Year ended
31st December 2022
The group experienced a year of profitable
expansion, characterized by substantial
revenue and AUM growth, as well as the
successful integration of multiple acquisitions
2022 HIGHLIGHTS
IFRS PROFIT OF £3,178,578
EARNINGS PER SHARE BASIC 0.7P PER SHARE
FULLY DILUTED 0.4P PER SHARE
LAUNCH OF FIRST LONGEVITY ASSET BASED
INTERVAL FUND
ALPHA ALTERNATIVE ASSSETS FUND (NASDAQ: AAACX)
BLACKOAK ALPHA GROWTH FUND COMPLETES
THREE YEAR TRACK RECORD, ACHIEVING OVER A
27% TOTAL RETURN SINCE INCEPTION IN SEPTEMBER
2019 UP UNTIL END DECEMBER 2022
TWO SUCCESSFUL ACQUISITIONS
ALPHA INTERNATIONAL LIFE ASSURANCE COMPANY (GUERNSEY) LTD
HAVELET SETTLEMENT ASSIGNMENT COMPANY LTD
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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
1
2
3
4
9
15
22
30
32
33
41
42
43
44
45
46
47
48
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Company Information
Directors
Gobind Sahney
Daniel Swick (resigned 31 August 2022)
Jason Sutherland
Company Secretary
Neil Warrender
Registered Office
35 Berkeley Square
London W1J 5BF
Registered Number
09734404 (England and Wales)
Broker
Allenby Capital Limited
5 St Helen’s Place
London
EC3A 6AB
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
Solicitors
Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Principal Bankers
Barclays Bank UK Plc
Leicester
LE87 2BB
Registrars
Link Asset Services
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0GA
1
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Chairman’s Statement
It is with great pleasure that I present the annual financial statements of Alpha Growth Plc, and I
am especially pleased to announce that the company is reporting its first full year of profit.
This milestone achievement is a testament to the progress which we’re making with our build
and buy strategy, and it further validates our vision for the company. Our stated goal (which we
refer to as our 2B plan) is to be managing over $2bn of assets under management (AUM) by
2025, and I am proud to say that we have made significant progress towards this target during
2022.
Over the past year, we have made substantial investments in our various strategies to ensure
we can sustain our rapid growth. One of our most significant accomplishments throughout the
year was the acquisition of Old Mutual International (Guernsey) Ltd, which we subsequently
renamed Alpha International Life Assurance Company (Guernsey) Limited (AILAC). Through our
95% owned subsidiary, Northstar Group (Bermuda) Limited, we acquired 100% of the issued
share capital of AILAC, which produced a gain on the acquisition.
We also acquired the entire share capital of Havelet Assignment Company Limited, a Barbados-
based
to our assets under
administration/management. Both acquisitions are expected to contribute to our gross profits
from day one.
financial services company, which
further added
These two acquisitions added significantly to the Group’s assets under administration/
management and saw the Group make a significant step towards its current strategy to manage
over $2bn of assets, once this goal is achieved, we expect the company to be generating
significant and sustainable profits for our shareholders.
In addition to these acquisitions, we won a mandate to manage the Interval Fund, Alpha
Alternative Assets Fund, an innovative US mutual fund invested in longevity assets that we
believe has strong growth potential. While the Fund has required investment during the current
year, we are confident that this investment will begin to be recovered in the near future as our
marketing of the fund expands in 2023.
The team continues to explore acquisition opportunities of life insurance companies and blocks
of life insurance that are accretive to the current Group companies, along with growth
opportunities in the fund management space.
We remain very confident of achieving our 2B plan and see these accomplishments as another
step towards building a significant business within the insurance linked asset/wealth
management sector.
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
29 April 2023
2
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 specialised 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 organised 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.
Jason Sutherland, Non-Executive Director
Mr. Sutherland is the Senior Advisor for DRB Capital. He also launched the first ever AAA rated
placement of mortality backed linked annuity receivables totaling $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 Year Ended 31 December 2022
Directors’ Report
The Directors present their report with the audited consolidated financial statements of the Group
for the year ended 31 December 2022. A commentary on the business for the year is included
in the Chairman’s Statement on page 2. A review of the business is also included in the Strategic
Report on pages 9 to 14.
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 2022 were as follows:
Director
Position
Appointed Resigned Ordinary
Options
Gobind Sahney
Daniel Swick
Executive
Chairman
Chief Operating
Officer
15/08/2015
- 7,045,834 84,624,353
shares
01/06/2018
31/08/22
- 24,645,665
Jason Sutherland Non-Executive
06/03/2019
-
133,333 18,232,198
Director
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 19 April 2023, the total number of issued Ordinary Shares with voting rights in the Company
was 451,813,531. 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
Hargreaves Lansdown Asset Management
Interactive Investor
Halifax Share Dealing
Roy Rawlins
Number of Ordinary
Shares
112,340,242
96,221,257
30,291,084
20,274,833
17,600,000
% of
Share Capital
25%
21%
7%
5%
4%
4
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 20 of the financial
statements.
Greenhouse Gas (GHG) Emissions/TCFD
As the Company has not consumed more than 40,000 kWh of energy in the year period, it
qualifies as a low energy user under SI 2018/1155 and is not required to report on its emissions,
energy consumption or energy efficiency activities. Furthermore, given the size and nature of the
business the Directors consider that it is not possible to provide meaningful TCFD information as
would otherwise be required under the Listing Rules. Until the Group has reached its $2bn AUM
target the Directors intend to focus on growing the business whilst minimising their carbon
footprint to the extent practicable and will look to build our capabilities, modelling and disclosures
thereafter once acquisitions have been embedded.
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 optimising 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:
• Largely eliminating emissions from Board meetings by holding all such meetings over
telepresence equipment or coordinating with other essential meetings.
• Seeking to move to a paperless environment so far as practicable.
• Largely eliminating the environmental impact of employee commuting and travel by sub-
letting the office and moving fully to flexible working arrangements whilst 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 year ended 31 December 2022 (2021:
nil).
5
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Directors’ Report (continued)
Future developments and events subsequent to the year end
Further details of the Company’s future developments and events subsequent to the year-end
are set out in the Strategic Report on pages 9 to 14.
Corporate Governance
The Governance Report forms part of the Director’s Report and is disclosed on pages 15 to 21.
Going Concern
As at 31 December 2022 the Group had a cash balance (excluding cash held in insurance
businesses) of £218,530 (2021: £195,523). Alpha International Life Assurance Company
(“AILAC”) has cash reserves over and above those needed for regulatory capital purposes of
around £1 million, of which around £200k have been used to pay Group liabilities related to the
acquisitions since year end. The Group revenues, net of costs related to the operating
businesses, are approximately £400,000 a quarter and the run rate for expenses is approximately
£350,000 a month. The Group is currently contributing approximately £30,000 a month towards
meeting the operating costs of the Interval Fund although this contribution had dropped to nil by
the end of the first quarter of 2023. Accordingly, the Group is expected to be cash flow positive
on its operational activities from the start of the second quarter of 2023.
In October 2022, the Company entered into a short-term loan of £350,000 with repayment due
over the six months starting in March 2023. Since the year-end 18,750,000 warrants have been
exercised, realising proceeds of £375,000.
The Group carefully monitors its core spend. Notwithstanding the cash outflows incurred in the
first half of the year and the need to continue to support the Interval Fund in the short term, the
Directors have a reasonable expectation that the Group will be able to manage its funds to
continue in operational existence until the Interval Fund reaches sufficient AUM to cover its own
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 20 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
United Kingdom adopted International Accounting Standards (“UK-adopted IAS”).
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
6
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Directors’ Report (continued)
Statement of Directors’ responsibilities (continued)
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 UK-adopted IAS have been followed, subject to any material
departures disclosed and explained in the financial statements; and
Prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Remuneration Committee Report comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities. They are also responsible for making 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 page 3 confirm that, to the best
of their knowledge and belief:
•
•
the financial statements prepared in accordance with UK-adopted IAS, give a true and
fair view of the assets, liabilities, financial position and loss of the Company; and
the Annual Report and financial statements, including the Strategic Report, includes a
fair review of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties that they
face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of which the Company’s
auditors are unaware, and each Director has taken all the steps that he ought to have taken as
a Director in order to make himself aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
7
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Directors’ Report (continued)
Statement of Directors’ responsibilities (continued)
Subsequent events
Subsequent events have been detailed in the Strategic Report on page 11 and note 22 to the
financial statements.
