. Movements in fair value are recognised in profit and loss but will offset each other.
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 Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
h) Revenue and Cost of Sales from Contracts with Clients
Revenue from contracts with clients represents management fees and investment contract fees
earned by the Group and is recognised on an accruals basis when earned. Cost of sales from
contracts with sales represents that proportion of the management fees due to the Group’s joint
venture partner whilst cost of sales on investment contracts represents reinsurance and other
costs directly related to those contracts..
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.
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.
51
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
j) Segmental Reporting
At this point, identifying and assessing investment projects is the only activity the Group is
involved in and is therefore considered as the only operating/reportable segment. The
Group has to date implemented two such investment projects, namely the launching of
Black Oak Alpha Growth Fund and the acquisition of PLAC.
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 to the extent
that warrants or options have been issued for services rather than to shareholders in
relation to share subscriptions.
The cost of employees share options has been calculated using a Back Scholes model and
is recognised in the statement of comprehensive income in the period in which the options
are issued. The corresponding credit is recognised as an option reserve.
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,
calculated using a Black-Scholes model in the absence of any clearly delineated service
and 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.
Details of outstanding warrants and employee options and the inputs to the models used
to calculate fair value can be found in note 19 and 20.
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 21.
m) Equity
Equity instruments issued by the Company are recorded at the value of net proceeds after
direct issue costs.
52
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
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.
o) Accounting for insurance contracts and investment contracts in owned insurance
business
Insurance and investment contracts classification
The policy holders own contracts that transfer insurance risk or financial risk, or both.
Insurance contracts are those that transfer significant insurance risk. Such contracts may
also transfer financial risk. As a general guidance, the Group defines as significant
insurance risk the possibility of having to pay benefits on the occurrence of an insured event
that are at least 10% more than the benefits payable if the insured event did not occur. In
all cases the insurance risk is reinsured such that the net amount of life assurance risk that
the Group has on each contract is US $100,000.
Investment contracts are those contracts significant financial risk with no significant
insurance risk. All investment contracts issued by PLAC are unit-linked.
Revenue recognition
For investment contracts, amounts collected as “premiums” are not included in the income
statement. They are reported as deposits in the balance sheet (under investment contract
assets). Insurance premiums on insurance policies and fees charged on insurance
contracts are included as revenue in the income statement and are recognised as services
are provided.
Claims
Claims under insurance contracts are recognised when payments are due. Claims costs
includes the costs of handling claims. “Claims” under investment contracts are not reflected
in the income statement. They are deducted from insurance contract liabilities in the
balance sheet.
Provisions for liabilities
The provision for insurance contract liabilities comprises a unit-linked component together
with a claims reserve for non unit-linked contracts. The provision is determined on a best-
estimate basis and is established based on methods and assumptions approved by
management based on advice from actuaries. Provisions are shown gross of reinsurance
recoveries
Investment contracts consist of unit-linked contracts. Unit-linked liabilities are determined
by reference to the value of the underlying matched assets.
53
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
p) Intangible assets
The present value of acquired in-force business (PVIF) arises on the acquisition of
portfolios of investment and insurance contracts, either directly or through the acquisition
of a subsidiary. It represents the net present value of the expected pre-tax cash flows of
the contracts which existed at the date of acquisition and is amortised over the remaining
lifetime of those contracts. The amortisation is recognised in the statement of
comprehensive income and is calculated on a systematic basis to reflect the pattern of
emergence of profits from the acquired contracts. Amortisation is stated net of any unwind
of the discount rate.
The estimated lifetime of the acquired contracts ranges from 7 to 27 years.
The value of the acquired PVIF is assessed annually for impairment and any impairment is
recognised in full in the statement of comprehensive income in the year it is identified.
q) Leased assets
Identification of leased assets
For any new contracts entered into on or after 1 January 2019, the Group considers
whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a
contract, that conveys the right to use an asset (the underlying asset) for a period of time
in exchange for consideration’. To apply this definition the Group assesses whether the
contract meets three key evaluations which are whether
i)
the contract contains an identified asset, which is either explicitly identified in the
contract or implicitly specified by being identified at the time the asset is made
available to the Group
the Group has the right to obtain substantially all of the economic benefits from
use of the identified asset throughout the period of use, considering its rights within
the defined scope of the contract the Group has the right to direct the use of the
identified asset throughout the period of use.
ii)
The Group assess whether it has the right to direct ‘how and for what purpose’ the asset
is used throughout the period of use.
