Alpha Growth Plc
Annual Report & Financial Statements
for the year ended
31 December 2023
Company Number 09734404
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Contents
Company Information
Chairman’s Statement
Board of Directors and Senior Management
Directors’ Report
Strategic Report
Governance Report
Remuneration Committee Report
Audit Committee Report
Nomination Committee Report
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Page
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5
11
18
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32
35
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51
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Company Information
Directors
Gobind Sahney
Jason Sutherland
Neil Warrender (appointed 2 May 2023)
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 2023
Chairman’s Statement
After my statement in September, which was published alongside our half-year results, the latter
half of 2023 has been dedicated to deepening the integration of our acquisitions and strategically
positioning our group's companies for success in their specific business domains.
Over this period, Alpha has significantly strengthened its position and now boasts a wide array
of financial and insurance products and services. With operations spanning five pivotal countries,
we are now authorized and regulated to operate and provide services within many of the world’s
key financial centres.
I am confident that we are not only capitalizing on opportunities but also confronting challenges
head-on, ensuring our operations remain agile and efficient within a dynamic regulatory
landscape. By actively leveraging sectoral changes, Alpha is poised to emerge as a prominent
player in the financial services sector.
You will notice in our financial statements that we received a disclaimer of opinion from our
auditors. During the planning for the audit it became clear that a limited number of contracts
issued by PLAC fell into the definition of insurance contracts under IFRS, this is despite the
auditors previously accepting their treatment as investment contracts. Since the Board had not
had any reason to question the past treatment, they had not prepared themselves for the impact
of IFRS 17, which only applies to insurance contracts. During the audit, it became apparent that
trying to implement IFRS 17 in the limited time available would lead to significant delays in
finalizing the accounts and would also lead to a resultant increase in audit fees. The Board’s
own assessment of the impact of IFRS 17 was that it would have had no impact on the reported
position or the net assets, the differences would have been presentational only.
In order to file our accounts on time, the Directors elected to follow the accounting policy
previously adopted for these contracts and to explain the departure from IFRS in accordance
with their responsibility statement. This has led to the auditors disclaiming an opinion. The
Directors are considering their options going forward and have started the process of sounding
out potential new auditors who have the required in-house IFRS expertise. Whichever route we
choose we will start work on ensuring the accounts are fully IFRS compliant in 2024 as soon as
practicable.
Following positive and constructive correspondence with the Financial Reporting Council, the
board have spent a lot of time and effort enhancing the disclosures in the accounts. Some of
these enhancements are discussed below.
The Board has decided to disaggregate those assets and liabilities of the insurance subsidiaries,
which were previously listed as one line, with a separate note detailing the underlying assets.
We believe the accounts now give a clearer picture for our shareholders as to the strength of the
business.
As at 31 December 2023, the Group held a very healthy £7,420,418 within bank accounts,
excluding amounts held within life policies. The Board has adopted new KPIs as detailed on
page 13, both of which demonstrated stability following the acquisitions at the end of 2022. The
assets under administration and management stood at $619 million, a small advance towards
our $2B goal, whilst the surplus in net current assets over regulatory capital requirements stood
at £2.7 million.
In further positive news, the Company has repaid its borrowings and is now debt free.
2
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Chairman’s Statement (continued)
Following the acquisition of Alpha International Life towards the end of 2022, the short-term cash
needs of the Company have become significantly more manageable and this puts the Company
in the position to self-finance its own operations. The Company does not expect to have to raise
any additional equity capital as it progresses towards its previously communicated strategy of
managing over $2bn of assets in 2025. Each of AILAC and PLAC successfully obtained a credit
rating during the year and accordingly one of these entities is expected to be the vehicle used to
finance acquisitions, if finance is required.
Our path forward includes adding to Alpha’s core management team in the positions of fund and
life insurance marketing. We are encouraged by independent feedback in the industry of the life
insurance linked wealth management “ecosystem” we have assembled. The updated Alpha
website (www.algwplc.com) has received many compliments regarding how it explains the
“ecosystem” we are building. The Directors believe that this recognition will eventually be
reflected in our market value as a global audience is exposed to Alpha.
As you’re aware, the Directors have maintained a lean operating structure and will continue to
do so until value can be achieved with additional team members. The addition of Jason
Sutherland as a full-time executive has proven highly beneficial, further complimented by the
addition of Neil Warrender as Non-executive and Finance Director responsible for leading the
compliance and regulatory relationships.
As we advance our build strategy, we maintain an ongoing assessment of buy opportunities
within both the fund and life insurance segments. While certain anticipated opportunities have
yet to materialize due to factors like rising interest rates and political tensions in Europe, we
remain optimistic and currently have a robust pipeline of targets to evaluate, each holding the
potential to significantly enhance both our revenue and assets under management. Updates
regarding this will be delivered in due course.
Our strategy continues to insulate us from a lot of the volatility in capital markets, however, like
many smaller listed companies, our share price performance has been impacted by current
market conditions. The Directors firmly believe there exists a notable disparity between our
current market capitalization and the genuine value of the company and its assets. They are
confident that our value creation strategy will start to reflect in the share price as we continue to
achieve our stated goals. Additionally, they anticipate a resurgence in investor interest in smaller
companies, further bolstering our position and providing significant shareholder returns.
I would like to take this opportunity to thank the shareholders for their continued support as we
build Alpha Growth into a significant organisation within its sector.
Gobind Sahney
Chairman
30 April 2024
3
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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, Executive Director
Mr. Sutherland became an executive member of the management team at the start of the year.
He launched the first ever AAA rated placement of mortality backed linked annuity receivables
totalling $151m. Mr. Sutherland also recently ran $3bn of policies under the Lamington Road
Fund in Dublin, Ireland which was acquired by Emergent Capital and ran Citadel's London office
at the same time. Prior to that Mr. Sutherland spent 12 years with the Peach Holdings Group,
most recently as Managing Director of Legal and operations for Peachtree Asset Management
based in London and Luxembourg, where he was an FCA approved person, guiding the
fundraising efforts, and coordinating with regulatory bodies in UK, US, Cayman Islands,
Luxembourg and Ireland. During the year his contributions to the life settlements sector were
recognised when he received the the Alexander Hamilton Award from the National Association
of Settlement Purchasers (NASP).
Neil Warrender, Non-Executive Director
Mr Warrender is a trained chartered accountant having qualified with a “Big 4” firm. He
subsequently has had a varied career in financial services including roles at a traditional asset
manager, a private equity firm and a hedge fund before establishing a consultancy firm whose
clients included Peachtree Asset Management, the London based firm that Mr Sutherland was
Managing Director of. Mr Warrender has been acting as Company Secretary to Alpha Growth
since June 2019 and was invited to join the Board in the current year in recognition of his
continuing contributions to the Group. Mr Warrender was recently appointed as CFO of Narf
Industries plc, another LSE listed firm.
4
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Directors’ Report
The Directors present their report with the audited consolidated financial statements of the Group
for the year ended 31 December 2023. 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 10 to 15.
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 year and their beneficial interest in the Ordinary
Shares of the Company at 31 December 2023 were as follows:
Director
Position
Appointed Resigned Ordinary
Options
Gobind Sahney
Executive
Chairman
15/08/2015
- 7,045,834 81,434,303
shares
Jason Sutherland Executive Director
06/03/2019
Neil Warrender
Non-Executive
Director
02/05/2023
-
-
133,333 18,231,198
-
3,841,195
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 2024, the total number of issued Ordinary Shares with voting rights in the Company
was 467,775,068. 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
Mark Ward
Hargreaves Lansdown Asset Management
abdn plc
Roy Rawlins
Private Stakeholders (UK)
Lloyds Banking Group
James Sampson
AJ Bell Group
AN Minto
Marcus Alder
Number of Ordinary
Shares
113,087,803
91,859,128
24,148,239
22,571.477
22,257,544
20,550,153
19,494,882
18,259,673
16,792,500
14,147,096
% of
Share Capital
24%
20%
5%
5%
5%
4%
4%
4%
4%
3%
5
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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
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.
TCFD Disclosures
a) Describe the Board’s
oversight of climate-
related risks and
opportunities.
b) Describe
management’s
role in assessing
and managing
climate-related risks.
c) Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium and long
term
d) Describe the impact
of climate-related risks
and opportunities on
the organisation’s
businesses, strategy
and financial planning
Whilst the Board meets formally as ad when needed to
meet its statutory obligations, it principally operates on an
informal basis, through regular communication between the
two Executive Directors and the Non-Executive Director.
This communication is focused on risks and opportunities
that arise on an ongoing basis.
Through those discussions the Board has assessed that at
the current time there are no climate-related risks or
opportunities that would have a material impact on the
Group or the wider community. This is in the context of the
Group currently having just five employees and substantially
all of the climate impact of the Group being driven by
regulatory imperatives. The Board will keep this
assessment under regular review.
There is no formal management structure as there are just
five Group employees. Each manager individually will seek
to make personal decisions so as to minimise climate-
related risks. This manifests itself in seeking to minimise
travel by, for example, working from home or, in the
Chairman’s case, by choosing to move his home to the
same island as a major subsidiary.
The Group has not identified any material climate-related
risks and opportunities in the short-term. Medium and
longer-term assessments will depend on what acquisitions
are made by the Group and accordingly the Board will
reassess those climate-related risks and opportunities as
soon as practically possible following an acquisition.
Climate related risks and opportunities are not currently a
consideration when the Group is developing its businesses,
strategy or financial planning given the immaterial level of
risk. Individual employees are encouraged to take climate
matters into account when planning how they wish to work
and management offer maximum flexibility to facilitate this.
6
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Directors’ Report (continued)
TCFD Disclosures (continued)
e) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a
2°C or lower scenario
f) Describe the organisation’s
processes for identifying and
assessing climate- related risks
g) Describe the organisation’s
processes for managing
climate-related risks
h) Describe how processes
for identifying, assessing and
managing climate-related risks are
integrated into the organisation’s
overall risk management.