This responsibility statement was approved by the Board of Directors on 29 April 2023 and is
signed on its behalf by:
Signed ………………………………………….
Gobind Sahney 29 April 2023
Executive Chairman
Strategic Report
8
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Strategic Report
The Directors present the Strategic Report of Alpha Growth Plc for the year ended 31 December
2022.
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 prior period the Group acquired
a 95% interest in a Bermudan life assurance company, Providence Life and Assurance Company
(“PLAC”).
During the year under review, the Group acquired a 95% interest in AILAC, which is a Guernsey
life assurance company with some similar characteristics to PLAC. The Group also acquired a
100% interest in Havelet Assignment Company Limited (“Havelet”), a Barbados financial services
company specialising in settlement assignments. The third addition during the year was Alpha
Growth Management LLC, an SEC approved investment adviser which has a mandate to
manage the Interval Fund which invests in SLS Assets. All three acquisitions were made for
nominal consideration and both Havelet and AILAC add to gross profits from the date of
acquisition.
Business Strategy
The Company’s business strategy has evolved significantly as a result of its acquisitions. Starting
from a foundational skill set in the longevity asset sector, the Group is focused on insurance
linked asset management through its two business segments – fund management and life
insurance company holdings.
In both segments the strategy is to build assets under management and administration. The fund
management business is focused on two funds, BlackOak Alpha Growth, a private fund that
invests in life settlements and Alpha Alternative Assets Fund, a US registered fund that invests
in securities that are backed by longevity assets such as life and structured settlements and
combinations of the two.
The life insurance business provides private placement life and variable annuities and insurance
wrapped/unit linked policies to an international client base and is currently focused on two
insurance businesses: Providence Life Assurance Company located in Bermuda, principally
focused on the US market and Alpha International Life Assurance Company located in Guernsey
and principally focused on the European market.
The Company believes that the longevity asset sector is particularly attractive to investors
seeking uncorrelated returns and that the business offerings of its insurance business provide
tax efficient opportunities to policyholders for growth of their savings.
9
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Strategic Report (continued)
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 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. We retain the services of
a former broker to maintain an ongoing dialogue. 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, AILAC and Havelet 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 Chairman moved to
Bermuda so as to better communicate with the community where PLAC is located.
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 15 to 21.
10
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Strategic Report (continued)
Events since the period end
On 20 March 2023 the Company issued 18,750,000 shares at 2p per share on exercise of
certain warrants issued to the Company’s former brokers. This resulted in a cash inflow of
£375,000 which will be used to repay the loan referred to in Note 13 and the Company has
negotiated earlier repayment terms for that loan which will likely reduce the interest charge by
£4,000.
Subsequent to the year-end Credit Suisse, Silicon Valley Bank (“SVB”) and Signature Bank
(“Signature”) announced that they were in financial difficulties. At the time of the announcement
the Group had an exposure of approximately £2 million to SVB and Signature combined.
Management immediately took actions to reduce the Group’s exposure to those banks and
subsequently both announced rescue plans which secured all deposits. The Group has not
suffered any loss as a result of these events but remains vigilant to credit risk.
Financial review
Results for the 2022 period
The Group generated a profit for the year to 31 December 2022 of £3,178,578 (sixteen months
to 31 December 2021: loss of £1,714,304 (restated)).
The profit for the year mainly resulted from the bargain price paid on AILAC, which was acquired
for less than its net assets. This gain was partially offset as a result of on-going administrative
expenses to provide service to clients and the costs of a standard listing, as well as accounting
charges for employee share options. The Group is at, or close to, break-even on an operating
profit basis going into 2023.
Cash flow
Net cash inflows for the year to 31 December 2022 were £23,007 (2021: inflow of £151,903).
Closing cash
As at 31 December 2022, the Group held £218,530 (2021: £195,523) 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.
Position of Company’s Business
During the year
In December 2022, the Group acquired net assets totaling approximately £4 million for nominal
consideration through the acquisition of two subsidiaries.
11
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Strategic Report (continued)
Position of Company’s Business (continued)
At the year end
At the year end the Group’s Statement of Financial Position shows net assets totaling £6,708,435
(2021 (restated): £3,018,948). The Company earns fees for managing the activities of the
subsidiaries and expects to earn sufficient revenues in the current year to make profits.
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 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.
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.
12
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Strategic Report (continued)
Principal Risks and Uncertainties (continued)
Risks/Uncertainties to the Company
Issue
Developing business model
Risk/Uncertainty
The Company trades through its
Group companies’ Alpha Longevity
Management Ltd. Alpha Growth
Management LLC and Alpha Group
however
Limited,
(Bermuda)
revenues were
the
less
expenses incurred. The Company
borrowed £350,000 from an affiliate
of the Company Secretary, during
the year, to finance these losses and
to cover the operational costs of the
Interval Fund.
than
Company may
The
significant
advisory opportunities
competition
face
for
be
that
may
There
significant
competition for some or all of the
advisory opportunities
the
Company may explore. Such
competition may come from direct
competitors offering similar services
or
private
investment funds many of which
internal
may
experience in managing longevity
assets and/or SLS strategies and
portfolios.
extensive
public
have
from
and
Loss of key personnel
The Company comprises a few key
individuals. Any unforeseen loss of
these key personnel would be
damaging to the Company.
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
The Company’s
functional and
presentational currency is pounds
sterling. As a result, the Company’s
financial statements will carry the
Company’s assets in sterling. Where
the Company conducts business in
USD it exposes itself to foreign
exchange risk.
The SLS Asset class in the United
States is highly regulated and will
likely continue to be the focus of
increasing regulatory oversight.
Compliance with various laws and
regulations does impose compliance
costs and
the
Company, with
and/or
sanctions for non-compliance.
restrictions on
fines
13
to
than
team
other
financial
resources,
Mitigation
The management
is
experienced in the industry with
many contacts. The acquisition of
AILAC has provided the Group with
the cash resources to repay the
loan, whilst the profitability of both
AILAC and PLAC should ensure the
Group is able to settle operating
costs when due. The recruitment of
a new marketing executive is aimed
at growing the AUM of Black Oak
Growth Fund and the Interval Fund
which should ensure the Group is
both profitable and cash
flow
positive in 2023.
While some competitors may have
greater
the
Company will be able to provide a
its
more personal approach
clients and with greater retention
rates
potential
competitors. The acquisition of
AILAC and Havelet together with
the
for
the mandate
acquiring
Interval Fund will enhance
the
competitiveness of the Group and
also provide diversification
in
revenue streams.
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. During the year one of
the Directors left but has been
quickly replaced by someone with a
more appropriate skillset and the
Group is already starting to see
benefits. Share options incentivise
the Directors and other key staff 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
reductions
is not
in costs.
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
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
Inability
funding
to
raise emergency
In the event of a significant issue
arising for which the Company is
required to access substantial liquid
funds in excess of its available cash
balances, it may not be easy to
obtain additional funds as and when
required.
The Company monitors its cash
requirements carefully and in the
need of significant additional funds
would look to increase its financing.
The Company has demonstrated its
ability to source short term funding
by obtaining a loan through the
Company Secretary’s contacts.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the Governance
Report.
Capital structure
The Company’s capital consists of ordinary shares, which rank pari passu in all respects, and
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 29 April 2023
Chairman
14
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 one Executive Director and one Non
-Executive Director. 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. The Company intends to
strengthen the Board in due course.
• 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 19, an informal induction is considered sufficient given the size and
limited complexity of the Company as well as the experience of the one Director who has
joined since the Company’s shares were listed.
15
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Governance Report (continued)
Compliance with the UK Code of Corporate Governance (continued)
• The Nomination Committee is made up of one Executive Director. This is outside the
principals of the Corporate Governance Code, which requires that a majority of members
should be independent Non-Executive Directors. The Directors consider the present
structure and arrangements to be adequate given the size and stage of development of
the Company.
• The Remuneration Committee comprises just one Non-Executive Director whereas the
Corporate Governance Code requires a minimum of two members. The Directors
consider the present structure and arrangements to be adequate given the size and stage
of development of the Company.
The UK Corporate Governance Code can be found at www.frc.org.uk
Set out below are Alpha Growth Plc’s corporate governance practices for the year ended 31
December 2022.
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 ad-hoc meetings of the Board.
These meetings are timed to link to key events in the Company’s development and regular
reviews of the business are conducted. During the year, the Board met on three occasions.
