Alpha Growth : pl annual report and accounts

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

	Page
Company Information	1
Chairman's Statement	2
Board of Directors and Senior Management	4
Directors' Report	5
Strategic Report	11
Governance Report	18
Remuneration Committee Report	25
Audit Committee Report	32
Nomination Committee Report	35
Independent Auditors' Report	36
Consolidated Statement of Comprehensive Income	44
Consolidated Statement of Financial Position	45
Company Statement of Financial Position	46
Consolidated Statement of Changes in Equity	47
Company Statement of Changes in Equity	48
Consolidated Statement of Cash Flows	49
Company Statement of Cash Flows	50
Notes to the Financial Statements	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

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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.

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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

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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.

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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
				shares
Gobind Sahney	Executive	15/08/2015	-	7,045,834	81,434,303
	Chairman
Jason Sutherland	Executive Director	06/03/2019	-	133,333	18,231,198
Neil Warrender	Non-Executive	02/05/2023	-	-	3,841,195
	Director

Qualifying Third Party Indemnity Provision

At the date of this report, the Company has a third-party indemnity policy in place for all active Directors.

Substantial shareholders

As at 19 April 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	Number of Ordinary	% of
	Shares	Share Capital
Mark Ward	113,087,803	24%
Hargreaves Lansdown Asset Management	91,859,128	20%
abdn plc	24,148,239	5%
Roy Rawlins	22,571.477	5%
Private Stakeholders (UK)	22,257,544	5%
Lloyds Banking Group	20,550,153	4%
James Sampson	19,494,882	4%
AJ Bell Group	18,259,673	4%
AN Minto	16,792,500	4%
Marcus Alder	14,147,096	3%

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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	Whilst the Board meets formally as ad when needed to
oversight of climate-	meet its statutory obligations, it principally operates on an
related risks and	informal basis, through regular communication between the
opportunities.	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.
b) Describe	There is no formal management structure as there are just
management's	five Group employees. Each manager individually will seek
role in assessing	to make personal decisions so as to minimise climate-
and managing	related risks. This manifests itself in seeking to minimise
climate-related risks.	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.
c) Describe the climate-	The Group has not identified any material climate-related
related risks and	risks and opportunities in the short-term. Medium and
opportunities the	longer-term assessments will depend on what acquisitions
organisation has	are made by the Group and accordingly the Board will
identified over the	reassess those climate-related risks and opportunities as
short, medium and long	soon as practically possible following an acquisition.
term
d) Describe the impact	Climate related risks and opportunities are not currently a
of climate-related risks	consideration when the Group is developing its businesses,
and opportunities on	strategy or financial planning given the immaterial level of
the organisation's	risk. Individual employees are encouraged to take climate
businesses, strategy	matters into account when planning how they wish to work
and financial planning	and management offer maximum flexibility to facilitate this.

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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	The Group does not foresee any impact on its
organisation's strategy, taking into	resilience arising from all foreseeable climate-related
consideration different climate-	scenarios, including a full two degrees of warming.
related scenarios, including a
2°C or lower scenario
f) Describe the organisation's	The Group currently has no process for identifying and
processes for identifying and	assessing climate-related risks given they are not
assessing climate- related risks	deemed material to the organisation. This will be kept
	under review as the organisation grows.
g) Describe the organisation's	The process for managing such risks is to provide all
processes for managing	five employees with the flexibility to manage those
climate-related risks	limited risks that are under their control.
h) Describe how processes	There is no assessment of climate-related risks into
for identifying, assessing and	the Group's overall risk management as those risks
managing climate-related risks are	are not currently considered to be material.
integrated into the organisation's
overall risk management.
(i) Disclose the metrics	The Group does not seek to measure climate-related
used by the organisation to assess	risks as they are not considered material and
climate-related risks and	substantially all of those risks are driven by regulatory
opportunities in line with its	imperatives that are outside the Group's control (eg
strategy and risk management	requests to meet face to face with regulators). The
process.	Board will reconsider this position on any material
	change to the Group or its activities.
(j) Disclose Scope 1, 2, and, if	The Group's activities are outside the scope of the
appropriate, Scope 3 greenhouse	Global GHG Accounting and Reporting Standard on
gas emissions, and the	insurance-related emissions.
related risks.
(k) Describe the targets	The Group currently has no set such targets since
used by the organisation to	climate-related risks and opportunities are largely
manage climate-related risks and	outside of the control of the Group. Notwithstanding
opportunities and performance	this the Board is pleased to note that employees
against target	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).

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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

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