Measurement and recognition of leases
At lease commencement date, the Group recognises a right-of-use asset and a lease
liability on the balance sheet. The right-of-use asset is measured at cost, which is made
up of the initial measurement of the lease liability, any initial direct costs incurred by the
Group, an estimate of any costs to dismantle and remove the asset at the end of the
lease, and any lease payments made in advance of the lease commencement date (net
of any incentives received). The Group depreciates the right-of-use assets on a straight-
line basis from the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term. The Group also assesses the right-of-
use asset for impairment when such indicators exist. At the commencement date, the
Group measures the lease liability at the present value of the lease payments unpaid at
that date, discounted using the interest rate implicit in the lease if that rate is readily
available or the Group’s incremental borrowing rate. Subsequent to initial measurement,
the liability will be reduced for payments made and increased for interest.
54
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
r) 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 period ended 31 December 2021 are discussed below:
Acquisition of subsidiary
During the year the Group acquired an insurance subsidiary which has gross assets
significantly higher than those of the rest of the Group. When accounting for the acquisition
of PLAC management is required to make an assessment of the fair value of the assets and
liabilities acquired at the date of acquisition. This assessment was based on the audited
accounts of PLAC at 31 December 2020 adjusted to reflect movements reported in PLAC’s
management accounts for the three months to 31 March 2021. The assessment of those fair
values is subject to significant uncertainties and judgements.
Determination of AVIF
The intangible asset arising on the acquisition of PLAC, which represents the difference
between the acquisition cost and the fair value of net assets acquired, represents an amount
paid for the future value of in-force contracts which is amortised over the expected term of
those contracts and a separate amount of goodwill, which is not amortised but is subject to
an ongoing impairment assessment. The PVIF number requires management to make
judgements about the future value of the profitability of those contracts which is, in turn,
based on an assessment of how long death benefits will remain in place. Given the limited
number of contracts in place such judgements are subject to significant uncertainties.
Fair value of warrants
In the current period the Company has included a share-based payment reserve for the value
of warrants issued to brokers in relation to services provided 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
Employee share options
During the period the Company awarded a number of employee share options to the
Directors, former directors and senior management. The value of these options has been
reported as an expenses in the profit and loss account with a corresponding credit to option
reserve. The value of these options has been calculated using a Black-Scholes model with
a volatility adjustment applied to reflect the fact that the Company has a limited trading
history. The amount of the discount is subject to a significant amount of judgement and a
reduction in that discount would materially impact the stated value of the options.
55
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
3.
Revenue and Cost of Sales
Revenue relates to the two business segments of fund management and owned insurance
businesses, whilst cost of sales relates solely to the fund management activities. All
revenues are from the one geographical area of North America.
4.
Expenses by Nature
Group
2021
Company
2021
Group
2020
Company
2020
£
850,431
130,363
60,389
34,619
38,254
67,700
1,286,132
£
850,431
43,850
60,389
34,619
-
61,158
378,718
£
247,001
21,000
-
-
-
94,190
205,009
£
247,001
21,000
-
-
-
94,190
201,474
2,467,888 1,429,165
567,200
563,665
Group
2021
Company
2021
Group
2020
Company
2020
£
£
£
£
43,850
43,850
21,000
21,000
14,900
14,900
11,000
11,000
Directors’ fees (Note 17)
Audit fees
Costs relating to acquisitions
Amortisation of right of use assets
Amortisation of intangible assets
Professional and consultancy fees
Other expenses
Operating expenses
5. Auditors’ remuneration
Fees payable to the Company’s current auditor
for the audit of the Company’s annual
accounts:
Fees payable to the Company’s current auditor
for non-audit services:
6. Income tax
Analysis of tax credit in the year
Group
2021
Company
2021
Group
2020
Company
2020
Current tax
Deferred tax
Income tax
£
-
-
-
£
-
-
-
£
-
-
-
£
-
29,620
29,620
56
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
6.