Outside the formal 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;
16
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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
3 of 3
1 of 3
3 of 3
The Board is pleased with the high level of attendance and participation of Directors at Board
and committee meetings, with Danny Swick’s non-attendance being at meetings dated after his
departure. 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 Director - The Non-Executive Director brings 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.
17
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Governance Report (continued)
Remuneration Committee
The Company has established a Remuneration Committee, the sole member of which at present
is the 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 year was the Non-Executive Director; Jason Sutherland.
The Company is looking to identify an additional Non-Executive Director but those efforts have
been hindered by pressing matters of business such as the integration of new subsidiaries. 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 30 to 31.
Nominations Committee
The Company has established a Nominations Committee, the sole member of which at the
present time is the Executive Chairman. The Nominations 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 32.
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.
18
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 year under review the Board comprised of an Executive Chairman, the former Chief
Operating Officer (until 31 August 2022) and one 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. The Executive Chairman is actively
looking to increase Board representation.
Independence - The Non-Executive Director brings a broad range of business and commercial
experience to the Company. The Board considers the Non-Executive Director 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 2022.:
Directors
Male
2
Female
-
19
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Governance Report (continued)
The Board will pursue an equal opportunity policy and seek to employ those persons most
suitable to delivering value for the Company.
Accountability
The Board is committed to providing shareholders with a clear assessment of the Company’s
position and prospects. This is achieved through this report and as required other periodic
financial and trading statements. The Board has made appropriate arrangements for the
application of risk management and internal control principles. The Board has delegated to the
Audit Committee oversight of the relationship with the Company’s auditors as outlined in the
Audit Committee report on pages 30 to 31.
Going concern – The preparation of the financial statements requires an assessment on the
validity of the going concern assumption.
The Directors have reviewed projections for a period of at least 12 months from the date of
approval of the financial statements. The Company is expected to have sufficient revenue to
cover costs and the Group is expected to be able to repay the short-term loan from cash held in
AILAC and/or the exercise of warrants. If there are delays in increasing the AUM of the Interval
Fund, 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 whether the regulatory capital requirements on AILAC and PLAC increase.
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.
20
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Governance Report (continued)
Shareholder relations
Communication and dialogue – Open and transparent communication with shareholders is given
high priority and there is regular dialogue with both retail and 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 prior 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
29 April 2023
21
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Remuneration Committee Report
The Remuneration Committee presents its report for the year ended 31 December 2022.
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 time spent integrating new acquisitions as well as the departure of
the Chief Operating Officer.
During the year ended 31 December 2022, the Remuneration Committee held two formal
meetings attended by the sole committee member.
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 by approval of the prior period’s
Remuneration Report at the AGM on 20th June 2022. To facilitate the reading of the policy which
follows, out of date references have been removed.
22
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
23
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 Year Ended 31 December 2022
Long Term
Bonus Scheme
(LT Bonus),
Share Option
and Deferred
Share Award
Plan (DSA)
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 Committee is
satisfied that targets have been
met.
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,
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.
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
24
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Remuneration Committee Report (continued)
The Directors’ remuneration policy was approved as part of the Directors’ Remuneration Report
by 97.43% of voting shareholders at the 2022 AGM.
Non-Executive Directors
The table below summarises the main elements of remuneration for Non-Executive Directors:
Component
Non-executive fees
Share options
Benefits
Approach of the Company
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 may be paid in cash or in shares or a
combination of both following discussion between the Executive Chairman
and the Non-Executive Director.
Fees are structured as a basic fee with additional fees payable for
membership and/or chairmanship of a committee or other additional
responsibilities.
Share options may be awarded to Non-Executive Directors where they
make a significant contribution towards the Group making an acquisition.
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.
25
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
26
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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
Jason Sutherland
Year of
appointment
Number of years
completed
Date of current
engagement letter
2015
2019
7
3
20/12/2017
06/03/2019
The Directors’ service agreements are available for review on request.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the
individual’s experience and their current base salary. Where an individual is recruited at below
market norms, they may be re-aligned over time (e.g. two to three years), subject to performance
in the role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Board may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
27
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Remuneration Committee Report (continued)
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 December 2022
(GBP):
Name of Director
Salary and
fees
Taxable
benefits
Annual
bonus and
long term
benefits
Pension
related
benefits
Other
Total
Swick
171,554
Gobind Sahney
Daniel
(resigned)
Jason Sutherland
Set out below are the emoluments of the Directors for the sixteen-month period ended 31
December 2021 (GBP):
245,152
97,364
48,000
78,800
-
-
-
-
-
-
-
-
-
-
416,706
97,364
126,800
Name of Director
Gobind Sahney
Daniel Swick
Jason Sutherland
Salary
and fees
168,013
162.434
80,000
(restated)
Annual
bonus and
long term
benefits
287,251
120,938
45,328
Taxable
benefits
-
-
-
Pension
related
benefits Bonus
Total
-
-
-
15,424
470,688
15,043
298,415
4,000
129,328
The long term benefits represent the estimated cost to the Company (see note 19) 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
Mr Sutherland’s remuneration for the prior year has been amended to include his right to receive
a payment in shares at £2,000 per month since 1 January 2020 that was not previously
recognised.
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 other than that to Danny Swick
as detailed above.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
28
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Remuneration Committee Report (continued)
UK Remuneration percentage changes
No percentage changes for remuneration have been set out in this report as the prior period
numbers cover a sixteen-month period, include options covering the period since inception and
include a Director who resigned in the current year and therefore the Directors consider that such
percentages would be misleading.
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 the Group’s one year of profitability was a
result of a bargain purchase. 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 three 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 2022 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
29 April 2023
29
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 closely monitors
the level of audit and non-audit services they provide to the Company.
30
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Audit Committee Report (continued)
Meetings
In the year to 31 December 2022 the Audit Committee had one formal meeting with the auditors
attended by Jason Sutherland as the sole committee member.
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 prior period and is due to rotate off the engagement after completing the
December 2025 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 2023 Annual General Meeting.
Jason Sutherland
Chairman of the Audit Committee
29 April 2023
31
Type text here
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Nomination Committee Report
The Nomination Committee is comprised of the Executive Chairman Gobind Sahney.
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 and no meetings..
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
29 April 2023
32
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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 year ended 31 December 2022 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 UK-adopted international accounting standards 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 2022 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with
UK-adopted international accounting standards 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.
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;
review of budgets and forecasts, including challenging any key assumptions;
•
• discussion with management to understand the strategy for the business going forward and
•
assess the coherence of budgets and forecasts with this strategy;
review of contracts or agreements in place that may result in revenue generation for the group
in future periods;
33
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
• conducting a sensitivity analysis of the group’s forecast cash flow position and considering
the appropriateness of the disclosures and notes to the financial statements and the director’s
report; and
review of the availability of further funding is 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.
In relation to the entities reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the directors’ report in the
financial statements about whether the director’s considered it appropriate to adopt the going
concern basis of accounting.
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 £137,200 (2021: £113,600), based on 3% of net assets. Using the
net assets as a basis of setting materiality was determined to be most suitable because the
capital position is the focus of management and other stakeholders, consistent with the nature
of the group’s business at this stage in its lifecycle. We compared this with similar businesses
and noted this to be a consistent approach. In the previous period, 3% of net assets was used in
calculating group materiality.
Group performance materiality was set at £96,040 (2021: £79,250), 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 acquisitions made in the
year.
Parent company materiality was set at £18,776 (2021: £32,600), based on 2% of expenses. In
the previous period, the parent company materiality used the same basis and percentage. 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 £15,021 (2021: £26,080), 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 £6,860 (2021: £5,680), and £1,630 (2021: £939), respectively. We also reported
misstatements below this level that warranted reporting on qualitative grounds. This represents
5% of overall materiality.
34
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
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 a full-
scope audit on the parent entity, focusing on areas involving significant accounting estimates
and judgements by the directors and considering 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. During the year, the group acquired Alpha International Life Assurance Company Ltd.
(“AILAC”) and Havelet Assignment Company Ltd. (“Havelet”). AILAC, as well as one of the
group’s existing subsidiaries, Providence Life Assurance Company (Bermuda) Ltd. (“PLAC”), are
in-scope of our audit based on the entities’ significance to the group. Thus, we have performed
a detailed review of the component auditors’ working papers for these components to ensure
that the audits have been performed in line with the relevant standards and applicable
regulations, and in line with the referral instructions we sent them. Havelet was considered
financially insignificant based on group materiality; however, we have identified significant
balances within this entity. Thus, we have performed a review of the component auditor’s working
papers with respect to the specific significant balances to ensure that the audit has been
performed in line with the relevant standards.