(i) Disclose the metrics
used by the organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk management
process.
(j) Disclose Scope 1, 2, and, if
appropriate, Scope 3 greenhouse
gas emissions, and the
related risks.
(k) Describe the targets
used by the organisation to
manage climate-related risks and
opportunities and performance
against target
The Group does not foresee any impact on its
resilience arising from all foreseeable climate-related
scenarios, including a full two degrees of warming.
The Group currently has no process for identifying and
assessing climate-related risks given they are not
deemed material to the organisation. This will be kept
under review as the organisation grows.
The process for managing such risks is to provide all
five employees with the flexibility to manage those
limited risks that are under their control.
There is no assessment of climate-related risks into
the Group’s overall risk management as those risks
are not currently considered to be material.
The Group does not seek to measure climate-related
risks as they are not considered material and
substantially all of those risks are driven by regulatory
imperatives that are outside the Group’s control (eg
requests to meet face to face with regulators). The
Board will reconsider this position on any material
change to the Group or its activities.
The Group’s activities are outside the scope of the
Global GHG Accounting and Reporting Standard on
insurance-related emissions.
The Group currently has no set such targets since
climate-related risks and opportunities are largely
outside of the control of the Group. Notwithstanding
this the Board is pleased to note that employees
continue to do what they can to reduce climate risk by
working from home and moving their home closer to
an operating subsidiary. The Board will reconsider this
position on any material change to the Group or its
activities.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 December 2023 (2022:
nil).
7
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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 10 to 15.
Corporate Governance
The Governance Report forms part of the Director’s Report and is disclosed on pages 16 to 22.
Going Concern
As at 31 December 2023 the Group had a cash balance (excluding amounts with unit-linked
insurance policies) of £7,420,418 (2022 (restated): £8,033,180) and net current assets of
£3,461,432 (2022 (restated) £4,422,165). The Group has no material debt other than amounts
borrowed to finance policy holder loans, which are backed by the assets in the life policies.
With the issue of a new $20 million life policy in December 2023, a significant inflow into the
Alpha Alternatives Fund and a new sub-lease of the office in California, the Group is projecting
to be cash neutral from the start of the year and there are several ongoing projects any one of
which, if they achieve are successful, will result in the Group becoming cash flow positive. In the
mean time the Group paid off its short term loan during the past year, generated significant profits
on the termination of the sub-lease and generally was in a position to improve its record on timely
payment of creditors.
Auditors
The Directors are currently considering their options in relation to whether or not to reappoint the
auditors and will update shareholders at the AGM.
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
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
8
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Directors’ Report (continued)
Statement of Directors’ responsibilities (continued)
•
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 draw attention to Note 2 b of these financial statements where it is explained that
they have decided to treat all unit-linked insurance contracts as investment contracts under IFRS
9 – Financial Instruments, notwithstanding some may fall within the definition of insurance
contracts under IFRS 17 – Insurance Contracts.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Remuneration Committee Report comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities. They are also responsible to make a statement that they consider that the
annual report and accounts, taken as a whole, is fair, balanced, and understandable and provides
the information necessary for the shareholders to assess the Group’s and Company’s position
and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from legislation in other
jurisdictions.
Directors’ responsibility statement pursuant to disclosure and Transparency Rule
Each of the Directors, whose names and functions are listed on pages 3 confirm that, to the
best of their knowledge and belief:
•
•
the financial statements prepared in accordance with 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.
9
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Directors’ Report (continued)
Statement of Directors’ responsibilities (continued)
Subsequent events
Subsequent events have been detailed in the Strategic Report on page 12 and note 21 to the
financial statements.
This responsibility statement was approved by the Board of Directors on 30 April 2024 and is
signed on its behalf by:
Signed ………………………………………….
Gobind Sahney 30 April 2024
Executive Chairman
Strategic Report
10
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report
The Directors present the Strategic Report of Alpha Growth Plc for the year ended 31 December
2023.
Review of Business in the Period
Operational Review
The Company’s principal activity is set out in the Directors’ Report on page 4.
During the year the Company’s primary focus was on integrating the two businesses acquired
towards the end of 2022 whilst seeking out further acquisition opportunities to move towards the
stated $2 Bn AUM/AUA goal. Having undertaken a root and branch review of the AILAC
operations, the Company was able to reduce overheads and identify a new product opportunity
which is under discussion with regulators. The Directors believe that this new niche product will
be attractive to the prospects that are known to the existing team and have also identified an
insurance management group in Guernsey who will be well placed to manage it.
During the year under review, the Group bought out the 5% minority interest in the two life
assurance subsidiaries in exchange for the allotment to the minority shareholder of 12,696,231
ordinary shares of 1p each in the Company. The Group’s primary focus during the year has been
on integrating the businesses acquired during the prior year together with working towards further
acquisitions which are expected to be accretive to net assets and profitability. We are pleased to
report that shortly before the year end Providence Life Assurance Company (“PLAC”) issued a
new $20 million life policy increasing its AUM by over $5 million whilst the Alpha Alternatives
Fund attracted subscriptions of a further $5 million which the Board believes are the first stepping
stones towards organic growth in AUM to go alongside the growth from acquisitions.
The Company has been speaking with a number of potential acquisition targets during the year
and remains optimistic that these will lead to significant growth in AUM and positive cash flows
in the short to medium term.
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 main revenue generators – fund management and life
insurance company holdings.
In both lines of business 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 combination 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.
11
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
Business Strategy (continued)
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.
It is worth noting that whilst the commercial arrangements and accounting presentation of the
two lines of business differ, they operate as one integrated business segment under the
management of the two Executive Directors and therefore do not fall into separate business
segments as defined in IFRS 8.
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 long-term value to shareholders 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.
12
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
S172 (1) (continued)
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 prior year the Chairman moved
to Bermuda so as to better communicate with the community where PLAC is located and to
reduce his climate-impact.
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. The Board has
been actively engaging with the Financial Reporting Council over the past six months and has
taken on board a number of their comments and suggestions in preparing these financial
statements.
Further information on the ways in which the Board engages with stakeholders is set out in the
Governance Report on pages 17 to 23.
Events since the period end
There have been no events since the period end which have a material impact on an
understanding of these financial statements.
Financial review
Results for the 2023 period
The Group incurred a loss for the year to 31 December 2023 of £1,356,255 (31 December 2022:
generated profit of £3,178,578).
The result for the current year includes a one-off gain of £147,805 on cancellation of a sub-lease
by the lessee. The profit for the prior year mainly resulted from the bargain price paid on AILAC,
which was acquired for £4,106,000 less than its net assets.
Cash flow
Net cash outflows (excluding flows within life policies) for the year to 31 December 2023 were
£612,762 (2022 (restated): inflow of £6,971,350).
Closing cash
As at 31 December 2023, the Group held £7,420,418 (2022 (restated): £8,033,180) in bank
accounts, excluding amounts held within life policies.
Key Performance Indicators
Following the acquisition of AILAC towards the end of 2022, the short-term cash needs of the
Company have become much more manageable and accordingly the Directors have been able
to adopt new KPIs in line with the medium-term strategy of achieving $2 billion of assets under
administration/management. Acknowledging the need to ensure that the Group is able to finance
13
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
Key Performance Indicators (continued)
its own operations as it moves towards this goal, the Directors also monitor the surplus of Group
net current assets over the regulatory capital needs of the business.
The KPI indicators as at 31 December 2023 with their prior year comparatives are detailed below:
2023
2022
AUM:
$619.1m
$586.8m
Surplus net current assets:
£2.7m
£3.7m
Position of Company’s Business
During the year
In March 2023 the Company issued 1,875,000 ordinary shares of 1p each on exercise of broker
warrants for a total consideration of £375,000. In May 2023, the Company acquired the minority
interest held by the former majority owner of Northstar Group (Bermuda) Ltd for shares in the
Company with a value of £330,102. In September 2023 the Company made a profit of £147,805
on the cancellation of a sub-lease by the lessee.
At the year end
At the year end the Group’s Statement of Financial Position shows net assets totaling £5,711,263
(2022: £6,623,015). 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, one Executive Director 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.
14
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
Position of Company’s Business (continued)
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.
Risks/Uncertainties to the Company
Issue
Developing business model
Risk/Uncertainty
The Company is dependent on inter-
company service revenues from the
operating subsidiaries in order to
finance the Directors fees and pay
costs related to its listing. During the
year the operating subsidiaries did
not earn sufficient fees to fully offset
their costs and pay the Company
sufficient to meet its costs.
Company may
The
significant
advisory opportunities
competition
face
for
be
that
may
significant
There
competition for some or all of the
advisory opportunities
the
Company may explore. Such
competition may come from direct
competitors offering similar services
or
private
investment funds many of which
may
internal
experience in managing longevity
assets and/or SLS strategies and
portfolios.
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.
15
to
than
cash
other
historic
financial
resources,
Mitigation
Towards the end of the year two of
the operating subsidiaries increased
their AUM sufficiently to mean that
the Group as a whole is profitable
going into 2024. Furthermore most
of the deficit in 2023 was offset by a
one-off gain from the cancellation of
a sub-lease. Both AILAC and PLAC
have
reserves
sufficient to cover any short-term
cash needs.
While some competitors may have
greater
the
Company will be able to provide a
more personal approach
its
clients and with greater retention
potential
rates
competitors. The acquisition of
AILAC and Havelet together with
acquiring
the
the mandate
Interval Fund has enhanced the
competitiveness of the Group and
also provided diversification
in
revenue streams. Those businesses
are now fully integrated into the
significant growth
Group with
opportunities.
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.
for
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
Position of Company’s Business (continued)
Risks/Uncertainties to the Company
Issue
Risk/Uncertainty
Mitigation
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 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
relies on
The Company
the
experience and talent of its senior
management and on its ability to
recruit and retain key employees
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.
It
business
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.
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.