Income tax (continued)
Loss
on
activities before tax
ordinary
Analysis of charge in the
year
Loss on ordinary activities
rate of
multiplied by
corporation tax in the UK
of 19% (2020: 19%)
Expenses not deductible
for tax purposes
Tax losses carried forward
Deferred credit tax for the
year
(1,695,924)
(1,336,336)
(567,200)
(563,665)
322,226
253,904
107,768
107,096
(128,364)
(89,662)
-
-
(164,242)
(164,242)
(107,768)
(107,096)
29,620
-
-
-
The Group has accumulated tax losses of approximately £3,100,000 (2020: £1,758,000) 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 the losses of the Company due to
the uncertainty of future profits. The amount of the deferred tax asset not recognised is
approximately £474,000 (2020: £310,000). A deferred tax asset of £378,000 has been
recognised in the assets of the insurance business relating to deferred acquisition costs.
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 £1,666,304 (2020: £567,200) for the Group by the
weighted average number of ordinary shares in issue during the year of 354,478,424 (2020:
190,901,671):
Loss for the year from continuing operations
2021
£
(1,666,304)
2020
£
(567,200)
Weighted average number of shares in issue
354,478,424
190,901,671
Basic and diluted earnings per share
(0.5p)
(0.3p)
In accordance with IAS 32 no diluted EPS is shown as the Group is loss making.
Potential dilutive shares are detailed in notes 19 and 20.
57
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
8.
Investments
Shares in group undertakings:
Opening balance
Additions in the period
Closing balance
Company
£
2
2,894,658
2,894,660
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 December 2021 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
Alpha Longevity Management
Limited
Pacific Longevity Ltd
Alpha Group (Bermuda) Ltd
Alpha Growth Management Inc United States
Northstar Group (Bermuda)
Ltd
Providence Life Assurance
Company Ltd
Bermuda
Bermuda
British Virgin Islands
Republic of Ireland
Bermuda
Ownership*
2020
2021
100%
100%
100%
100%
95%
95%
100%
100%
N/A
N/A
0%
0%
*All ownership interests are directly held by the Company except that in Providence Life
Assurance Company Ltd which is held through the Company’s interest in Northstar Group
(Bermuda) Ltd. Alpha Group (Bermuda) Ltd and Alpha Growth Management Inc were newly
established during the period to facilitate Group activities in Bermuda and the USA
respectively.
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.
The registered office of Alpha Group (Bermuda) Ltd, Northstar Group (Bermuda) Ltd and
Providence Life Assurance Company Ltd is at Atlantic House, 11 Par-la-Ville Road,
Hamilton, HM11, Bermuda,
The registered office of Alpha Growth Management Inc is at 500 Newport Center Drive, Suite
680, Newport Beach, California 93660, USA.
58
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
8.
Investments (continued)
All subsidiaries are included in the consolidation and share the same principal activity except
Providence Life Assurance Company Ltd which has been acquired with a view to facilitating
the activities of the rest of the Group.
The Company remains a member of BOAGF GP, LLC, with a 50% interest. There has been
no activity in this entity during the period.
9.
Intangible assets - Group
Cost
At 1 September 2020
Additions during the period
At 31 December 2021
Amortisation/Impairment
At 1 September 2020
Charge for the period
At 31 December 2021
Net book amount
At 31 December 2021
A 31 August 2020
10. Trade and other receivables
Other receivables
Loans
Prepayments and accrued
income
AVIF
£
Goodwill
£
Total
£
-
765,070
-
138,005
-
903,075
765,070
138,005
903,075
-
38,254
38,254
726,816
-
-
-
-
-
-
-
38,254
38,254
864,821
-
Group
As at 31
December
2021
£
20,818
140,742
Company
As at 31
December
2021
£
20,818
292,577
Group
As at 31
August
2020
£
5,942
222,403
Company
As at 31
August
2020
£
5,942
225,936
112,004
56,496
16,780
16,780
273,564
369,891
245,125
248,658
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.
59
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
11. Cash and cash equivalents
Cash at bank
Group
As at 31
December
2021
£
195,523
Company
As at 31
December
2021
£
109,558
Group
As at 31
August
2020
£
43,620
Company
As at
31 August
2020
£
43,620
195,523
109,558
43,620
43,620
The Directors consider the carrying amount of cash and cash equivalents approximates to
their fair value.