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
business
liabilities
in
insurance
The valuation of
in
the
insurance business, represents the single
biggest area of judgement for the business.
liabilities held
These liabilities are borne from the numerous
types of investment contract written by the
group’s subsidiaries, the valuation of which
involves the use of judgement and estimation
to value, specifically:
• non-unit expense reserves, requiring
in selecting
judgement
the use of
forward-looking expense assumptions;
reserves for claims which have been
incurred but not reported as at the year
end (‘IBNR’); and
•
Our work in this area included a review of the
component auditors’ files to ensure that their
work was performed in line with our referral
instructions and confirm they have performed
sufficient procedures, including:
• using an actuarial specialist to review
management’s key assumptions used to
calculate the liabilities in insurance business
and reviewing management’s methodology
for reasonableness and consistency with
prior periods;
challenging management’s methodology
and assumptions and
the
workpapers relating to this work;
reviewing
•
35
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
• deferred acquisition cost assets related
•
to these contracts.
(Refer to notes 2(o) and 14 for further
details)
intangible
Valuation of
assets on
acquisition of AILAC and acquisition
accounting
Acquisition accounting under
IFRS 3
Business Combinations requires an acquiring
entity to recognise the identifiable assets
acquired and the liabilities assumed and
ascertain their fair values. The acquisition of
AILAC during
represents a
the period
significant transaction for the group.
Intangible assets may arise on the acquisition
of AILAC and there is both judgement and
complexity around their initial recognition.
the
There
calculation of any gain on acquisition or
goodwill recognised, as well as the resultant
disclosures.
is also complexity around
(Refer to note 15 for further details)
and
testing
the material
the
completeness of data used
calculation of the liabilities in insurance
business; and
accuracy
in
• evaluating management’s accounting policy
for valuing these contracts and assessing
the disclosures against the requirements of
the UK-adopted international accounting
standards.
We obtained sufficient assurance that the
methodology and assumptions used in the
valuation of liabilities in insurance business
are appropriate, based on the performance of
the procedures above.
Our work in this area included:
• reviewing
the sale and purchase
agreement between the group and the
seller of AILAC to ensure the acquisition
accounting accurately reflects the terms
of the agreement;
• reviewing
challenging
and
management’s acquisition accounting
against the requirements of IFRS 3;
• reviewing
and
challenging
the
appropriateness and valuation of any
intangible assets recognised as part of
the acquisition and whether any
is
resultant
consistent with IAS 36 Impairment of
Assets; and
impairment assessment
• checking whether the disclosures in the
financial statements are complete and
adequate.
We obtained sufficient assurance that the
acquisition accounting was appropriate,
based on the performance of the procedures
above.
36
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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:
•
•
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate
•
for our audit have not been received from branches not visited by us; or
the parent company financial statements 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 director’s report in relation to going concern and that part of the
Governance Report 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 Governance Report is materially consistent with the financial statements or our
knowledge obtained during the audit:
37
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
• 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 6;
• 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 pages 6 and 7;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on pages 13 and 14;
• The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 20; and
• The section describing the work of the audit committee set out on pages 30 and 31.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible
for the preparation of the group and parent company financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible
for assessing the group’s and the parent company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
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 the group’s management, industry research, review of Board minutes and
RNSs and application of cumulative audit 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 the Companies Act 2006, the Listing Rules and the UK
Corporate Governance Code.
38
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
• 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 Board minutes, review of legal and regulatory correspondence and review of legal
fees.
• We also identified the risks of material misstatement of the financial statements due to fraud.
We considered 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 or intangibles and the valuation of
liabilities in insurance business; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
• We reviewed the audit files of the component auditors, placing greater focus on the areas
addressing fraud and non-compliance with laws and regulations locally as well as compliance
with the applicable UK laws and regulations. We reviewed the component auditors’ audit
procedures on the identified key audit matters, management override and their assessment
of each entities’ compliance with local laws and regulations via review discussions with
management and review of the audit file.
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 2022. Our total uninterrupted period of engagement is five years,
covering the periods ended 31 August 2018, 31 August 2019, 31 August 2020, 31 December
2021 and 31 December 2022.
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.
Our audit opinion is consistent with the additional report to the audit committee.
39
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
[Signature]
Martin Watson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
29 April 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
40
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Consolidated Statement of Comprehensive Income
Revenue from Owned Insurance Companies
Revenue from Contracts with Clients
Total revenue
Net movement on DAC/AVIF
Interest expense and investment costs
Bargain purchase
Expenses in managing owned insurance
companies
Operating expenses
Profit/(loss) before taxation
Taxation
Year ended
31 December 2022
£
3,424,875
346,787
3,771,662
(16,729)
(27,838)
4,106,000
(2,336,898)
(2,403,021)
16 mths ended
31 December 2021
(restated)
£
2,290,948
354,224
2,645,172
27,355
(8,306)
-
(1,639,167)
(2,768,978)
3,093,176
(1,743,924)
85,402
29,620
Note
14
3
15
4
6
Profit/(loss) for the period
3,178,578
(1,714,304)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on foreign operations
192,270
-
Total comprehensive income/(loss)
3,370,848
(1,714,304)
Attributable to:
Owners of the Company
Non-controlling Interests
Earnings per share from continuing
operations attributable to the equity owners
Basic earnings per share (pence)
Fully diluted earnings per share (pence)
7
7
3,178,359
192,489
(1,702,811)
(11,493)
3,370,848
(1,714,304)
0.7p
0.4p
(0.5p)
N/A
All results derive from continuing operations.
The notes to the financial statements form an integral part of these financial statements.
41
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Consolidated Statement of Financial Position
Assets
Intangible fixed asset
Right of use assets
Annuity contracts
Total assets in insurance business
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity attributable to shareholders
Share capital
Share premium
Option reserve
Share based payment reserve
Foreign exchange reserve
Retained deficit
Total equity attributable to
shareholders
Non-controlling interests
Total equity
Liabilities
Lease liabilities
Total liabilities in insurance business
Structured settlements
Trade and other payables
Total liabilities
Note
9
23
24
14
10
11
12
12
12
12
12
14
13
As at
31 December 2022
£
939,955
183,672
7,063,374
454,303,995
453,266
218,530
As at
31 December 2021
(restated)
£
864,821
262,117
-
209,251,676
273,564
195,523
463,162,792
210,847,701
431,887
5,388,152
815,474
113,390
182,748
(505,314)
6,426,337
282,098
431,887
5,404,313
480,674
113,390
-
(3,500,925)
2,929,339
89,609
6,708,435
3,018,948
238,483
447,956,125
7,063,374
1,196,375
269,110
207,449,925
-
109,718
456,454,357
207,828,753
Total equity and liabilities
463,162,792
210,847,701
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 29 April 2023 and signed on its
behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
42
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Company Statement of Financial Position
Assets
Investment in subsidiaries
Right of use assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity attributable to shareholders
Share capital
Share premium
Option reserve
Share based payment reserve
Retained deficit
Total equity
Liabilities
Lease liabilities
Trade and other payables
Total liabilities
Note
8
23
10
11
12
12
12
12
13
As at
31 December 2022
£
2,932,219
183,672
952,119
9,751
As at
31 December 2021
(restated)
£
2,935,819
262,117
369,891
109,558
4,077,761
3,677,385
431,887
5,388,152
815,474
113,390
(3,539,660)
431,887
5,404,313
480,674
113,390
(3,178,915)
3,209,243
3,251,349
238,483
630,035
868,518
269,110
156,926
426,036
Total equity and liabilities
4,077,761
3,677,385
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 £360,745 (2021: £1,384,336 (restated)).