Company
has
The Company is subject to an
increasing burden of regulation
complex
and
accounting standards.
increasingly
Inability
funding
to
raise emergency
if
increased
regulators
The Company is operating with a
very small team ad it may be difficult
for that team to find the time to meet
requirements
the
especially
and
accounting standards issuers are
not able
to apply requirements
proportionately.
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 team is very experienced and
able to quickly adapt to the changing
regulatory environment.
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 Non-
Executive Director’s consultancy
firm.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the Governance
Report.
16
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Strategic Report (continued)
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 30 April 2024
Chairman
17
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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 there should be a minimum of two members of the
Audit Committee and 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. Adding a second member to the Audit
Committee would result in there not being an independent majority so having one
independent member is considered the closest to meeting the Cod that can be achieved.
The Directors consider the present composition to be adequate given the size of the
Company and volume of transactions.
• The Code requires that a smaller company should have at least two Independent Non-
Executive Directors. The Board currently consists of two Executive Directors and one
Non -Executive Director. The Non-Executive Director holds share options and is expected
to be granted further options and is therefore not 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.
18
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Governance Report (continued)
Compliance with the UK Code of Corporate Governance (continued)
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 two Directors who
have joined since the Company’s shares were listed.
• 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 two Executive Directors who set their own
remuneration whereas the Corporate Governance Code requires that no Director should
be involved in setting their own remuneration. The Directors consider the present
structure and arrangements to be adequate and the most practical approach 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 2023.
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 two 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;
19
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Governance Report (continued)
Leadership (continued)
• The Company’s overall strategy;
• Financial statements and dividend policy;
• 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 integration of AILAC into the Group and
the identification of suitable new investment opportunities for the Company to pursue.
Attendance at meetings:
Member
Gobind Sahney
Jason Sutherland
Neil Warrender
Position
Executive Chairman
Executive Director
Non-Executive Director
Meetings
attended
2 of 2
2 of 2
2 of 2
The Board is pleased with the 100% level of attendance and participation of Directors at Board
and committee meetings. Attendance at Committee meetings is detailed in the respective
Committee reports.
The Chairman, Gobind Sahney, sets the Board Agenda and ensures adequate time for
discussion.
Directors appointed by the Board are subject to election by shareholders at the Annual General
Meeting of the Company following their appointment and thereafter are subject to re-election in
accordance with the Company’s articles of association.
Non-Executive 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 the Non-Executive Director will be made available
upon written request.
20
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Governance Report (continued)
Remuneration Committee
The Company has established a Remuneration Committee, the members of which at present are
the two Executive Directors, Gobind Sahney and 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 seeks to ensure 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, at the end of the year was the Non-Executive Director, Neil Warrender
(Jason Sutherland having stepped down on becoming an Executive Director). 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.
21
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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, an Executive Director
and one Non-Executive Director (who does not meet the Governance Code criteria to be treated
as independent). 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 subject to the financial constraints of the Group.
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 - 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 Remuneration Committee performs a performance
evaluation on each of the Directors when setting the level of remuneration and participating in
long-term incentive schemes..
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 2023.:
Directors
Male
3
Female
-
The Board will pursue an equal opportunity policy and seek to employ those persons most
suitable to delivering value for the Company.
22
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Governance Report (continued)
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 31 to 33.
Going concern – The preparation of the financial statements requires an assessment on the
validity of the going concern assumption. The Directors’ assessment of the Company’s ability to
remain a going concern is detailed on page 7.
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 the 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.
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.
23
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Governance Report (continued)
Shareholder relations (continued)
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 – the Company is 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:
…………………
Neil Warrender
Non-Executive Director
30 April 2024
24
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Remuneration Committee Report
The Remuneration Committee presents its report for the year ended 31 December 2023.
Membership of the Remuneration Committee
The Remuneration Committee during the year comprised of the two Executive Directors, Jason
Sutherland and Gobind Sahney. The Company’s Non-Executive Director has a skillset which is
not well suited to being involved in remuneration decisions, whilst the Executive Directors hands
on involvement in all Group matters means they are best placed to assess what the Group can
afford in remuneration whilst ensuring long-term incentives encourage them to keep looking to
add shareholder value.
During the year ended 31 December 2023, the Remuneration Committee held one formal
meeting attended by the two committee members. The Remuneration Committee is currently
looking at ways to better align the long-term incentive plan with the medium-term strategy and
accordingly no share options were issued during the year.
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 16th June 2023. To facilitate the reading of the policy which
follows, out of date references have been removed.
25
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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
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.
• The free cashflow expected
to be generated by the
Group and any surplus cash
available after taking into
account regulatory capital
needs.
As the Executive
Directors are currently
receiving remuneration
which is below that which
they could achieve in the
open market, there is no
limit on potential rises.
Base salaries will rise
based on affordability
until the Executive
Directors reach the point
where their salaries
reflect their value to the
Group.
None, although
an individual’s
contribution to the
Group and overall
business
performance is
considered when
setting and
reviewing
salaries.
Variable
Elements
Annual
Bonus
Scheme (Bonus)
Long Term
Bonus Scheme
(LT Bonus),
Share Options
Purpose and link to
strategy
Operations
Maximum potential
payments
Performance
Metrics
No material
bonuses have been
paid to date but it
may be possible to
pay out bonuses
following a
significant increase
in AUM which
moves the Group
closer to its
medium-term
strategy goal..
Seeks to reward
Directors and key
employees for
generating
shareholder value
over the medium-
term (5 years).
The Group is not currently in a
position to pay bonuses in the
normal course of business. In
the event that an acquisition or
other event generates an
unexpected cash windfall the
Remuneration Committee will
consider paying bonuses both
as a reward for the work in
generating the additional cash
and to catch up the Executive
pay towards market rate.
There is currently no
maximum bonus as the
level will depend on the
extra cash generated for
the Group from the
transaction and the
amount of catching up
that the Remuneration
Committee considers
appropriate.
Directors and employees are
granted share options at the
current share price. Those
options can be exercised at any
time up to five years after they
have been granted, although if
the option holder leaves the
Group they have to exercise
within six months of leaving.
Option awards across all
Directors and key
employees are not to
exceed 10% of the
issued share capital in
any one year.
to
Performance will
by measured by
refence
the
surplus net assets
figure in the KPIs
and the amount of
(excluding
cash
life
that within
the
policies) on
balance sheet.
Options are
rewarded both to
reflect their
perceived
contribution of the
individual to
meeting strategy
goals in the past
twelve months
and their ability to
continue to add
shareholder value
in the future.
26
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Remuneration Committee Report (continued)
The Directors’ previous remuneration policy was approved as part of the Directors’ Remuneration
Report by 81.83% of voting shareholders at the 2023 AGM. The Directors have noted that there
was a level of dissent with the remuneration policy previously presented and have sought both
to simplify it and to explain more clearly why there is a need for a generous long term incentive
plan.
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.
Share options may be awarded to Non-Executive Directors where they
make a significant contribution towards the Group’s operations over and
above that recognised by the Non-executive fees.
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
Maximum performance
Fixed elements of remuneration only – base salary and benefits
Assumes 100% pay-out under the LT Bonus
Assumes 100% pay-out under the Bonus
(assuming cash available)
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.
27
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Remuneration Committee Report (continued)
Service contracts and loss of office Executive Directors and Employees (continued)
As bonuses are not currently paid in the normal course of business a departing Director would
not generally be paid a bonus.
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
There is no potential maximum payment as a percentage of base salary as the Group is
dependent on the commitment of the Executive Directors to achieve its strategic goals given the
very small team. There are no specific performance targets in place.
28
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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, but this policy
applies to the Board and two other key consultants.
Terms of appointment
The services of the two Executive 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
8
4
20/12/2017
06/03/2023
Mr Warrender’s services as Non-executive Director are provided under the terms of an
agreement between the Company and LPR Consulting LLP, a limited liability partnership of which
Mr Warrender is a member.
The Directors’ service agreements are available for review on request.
Policy for new appointments
Base salary levels will take into account the Group’s ability to pay, 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. three to five
years) and through long-term incentives, 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.
29
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Remuneration Committee Report (continued)
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 December 2023
(GBP):
Name of Director
Gobind Sahney
Jason Sutherland
Neil Warrender
Fees
240,089
127,546
32,000
Taxable
benefits
Long term
benefits
Pension
related
benefits
-
-
-
-
-
-
-
-
-
Other
Total
-
-
-
240,089
127,546
32,000
Set out below are the emoluments of the Directors for the year ended 31 December 2022
(GBP):
Name of Director
Gobind Sahney
Daniel Swick
(resigned 31.08.22)
Jason Sutherland
Fees
171,554
97,364
48,000
Taxable
benefits
Long term
benefits
Pension
related
benefits
-
-
-
245,152
-
78,800
-
-
-
Other
Total
-
-
-
416,706
97,364
126,800
The long-term benefits represent the estimated cost to the Company (see note 18) of options
awarded to the Directors in recognition of their level of contribution to the Company’s
advancement, participation, and other factors considered by the Remuneration Committee
Pension contributions (audited)
The Company does not currently have any pension plans for any of the Directors and does not
pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors or past Directors.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors 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.
30
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Remuneration Committee Report (continued)
UK Remuneration percentage changes
The UK remuneration for 2023 reflects the fact that during the year the Remuneration Committee
decided to amend the UK remuneration of the Executive Directors to reflect the time they spend
focussed on the two life assurance subsidiaries which are non-UK companies. Furthermore
during the current year Mr Sutherland’s role went from being a non-executive one to an executive
one. Accordingly, whilst the UK remuneration has fallen significantly this largely reflects the
changed arrangements.
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 prior 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 most likely once it reaches its 2B strategic goal.
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 four years and it changed the allocation of directors
remuneration to the UK in the current year. 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 2023 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.
………………………
Gobind Sahney
Executive Director
30 April 2024
31
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Audit Committee Report
The Audit Committee during the year comprised the sole Non-Executive Director, which was
Jason Sutherland until Neil Warrender’s appointment in May 2023. The Audit Committee
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. Mr Warrender 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. He was recently appointed as chief finance officer of
another main board LSE listed company.