12. Called up share capital
Shares
As at 31 December 2021 the Company’s issued and outstanding capital structure comprised
431,887,388 shares, 187,500,000 shareholder warrants exercisable at 3p per share and
18,750,000 broker warrants exercisable at 2p per share.
On 7 September 2020 the Company issued 35,714,286 ordinary shares of £0.001 each at a
placing price of £0.014 per placing share. The shares rank pari passu in all respects to the
existing ordinary shares.
On 15 March 2021, the Company issued 187,500,000 ordinary shares of £0.001 each at a
placing price of £0.02 per placing share. Each placing share had a shareholder warrant
exercisable at 3p per share at any time up to two years following Admission of the placing
shares. The shares rank pari passu in all respects to the existing ordinary shares.
On 17 May 2021, the Company issued 3,571,429 ordinary shares of £0.001 each on exercise
of warrants at price of £0.014 per warrant share. 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 2020
205,101,673
205,102
1,789,744
Share issue for cash
Warrants exercised
Share issue costs
223,214,286
3,571,429
-
223,214
3,571
4,026,786
46,429
-
(458,646)
113,390
At 31 December 2021
431,887,388
431,887
5,404,313
113,390
60
-
-
-
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
13.
Trade and other payables
Current liabilities
Trade payables
Amounts due under leases
Intergroup liabilities
Accruals
Group
As at 31
December
2021
£
Company
As at 31
December
2021
£
-
51,868
-
61,719
-
51,868
6,286
61,482
Group
As at 31
August
2020
£
57,113
-
-
34,900
Company
As at 31
August
2020
£
57,113
-
-
34,900
113,587
119,636
92,013
92,013
14. 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 December 2021 and 31 August
2020.
15.
Insurance company disclosures
There is no material risk to the Group arising from the investment portfolios held by PLAC
as the majority of policyholder liabilities are directly linked to the value of the policyholder
investments held. Further details of the amounts included in the consolidated financial
statements in respect of PLAC for the period from its acquisition on 19 March 2021 to 31
December 2021 are disclosed below to assist readers in understanding their impact on the
consolidated financial statements. No comparative information has been provided since
PLAC was not part of the Group during the year to 31 August 2020.
19 Mar
2021 to
31 Dec
2021
£
2,290,948
(1,639,167)
3,523
655,304
22,682
(949,002)
(271,016)
29,620
(241,396)
Policy charges and fee income
Net premiums earned
Investment income
Total revenue
Movement in deferred acquisition cost
Operating costs
Net result before tax
Tax credit
Net result after tax
61
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
15.
Insurance company disclosures (continued)
The financial assets and liabilities in the table below and falling within the scope of IFRS 9:
Financial Instruments. Disclosures have, where indicated, been classified as at fair value
through profit and loss (and are designated as such on initial recognition), available for sale
or other. Debtors that are past due have been reduced for impairment losses where
applicable.
Consolidated balance sheet for insurance companies
Investment contracts held to back unit linked liabilities
Investments at fair value through profit and loss
-
Cash and cash equivalents in insurance business
Investments in insurance business
Policy backed loans
Deferred tax asset
Deferred acquisition costs
Other assets
Total assets in insurance business
Investment contracts unit-linked liabilities
Policy loan liabilities
Reserves for unreported claims
Creditors arising from insurance and re-insurance operations
Amounts owed to Group companies
Other creditors
Total liabilities in insurance business before elimination
Elimination of amounts owed to Group companies
Total liabilities in insurance business
Net assets in insurance business
At 31 Dec
2021
£
200,535,301
522,307
410,641
5,935,472
377,944
537,511
932,500
209,251,676
200,535,301
5,931,964
409,275
274,145
9,573
298,970
207,459,498
(9,573)
207,449,925
1,801,751
Investments held by insurance company
Investments held within investment contracts are measured at fair value, and they can be
grouped into Levels 1 to 3 based on the degree to which fair value is observable.
-
-
-
Level 1 fair values are those derived from quoted prices in active markets;
Level 2 fair values are those derived from inputs other than quoted prices that are observable
either directly or indirectly;
Level 3 fair values are those derived from valuation techniques that are based on inputs that
are not quoted prices.
62
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
15.
Insurance company disclosures (continued)
For each of the financial assets held within investment contracts in the table below, carrying
value is a reasonable approximation of fair value. There were no transfers between levels
during the period.