This report was approved by the board and authorised for issue on 29 April 2023 and signed on its
behalf by:
………………………
Gobind Sahney
Chairman
Company Registration Number: 09734404
43
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Consolidated Statement of Changes in Equity
Share
Capital
Share
Premium
Option
reserve
£
£
£
Share-based
payment
reserve
£
Foreign
Exchange
Reserve
£
Total
Attributable to
Shareholders
£
Non-
Controlling
Interests
£
Retained
Deficit
£
Total
£
Balance at 1 September 2020
Loss for the period as originally
stated
Prior year adjustment
Total comprehensive loss for the
period (restated)
Share issue
Share issue costs
Employee share options issued
Non-controlling interests acquired
205,102
1,789,744
-
-
-
-
-
-
226,785
4,082,730
(468,161)
-
-
-
-
-
480,674
-
-
-
-
-
-
-
-
-
-
(9,515)
122,905
-
-
Balance at 31 December 2021
431,887
5,404,313
480,674
113,390
Profit for the year
Foreign exchange gain on
conversion of subsidiary
Total comprehensive income for
the year
Share issue costs
Employee share options issued
-
-
-
-
-
-
-
-
(16,161)
-
-
-
-
-
334,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,798,114)
196,732
-
196,732
(1,654,811)
(48,000)
(1,702,811)
-
-
-
-
(1,654,811)
(48,000)
(1,702,811)
4,300,000
(345,256)
480,674
(11,493)
-
(11,493)
-
-
-
-
101,102
(1,666,304)
(48,000)
(1,714,304)
4,300,000
(345,256)
480,674
101,102
(3,500,925)
2,929,339
89,609
3,018,948
2,995,611
2,995,611
182,967
3,178,578
182,748
-
182,748
9,522
192,270
182,748
2,995,611
3,178,359
192,489
3,370,848
-
-
-
-
(16,161)
334,800
-
(16,161)
334,800
Balance at 31 December 2022
431,887
5,388,152
815,474
113,390
182,748
(505,314)
6,426,337
282,098
6,708,435
See notes below parent company statement of changes in equity for explanation as to the reserves. The notes form an integral part of these financial statements
44
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Company Statement of Changes in Equity
Share
capital
£
Share
premium
£
Option
reserve
£
205,102
1,789,744
-
-
Share based
payment
reserve
£
-
-
-
-
-
-
Retained
deficit
£
Total
£
(1,794,579)
200,267
(1,336,336)
(1,336.336)
(48,000)
(48,000)
-
(1,384.336)
(1,384,336)
226,785
-
-
4,082,730
(468,161)
-
-
-
480,674
(9,515)
122,905
-
-
-
-
4,300,000
(345,256)
480,674
431,887
5,404,313
480,674
113,390
(3,178,915)
3,251,349
-
-
-
-
-
-
-
-
-
(16,161)
334,800
-
-
-
-
-
(360,745)
(360,745)
(360,745)
(360,745)
-
-
334,800
(16,161)
431,887
5,388,152
815,474
113,390
(3,539,660)
3,209,243
Balance as at 1
September 2020
Loss for the period
as originally stated
Prior year
adjustment
Total comprehensive
loss for the period
Share issue
Share issue costs
Options issued
Balance as at 31
December 2021
Loss for the period
Total
comprehensive
loss for the period
Options issued
Share issue costs
Balance as at 31
December 2022
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.
Foreign exchange reserve represents foreign exchange movements arising on the conversion of the net
assets of subsidiaries whose accounts are prepared in currencies other than sterling.
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.
45
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Consolidated Statement of Cash Flows
Cash flow from operating activities
Profit/(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 net assets in insurance company
Increase/(decrease) in trade and other payables
Year ended
31 December
2022
£
16 mths ended
31 December
2021 (restated)
£
Note
3,121,014
(1,687,618)
334,800
116,699
(179,702)
(4,460,717)
726,657
480,674
72,873
(28,439)
(1,772,131)
(30,294)
Net cash used in operating activities
(341,249)
(2,964,935)
Cash flows from investing activity
Acquisition of intangible asset
Acquisition of subsidiary (net of cash acquired)
Acquisition of non-controlling interest
(113,387)
193,493
-
(903,075)
-
101,102
Net cash generated from/(used in) investment activity
80,106
(801,973)
Cash flows from financing activities
Repayment of leasing liabilities
Interest paid on leasing liabilities and loans
Loan finance
Net proceeds from issuance of shares net of issue costs
(30,626)
(19,063)
350,000
(16,161)
(27,627)
(8,306)
-
3,954,744
Net cash generated from financing activities
284,150
3,918,811
Increase in cash and cash equivalents
23,007
151,903
Cash and cash equivalents at beginning of period
195,523
43,620
Cash and cash equivalents at end of period
11
218,530
195,523
The notes to the financial statements form an integral part of these financial statements.
46
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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
Increase/(decrease) in trade and other payables
Year ended
31 December
2022
£
Note
16 mths
ended 31
December
2021
£
(337,000)
(1,328,030)
334,800
78,445
480,674
34,619
(582,228)
113,108
(121,233)
(24,245)
Net cash used in operating activities
(392,875)
(958,215)
Cash flows from investing activity
Proceeds from disposal of subsidiary undertaking
Investment in subsidiary undertakings
Net cash generated from/(used in) investing activities
Cash flows from financing activities
3,600
-
3,600
-
(2,894,658)
(2,894,658)
Repayment of leasing liabilities
Interest on leasing liabilities
Loan finance
Net proceeds from issuance of shares net of issue costs
(30,626)
(13,745)
350,000
(16,161)
(27,627)
(8,306)
-
3,954,744
Net cash generated from financing activities
289,468
3,918,811
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
(99,807)
109,558
65,938
43,620
Cash and cash equivalents at end of period
11
9,751
109,558
The notes to the financial statements form an integral part of these financial statements.
47
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
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.
These consolidated financial statements comprise the financial statements of the Company and its
subsidiaries (the “Group”).
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. Although the
vast majority of the assets and liabilities of the Group comprise those in insurance businesses, the
Directors have chosen not to prepare the consolidated financial statements on the basis that Alpha
Growth plc is an insurance group. This is because the purpose of acquiring assets is to facilitate
growth in advisory fees by being able to offer appropriate solutions to a wider audience of potential
investors and customers. The consolidated and company statements of financial position are
presented broadly in order of liquidity.
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 UK-adopted International Accounting Standards.
The financial statements have been prepared under the historical cost convention.
b) Comparative Information
The Company changed its year-end during the prior period from 31 August to 31 December in
order to make its year-end coterminous with that of PLAC, which was the most significant entity
in the Group in terms of gross assets and operating revenues. As a result these accounts show
comparative results for a sixteen month period whereas the current period is for a twelve month
period and therefore is not directly comparable.
The prior year numbers have been adjusted to reflect the following information that came to light
during the current year and has a material impact on the prior year.
The first is Mr Sutherland being entitled to receive £2,000 monthly in additional director’s fees
since 1 January 2020 due to be paid in shares. This has resulted in a £48,000 increase in prior
year losses for the Group and Company with a £48,000 increase in trade and other payables.
The second is that the subsidiary, Alpha Longevity Management Ltd, has issued unpaid share
capital of $50,000 rather than the $1 previously reported. This has resulted in an increase of
£41,159 in the cost of investments on the Company Statement of Financial Position and an
increase of £41,159 in trade and other payables. There is no impact on the consolidated
numbers.
48
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
c) New Standards and Interpretations
No new Standards or Interpretations have been adopted in these financial statements.
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 Endorsement Board):
Standard/Interpretation
Subject
Insurance contracts
Period first applies (year
ended)
31 December 2023
IFRS 17 (including the
June 2020 and
December 2021
amendments)
Amendments to IFRS 10
and IAS 28
Amendments to IAS 1
Amendments to IAS 1
and IFRS Practice
Statement 2
Amendments to IAS 8
Amendments to IAS 12
Sale or Contribution of
Assets between an Investor
and its Associate
Classification of Liabilities
Accounting policies
disclosure
31 December 2023
31 December 2023
31 December 2023
Definition of Accounting
Estimates
Deferred Tax
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 and AILAC together with a share of
management fees earned from Black Oak Alpha Growth Fund (“BOAGF”). The PLAC and AILAC
revenues are partly used to service the life policies but the board of PLAC and AILAC have
respectively agreed to pay $75,000 and £300,000 a quarter to Alpha Group (Bermuda) Ltd to
cover support from head office. The Group’s share of management fees from BOAGF for 2023
is projected to be circa £50,000 a quarter. Operating costs, excluding those already reflected in
the fees payable by PLAC and AILAC are projected to be £350,000 a quarter in addition to which
the Group is currently contributing around £80,000 a quarter to the operating costs of the Interval
Fund. This means that the Group as an operating business is running a small cash deficit
currently, but the Directors expect the Interval Fund to start generating revenues by Q3 2023,
which will result in cash flows turning positive. Under all foreseeable scenarios, the cash surplus
in AILAC together with the cash received on exercise of warrants since the year end will be
sufficient to enable the Group to meet its working capital needs during the going concern period,
being 12 months for the date of signing the financial statement,
49
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
d) Going Concern (continued)
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 subsidiaries.
Of the results for the year losses of £360,745 (2021: £1,384,336) 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.