Members of the Audit Committee are appointed by the Board and whilst Mr Warrender holds
options, 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. The Audit Committee met
with the auditors in March 2024 having received their fee proposal for the 2023 audit. The
proposed fees would have resulted in a significant rise in audit costs against the backdrop of the
Board having made great efforts to reduce overheads in the operating businesses. The increase
was largely driven by the impact of IFRS 17 and ultimately the Audit Committee recommended
to the Board that they continue to treat all unit-linked policies as investment contracts under IFRS
9 due to the disproportionate costs and delays associated with the alternative treatment.
This has led to the auditor disclaiming any opinion on these financial statements.
32
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Audit Committee Report (continued)
Financial Reporting Council (FRC) Review
In August 2023, Alpha Growth plc received a number of queries from the Financial Reporting
Council (FRC) principally concerning the presentation of the insurance subsidiaries and the
calculation of the diluted earnings per share in the 2022 Annual Report and Accounts. As a result
of the review, and as explained in the Accounting Policies, both the Group’s Consolidated
Statement of Financial Position and the Statement of Cashflows for 2022 have been restated to
disaggregate the assets (including cash balances) and liabilities that were previously reported
as one line. In addition, the diluted earnings per share figure in the 2022 Statement of
Comprehensive Income has been restated to reflect the fact that the options and warrants, being
exercisable at above the average market price, are non-dilutive.
The Committee reviewed all correspondence between Alpha Growth plc Group and the FRC and
also discussed the matter with our external auditor. The FRC’s enquiries, which were limited to
a review of the Group’s 2022 Annual Report and Accounts, are nearing completion. The FRC
review does not benefit from detailed knowledge of our business or an understanding of the
underlying transactions entered into, and, accordingly, the review provides no assurance that the
Annual Report and Accounts are correct in all material respects.
Meetings
In the year to 31 December 2023 the Audit Committee had one formal meeting with the auditors
attended by Jason Sutherland as the sole committee member. Since the year end the Audit
Committee has had a formal meeting with the auditors, attended by Neil Warrender.
The key work undertaken by the Audit Committee is as follows;
•
•
•
•
•
•
review the auditors’ proposed audit fees and presentation thereof 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. Whilst
the Audit Committee has not recommended the removal of the auditors, the Committee
understands that as result of the disclaimer of opinion, PKF Littlejohn LLP are likely to resign.
The Audit Committee has started the process of seeking new auditors.
33
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Audit Committee Report (continued)
External auditor
The Company’s external auditor is PKF Littlejohn LLP. The external auditor has unrestricted
access to the sole member of the Audit Committee. 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 at the start of 2024 and is due to rotate off the engagement after completing the December
2026 audit. In light of their expected resignation, the Committee has not recommended that the
Board put forward PKF Littlejohn for re-election but is in the process of reviewing options.
Neil Warrender
Chairman of the Audit Committee
30 April 2024
34
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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
30 April 2024
35
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALPHA GROWTH PLC
Disclaimer of opinion
We were engaged to audit the financial statements of Alpha Growth Plc (the ‘parent company’) and
its subsidiaries (the ‘group’) for the year ended 31 December 2023 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.
We do not express an opinion on the accompanying financial statements of the group and parent
company. Because of the significance of the matter described in the Basis for disclaimer of opinion
section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide
a basis for an audit opinion on these financial statements.
Basis for disclaimer of opinion
The group has a material subsidiary, Providence Life Assurance Company (Bermuda) Ltd (‘PLAC‘),
whose financial position and results are consolidated and presented within the group’s consolidated
financial statements. IFRS 17, Insurance Contracts became effective on 1 January 2023 and as part
of our planning and risk assessment procedures, we noted through discussions with management
that the group’s conclusion was that the contracts issued by PLAC are not in scope of IFRS 17. We
challenged management’s conclusion as most of the contracts contain mortality risks. The mortality
risks are reinsured by PLAC such that PLAC does not retain net insurance risk after the effect of
reinsurance. Under the superseded IFRS 4 Insurance Contracts, the group included provisions for
the mortality risks and corresponding reinsurance recoveries with respect to the PLAC contracts.
Subsequently management prepared an analysis with input from their actuaries and concluded that
most of the contracts issued by PLAC transferred significant insurance risk and would therefore be
within the scope of IFRS 17 but ultimately decided the impact was not material and therefore decided
to treat them in a manner consistent with prior years. We were unable to validate management’s
position for the reasons set out below.
In our opinion, management failed to implement IFRS 17 appropriately in a number of areas including
but not limited to the:
• scoping of the PLAC contracts in IFRS 17;
• determination of unit of account to establish how the assets and liabilities are grouped or
separated for recognition under IFRS 17;
• determination of the contract boundary for the PLAC contracts;
•
treatment of investment components within the contracts;
• application of the appropriate measurement model under IFRS 17 (that is, variable fee
approach versus the general measurement model versus the premium allocation approach);
• weighing of coverage units between the investment return service and the insurance service
within the contracts;
• accounting for the related reinsurance contracts; and
•
IFRS 17 disclosures.
In our opinion, given management’s failure to appropriately implement IFRS 17, we were unable to
obtain sufficient and appropriate supporting evidence to assess the impact of implementing IFRS 17
on the group’s financial statements. As a result, we were unable to determine whether any
adjustments might have been found necessary in respect of the measurement and presentation of
the PLAC insurance issued and reinsurance ceded contracts and the elements making up the primary
statements as well as related disclosures.
36
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Our application of materiality
The scope of our audit is 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.
Preliminary group materiality was set at £180,800 (2022: £137,200), based on 3% of unaudited 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.
Preliminary group performance materiality was set at £126,560 (2022: £96,040), based on 70%
(2022: 70%) of preliminary 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.
Preliminary parent company materiality was set at £8,400 (2022: £18,776), based on 2% of unaudited
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.
Preliminary parent company performance materiality was set at £6,720 (2022: £15,0210), based on
80% (2022: 80%) of preliminary parent company materiality. The level of preliminary 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.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in
the financial statements. In particular we looked at areas involving significant accounting estimates
and judgement by the directors such as the impact of IFRS 17 and related disclosures on the financial
statements.
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. Except for the matter described in the Basis for disclaimer of
opinion section, as we were unable to complete our risk assessment procedures, we have determined
that there are no other key audit matters to communicate in our report.
Other information
The other information comprises the information included in the strategic and directors’ reports, other
than the financial statements and our auditor’s report thereon. The directors are responsible for the
other information contained within the strategic and directors’ reports. 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
37
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
Because of the significance of the matter described in the Basis for disclaimer of opinion section of
our report, we have been unable to conclude whether a material misstatement of the other information
exists.
Opinion on other matters prescribed by the Companies Act 2006
Because of the significance of the matter described in the Basis for disclaimer of opinion section of
our report, we have been unable to form an opinion, whether based on the work undertaken in the
course of the audit:
•
•
•
the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006;
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
Because of the significance of the matter described in the Basis for disclaimer of opinion section of
our report:
• we have not obtained all the information and explanations that we considered necessary for
the purpose of our audit;
• we were unable to determine whether the part of the directors’ remuneration report to be
audited are in agreement with the accounting records and returns; and
• we were unable to determine whether adequate accounting records have been kept.
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:
•
•
returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records
and returns; or
• certain disclosures of directors’ remuneration specified by law are not made.
Corporate governance statement
We planned to review the directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the entity’s voluntary compliance with
the provisions of the UK Corporate Governance Code. Due to the significance of the matter described
in the Basis for disclaimer of opinion section of our report, we have been unable to form a conclusion
as to whether each of the following elements of the Corporate Governance Statement are materially
consistent with the financial statements or our knowledge obtained during the audit:
• Directors' statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 8;
• 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 8;
• Directors’ statement on whether they have a reasonable expectation that the group will be
able to continue in operation and meets its liabilities set out on page 8;
• 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 8 and 9;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on pages 15 and 16;
• The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on pages 22,23 and 24; and
• The section describing the work of the audit committee set out on pages 32, 33 and 34.
38
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Responsibilities of directors
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible
for the preparation of the group and parent company financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for
assessing the group and 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 and parent company or to cease operations, or have
no realistic alternative but to do so.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our planned procedures are capable of
detecting irregularities, including fraud is detailed below:
• We planned to obtain 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
meeting minutes and Regulatory News Services announcements and application of
cumulative audit experience of the sector.
• We determined the principal laws and regulations relevant to the group and company in this
regard to be those arising from the Companies Act 2006, the Listing Rules and the UK
Corporate Governance Code.
• We planned 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 planned 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 planned to identify 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.
• We planned to address 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 planned to review 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 planned to review the
component auditors’ audit procedures on the key audit matters, management override and
their assessment of each entities’ compliance with local laws and regulations through
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
39
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
rather than error, as fraud involves intentional concealment, forgery, collusion, omission or
misrepresentation.
Because of the significance of the matter described in the Basis for disclaimer of opinion section of
our report, we did not complete the planned audit procedures set out in this section.
Auditor’s responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the group and parent company’s financial statements in
accordance with ISAs (UK) and to issue an auditor’s report.
However, because of the matter described in the Basis for disclaimer of opinion section of our report,
we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on these financial statements.
We are independent of the group and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in 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.
Other matters which we are required to address
We were appointed by the audit committee on 30 November 2018 to audit the financial statements
for the period ending 31 August 2018 and subsequent financial years. Our total uninterrupted period
of engagement is six years, covering the periods ended 31 August 2018, 31 August 2019, 31 August
2020, 31 December 2021, 31 December 2022 and 31 December 2023.
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.
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.