Level 1
£
Level 2
£
Level 3
£
Total
£
Cash and cash equivalents
Investments
Segregated accounts
assets
522,307
410,641
146,900,905
-
-
12,927,367
522,307
410,641
40,727,029 200,535,301
-
-
147,833,853
12,927,367
40,727,029 201,488,249
Investments are held to back unit-linked liabilities Any increase or decrease in their value is
matched by an associated decrease or increase in liability to policyholders.
Group net investment in insurance companies
Total assets in insurance company
Total liabilities in insurance company
Other intangible assets acquired AVIF
Other intangible assets acquired Goodwill
At 31 Dec
2021
£
209,251,676
(207,449,925)
765,070
138,005
2,704,826
16.
Acquisition of subsidiary
On 22 March 2021 the Company acquired 95% of the equity of Northstar Group (Bermuda)
Ltd which owns 100% of PLAC. PLAC is a life assurance company registered in Bermuda
and regulated by the Bermuda Monetary Authority. The Company incurred costs of £60,388
related to the acquisition which are recorded in operating expenses.
None of the assets or liabilities acquired required restatement under IFRS3 and are as
presented below:
Total assets in insurance company
Total liabilities in insurance company
Identifiable assets less liabilities
Other intangible assets - acquired AVIF and goodwill
Non-controlling interest
Consideration satisfied by cash
63
211,500,851
(209,411,769)
2,089,082
903,075
(101,102)
2,891,055
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
17. Related party disclosures
Balances and transactions between the Company and its subsidiaries, which are related
parties have been eliminated on consolidation and are not disclosed in this note.
The remuneration transactions with Directors have been included in in the remuneration
table in Note 18.
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
December 2021 (2020: £nil).
Directors fees paid to Gobind Sahney were paid to GO Services LLC (“GO Services”). GO
Services is connected by way of Mr. Gobind being the controlling member of GO Services.
There were no balances outstanding between the Company and GO Services at 31
December 2021 (2020: £nil).
18. Directors’ emoluments
Details concerning Directors’ remuneration can be found below. The Directors are
considered to be the key management.
Name of Director
Gobind Sahney
Daniel Swick
Jason Sutherland
Total
Fees
£
Other
£
183,437 287,251
177,477 120,938
45,328
36,000
Total
£
470,688
298,415
81,328
396,914 453,517
850,431
Other amounts represent director share options, see note 20 for further details.
19. Share warrants
Warrants
The Company during the period past granted warrants to its former Broker. Warrants are
exercisable at the 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. The warrants vest immediately
and with an exercise period of 2 years from the date of grant. 18,750,000 Broker warrants
were granted to in the period end 31 December 2021 (2020: nil).
Details of the broker and shareholder warrants outstanding during the period are as
follows:
64
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
19. Share warrants (continued)
Warrants (continued)
2021
Number of
warrants
000’s
-
22,321
187,500
Weighted
average
exercise
price
£
2020
Number of
warrants
000’s
Weighted
average
exercise
price
£
-
9,167
0.014
0.019
0.020
-
-
(3,571)
0.014
(9,167)
0.014
Outstanding at the beginning of
the period
Granted during the period for
services
Granted during the period with
shares*
Exercised during the period
Outstanding at the end of the
period
206,250
0.020
Exercisable at the end of the
period
206,250
0.020
-
-
-
-
The charge against the share premium account on issue of the broker warrants was
£122,905 and £113,390 net of broker warrants exercised (2020 credit on exercise:
£20,640). The fair value of these warrants was calculated using the following model inputs
Share price at date of grant
2.5 pence
Exercise price
Expected volatility
Expected dividend
Vesting criteria
Contractual life
Risk free rate
2 pence
19.75%
Nil
Exercisable on date of grant
2 years
1.0%
Estimate fair value of each warrant 0.6 pence
In addition during the prior 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 £nil (2020: £25,658) and those costs are recognised in the
statement of comprehensive income.
* Shareholder warrants are not provided for services and accordingly no warrant reserve or
share based payment is recognised for these warrants.