The only subsidiaries that are required to and/or have produced financial statements are PLAC,
AILAC, Havelet and Alpha Longevity Ltd. AILAC and Havelet were acquired in late November
2022 with both sets of accounts being prepared for the year to 31 December 2022. Revenues
and expenses are incorporated on a pro-rata basis from the date of acquisition although in the
case of AILAC an adjustment has been made to reflect the fact that under the terms of the sale
and purchase agreement, the Group benefits from all net revenues after 31 July 2022.
.
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.
50
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2)
Summary of Significant Accounting Policies (continued
e) Foreign Currency Translation (continued)
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:
The assets and liabilities for each statement of financial position presented are converted
i)
using the rates in effect at the date of the statement of 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.
iv) Movements resulting from converting the opening equity attributable to subsidiaries at the
current year exchange rate are reported as a foreign exchange reserve in the statement of
changes in equity
g) Financial Instruments
i)
Initial recognition
A financial asset or financial liability is recognised in the statement of financial position of the
group when it arises or when the group becomes part of the contractual terms of the financial
instrument.
ii) Classification
a) Financial assets at amortised cost
The Group measures financial assets at amortized cost if both of the following conditions are
met:
• the asset is held within a business model whose objective is to collect contractual cash flows;
and
• the contractual terms of the financial asset generating cash flows at specified dates only
pertain to capital and interest payments on the balance of the initial capital.
Financial assets which are measured at amortised cost, using the Effective Interest Rate Method
(EIR) and are subject to impairment where there is significant uncertainty as to the timing and
51
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
g) Financial Instruments (continued)
a) Financial assets at amortised cost (continued)
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
Assets held in insurance business include investment contracts which 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 held in liabilities in insurance business.
Movements in fair value are recognised in profit and loss but will offset each other.
Annuity contracts comprise both deferred variable and fixed annuity contract financial assets,
which are held to meet structured settlement obligations accepted by the Group. The fair value
of fixed annuity contracts is derived from the sum of the remaining annuity payments, discounted
to present value using US treasury discount rates. The fair value of deferred variable annuity
contracts is derived from the quoted market prices of the investments underlying each deferred
variable annuity.
Structured settlements represent periodic payment obligations accepted by the Group on
deferred contingent attorney fees, class action, single event plaintiff attorneys and law firms. The
fair value of structured settlements is based on the discounted value of future payment
obligations.
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.
52
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
h) Revenue 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.
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.
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 five such investment projects, namely the launching of Black Oak Alpha
Growth Fund plus the Interval Fund and the acquisitions of PLAC, AILAC and Havelet.
53
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
j) Segmental Reporting (continued)
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 Black 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 notes 18 and 19.
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 20.
m) Equity
Equity instruments issued by the Company are recorded at the value of net proceeds after direct
issue costs.
n) Cash and Cash Equivalents
Cash and cash equivalents comprise cash held in bank. This definition is also used for the
Statement of Cash Flows.
The Company considers the credit ratings of banks in which it holds funds in order to reduce
exposure to credit risk. The Company only keeps its holdings of cash and cash equivalents with
institutions which have a minimum credit rating of ‘A-’.
The Company considers that it is not exposed to major concentrations of credit risk.
54
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
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 insurance contracts issued by the Group are accounted for as investment contracts and
are accordingly referred to as such.
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).
Claims
“Claims” under investment contracts are not reflected in the income statement. They are
deducted from investment contract liabilities in the balance sheet.
Provisions for liabilities
Investment contracts consist of unit-linked contracts. Unit-linked liabilities are determined by
reference to the value of the underlying matched assets with a non-unit linked reserve for known
future liabilities relating to those investment contracts.
p)
Intangible assets
The present value of acquired in-force business (AVIF) 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 AVIF 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, 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
55
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
q) Leased assets (continued)
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
ii) 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.
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.
r) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with UK-adopted IAS 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 made by management that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the financial statements for the year ended
31 December 2022 are discussed below:
Assets and liabilities in insurance business
These assets and liabilities principally comprise investment contracts written by the Group,
whose fair value is dependent upon the fair value of the underlying financial assets. The liabilities
are determined by reference to the value of the underlying matched assets with a non-unit linked
reserve for known future liabilities relating to those investment contracts, for example relating to
future expenses. The fair value of the underlying financial assets which is £422,843,781 (2021:
200,535,301) and the valuation of non-unit reserves which is £466,811 (2021: 409,275) both
require estimates to be made.
56
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
r) Significant accounting judgements, estimates and assumptions (continued)
The judgements that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the financial statements for the year ended 31 December
2022 are discussed below:
Acquisition of subsidiary
During the year the Group acquired an insurance subsidiary which has gross assets which are
higher than those of the rest of the Group combined. When accounting for the acquisition of
AILAC, 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 AILAC at 31 December 2022, adjusted to reflect movements reported in AILAC’s management
accounts for the month of December 2022. The assessment of those fair values is subject to
significant uncertainties and judgements.
Determination of gain on bargain purchases
AILAC was acquired for nominal consideration, notwithstanding that at the date of acquisition it
had significant net assets on the balance sheet. The gain on the bargain price acquisition, being
the difference between the fair value of net assets acquired and the acquisition cost, represents
an amount that the sellers were prepared to forego in order to reduce their risks, administrative
and regulatory obligations in the future. As the risks are unable to be quantified with any certainty
and relate to potential future events, the true gain on the bargain purchase is subject to significant
uncertainties.
Employee share options
During the period the Company awarded a number of employee share options to the Directors
and senior management. The value of these options has been reported as an expense in the
profit and loss account with a corresponding credit to the 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.
Recoverability of Interval Fund Expenses
Group “Trade and other receivables” includes an amount of £192,346 (2021: £35,814) in respect
of amounts paid under an expense cap agreement together with other organisational costs
incurred in respect of the Interval Fund. The recovery of these amounts is dependent on whether
the assets under management of the Interval Fund are to grow sufficiently such that the expense
ratio of that fund falls below a target level. Whilst the Directors believe that the Interval Fund is
likely to attract significant investment such that these amounts will be recovered in the upcoming
twelve months, there remain significant uncertainties as to whether this will be the case. If these
expenses are not recoverable the Group’s net assets would be lower by £192,346 and there will
be a commensurate charge in the Statement of Comprehensive Income.
57
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
3.
Revenue and Cost of Sales
Revenue and cost of sales relates to the two business activities of fund management and owned
insurance businesses. All revenues except £246,583 (2021: £nil) are from the one geographical
area of North America with AILAC related revenues being from Europe.
4.
Expenses by Nature
Directors’ fees (Note 17)
Audit fees payable to Company auditors
Other audit fees
Costs relating to acquisitions
Amortisation of right of use assets
Amortisation of intangible assets
Professional and consultancy fees
Other expenses
Group
2022
Company
2022
£
640,870
62,570
173,525
158,942
78,445
38,254
151,899
1,098,516
£
640,870
62,570
-
-
78,445
-
151,899
348,572
Group
2021
(restated)
£
898,431
43,850
65,055
60,389
34,619
38,254
67,700
1,560,680
Company
2021
(restated)
£
898,431
43,850
-
60,389
34,619
-
61,158
378,718
Operating expenses
2,403,021
1,282,356
2,768,978
1,477,165
5.
Auditors’ remuneration
Group
2022
Company
2022
Group
2021
Company
2021
£
£
£
£
Fees payable to the Company’s current auditor for
the audit of the Company’s annual accounts:
62,570
62,570
43,850
43,850
Fees payable to the Company’s current auditor for
non-audit services:
-
-
14,900
14,900
6.
Income tax
Analysis of tax credit in the year
Group
2022
Company
2022
Group
2021(rest)
Company
2021 (rest)
Current tax
Deferred tax
Income tax
£
-
85,402
85,402
58
£
-
-
-
£
-
29,620
29,620
£
-
-
-
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
6.