Satyajeet Beekarry (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
30 April 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
40
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Consolidated Statement of Comprehensive Income
Year ended
31 December 2023
£
Year ended
31 December 2022
£
Note
Continuing operations
Revenue from Owned Insurance Companies
Revenue from Contracts with Clients
Other income
Total revenue
Net movement on DAC/AVIF
Interest expense and investment costs
Bargain purchase
Expenses in managing owned insurance companies
Operating expenses
(Loss)/profit before tax
Taxation
3
3
15
4
6
4,731,056
449,415
26,314
5,206,785
(52,931)
(21,422)
-
(2,813,214)
(3,810,655)
3,424,875
346,787
-
3,771,662
(16,729)
(27,838)
4,106,000
(2,336,898)
(2,403,021)
(1,491,437)
3,093,176
135,182
85,402
(Loss)/profit for the period
(1,356,255)
3,178,578
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss:
Exchange differences on foreign operations
10,436
192,270
Total comprehensive (loss)/income
(1,345,819)
3,370,848
Attributable to:
Owners of the Company
Non-controlling Interests
(1,335,239)
(10,580)
3,178,359
192,489
(1,345,819)
3,370,848
Earnings per share from continuing
operations attributable to the equity owners
Basic earnings per share (pence)
Fully diluted earnings per share (pence)
7
7
(0.2)p
(0.2)p
Restated
0.7p
0.7p
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 2023
Consolidated Statement of Financial Position
Note
11
10
23
9
14
13
24
14
14
Assets
Cash and cash equivalents
Short term investments
Trade and other receivables
Loans to policyholders
Deferred tax asset
Right of use assets
Intangible assets
Assets backing unit-linked and
contractual liabilities
Cash and cash equivalents - assets
backing
Financial assets
Total Assets
Liabilities
Trade and other payables
Policy claims payable
Short term loans
Lease liabilities
Provisions
Unit-linked and contractual liabilities
Unit-linked liabilities
Structured settlements
Total Liabilities
Net Assets
Total Equity 1
As at
31 December 2023
£
7,420,418
360,430
13,928,139
10,178,506
617,887
143,422
1,488,520
As at
31 December 2022
(restated)
£
8,033,180
345,836
13,806,729
6,718,811
508,288
183,672
1,508,890
34,137,322
31,105,407
10,950,357
423,770,659
434,721,016
17,458,191
414,046,964
431,505,155
468,858,338
462,610,561
5,375,795
12,705,096
10,174,784
170,386
-
4,825,998
12,260,000
6,714,911
238,483
443,000
28,426,061
24,482,391
427,809,449
6,911,565
424,441,781
7,063,374
463,147,075
455,987,546
5,711,263
6,623,015
5,711,263
6,623,015
1. Non-controlling interest is presented in the statement of changes in equity
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 30 April 2024 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 2023
Company Statement of Financial Position
Assets
Cash and cash equivalents
Trade and other receivables
Right of use assets
Investment in subsidiaries
Total Assets
Liabilities
Trade and other payables
Lease liabilities
Total Liabilities
Net Assets
Total Equity
As at
31 December 2023
£
As at
31 December 2022
£
Note
11
10
23
8
13
24
122,499
983,723
143,422
3,262,320
9,751
952,119
183,672
2,932,219
4,511,964
4,077,761
147,853
170,386
318,239
630,035
238,483
868,518
4,193,725
3,209,243
4,193,725
3,209,243
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 profit for the parent company for the year was £201,175 (2022: loss £360,745).
This report was approved by the board and authorised for issue on 30 April 2024 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 2023
Consolidated Statement of Changes in Equity
Share
Capital
Share
Premium
£
-
Balance at 1 January 2022 431,887
-
Profit for the year
Foreign exchange gain on
conversion of subsidiary
Total comprehensive
income for the year
Share issue costs
Employee share options
issued
Balance at 31 December
2022 as originally stated
Restatement to reflect
elimination of insurance and
reinsurance reserves
431,887
-
-
-
-
£
5,404,313
-
-
-
(16,161)
Option
Reserve
£
480,674
-
-
-
-
-
334,800
Share-
based
payment
reserve
£
113,390
-
Foreign
Exchange
reserve
£
-
-
Retained
Deficit
£
(3,500,925)
2,995,611
Total
Attributable
to
Shareholders
£
2,929,339
2,995,611
Non-
Controlling
Interests
£
89,609
182,967
Total
£
3,018,948
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
5,388,152
815,474
113,390
182,748
(505,314)
6,426,337
282,098
6,708,435
-
-
-
-
(85,420)
(85,420)
-
(85,420)
Balance at 31 December
2022 restated
Loss for the year
Foreign exchange loss on
conversion of subsidiary
Total comprehensive loss
for the year
Share based payments
Share issue costs
Employee share options
expired
Exercise of warrants
Acquisition of non-
controlling interests
Balance at 31 December
2023
431,887
5,388,152
815,474
113,390
182,748
(590,734)
6,340,917
282,098
6,623,015
-
-
-
4,442
-
-
-
-
-
104,374
(30,610)
-
-
-
-
-
-
(153,561)
-
-
-
-
-
-
18,750
469,640
12,696
317,406
-
-
467,775
6,248,962
661,913
(113,390)
-
-
-
(1,345,675)
(1,345,675)
(10,580)
(1,356,255)
(67,287)
-
(67,287)
77,723
10,436
(67,287)
(1,345,675)
(1,412,962)
67,143
(1,345,819)
-
-
-
-
-
-
-
153,561
-
-
108,816
(30,610)
-
375,000
-
-
-
-
108,816
(30,610)
-
375,000
330,102
(349,241)
(19,139)
115,461
(1,782,848)
5,711,263
-
5,711,263
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 2023
Company Statement of Changes in Equity
Share
Capital
£
Share
Premium
£
Option
Reserve
£
Share-
based
payment
reserve
£
Retained
Deficit
£
Total
£
431,887
5,404,313
480,674
113,390
(3,178,915)
3,251,349
-
-
-
-
-
-
-
-
-
(360,745)
(360,745)
-
(360,745)
(360,745)
-
(16,161)
334,800
-
-
-
-
-
334,800
(16,161)
431,887
5,388,152
815,474
113,390
(3,539,660)
3,209,243
-
-
4,442
-
-
-
-
104,374
(30,610)
-
-
-
-
-
(153,561)
-
-
-
-
-
201,174
201,174
201,174
201,174
-
-
108,816
(30,610)
153,561
-
18,750
469,640
12,696
317,406
-
-
(113,390)
-
-
-
375,000
330,102
467,775
6,248,962
661,913
-
(3,184,925)
4,193,725
Balance at 1 January
2022
Loss for the year
Total comprehensive
loss for the year
Options issued
Share issue costs
Balance as at 31
December 2022
Profit for the year
Total comprehensive
income for the year
Share based payments
Share issue costs
Employee share options
expired
Exercise of warrants
Acquisition of non-
controlling interests
Balance as at 31
December 2023
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 2023
Consolidated Statement of Cash Flows
Cash flow from operating activities
(Loss)/profit for the year before interest and taxation
Adjusted for:
Services settled by way of payment in shares/options
Amortisation of intangible assets and right of use assets
Gain on disposal of sublease
Bargain purchase
Other non-cash movements
Note
2023
£
2022
£
(restated)
(1,496,329)
3,121,014
108,816
64,430
(147,805)
-
(451,301)
334,800
99,970
-
(4,106,000)
132,632
Operating cash outflows before movements in working
capital:
(1,922,189)
(417,584)
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in short term loans
Increase in policy claims
(Increase)/decrease in short term investments
(Increase)/decrease in financial assets backing unit-linked
liabilities
Increase/(decrease) in unit linked liabilities and structured
settlements
Net cash used in/generated from operating activities
Cash flows from investing activities
Cash acquired on purchase of subsidiary
Net cash from investing activities
Cash flows from financing activities
Repayment of leasing liabilities
Sublease of premises including interest
Interest paid on leasing liabilities and loans
Loan finance
Other interest received
Net proceeds from issuance of shares net of issue costs
(121,410)
910,701
179
445,096
(14,594)
(174,225)
(218,705)
(392)
3,585
64,804
(9,723,695)
8,220,038
3,215,859
(3,776,520)
(7,210,053)
3,701,001
-
-
9,570,493
9,570,493
(68,097)
171,439
(31,422)
(350,000)
23,147
344,390
(30,627)
-
(27,838)
350,000
-
(16,161)
Net cash from financing activities
89,457
275,374
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
(7,120,596)
25,491,371
13,546,868
11,944,503
Cash and cash equivalents at end of year
11
18,370,775
25,491,371
Cash and cash equivalents at end of year consists of:
Cash and cash equivalents presented within assets
Cash and cash equivalents presented within assets backing
unit-linked liabilities
7,420,418
8,033,180
10,950,357
17,458,191
18,370,775
The notes to the financial statements form an integral part of these financial statements.
25,491,371
46
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Company Statement of Cash Flows
Note
2023
£
2022
£
Cash flow from operating activities
Profit/(loss) for the year before interest and taxation
Adjusted for:
Services settled by way of payment in shares/options
Amortisation of intangible assets and right of use assets
Gain on disposal of sublease
Non-cash foreign exchange gains
Operating cash outflows before movements in
working capital:
219,430
(337,000)
108,816
14,837
(147,805)
4,945
334,800
78,445
-
-
200,223
76,245
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
(31,603)
(122,182)
(582,228)
113,108
Net cash from/(used in) operating activities
46,438
(392,875)
Cash flows from investing activities
Proceeds from disposal of subsidiary undertaking
Net cash from investing activities
Cash flows from financing activities
Repayment of leasing liabilities
Sublease of premises including interest
Interest paid on leasing liabilities and loans
Loan finance
Net proceeds from issuance of shares net of issue costs
-
-
(68,097)
171,439
(31,422)
(350,000)
344,390
3,600
3,600
(30,626)
-
(13,745)
350,000
(16,161)
Net cash from financing activities
66,310
289,468
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
112,748
9,751
(99,807)
109,558
Cash and cash equivalents at end of year
11
122,499
9,751
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 2023
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
During 2023, the Financial Reporting Council (FRC) submitted a request for further information
on the Group’s Annual Report and Accounts for the year ended 31 December 2022. The FRC’s
review was based solely on the Group’s published Annual Report and Accounts and does not
provide assurance that the Annual Report and Accounts are correct in all material respects; the
FRC’s role is not to verify the information provided but to consider compliance with reporting
requirements.