65
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
20. Share-based payment awards
During the period the Company issued share options to the Directors, certain former
directors and senior management. The total options granted represent 10% of the issued
share capital of the Company at each calendar year end following the admission of shares
to the main market of the LSE. The allocation of these options amongst the Directors and
others was decided by the Remuneration Committee based on the contribution of those
individuals to the future prospects of the Company. The options have a five year term from
the year end to which they relate and are exercisable at the market price of the shares on
the day prior to issue.
The share options outstanding at 31 December 2021 had a weighted average contractual
life of 4 years. The fair value of options granted during the year was £480,674 (2020: nil)
calculated using a Black-Scholes model with inputs as follows
.
Share price at date of grant
Exercise price
Expected volatility
Expected dividend
Vesting criteria
Contractual life
Risk free rate
2.95 pence
2.95 pence
19.75%
Nil
Exercisable on date of grant
2 -5 years
1.0%
Estimate fair value of each warrant 0.35 to 0.58 pence
Share options outstanding during the period ended 31 December 2021 were as follows:
2021
Number of
options
000’s
-
93,774
-
Weighted
average
exercise
price
£
-
0.0295
-
Outstanding at the beginning of
the period
Granted during the period
Exercised during the period
Outstanding at the end of the
period
93,774
0.0295
Exercisable at the end of the
period
93,774
0.0295
2020
Number of
options
000’s
Weighted
average
exercise
price
£
-
-
-
-
-
-
-
-
-
-
66
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
21.
Financial Instruments
The following table sets out the categories of financial instruments held as at 31 December
2021 and 31 August 2020:
Group
As at 31
December
2021
Company
As at
31 December
2021
Group
As at 31
August
2020
Company
As at
31
August
2020
£
£
£
£
200,535,301
8,716,375
195,523
262,117
20,818
140,742
-
-
-
-
-
-
109,558
262,117
43,620
-
43,620
-
20,818
292,577
5,941
197,233
5,941
225,936
Financial Assets
Financial assets measured at fair
value through profit and loss
linked
- Unit
contracts (see note 15)
investment
in
insurance
Other assets
business
Loans and receivables - Cash
and cash equivalents
Right of use assets
Loans and receivables - Trade
and other receivables
Loans and receivables – Loans
Financial liabilities
Financial liabilities measured at
fair value through profit and loss:
investment
- Unit
linked
contracts
200,535,301
-
-
-
Financial liabilities measured at
amortised cost
- Trade and other payables
- Lease liabilities
- Other insurance related
liabilities
61,719
269,109
6,914,624
67,768
269,109
92,013
38,731
-
-
-
67
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
21.
Financial Instruments (continued)
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 other than those within unit-liked investment
contracts referenced in note 15. 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.
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 has a material exposure to foreign currency risk as substantially of the
assets of the Group outside of those held by the Company are denominated in US
Dollars. The net assets of subsidiaries denominated in US Dollars amount to
approximately £1.87 million (2020: £nil).
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.
68
Alpha Growth Plc
Annual Report & Financial Statements
For the Sixteen Months Ended 31 December 2021
Notes to the Financial Statements (continued)
22.
Average number of people employed
Average number of people employed, including Directors:
Group
2021
Company
2021
Group
2020
Company
2020
Number
Number
Number
Number
5
4
4
4
Office and management
23 Subsequent events
Following the year end the Company announced that its Bermuda subsidiary had signed a sale
and purchase agreement to acquire a Guernsey based insurance company which is a Category 1,
international life insurer, with approximately 3,785 long-term life insurance contracts in force as of
31 December 2021. The acquisition is subject to regulatory approvals and is a non-adjusting event
for accounting purposes.
24
Leases – Company and Group
The Company has a sixty-month lease for the rental of a property in California, which expires in
May 2026. The right of use asset on the lease has been separately reported in the statement of
financial position as the Company has no other fixed assets. The lease is non-terminable other
than with a substantial penalty and there is no right to sub-let otherwise than with the consent of
the landlord. Additional information on the right of use asset is as follows:
Office
Carrying
Amount B/Fwd
Additions
Depreciation
Carrying
Amount C/Fwd
-
296,736
(34,619)
262,117
The net present value of lease liabilities are all due within 5-6 years and comprise
Group & Co
As at 31
December
2021
£
Group & Co
As at 31
August
2020
£
269,109
32,254
301,363
-
-
-
Lease payments
Finance charges
69