Income tax (continued)
Factors affecting the tax credit for the year are as follows:
Profit/(loss) on ordinary
activities before tax
3,093,176
(360,745)
(1,743,924)
(1,384,336)
on
Analysis of charge in the
year
(Profit)/loss
ordinary
activities multiplied by rate of
corporation tax in the UK of
19% (2021: 19%)
Bargain
subject to tax
Expenses not deductible for
tax purposes
Tax losses carried forward
purchase
not
Deferred credit tax for the
year
(587,703)
68,542
331,346
263,024
780,140
-
(38,830)
(337)
(128,364)
(89,662)
(68,205)
(68,205)
(173,362)
(173,362)
85,402
-
29,620
-
The Group has accumulated tax losses of approximately £3,600,000 (2021: £3,150,000 (restated))
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
£684,000 (2021: £483,000 (restated)). A deferred tax asset of £508,000 (2021: £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 earnings per share is calculated by dividing the profit for the year from
continuing operations of £3,178,578 (2021: loss £1,666,304) for the Group by the weighted average
number of ordinary shares in issue during the year of 431,887,388 (2021: 354,487,424). For diluted
earnings per share the number of shares in issue is calculated assuming all the options (137m) and
warrants (206m) have been exercised.
Profit/(loss) for the year from continuing operations
2022
£
3,178,578
2021
£
(1,714,304)
Weighted average number of shares in issue
Fully diluted average number of shares in issue
431,887,388
777,100,388
354,478,424
N/A1
Basic earnings per share
Fully diluted earnings per share
0.7p
0.4p
(0.5p)
N/A
Potential dilutive shares are detailed in notes 18 and 19.
1Since the Group made a loss in 2021, there is no reported dilution for that period.
59
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
8.
Investments in group undertakings
Shares in group undertakings:
Opening balance
Disposals in the year
Closing balance
Company
£ (restated)
2,935,819
(3,600)
2,932,219
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 2022 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
Havelet Assignment Company
Limited
Alpha Growth Management Inc
Alpha Growth Management LLC
Northstar Group (Bermuda) Ltd
Providence Life Assurance
Company Ltd
Alpha International Life Assurance
Co Ltd
British Virgin Islands
Republic of Ireland
Bermuda
Barbados
United States
United States
Bermuda
Bermuda
Guernsey
Ownership*
2021
2022
100%
100%
100%
100%
N/A
100%
95%
95%
95%
100%
100%
100%
0%
100%
0%
95%
95%
0%
*All ownership interests are directly held by the Company except that both PLAC and AILAC are held
through the Company’s interest in Northstar Group and Havelet is held through Alpha Group
(Bermuda) Ltd.
Alpha Growth Management Inc was struck off during the year, since the original plans for the entity
were superseded when the Group acquired Alpha Growth Management LLC. Pacific Longevity
Limited was in the process of being voluntarily struck off at the year end and this process has now
been completed.
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 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 LLC is at 500 Newport Center Drive, Suite 680,
Newport Beach, California 93660, USA.
The registered office of AILAC is at Albert House, South Esplanade, St Peter Port, Guernsey, GY1
1AW.
60
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
8. Investments in group undertakings
The registered office of Havelet is at 1st Floor. Limegrove Centre, Holetown, St James, Barbados, W.I.
All subsidiaries are included in the consolidation and share the same principal activity except PLAC
and AILAC which have 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 January 2022
Additions
At 31 December 2022
Amortisation/Impairment
At 1 January 2022
Charge for the period
At 31 December 2022
Net book amount
At 31 December 2022
A 31 December 2021
10. Trade and other receivables
Trade debtors
Other receivables
Loans
Prepayments and accrued income
AVIF
£
Rights
£
Goodwill
£
Total
£
765,070
-
-
113,388
138,005
-
903,075
113,388
765,070
113,388
138,005 1,016,463
38,254
38,254
76,508
-
-
-
-
-
-
38,254
38,254
76,508
688,562
113,388
138,005
939,955
726,816
-
138,005
864,821
Group
As at 31
December
2022
£
21,168
21,492
237,919
Company
As at 31
December
2022
£
500,000
21,492
354,807
Group
As at 31
December
2021
£
-
20,818
140,742
Company
As at 31
December
2021
£
-
20,818
292,577
172,687
75,820
112,004
56,496
453,266
952,119
273,564
369,891
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.
61
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
11. Cash and cash equivalents
Cash at bank
Group
As at 31
December
2022
£
218,530
Company
As at 31
December
2022
£
9,751
Group
As at 31
December
2021
£
195,523
Company
As at
31 December
2021
£
109,558
218,530
9,751
195,523
109,558
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair
value.
12. Share capital
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 December
2021
Authorised
Called up
904,664,388
431,887,388
431,887
5,404,313
113,390
Share issue costs
-
-
(16,161)
-
At 31 December 2022
904,664,388
431,887,388
431,887
5,388,152
113,390
Of the authorised share capital 343,213,000 ordinary shares are reserved for issue under options
and warrants, See notes 18 and 19 for the terms on which those shares can be issued.
13. Trade and other payables
Current liabilities
Trade payables
Short term loan
Intergroup liabilities
Accruals
Group
As at 31
December
2022
£
Company
As at 31
December
2022
£
Group
As at 31
December
2021
£ (rest)
Company
As at 31
December
2021
£ (rest)
401,711
350,000
-
444,644
42,525
350,000
41,685
195,825
-
-
-
109,718
47,445
109,481
1,196,375
630,035
109,718
156,926
The short-term loan is repayable as to £250,000 on 31 March 2023 and then five equal month
instalments of £25,000 making total repayments of £375,000 including interest.
62
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
14.
Insurance company disclosures
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
At 31 Dec
2022
£
At 31 Dec
2021
£
Investments at fair value through profit and loss
- Financial instruments held to back unit linked liabilities
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 businesses
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 businesses before elimination
Elimination of amounts owed to Group companies
Total liabilities in insurance business
Net assets in insurance businesses
422,843,781
9,412,650
345,836
6,718,811
508,288
568,935
13,905,694
454,303,995
424,441,781
6,893,911
466,811
12,360,922
-
4,380,431
448,543,855
(587,730)
447,956,125
6,347,870
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
There is no material risk to the Group arising from the investment portfolios held by PLAC or AILAC
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
the two insurance subsidiaries for the period from their respective acquisitions on 19 March 2021
and 25 November to 31 December 2022 are disclosed below to assist readers in understanding their
impact on the consolidated financial statements.
63
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
14.
Insurance company disclosures (continued)
Policy charges and fee income
Direct costs of insurance business
Investment income
Total revenue
Movement in deferred acquisition cost
Operating costs (excluding group fees)
Net result before tax
Tax credit
Net result after tax
Year to 31
Dec 2022
£
3,424,875
(2,336,898)
-
19 Mar 2021 to
31 Dec 2021
£
2,290,948
(1,639,167)
3,523
1,087,977
21,525
(755,287)
354,215
85,402
439,617
655,304
22,682
(949,002)
(271,016)
29,620
(241,396)
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.
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
At 31 December 2022
Receivables
Cash and cash equivalents
Fixed income
Equities
Investment funds
Private placements
Direct investments
At 31 December 2021
Receivables
Cash and cash equivalents
Fixed income
Equities
Investment funds
Private placements
Direct investments
Level 2
£
-
-
-
6,491,257
-
-
-
6,491,257
Level 2
£
-
-
-
12,927,367
-
-
-
12,927,367
Level 3
£
-
-
-
23,765,097
-
4,234,731
39,777,270
Level 3
£
-
-
-
24,712,482
-
11,797,403
4,217,143
40,727,029
Total
£
6,179
25,203,227
25,667,401
311,399,741
54,313,546
11,777,442
4,234,731
432,602,267
Total
£
5,554
11,748,979
24,473,263
82,358,180
66,887,725
11,797,403
4,217,143
201,488,249
Level 1
£
6,179
25,203,227
25,667,401
281,143,387
54,313,546
-
-
386,333,740
Level 1
£
5,554
11,748,979
24,473,263
44,718,330
66,887,725
-
-
147,833,853
64
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
14.
Insurance company disclosures (continued)
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. The segregated account liabilities
follow the similar fair value levelling as the segregated account assets.
Group net investment in insurance companies
Total assets in insurance companies
Total liabilities in insurance companies
Other intangible assets acquired AVIF
Other intangible assets acquired Goodwill
15.
Acquisition of subsidiaries
At 31 Dec
2022
£
454,303,955
(448,543,855)
688,562
138,005
At 31 Dec
2021
£
209,251,676
(207,449,925)
765,070
138,005
6,586,667
2,704,826
On 6 December 2022 the Company’s 95% owned subsidiary Northstar Group (Bermuda) Ltd
acquired 100% of AILAC. AILAC is a life assurance company registered in Guernsey and regulated
by the Guernsey Financial Services Commission. The Group incurred costs of £158,942 related to
the acquisition which are recorded in operating expenses. On 12 December 2022 the Company’s
100% owned subsidiary Alpha Group (Bermuda) Ltd acquired 100% of Havelet. Havelet is a liability
assignment company registered in Barbados and regulated by the Barbados Financial Services
Commission.