As a result of the review, the Directors have decided to present information relating to the life
assurance subsidiaries on a disaggregated basis, rather than reporting two separate line items
comprising total assets in insurance businesses and total liabilities in insurance businesses.
The disaggregation information was previously presented in a note to the financial statements
but those separate line items are now included with the assets and liabilities of the Company
and its other subsidiaries. This has resulted in a restatement of the Consolidated Statement of
Financial Position and the Consolidated Cash Flow Statement
The fully diluted earnings per share figure in the Consolidated Statement of Comprehensive
Income has been restated to reflect the fact that, in accordance with IAS 33 the warrants and
options are non-dilutive since the exercise price is below the average market price in 2022.
48
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
b) Comparative Information (continued)
The Directors also asked the directors of the two insurance subsidiaries to review their
treatment of unit-linked policies in the light of the introduction of IFRS 17. Previously the
Company had been informed by those subsidiaries that none of the life assurance policies
transferred any significant insurance risks to those entities and accordingly the Company has
always treated all contracts issued by PLAC and AILAC as investment contracts subject to
IFRS 9. The Directors noted that notwithstanding this the accounts of PLAC did include an
insurance risk provision and a reinsurance recoverable amount.
After reviewing the contracts the Company ultimately came to the view that it would continue
to treat them as investment contracts as the Directors have a responsibility to apply accounting
policies consistently and treating as insurance contracts would have involved a change of
policy. This decision was reached after making an assessment as to the likely impact of IFRS
17 which, in the Directors opinion, would only have impacted the presentation with no impact
on the reported loss or net assets. This decision has led the auditors to disclaim their opinion
as they were unable to conclude on the matter in the time available.
In view of the continued treatment of unit-linked as investment contracts the Company has
decided that it is not appropriate to retain any insurance or reinsurance related provisions.
Accordingly the prior year numbers have been adjusted by reducing current assets by £588,695
to eliminate a reinsurance recoverable, reducing current liabilities by £503,275 to eliminate an
insurance provision with the result that retained earnings for the Group have been reduced by
£85,420.
c) New Standards and Interpretations
The following new Standards and/or interpretations have been applied to these financial
statements for the first time.
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
and IFRS Practice
Statement 2
Amendments to IAS 8
Amendments to IAS 12
Amendments to IAS 12
Sale or Contribution of
Assets between an Investor
and its Associate
Accounting policies
disclosure
31 December 2023
31 December 2023
Definition of Accounting
Estimates
Deferred Tax
Income Taxes
31 December 2023
31 December 2023
31 December 2023
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):
49
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
c) New Standards and Interpretations (continued)
Standard/Interpretation
Subject
Amendments to IAS 1
Amendments to IFRS 16
Amendments to IAS 7
and IFRS 7
Amendments to IAS 21
Classification of Liabilities
Lease liability in a sale and
leaseback
Disclosures: Supplier
Finance Arrangements
Lack of Exchangeability
Period first applies (year
ended)
31 December 2024
31 December 2024
31 December 2024
31 December 2025
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.
As at 31 December 2023 the Group had a cash balance (excluding amounts with unit-linked
insurance policies) of £7,420,418 (2022 (restated): £8,033,180) and net current assets of
£3,461,434 (2022 (restated) £4,422,165). The Group has no material debt other than amounts
borrowed to finance policy holder loans, which are backed by the assets in the life policies.
With the issue of a new $20 million life policy in December 2023, a significant inflow into the
Alpha Alternatives Fund and a new sub-lease of the office in California, the Group is projecting
to be cash neutral from the start of the year and there are several ongoing projects any one of
which, if they achieve are successful, will result in the Group becoming cash flow positive. In
the mean time the Group paid off its short term loan during the past year, generated significant
profits on the termination of the sub-lease and generally was in a position to improve its record
on timely payment of creditors.
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 profits of £201,175 (2022: losses £360,745) were made
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.
50
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
e) Basis of consolidation (continued)
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 Management. Prior year numbers in the Statement of
Comprehensive Income for AILAC and Havelet only include revenue and expenses for one
month as they were acquired towards the end of 2022, although in the case of AILAC an
adjustment was made to reflect the fact that under the terms of the sale and purchase
agreement, the Group benefited 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.
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.
51
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
g) Financial Instruments (continued)
ii) Classification
a) Financial assets at amortised cost
The Group measures financial assets at amortized cost if both of the following conditions are
met:
• the asset is held within a business model whose objective is to collect contractual cash flows;
and
• the contractual terms of the financial asset generating cash flows at specified dates only pertain
to capital and interest payments on the balance of the initial capital.
Financial assets which are measured at amortised cost, using the Effective Interest Rate
Method (EIR) and are subject to impairment where there is significant uncertainty as to the
timing and likelihood of recovery due to credit risks. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired
b) Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest rate method include
trade and other payables that are short term in nature. Financial liabilities are derecognised if
the Group’s obligations specified in the contract expire or are discharged or cancelled.
Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate (“EIR”). The EIR amortisation
is included as finance costs in profit or loss. Trade payables other payables are non-interest
bearing and are stated at amortised cost using the effective interest method.
c) Financial assets and liabilities at fair value through profit and loss
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 under assets backing unit-linked and contractual liabilities as are the offsetting
unit-linked and contractual liabilities reported as such. Movements in fair value are recognised
in profit and loss but will offset each other.
iii) Derecognition
A financial asset is derecognised when:
The rights to receive cash flows from the asset have expired, or the Group has transferred its
rights to receive cash flows from the asset or has undertaken the commitment to fully pay the
cash flows received without significant delay to a third party under an arrangement and has
either (a) transferred substantially all the risks and the assets of the asset or (b) has neither
transferred nor held substantially all the risks and estimates of the asset but has transferred
the control of the asset.
52
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
g) Financial Instruments (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.
53
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
j) Segmental Reporting
At this point, identifying and assessing investment projects is the only activity the Group is
involved in and is therefore considered as the only operating/reportable segment. The Group
has to date implemented five such investment projects, namely the launching of Black Oak
Alpha Growth Fund plus the Alpha Alternatives Fund and the acquisitions of PLAC, AILAC and
Havelet. The Directors are satisfied that no group of projects constitutes a separate segment
as all projects are overseen by the two Executive Directors jointly with no separate business
head.
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. On expiry of the warrants
or options any amount previously recognised in respect of those share-based payments is
directly credited to retained reserves.
In addition to the above the Company when placing shares through its Broker had 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.
During the year some of the broker warrants were exercised resulting in the elimination of the
share based payment reserve created on their issue and a reduction in the share premium
amount. Some employee options expired and this resulted in a reduction to the option reserve
and an increase in retained earnings.
Details of outstanding warrants and employee options and the inputs to the models used to
calculate fair value can be found in notes 17 and 18.
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 19.
54
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
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.
o) Accounting for insurance contracts and investment contracts in owned insurance
business
Insurance and investment contracts classification
The policyholders own contracts that transfer insurance risk or financial risk, or both.
All of the unit-linked policies offered by the Group are principally issued with a view to
policyholders gaining the tax benefits of holding investments within a life assurance wrapper.
Whilst a small number of these contracts also transfer a significant insurance risk to the Group,
this insurance risk is fully reinsured. Furthermore the mortality risk charges are stepped
annually to ensure all risks are fully reflected in the policyholder charges.
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 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
55
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
p) Intangible assets (continued)
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.
On the acquisition of Havelet the amount by which the fair value of liabilities on acquisition
exceeded the fair value of assets was treated as an intangible asset representing the right to
future management fees under contracts in place on acquisition. These rights are being written
off over ten years, being the average remaining life of the contracts.
On acquisition of PLAC the excess of the consideration paid over the fair value of net assets
acquired (including the AVIF) was treated as goodwill. Similarly the excess of the fair value of
the shares issued in consideration for the minority interest over the net assets attributable to
that minority interest have been added to goodwill during the year.
All intangible assets are 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
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.
56
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
r) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with 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 backing unit-inked and contractual liabilities
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. The fair
value of the underlying financial assets which is £434,721,0126 (2022: £431,505,155) is based
on valuations provided by third party managers. The Group may have limited access to the
information necessary to verify that the valuation equates to fair value, although the total unit-
linked liabilities will always equal the value of assets held in unit-linked policies.
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
2023 are discussed below:
Recoverability of Alpha Alternatives fund expenses
Group “Trade and other receivables” includes an amount of £425,271 (2022: £192,346) in
respect of amounts paid under an expense cap agreement together with other organisational
costs incurred in respect of the Alpha Alternatives Fund. The recovery of these amounts is
dependent on whether the assets under management of the Alpha Alternatives Fund are to
grow sufficiently such that the expense ratio of that fund falls below a target level. Whilst the
Fund attracted a significant inflow just before the year end which reduced the risk of non-
recovery and the Directors believe that the Alpha Alternatives Fund is likely to attract significant
additional 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 £425,271 and there
will be a commensurate charge in the Statement of Comprehensive Income.
Treatment of investment contracts
As noted in note 2 (b) and 2 (o) the Company has decided to treat all unit-linked contracts as
investment contracts under IFRS 9 consistent with the prior year treatment. If those contracts
which transfer significant insurance risk to the Group were treated as insurance contracts this
would alter the presentation of them in these financial statements and might alter the fair value
of assets and liabilities. The Directors’ own analysis indicated that the only changes from
treating some investment contracts as insurance contracts would have been presentational.