AILAC was acquired as part of the Company’s pre-announced strategy to grow assets under
management (i.e. both owned and managed life settlements) to £2 billion. Havelet was acquired
because its business model is complementary to the activities of the rest of the Group and is expected
to give rise to cross-selling opportunities.
The sellers of AILAC were prepared to sell the company at a bargain purchase price as they were a
significantly larger group who saw AILAC’s business as insignificant whilst continuing to impose a
regulatory risk and capital burden on that group. Furthermore the list of potential buyers was limited
by the need to have experience at running similar businesses in order to receive regulatory approvals.
The Group has identified a number of large insurance groups who are equally keen to divest their
smaller subsidiaries and therefore there is the potential for further such acquisitions in the future.
Included in operating expenses is £158,942 of legal fees and other costs related to the acquisition of
AILAC. There are no such costs related to the acquisition of Havelet.
The Statement of Comprehensive Income includes, in the amount reported under revenue from
owned insurance companies, £246,583, in the amount reported under expenses in managing
insurance companies £101,750 and in the amount reported under operating expenses, £47,167
arising from the acquisition of AILAC which resulted in an overall increase in profits of £97,167. There
was no impact on the Statement of Comprehensive Income from the acquisition of Havelet as the
revenues and costs post-acquisition are not material.
The only restatement of the assets and liabilities in respect of AILAC required under IFRS3 was an
increase in liabilities of £400,000 to reflect a liability arising to the Company on acquisition. The only
restatement in respect of Havelet was to recognise an intangible asset, that being contractual rights
to future income acquired through the acquisition. The assets and liabilities are as presented below
in respect of each subsidiary acquired:
65
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
15.
Acquisition of subsidiaries
AILAC
Total unit-linked assets in insurance company
Total cash outside unit-linked policies
Other assets
Total assets in insurance companies
Total unit-linked liabilities in insurance companies
Trade and other payables
Total liabilities insurance companies
Identifiable assets less liabilities
Bargain purchase amount attributable to – Controlling interests
Non-controlling interest
Consideration satisfied by cash
Havelet
Intangible asset - rights
Trade and other receivables
Cash at bank
Trade and other payables
Identifiable assets less liabilities
£
227,362,000
9,377,000
12,782,000
249,521,000
(228,960,000)
(16,455,000)
245,415,000
4,106,000
(3,900,700)
(205,300)
£0
£
113,387
43,135
193,493
(350,015)
£0
Had both AILAC and Havelet been owned throughout the year revenues of the Group would have
increased by £1,920,919 and profits by £686,886.
16. 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 17.
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 2022 (2021: £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 2022 (2021: £nil).
The short-term loan referred to in note 13 was provided by OSMO Holdings Ltd, a company of which
the Company Secretary is a director and a 50% owner through his consultancy firm.
17. Directors’ emoluments
Details concerning Directors’ remuneration can be found below. The Directors are considered to be
the key management.
66
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
17. Directors’ emoluments
Name of Director
Gobind Sahney
Daniel Swick
Jason Sutherland
Total
Fees
£
Other
£
171,554 245,152
-
78,800
97,364
48,000
Total
£
416,706
97,364
174,800
316,918 323,952
640,870
Other amounts represent director share options, see note 19 for further details.
18. Share warrants
Warrants
The Company during the prior 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. Nil (2021: 18,750,000) broker warrants were granted in the
year ended 31 December 2022.
The charge against the share premium account on issue of the broker warrants was £nil (2021:
£122,905) and £nil (2021: £113,390) net of broker warrants exercised. The fair value of the broker
warrants issued in the prior year was calculated using the inputs set out in the prior year financial
statements.
Shareholder warrants are not provided for services and accordingly no warrant reserve or share based
payment is recognised for these warrants.
2022
Number of
warrants
000’s
Weighted
average
exercise
price
£
206,250
0.029
2021
Number of
warrants
hted average
exercise
price
000’s
-
£
-
0.019
0.030
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
-
-
-
-
-
-
22,321
187,500
(3,571)
Outstanding at the end of the period
206,250
0.029
206,250
0.029
Exercisable at the end of the period
206,250
0.029
206,250
0.029
67
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
19. Share-based payment awards
During the year, the Company issued share options to the Directors and senior management. The
total options granted represent 10% of the issued share capital of the Company at the end of the
calendar year. 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 although any departing option
holder must exercise those options within six months of leaving (or the date issued if later).
The share options outstanding at 31 December 2022 had a weighted average contractual life of
approximately 2 years. The fair value of options granted during the year was £334,800 (2021:
480,674) 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
Estimate fair value of each warrant
2.9 pence
2.95 pence
23.14%
Nil
Exercisable on date of grant
5 years
3.341%
0.78 pence
Share options outstanding during the year ended 31 December 2022 and period ended 31 December
2021 were as follows:
2022
Number of
options
000’s
93,774
43,189
-
Weighted
average
exercise
price
£
0.0295
0.0295
-
2021
Number of
options
Weighted
average
exercise price
000’s
-
£
-
93,774
-
0.0295
-
Outstanding at the beginning of the
period
Granted during the period
Exercised during the period
Outstanding at the end of the period
136,963
0.0295
93,774
0.0295
Exercisable at the end of the period
136,963
0.0295
93,774
0.0295
20. Financial Instruments
The following table sets out the categories of financial instruments held as at 31 December 2022 and
31 December 2021:
68
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
20. Financial Instruments (continued)
Group
As at 31
December
2022 £
Company
As at
31 December
2022 £
Group
As at 31
December
2021 £
Company
As at
31 Dec
2021 £
422,843,781
31,460,214
-
-
200,535,301
8,716,375
-
-
5,007,650
183,672
42,660
237,919
2,274,254
9,571
183,672
521,492
354,807
-
195,523
109,558
262,117
262,117
20,818
20,818
140,742
292,577
-
424,441,781
-
200,535,301
-
-
Financial Assets
Financial assets measured at
value through profit and loss
- Unit linked investment contracts
fair
(see note 14)
Other assets in insurance business
Loans and receivables - Cash and
term
cash equivalents – Short
investments
Right of use assets
Loans and receivables - Trade and
other receivables
Loans and receivables – Loans
Annuity contracts
Financial liabilities
Financial liabilities measured at fair
value through profit and loss:
- Unit linked investment contracts
Financial liabilities measured at
amortised cost
- Trade and other payables
-
Lease liabilities
401,711
238,483
42,525
238,483
61,719
67,768
269,109
269,109
- Other insurance related liabilities
23,514,344
-
6,914,624
-
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-linked investment contracts
referenced in note 14. 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 a significant proportion 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 £1.58
million (2021: £1.87 million).
69
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
20. Financial instruments (continued)
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.
21. Average number of people employed
Average number of people employed, including Directors:
Group
2022
Company
2022
Group
2021
Company
2021
Number
Number
Number
Number
3
3
5
4
Office and management
22
Subsequent events
On 20 March 2023 the Company issued 18,750,000 Shares at 2p per share on exercise of certain
warrants issued to the Company’s former brokers. This resulted in a cash inflow of £375,000 which will be
used to repay the loan referred to in Note 13 and the Company has negotiated earlier repayment terms for
that loan which will reduce the interest charge by £4,000.
Subsequent to the year-end Credit Suisse, Silicon Valley Bank (“SVB”) and Signature Bank (“Signature”)
announced that they were in financial difficulties. At the time of the announcement the Group had an
exposure of approximately £2 million to Signature. Management immediately took actions to reduce the
Group’s exposure to those banks and subsequently both announced rescue plans which secured all
deposits. The Group has not suffered any loss as a result of these events but remains vigilant to credit risk.
70
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2022
Notes to the Financial Statements (continued)
23
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
Depreciation
Carrying
Amount C/Fwd
262,117
(78,445)
183,672
The net present value of lease liabilities are all due within 4 years and comprise
Lease payments
Finance charges
24
Annuity Contracts - Group
Group & Co
As at 31
December
2022
£
Group & Co
As at 31
December
2021
£
215,985
22,498
269,109
32,254
238,483
301,363
The discounted and fair value of the annuity contracts as presented in the consolidated statement of
financial position relate to the following categories:
Deferred variable annuity contracts
Fixed annuity contracts
Group
as at 31
December
2022
£
4,789,120
2,274,254
7,063,474
Group
as at 31
December
2021
£
-
-
-
71