57
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
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 £1,832,146 (2022: £246,583) 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
Professional and consultancy fees
Gain on lease
Other expenses
Group Company
2023
£
105,527
75,000
-
-
14,837
222,428
(147,805)
131,606
2023
£
445,224
75,000
195,813
-
14,837
286,933
(147,805)
2,940,653
Group
2022
£
640,870
62,570
173,525
158,942
78,445
151,899
-
1,136,770
Company
2022
£
640,870
62,570
-
-
78,445
151,899
-
348,572
Operating expenses
3,810,655
401,593
2,403,021
1,282,356
5.
Auditors’ remuneration
Fees payable to the Company’s current
auditor for the audit of the Company’s annual
accounts:
Group
2023
Company
2023
Group
2022
Company
2022
£
£
£
£
75,000
75,000
62,570
62,570
Fees payable to the Company’s current auditor
for non-audit services:
-
-
-
-
6.
Income tax
Analysis of tax credit in the year
Current tax
Deferred tax
Income tax
Group Company
2023
£
2023
£
-
135,182
135,182
-
-
-
Group
2022
£
-
85,402
85,402
Company
2022
£
-
-
-
58
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
6.
Income tax (continued)
Factors affecting the tax credit for the year are as follows:
Profit/(loss) before tax
(1,491,437)
201,175
3,093,176
(360,745)
Analysis of charge in the year
(Profit)/loss on ordinary activities multiplied by
rate of corporation tax in the UK of 19% (2022:
19%)
Bargain purchase not subject to tax
Expenses not deductible for tax purposes
Tax losses utilised/(carried forward)
283,373
(38,223)
(587,703)
68,542
-
(2,057)
(146,134)
-
-
38,223
780,140
(38,830)
(68,205)
-
(337)
(68,205)
Deferred credit tax for the year
135,182
-
85,402
-
The Group has accumulated tax losses of approximately £3,475,000 (2022: £3,600,000) that are
available, under current legislation, to be carried forward indefinitely against future profits.
A deferred tax asset has not been recognised in respect of the losses of the Company due to the
uncertainty of future profits. The amount of the deferred tax asset not recognised is approximately
£660,000 (2022: £684,000)). A deferred tax asset of £617,887 (2022: £508,288) 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 loss for the year from
continuing operations of £1,356,255 (2022: profit £3,178,578) for the Group by the weighted average
number of ordinary shares in issue during the year of 458,046,069 (2022: 431,387,388). For diluted
earnings per share the number of shares in issue is calculated using the same denominator since
in both 2023 and 2022 the exercise price of warrants and options was higher than the average
market price of the Company’s during the year.
2023
£
2022
restated
£
Profit/(loss) for the year from continuing operations
(1,356,255)
3,178,578
Weighted average number of shares in issue
Fully diluted average number of shares in
issue
Basic earnings per share
Fully diluted earnings per share
Potential dilutive shares are detailed in notes 18 and 19.
458,046,069 431,887,388
458,046,069
431,887,388
(0.2)p
(0.2)p
0.7p
0.7p
59
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
8.
Investments in group undertakings
Shares in group undertakings:
Opening balance
Additions in the year
Disposals in the year
Closing balance
Company
£
2,932,219
330,102
(1)
3,262,320
Investment in group undertakings are recorded at cost, which is the fair value of the consideration
paid. During the year the year the Company acquired a 5% minority interest in Northstar Group
(Bermuda) Ltd in exchange for the allotment of 12,696,231 ordinary shares of 0.1p each ("Ordinary
Shares") at a deemed issued price of 2.6p per Ordinary Share. The Company’s subsidiary, Pacific
Longevity Limited, was struck off having never traded.
Principal subsidiaries
The group’s subsidiaries at 31 December 2023 and 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 LLC
Northstar Group (Bermuda) Ltd
Providence Life Assurance
Company Ltd
Alpha International Life Assurance
Co Ltd
British Virgin Islands
N/A
Bermuda
Barbados
United States
N/A
Bermuda
Guernsey
Ownership*
2022
2023
100%
N/A
100%
100%
100%
N/A
100%
100%
100%
100%
100%
0%
100%
95%
95%
95%
During the year Alpha Group (Bermuda) Ltd acquired the remaining 5% of the issued share capital
of Northstar Group (Bermuda) Ltd and the two entities merged.
At the end of the reporting period all ownership interests are directly held by the Company except
that PLAC, AILAC and Havelet are held through Alpha Group (Bermuda) Ltd.
The registered office of Alpha Longevity Management Limited as at the year-end was Sea Meadow
House, PO Box 116, Road Town, Tortola, VG1110, BVI. Immediately following the year end it was
redomiciled to Bermuda and its registered office is now at Atlantic House, 11 Par-la-Ville Road,
Hamilton, HM11, Bermuda.
The registered office of Alpha 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.
60
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
8. Investments in group undertakings (continued)
The registered office of AILAC is at Albert House, South Esplanade, St Peter Port, Guernsey, GY1
1AW.
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,
AILAC and Havelet 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 2023
Additions
Foreign exchange movement
At 31 December 2023
Amortisation/Impairment
At 1 January 2023
Charge for the year
At 31 December 2023
Net book amount
At 31 December 2023
A 31 December 2022
10. Trade and other receivables
Trade debtors
Other receivables
Loans and other client advances
Prepayments and accrued income
AVIF/DAC
£
Rights
£
Goodwill
£
Total
£
1,334,005
-
(29,363)
1,304,642
113,388
-
-
113,388
138,005
58,586
-
196,591
1,585,398
58,586
(29,363)
1,614,621
76,508
38,254
114,762
-
11,339
11,339
-
-
-
76,508
49,593
126,101
1,189,880
102,049
196,591
1,488,520
1,257,497
113,388
138,005
1,508,890
Group Company
2023
£
2023
£
Group
(Restated)
2022
£
-
13,293,781
540,249
94,109
-
21,168
350,890 13,374,955
237,919
559,785
172,687
73,048
Company
2022
£
500,000
21,492
354,807
75,820
13,928,139
983,723 13,806,729
952,119
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 2023
Notes to the Financial Statements (continued)
11. Cash and cash equivalents
Group
2023
Company
2023
Cash at bank
Cash at bank – backing liabilities
£
7,420,418
10,950,357
£
122,499
-
Group
(Restated)
2022
£
8,033,180
17,458,191
18,370,775
122,499
25,491,371
Company
2022
£
9,751
-
9,751
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair
value. Of the cash amounts held by the Group approximately £750,000 (2022: £750,000) is required
for regulatory capital purposes and therefore not available to meet liabilities.
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
£
Authorised
Called up
As at 31 December
2022
Authorisation lapsed
Share issues
Share issue costs
904,664,388
431,887,388
431,887
5,388,152
113,390
(180,880,188)
-
-
-
35,887,689
-
35,888
-
-
891,420
(30,610)
-
(113,390)
-
At 31 December 2023
723,784,200
467,775,068
467,775
6,248,962
-
Of the authorised share capital 105,555,132 ordinary shares are reserved for issue under options
and warrants, See notes 17 and 18 for the terms on which those shares can be issued.
13. Trade and other payables
Current liabilities
Trade payables
Short term loan
Intergroup liabilities
Other creditors
Accruals
Group Company
2023
£
2023
£
Group
(Restated)
2022
£
585,499
-
-
4,481,846
308,450
1,501
-
41,685
-
104,667
401,711
350,000
-
3,629,623
444,664
Company
2022
£
42,525
350,000
41,685
-
195,825
5,375,795
147,853
4,825,998
630,035
62
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
14. Assets backing unit linked and contractual liabilities (restated)
The Group operates a unit-linked life assurance business through the wholly owned subsidiaries
PLAC and AILAC (Life Companies). They provide investment products through a life assurance
wrapper. AILAC products are not subject to any material insurance risk and are therefore
recognised and accounted for as financial instruments and presented as financial liabilities due to
the policyholders within unit-linked liabilities. Whilst some PLAC contracts transfer significant
insurance risks, the Company has decided to continue to treat them as investment contracts for
consistency..
The Group also operates a liability assignment business through Havelet whereby financial
investments are held by the Group against structured settlement contracts.
The contractual rights and obligations of the investments remain with the Group and the fair value
of the investments is therefore included on the balance sheet, together with the liability to the
policyholders. The Group earns fee income for both providing the life assurance wrapper or
structured settlement arrangement and for administering the policies which is included in revenue.
Financial assets and liabilities held by AILAC, PLAC and Havelet are measured at fair value
through profit and loss, other balances include cash and receivables, which are measured at
amortised cost. The assets are regarded as current assets as they represent the amount available
to the policyholders who are able to withdraw their funds on call, subject to certain restrictions in
case of illiquidity or, in the case of Havelet, contract terms. Gains and losses from assets and
liabilities held to cover obligations to policyholders are attributable to those policyholders. As a
result, any gain or loss is offset by a change in the obligation to policyholders.
Financial liabilities due to unit-linked
policyholders
Structured settlement amounts due to Havelet
policyholders
Group
2023
£
Group
2022
£
427,809,449 424,441,781
6,911,565
7,063,374
There is no material risk to the Group arising from the investment portfolios held by PLAC, AILAC
or Havelet as all of the policyholder liabilities related to financial investments and cash are directly
linked to the value of the policyholder investments held.
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.
63
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
14.
Assets backing unit linked and contractual liabilities (continued)
At 31 December 2023
Receivables
Cash and cash equivalents
Fixed income
Equities
Investment funds
Private placements
Direct investment
At 31 December 2022
Receivables
Cash and cash equivalents
Fixed income
Equities
Investment funds
Private placements
Direct investment
Unit linked assets
Level 3
£
-
-
-
Level 2
£
-
-
-
-
Level 1
£
5,895
10,950,357
8,364,576
266,625,362
Total
£
5,895
10,950,357
8,364,576
3,441,771 270,067,133
96,479,539 7,119,849 23,245,594 126,844,982
12,235,733
6,252,340
- 12,235,733
4,281,209
-
-
1,971,131
384,396,860
7,119,849
43,204,307 434,721,016
Level 3
£
-
-
-
Level 2
£
-
-
-
Level 1
£
6,179
17,458,191
27,069,555
Total
£
6,179
17,458,191
27,069,555
281,143,387 6,491,257 27,082,449 314,717,093
53,967,710
11,777,442
6,508,985
379,645,022 6,491,257 45,368,876 431,505,155
-
-
- 11,777,442
6,508,985
-
53,967,710
-
-
The Group’s level 3 financial assets comprise holdings in pooled investment vehicles, including
private equity funds and real-estate funds. The pooled investment vehicles are measured in
accordance with the valuation policies adopted by the operators of those funds who generally
follow an international standard such as the International Private Equity and Venture Capital
Valuation Guidelines 2018 Private placements generally represent private equity investments that
are planning to list their shares in the short term. Such holdings are generally valued at cost,
although if a target listing price has been established then the fair value will be altered to reflect
that target price with a discount related to any uncertainty. Direct investments represent loans or
investments into real assets and are valued at cost unless there is evidence to support a different
fair value.
15. 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 16.
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 2023 (2022: £nil).
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
64
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
15.
Related party disclosures (continued)
were no balances outstanding between the Company and Kango Group at 31 December 2023
(2022: £nil).
Directors fees paid to Neil Warrender were paid to LPR Consulting LLP (“LPR”). LPR was
connected by way of Mr Warrender being the Managing Partner until 30 September 2023. LPR
also lent the Company £350,000 in 2022 on which was charged interest for the year of £11,000
(2022: £10,000). The loan and interest were fully repaid during 2023. Operating expenses for the
year include £35,250 (2022: £nil) charged by LPR for accounting services to the Group and share
issue costs include £1,000 (2022: £nil) charged by LPR for preparing filings. The Company owed
LPR £29,667 in accrued directors fees and consultancy fees at 31 December 2023 (2022: £350,000
loan, £10,000 accrued interest).
16.
Directors’ emoluments
Details concerning Directors’ remuneration can be found below. The Directors are considered to be
the key management.
Name of Director
Gobind Sahney
Jason Sutherland
Neil Warrender
Fees
£
240,089
127,546
32,000
Other
£
-
-
-
Total
£
240,089
127,546
32,000
399,635
-
399,635
Mr Sahney’s emoluments include an amount of £33,000 settled by payment of his medical insurance.
17. Share warrants
During the year all of the 18,750,000 broker warrants issued in 2021, with an exercise price of 2p
per warrant were exercised.
All of the 187,500,000 shareholder warrants which were exercisable at 3p per share expired in
December 2023. Details of the movement in warrants in issue during the year are provided in the
table below.
2023
Number of
warrants
000’s
Weighted
average
exercise
price
£
2022
Number of
warrants
000’s
Weighted
Average
exercise
price
£
Outstanding at the beginning of the
year
Exercised during the year
Expired during the period
206,250
0.029
206,250
0.029
(18,750)
(187,500)
0.02
-
-
-
-
-
Outstanding at the end of the period
Exercisable at the end of the period
Nil
Nil
65
Nil
206,250
0.029
Nil
206,250
0.029
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
18.
Share-based payment awards
During the year, the Company issued no further share options as the Remuneration Committee is
considering how best to align the interests of management with those of shareholders. The total
options granted in each accounting period up to 31 December 2022 represented 10% of the issued
share capital of the Company at the end of that accounting period. 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. All options issued to date
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). During the year 3.2 million options
(2022: nil) lapsed having reached the end of their five-year life and 29.2 million options (2022: nil)
lapsed due to the option holder having left the Group.
The share options outstanding at 31 December 2023 had a weighted average contractual life of
approximately 3 years. Share options outstanding during the year ended 31 December 2023 and
year ended 31 December 2022 were as follows:
2023
Number of
options
000’s
Weighted
average
exercise
price
£
2022
Number of
options
000’s
136,963
0.0295
93,774
Weighted
average
exercise price
£
-
-
(31,297)
-
0.0295
43,189
-
0.0295
-
Outstanding at the beginning of the
period
Granted during the period
Lapsed during the period
Outstanding at the end of the period
105,666
0.0295
136,963
0.0295
Exercisable at the end of the period
105,666
0.0295
136,963
0.0295
66
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
19. Financial Instruments
The following table sets out the categories of financial instruments held as at 31 December 2023
and 31 December 2022:
Group
2023
Company
2023
£
£
Group Company
2022
2022
(restated)
£
£
-
-
9,571
183,672
876,299
-
Financial assets
Financial assets measured at fair value
through profit and loss
Financial investments held within unit-
linked policies or to meet contractual
liabilities
Cash and cash equivalents held within
unit-linked policies
Cash and cash equivalents
Right of use assets
Trade debtors and other receivables
Loans to policyholders
Financial liabilities
Financial liabilities measured at fair
423,770,659
10,950,357
7,420,418
143,422
13,834,030
10,178,506
-
-
122,499
143,422
910,675
-
414,046,964
17,458,191
8,033,180
183,672
13,634,042
6,718,811
value through profit and loss
Unit linked investment liabilities
Structured settlements
Financial liabilities measured at
amortised cost
Trade and other payables
Policy claims payable
Short term loans
Lease liabilities
427,809,449
6,911,565
-
-
424,441,781
7,063,374
-
-
5,067,345
12,705,096
10,174,784
170,386
43,186
-
-
170,386
4,381,334
12,260,000
6,714,911
238,483
434,210
-
-
238,483
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. The Group provides policyholders with the option to borrow
against the value of their policies and has a facility with a financial institution to support those
loans but all interest risk on such loans is borne by the policyholder backed, as necessary, by
the assets in the policy.
67
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
19.
Financial Instruments (continued)
c) Foreign currency risk
Three of the subsidiaries have a functional and reporting currency of US Dollars and hold
substantially all of their assets and liabilities in US Dollars which exposes the Group to
foreign currency risk. Furthermore the Company has a US Dollar bank account as some
of the fees it earns are US Dollar denominated. The US Dollar exposures to financial
assets and liabilities of the Group and Company (excluding those where policyholders are
exposed to the risk) are as follows:
Financial assets
Cash and cash equivalents
Trade debtors and other
receivables
Loans to policyholders
Financial liabilities
Trade and other payables
Short term loans
Group Company
2023
£
2023
£
Group Company
2022
£
2022
£
735,701
33,458
243,646
1,178
863,047
10,132,687
(961,397)
(10,174,784)
-
-
-
-
547,950
6,718,811
(512,799)
(6,714,911)
-
-
-
-
Net foreign currency exposure
595,254
33,458
282,698
1,178
A 5% appreciation in sterling against the US Dollars would accordingly lead to a loss of
£29,763 (2022: £14,135) for the Group and £1,673 (2022: £59).
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, the greatest concentration of credit risk was to Utmost who hold some of the AILAC
policies within their life assurance company and owe AILAC amounts on policies that have
been redeemed. 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’, mostly
with Barclays. The Group and Company’s exposure to credit risk at the year end is detailed
below:
Financial assets
Cash and cash equivalents
Short term investments
Trade debtors and other
receivables
Group Company
2023
£
2023
£
Group Company
2022
£
2022
£
7,420,418
360,430
122,499
-
8,033,180
345,836
9,751
-
13,928,139
983,723
13,806,729
952,119
Total credit exposure
21,708,987 1,106,222
22,185,745
961,870
68
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
19. Financial Instruments (continued)
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.
The Group’s exposure to liquidity risk is low as the Group holds cash balances in instant
access bank accounts, which are more than sufficient to meet all liabilities other than those
which are backed by liquid assets in unit-linked policies. Excluding amounts which are held
for asset-backing of liabilities, the Group has cash balances of £7,420,418 (2022: £8,033,180)
and financial liabilities (excluding those backed by unit-linked policies) of £10,950,357 (2022:
£17,458,191).
f)
Capital risk management
The Group’s approach to capital management is to seek to maintain sufficient capital to meet
the operational and regulatory needs of the Group whilst using options and warrants to
incentivise the Directors and other key stakeholders to provide additional capital as and when
the share price improves. In addition, the Group will opportunistically raise additional capital
where the Directors identify investment opportunities which are expected to enhance
shareholder value and move the Group close to its 2B strategic aim. The Group does not
currently have any borrowings (other than those to finance policyholder loans) but may utilise
short-term borrowing in order to meet due diligence costs ahead of an expected acquisition.
The Company is not subject to any regulatory capital requirements but both the insurance
subsidiaries are subject to minimum solvency requirements. Of the total capital held by the
Group of £5.7 million (2022: £6.6 million) approximately £0.75 million (2022: £0.75 million) is
required for regulatory capital purposes.
The Company does not currently pay dividends nor does it expect to be in a position to buy-
back its shares for the foreseeable future although it has the right to do so in accordance with
limits set at the AGM.
20. Average number of people employed
Average number of people employed, including Directors:
Office and management
21. Subsequent events
Group
2023
Company
2023
Group
2022
Company
2022
Number
Number
Number
Number
5
3
5
4
Effective 1 February 2024 the right of use asset was sub-let for a second time. The sub-lease
covers the remaining 28 month term of the head lease and the sub-lease payments represent
approximately 85% of those due to be paid by the Company under the headlease.
69
Alpha Growth Plc
Annual Report & Financial Statements
For the Year Ended 31 December 2023
Notes to the Financial Statements (continued)
22. 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. At the start of the year the Company sub-let the office under an agreement that was
intended to cover the remaining term of the head lease but in the term the entity that acquired the
sub-let bought themselves out in September 2023. In accordance with IFRS 16 the right of use
asset was treated as disposed of on being sub-let and reacquired when the sub-lease was
cancelled. Additional information on the right of use asset is as follows:
Office:
Opening balance
Disposal during the year
Additions in the year
Amortisation during the year
Closing balance
Group
& Company
£
183,672
(183,672)
158,259
(14,837)
143,422
The net present value of lease liabilities are all due within 3 years and comprise:
Lease payments
Finance charges
Group & Co
2023
£
Group & Co
2022
£
159,366
11,020
215,985
22,498
170,386
238,483
70